Is Google toast? On the heels of the company's record earnings, you may wonder what would prompt such a question. But indeed, Google's days of dominance may be numbered.
In 1998, Google's founders, Sergey Brin and Larry Page, bet that by adding the online community's opinions of a website to the results ranking algorithm, indicated by the quantity and quality of links to the site, Google could give users more relevant search results. And they were right! By June 2000, Google was the unquestioned king of quality search. Over the next decade, Google continued to capture share and now controls 65 percent of the search market. Google figured out that adding the wisdom of the community would make its search results the best and enable them to build a dominant position.
In February 2004, Mark Zuckerberg launched Facebook from his dorm room at Harvard, heading into direct competition with social media players Friendster and MySpace. Four years later, Facebook became the social media leader by building a better tool for social interaction and keeping it "cool" through exclusivity and a non-intrusive ad model. Today, Facebook remains the undisputed social media champion comprised of over 500 million global users that spend significantly more time on their Facebook accounts than users do on Google. Facebook has organized the collective "wisdom "of the Web into like-minded micro communities of friends.
And here is where things get a little scary for Google.
Earlier this year, the online analytics firm Compete reported that Facebook had passed Google to become the top source of traffic to major portals like Yahoo and MSN and is among the leading traffic source to other types of sites. This was big news in search space. However, it was taken with a grain of salt by those who believed the findings were discounting quality in favor of quantity. That was before Facebook introduced its search game changer.
Facebook's Open Graph and "Like" feature allow users to recommend or "Like" content on the Web and share that content with their friends through Facebook. This turns Facebook's 500 million users into authoritative reviewers constantly recommending content, products, and services to their micro community of friends. Google's winning innovation was to add the wisdom of the Web community to organic search rankings. Facebook's Open Graph and "Like" button take this concept to the next level, adding the influence of recommendations from your friends to the general wisdom of the larger Web community. The logic here is simple. The majority of people would rather take a friend's advice than recommendations from Web users they may or may not have anything in common with.
Google's dominance in search grew from creating a better product. But on October 14, 2010, Microsoft and Facebook announced a partnership to bring "Like" data and profile search to Bing. The joint venture is a major hit to Google's invincibility. Facebook's 500 million global users spend, on average, 23 hours per month on the social site and its network is one of the fastest growing on the Internet, doubling in the last year. Community makes search stronger. The tightly knit Facebook community trumps Google's broad-based Web authority model. And search behavior has begun to change. Visitors are using Facebook to search for content, products, and services, as evidenced by the social network's amount of referral traffic. This all makes Facebook's progressive search model and its affiliation with Bing a very potent search competitor.
Recognizing the dent Facebook has made in its armor, Google is preparing a counter offensive, launching its own social site - Google Me. But after the false starts of Google Wave, Orkut, and Google Buzz, it's not clear what Google Me will do differently to compete in the social arena. Betting that users will ask their online friends to join a brand new community, one that will genuinely rival Facebook, seems like a longer shot than Powerball. Google could partner with or acquire Twitter, but it is unclear whether tweets can add the same level of social insight as the Open Graph and "Like" button.
Facebook will continue to grow as a highly-targeted, cost-efficient alternative to Google. Perhaps the term "Google killer" is a tad strong, but it's clear that if current trends continue, Google will have to tighten its championship belt, spend less time in its famous free lunch line, and get ready for a battle of equals. The rest of us can look forward to the ensuing drama and likely innovation this battle will necessitate. Charge!
Jonathan was CEO at MediaWhiz until July 2011. He was responsible for guiding strategy and operational execution, including overseeing the integration of the company's suite of marketing services, leading the development of new and unique capabilities, and ensuring the organization delivered better results for its performance marketing clients.
Before joining MediaWhiz, Jonathan was president of Lillian Vernon Corp., where he was responsible for the management of the company and its subsidiaries. Lillian Vernon was sold to a group of investors in July 2006.
Previously, Jonathan was the chief strategy officer of DoubleClick, where he was in charge of setting strategy and overseeing M&A. He began his tenure at DoubleClick as vice president responsible for the company's Internet Advertising Network before being appointed senior vice president of the company's Abacus online division, where he created DoubleClick's data strategy and oversaw development of new online targeting products and services.
Additionally, Jonathan was the executive responsible for developing United Media's original Web businesses (The Dilbert Zone, Snoopy.com, and Comics.com), and was a senior consultant with McKinsey & Co.
May 22, 2013
1:00pm ET / 10:00am PT
June 5, 2013
1:00pm ET / 10:00am PT