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Google and Facebook, as every goodthinker knows, are dangerously implacable enemies.
That war entered a venomous new stage last week, when the internet’s biggest search company announced that it had also become a Facebook-style social network. Google Buzz, launched on Tuesday, intends to turn Gmail’s 150 million users into a vast pool of shared personal information, building on similar initiatives such as Google Wave and Google Social Search.
Then it emerged last week that Google had bought the social- networking start-up Aardvark, which lets users “tap the knowledge of people in your network”. In other words, it was advancing its tanks even farther across Facebook’s lawn.
What we are witnessing is the ultimate battle for control of the internet. Google, employing the world’s smartest software engineers, has dominated the desktop-internet era for a decade through its unbeatable algorithm-based computing power. But now we’re into the mobile-internet era, Facebook intends to dominate by knowing what we are thinking, doing and intending to spend — wherever we happen to be. As Facebook’s founder Mark Zuckerberg sees it, this “social graph”, built around our friends, family and colleagues, will determine how hundreds of millions of us decide on everything from holidays to cosmetic surgeons. And with Facebook the proprietary gatekeeper — its mobile-phone applications already attracting extraordinary engagement from members — that’s a potential advertiser proposition that Google can only dream of.
It’s not that Mr Zuckerberg is still only 25 and naively arrogant that annoys Google, nor that his company has enticed swaths of senior Google talent. It’s that Facebook’s fast-growing dominance of the “social” internet threatens its rival’s entire business model. If it can sell advertisers access not just to what you’re thinking, but to where you are, who you’re with and what you plan to do, Facebook’s revenues from individually targeted “behavioural” advertising could increase exponentially. And it knows it.
“Google is not representative of the future of technology in any way,” a Facebook veteran boasted to Wired recently. “Facebook is an advanced communications network enabling myriad communication forms. It almost doesn’t make sense to compare them.”
The mobile internet changes everything — how we behave, spend, declare our intentions, and consume content. That’s why Google is pushing so aggressively its Android smartphone platform and Nexus One handsets. It’s also why Apple has helped software developers to distribute three billion iPhone apps. “That mobile device is never more than a metre or two away from my body, even when I’m asleep,” explains Android’s Eric Tseng. “It knows all my friends through contacts applications; it knows where I am because it’s got a GPS chip; what I’m doing as I’ve got my calendar on it; and it’s got all this contextual knowledge about me. That’s very powerful.”
Already 16 million Britons access the internet through their phones, with five million doing so to visit Facebook — putting it comfortably ahead of Google traffic. And we’re just at the start of this revolution: 3G mobile penetration in Western Europe rose from 17 per cent in 2007 to 29 per cent in 2009, and is forecast to reach 67 per cent next year; in Japan it is already 91 per cent. The lesson from Japan is that, unlike the desktop internet, where people are averse to paying for content, the networked mobile phone is a consumer goldmine. Morgan Stanley estimates that $43 billion was made from the mobile internet in Japan in 2008. Proportionately, Europe today is where Japan was almost a decade ago.
Why is Facebook so well positioned? Because , when all your friends are on Facebook, it makes no sense to go elsewhere.
Mr Zuckerberg’s human-powered view of the internet also taps into our yearning, as social creatures, to climb Abraham Maslow’s hierarchy of needs to attain self-actualisation: of the 400 million active Facebook users (up from 200 million last summer), half log on in any given day; they share five billion pieces of content a week and upload more than three billion photos each month. On average, they spend more than 55 minutes a day on Facebook. Those who access it via their mobile devices are “twice as active”. Now do you see why the search gurus in Google’s Mountain View headquarters are so anxious?
So it’s a slam-dunk that Facebook, quickly emerging as the repository of all human intentions, will trounce Google, right? Well, possibly — except for two teeny details. The first is money. Google has $24.5 billion in the bank, after making $6.5 billion profit in the past year. And Facebook — although Mr Zuckerberg predicted a 70 per cent revenue growth this year — only went “cashflow positive” last autumn. There’s a lot you can do with the odd $25 billion: from writing open cheques to YouTube until it can dominate the market in online TV and film distribution, to saturation- advertising its Chrome browser on London buses. Don’t be surprised if Facebook announces a public share offering soon to build a war chest.
Mr Zuckerberg’s second challenge is to convince his customers to surrender their privacy. A business based on giving advertisers access to your personal data must somehow convince you that it’s in your interests to do so: and so far, his repeated clumsy attempts have met a substantial consumer backlash. Early reactions to Buzz have also reminded Google that many of us are unhappy ceding vast amounts of personal information to a private business.
And never forget how quickly fashions change in the online ecosystem. Remember Friendster, Friends Reunited, even MySpace — owned by this newspaper’s parent, and currently struggling in between CEOs? All were the next big social thing once. That’s people for you.
You never can rely on them.
David Rowan is editor of Wired
URL Link:
http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article7028215.ece
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