Commentary
Google Sits, Oblivious, On The Most Valuable Social Network Of All
- by Ashkan Karbasfrooshan , Op-Ed Contributor, March 4, 2013
Are teens spending less time on Facebook? Likely. Ultimately, the problem with being the latest shiny toy in techland is that eventually a shinier toy comes along. That, in a nutshell, is the dark cloud looming over Mark Zuckerberg's Facebook: if it's not Twitter, it's Instagram. Tomorrow, it could be Crapstr.
Now don't get me wrong, for all intents and purposes, Facebook is a juggernaut and will remain one. There are more people on Facebook than there were people on earth a mere 200 years ago (the world crossed one billion people in 1804, in case you're wondering). But as a fellow media-focused VC likes to remind me, despite having a billion users, Facebook's revenue just ain't all that (relative to the only company that matters, really, and that being Google).
So long as Facebook shows a disregard of privacy and user rights, then Facebook credits/payments will underperform (do you really want your entire social network being aware of every purchase you make?). So with Facebook's current advertising model and products being what it is, I suspect Facebook's advertising business will continue to underwhelm Zuckerberg's own ambitions, let alone Wall Street's.
After all, at a time when first, Google buys YouTube (and Zagat!) and underwrites $100 million worth of video programming; second, Hulu/Netflix dive into content production; and third, even Intel sees a holy grail in programming, Facebook's reluctance to develop an internal media (and eventually, content) strategy will make it fall further and further away from its potential. Facebook could conceivably one day have a profile of every man and woman with a Web connection, but its revenue per user will shrink to marginal levels because of its misguided belief that advertising can ever truly go on auto-pilot mode, or that social advertising is some kind of silver bullet that provides efficiencies over the most effective form of advertising ever, search. Even Google got religion and hired salespeople, bought YouTube, underwrote content. But apparently, Facebook knows something that Google doesn't: the last time someone bet so big and so ill-advisedly on the "algorithm" was Barry Diller and Ask.com. The only winners there were billboard ad salesmen.
Ok, now it's Google's turn
This doesn't mean that Google isn't suffering from myopia, either.
In fact, the irony of Facebook and Google's envy of one another is comedic if it wouldn't be tragic.
On one side, you have Facebook so blinded by Google's AdSense success, that the social network emulates Google's YouTube strategy to grow video - -and thus branded -- advertising. Meanwhile, Google is so envious of Facebook's social media mojo that it has put its weight – and, to some extent its credibility -- behind Google Plus, when it has, in fact, the most valuable social network of all, YouTube.
Yeah, I said it
Facebook's problem, ultimately, is that it's a social network between people who just don't have all that much in common (from an advertiser's perspective).
Hear me out.
Yes, we're related to our families, have gone to school with some people, work with others and what not, but when you distill those relationships, they're actually rather superficial (ironically) to advertisers. With YouTube, however, the bond between users is topical and based on the content we watch. That is golden (again, to advertisers).
YouTube isn't necessarily maximizing its advertising opportunity the right way, but it's getting out of its own way and riding its size. Google is definitely missing the social networking opportunity by chasing it via Google Plus instead of YouTube. But as long as Facebook keeps whiffing on content and media, YouTube will keep growing ,and Facebook will slip into the background while Google Plus fades into oblivion.
Wait till Google launches their streaming music service...the back and forth between streaming and video should be big.
One of the most interesting statistics I have heard in the last six or so months is that tweens and teens look to YouTube to discover new music, more so than radio, all the radio apps, etc. This is something new, and telling, and in line with your piece here. Thanks.
Someone(s) has wealth beyond imagination (few but existing) has nefarious control issues. They buy (even bit by bit) FB and access to that much private information about, well just about everybody. They have plenty of other companies and people of consequence under their thumbs. What's your 1984 ?
"There are more people on Facebook than there were people on earth a mere 200 years ago " ... The problem with that statement is that, 200 years ago, those people knew they were here. But due to the very odd head-counting and join-mechanisms and formula used by FB, how many of their total "users" actually use FB, or even know that they ARE FB users? I didn't even know I had a FB page until months after it appeared, most likely as a result of some third-party form I filled-out at some point to access another site. ... At least when I wake-up surprised to find another tattoo on my body, I know that it probably was the result of too much gin the previous night. With FB, you never know for certain HOW you became one of their billions of "users."
Another spot on article Ash. Ive been asking for years whether at its core YouTube is a video search engine or a social network. I think it has been the former because of its owners roots but that its future is the later as per your article...
I couldn't agree with you more Ashkan. As a long-time Google tech partner, we are witnessing firsthand the maturation of YouTube - both as a significant revenue driver and as the ultimate social hub for consumers. YouTube's recently announced Channels 4 redesign will further accelerate this phenomenon across both the web and mobile. I think 2013 may in fact be the year when YouTube finally reaches its full potential and seriously challenges Facebook.
Youtube is doing very well *because* it doesn't chase the typical facebook user. It does not need billions more videos of other people's kids, family gatherings and plated meals. And nor, I think, do advertisers.
Anybody having problems with Google Adwords cancelling their accounts due to an internal accounting glitch?
You are right on target. With a wee makeover, Youtube could be Cinderella at the ball.
Great article with some relevant thoughts and insights.
However, Google Plus is not a social network it is a Social layer across ALL of Googles tools and features and brings everything together in one cohesive and integrated "world"
You say: "Meanwhile, Google is so envious of Facebook's social media mojo that it has put its weight – and, to some extent its credibility -- behind Google Plus, when it has, in fact, the most valuable social network of all, YouTube."
You also say: Google is definitely missing the social networking opportunity by chasing it via Google Plus instead of YouTube and that Google plus will fade into the background.
YouTube on it's own is not a social network per se - it is a search engine, content curation and delivery site. On it's own it is an Island, integrated with G+ and live streaming plus Google Hangouts, it is no longer an Island but a suburb.
I believe (as do many of the other 343 million active users) that Google is playing a very smart game and has created a "Social Layer" almost a new internet with G+ not a social network!
Sitting on the sidelines expecting G+ to fade away is perhaps the biggest mistake people can make because when they then decide to come and join the party a lot of the chairs will have gone!