Commentary

Google, Yahoo Take On Twitter, Facebook

From the rational, strategic perspective, we all know companies either evolve or die. Corporate graveyards are littered with organizations that grew fat and complacent, certain that no new technology, business model or social evolution would undermine their position at the top of the heap.

Smart companies protect themselves against inertia, creating systems that force instability and, one would hope, vitality. Design agency Space150, for example, rebrands itself, top to bottom, every 150 days. These efforts require the people there to continually question what they are about and how they position themselves.

But even without such a radically unsettling environment for ourselves, most of us have a built-in characteristic that keeps us on our toes. Call it the "Grass Is Greener" syndrome, a.k.a. "Ooh, What's That They're Playing With?"

Bear in mind that there's not a huge difference between these two motivations. It would be foolish for a large incumbent to ignore the fact that everyone is now playing with the greener grass. If newspapers, for example, had had a bit more of that new-toy envy, they might have recognized the threat posed by the Internet early enough to do something about it. So I'm not here to decry reactions to shifts in behavior.

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But I do wonder why, if Google Buzz is "not intended as a challenge to Facebook or Twitter," the company is launching its Buzz API "as answer to Facebook Connect" and its Reshare feature "just like on Twitter."

It'll be interesting to see if Buzz's evolution gives Google any market momentum. I'm betting it won't. After all, feature-chasing has rarely proven an effective tactic for stealing market share. If you're going after a competitor based on that competitor's strengths, why should anyone switch to you?

Which is why I think Facebook currently has more to worry about from Yahoo than from Buzz. Despite Carol Bartz not having a good answer to the strategy question in her testy interview with Michael Arrington, Yahoo has done something pretty important in the social media space: formed a partnership with Zynga.

Here's why I think it's important: everybody is mad at Facebook right now. The press is mad. Its users are mad (although, admittedly, only those that pay attention to FB policy changes). And, even with a new five-year agreement in place, it's a pretty safe bet that Zynga is mad about unilaterally having to give up 30% of its revenue, thankyouverymuch.

And yet Facebook still doesn't seem to care. Perhaps it's banking on the idea that everyone will stay because everyone is there, that nobody wants to go and be "social" by themselves on a new network. But here's the thing: on Yahoo, you're not by yourself; you're with 600 million other people. If Yahoo and Zynga get Facebookers to shift the platform on which they play Farmville and Mafia Wars, that alone could create a tipping point of user behavior -- and imagine if you combine it with Flickr and Yahoo Mail (which, incidentally, is bigger than Gmail).

Of course, there's only one problem: Yahoo doesn't have a social network; its Yahoo 360°, launched in 2005, never gained traction. And, in that same interview, Carol Bartz implied that Yahoo is only looking to do stuff in its "sweet spot."

If Yahoo was going to enter the social space, though, now's the time. Buzz has fallen flat. The tide is turning against Facebook. Yahoo has the user numbers, and it's not feature-chasing.

Over to you, Carol. And you, dear reader, for comment, here or via @kcolbin.

3 comments about "Google, Yahoo Take On Twitter, Facebook".
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  1. Arnold Waldstein from Waldstein Consulting, June 1, 2010 at 10:37 a.m.

    Great post... and you pose some challenging scenarios.

    Yup, Facebook has wallowed in its adolescence obviously. But for all the ire, mine included ("Facebook...can't love it but can't leave it" http://bt.io/FHn6), growth and activity numbers don't show a slowdown.

    But, the Zynga point is well taken...

    Honestly though, i don't think this is going to come to pass:

    -Google just doesn't get 'social'. Search certainly, 'social' not at all.

    -Yahoo...i just can't bend my head around their comeback. Facewbook's intrinsic value is beyond Zinga and populated by hundreds of millions who have never used Yahoo and won't make the leap from ingrained network Facebook benefits to this identity-challenged dinosaur.

    I could of course be wrong;) And I think that challenges to Facebook are coming...I just don't think this is the one.

    Thanks for this.

    I blog on the social web and Facebook @ http://arnoldwaldstein.com

  2. Gabe Elliott from Vision Media Interactive, June 1, 2010 at 11:03 a.m.

    Great article Kaila.

    The Zynga is pretty sweet but its also just the beginning of what you're going to see Yahoo do this year and next.

    And Arnold, "comeback". With 600 million strong I'd say we never left.

  3. Kaila Colbin from Boma Global, June 1, 2010 at 4:29 p.m.

    Thanks for the comments, guys! Gabe, looks like you got a jumpstart on that social strategy this morning, based on Michael Arrington's coverage: http://techcrunch.com/2010/05/31/yahoo-expands-yahoo-updates-tiptoes-on-privacy/. My predictions don't normally come true so quickly!

    :-)

    All the best,
    Kaila

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