Google Buys Slide, Puts On Social Warpaint

In my article about RockYou, a comment from a ReveNews author led to a discussion of Slide likely facing similar market pressures as RockYou. Both RockYou and Slide were darlings of MySpace and expanded to Facebook as it became a more dominant platform. Early on, both RockYou and Slide did well, using all the smarts and experience they developed on MySpace to tweak the viral loop driving their user numbers upward. No one thought they could be stopped. Well, no one that is, except Facebook, who controlled the platform and wanted to participate in the riches and valuations that RockYou and Slide were taking in.

Back in 2008, while Facebook allowed it, Slide and RockYou worked the viral knobs like artists, so much so that Slide commanded a hefty $500M valuation as it took more institutional money.  Max Levchin, founding of Slide even stated “I’m convinced it will be bigger than PayPal

The belief was that unlike PayPal, which was mostly dependent on eBay, Slide could ride on top of MySpace, Facebook, Bebo, and other social networks. By using their knowledge of social networks and viral loops, they believed that they could grow anywhere online using their viral techniques.

Of course we now know differently.  Facebook took several steps to show app vendors who was in control.  One step was to ‘clean up’ the User Interface (UI), hiding and/or removing applications from the default view of users, forcing users to take one or two clicks to access an application, and putting those applications out of mind. Users had to be passionate take the extra steps to even see these apps, driving app vendors to pay for advertising to gain more visibility. Another move by Facebook was to ratchet down the viral loop, limiting the methods and frequencies by which users could tell other users about new applications. Again, app vendors turned to Facebook advertising to regain the visibility lost.

As Facebook cleaned up their UI and turned things to their favor, other social networks followed suit changing to look more like Facebook, further pushing Slide and other personalization/expression apps to the fringes where only the dedicated would engage. A side effect of visually blanching Facebook and other social networks was that the ‘personalization and expression’ habit and viral loop was also killed. Less people saw cool slideshows and interactive apps, so fewer people commented on them or tried them out themselves. A vicious downward spiral that bled users away from apps.

So today, Facebook holds the cards, having crushed most app providers and especially personalization and expression apps without the sizable budgets needed to stand out in a crowd of more than 200,000 apps. Facebook dictates terms to most app makers, forcing them to accept 70 cents on the dollar for Facebook credits and locking them into 5 year deals. Five years ago, MySpace was multiple times the size of Facebook, and who knows if the tide will rapidly shift again to another network in that same time.

Realizing that popular shifts happen Google decided to capitalize on the number of skilled social network and viral experts who had found themselves on the losing end of Facebook’s changes to control its app market and UI.

It was only a matter of time before Google acquired a company with the background of Slide, and I expect that they will acquire a number of other companies with social network DNA to bulk up on their capabilities in engagement widgets, engagement ads, games, and viral growth.  Slide fits the bill well, as does LabPixies, which was acquired in April. Those two are not enough, as Google seems to have finally recognized that not only has it lagged in its attempts to do social, but that Facebook is a serious threat to its own dominance in advertising.

Google can start by setting the Slide team loose on the Google Buzz data for a Gmail situated social network launch. Let the Slide team apply their viral loop mastery on allowing Gmail users to quickly and seamlessly participate in the new Google social media offering by leveraging an existing email social graph. This time focusing on opt-in and relationship strength, as available from aggregate email data. This sounds like a bastardized, with a more functional feed and an email portal similar to, but more interactive and functional than, Google Buzz. There would be games from Zynga and LabPixies, both Google investments, with more gaming companies to follow, with added personalization apps plus widgets from Slide, and a network-wide integrated game mechanics system to engage and acquire users.

Google investment Zynga started rolling out a non-Facebook identity system earlier this summer for Facebook users, and last week Zynga modified their authentication system in a way that should allow them offer the same game to users on multiple social networks.  This step, would allow players on Google’s new network, Tagged, Yahoo, MySpace or elsewhere to join the same game and not be locked in to staying on Facebook to keep their characters.

Imagine that – being able take your Facebook Farmville or Mafia Wars character and play them on Google with no need to restart a new game.

Facebook has done well with the steps it has taken to make more money and control its platform. In the process, it has negatively impacted the businesses of game, widget, and app providers that are now more than willing to join Google, the largest Internet company with the most to lose from Facebook’s rise. With Google’s help, game developers are realizing that Facebook may not have all the cards.

About Duane Kuroda

Business ninja, deal hunter, Internet marketer, and technology fiddler obsessed about growing companies and launching products. Currently at Peerspin, Duane’s past lives include Vice President of Marketing roles at companies leading micropayments, Internet video, and online communities as well as research and consulting for mobile advertising. Duane has spoken at conferences including Digital Hollywood and Digital Video Expo on topics covering monetizing online content and online video, has appeared on TechNowTV and KNTV, and has been quoted in various magazines. Follow Duane on Twitter: @dkuroda.

2 Responses to Google Buys Slide, Puts On Social Warpaint

  1. Jen Grant says:

    Great article – I look forward to seeing what Google does with slide and how they can integrate it into Buzz.

  2. Mellodi says:

    Great article, let's see what Google does with it.