Facebook is Not the Next Google

Ever since Facebook announced its latest changes to Facebook Connect, speculation has ranged form Facebook becoming the next Google to the company seizing control of the internet. What happens 5 years from now is anyone’s guess; but one thing is certain, Facebook is not the next Google.

The two companies have very different business models, leaving plenty of room for the two leviathans to co-exist. Their respective advertising models offer marketers very distinct value propositions.  Google could easily leverage Facebook’s APIs to maintain its market lead.

The Value Proposition of Ad Targeting

While Google has proven itself as unparalleled advertising channel, (generating 90+ percent of its revenues from Adwords and underwriting all it’s other projects in the process), the recent changes to Facebook Connect seems to have considerably bolstered Facebook’s potential as a value-added marketing channel. Now, Facebook can not only “hyper-target” users with interactive ad experiences according to demographic data, but other companies can do so by accessing Facebook social graph. As one ex-Googler (writing for TechCrunch) put it:

Unlike Google Adwords, this model will not be constrained by the fact that you have to actually look for something. You don’t have to search for makeup, you simply have to log into Facebook, and be a young woman fashionista to discover Dior mascara. Dior can reach many more potential customers this way than by just advertising on Google Search.

What this analysis fails to acknowledge is that the value proposition of Google Adwords is that users are already looking for something. Google users are pre-qualified buyers already in the market for something. They want to buy.

Facebook users, on the other hand, may very well be “hyper-targeted” and fit perfectly into the target demographic. But they haven’t pre-qualified themselves. In fact according to Omniture traffic from social media is 20x less likely to purchase than average site visitor. From an advertiser’s point of view, then, Google offers a much lower risk ad investment than Facebook.

Facebook Connect(ing) to Google

Another reason why it seems unlikely for Facebook to completely displace Google is that there is nothing preventing Google from using Facebook Connect to access Facebook’s social graph. If Google did so, they could further bolster their ad-targeting abilities, and offer advertisers the best of both worlds.

Imagine if Google integrated Facebook Connect into their existing suite of products. If users were simultaneously logged into their Facebook accounts, Google could access their user data. Now, Google would be in a position to offer advertising according to user intent (i.e. searches) as well as social graph information – such as personal network, interests, and recent activity.

Given the number of Google users with Facebook account, the potential would be considerable. It would be an advertising opportunity that would be hard for marketers to exist. Not only could they enjoy both kinds of ad targeting, but they could consolidate more of their campaigns into one platform,  Google.

Reluctant Bedfellows?

As much user data as Facebook possesses, it lacks data about what lies beyond its own walls. After all, it’s a walled garden design to keep users in.

Indeed, Facebook Connect seems to be an effort to divert as much content and as many users as possible within those walls – and access to social graph data is a considerable incentive for third-party sites to do so.

But the project might be a bit too ambitious. At the rate that the social web is evolving, it seems unlikely that any social network will ever be able to corner as much of the web as Google has with search.

Furthermore, while Facebook is designed to keep users in, Google’s very modus operandi is to help users leave the site – to find out what else is out there beyond Google. And it is during that (search) process that Google is able to pre-qualify users for its advertisers.

So if Google were to leverage Facebook Connect, it could actually offer advertisers the best of both worlds. Advertisers would be able to target users according to intent, social graph data, or both. They would also be able to consolidate more of their campaigns under one roof.

Of course, this would mean that Google would be reliant on Facebook to some extent. They would have to rely on Facebook to maintain its active user-base and keep their data fresh and up to date.

But this would also mean that Facebook’s future would be secured. They would have become an invaluable source of user data for thousands of sites with millions of users and those sites would rely on Facebook for user data, just as they already rely on Google for traffic.

What’s important is that the two sites are not perfect competitors, and there’s no reason why one can only succeed at the expense of the other. In fact, both companies excel in their respected niches, and a strategic partnership between the two would likely be very profitable.

About CT Moore

A former Staff Editor here at Revenews.com, CT Moore is a recovering agency hack with over a decade experience leveraging search, social media, and content marketing to help brands meet their business goals online. He currently provides digital strategy consulting to start-ups, SMBs, enterprise level companies through his consultancy Socialed Inc.. CT is also an accomplished blogger and speaker who educates groups and companies on how they can better leverage different online channels.

One Response to Facebook is Not the Next Google

  1. Jason Laloux says:

    I think what is important is that they are both marketing companies. Both of them have built a business model on delivering ads.

    So to that extent, I think that Facebook really is the next Google. Even if Google ends up using the Facebook API to compete against Facebook, Facebook will still be the next big ad targeting company, and Google will be relying on them to target ads, just as webmasters now rely on Google for most of their traffic.