Source: flickr user malcyzyk
Facebook’s silly scheme to plant anti-Google privacy stories further highlights the bitter rivalry between the two companies, but it also points at what they’re really fighting over. The competition is not so much about each company’s core business — search vs. advertising-powered social networking — as it is about future products and services, and each company’s respective role as a technology platform provider. And potential partners and competitors need to know which battles these two competitors will take seriously so they can adjust their own priorities and investments.
Here are the key areas of competition for Facebook and Google:
- The “interest graph:” In contrast to a social graph of information about relationships between people, an interest graph based on topics might actually be a better indicator of purchase intent than what friends — who may not have similar tastes — like. Facebook Likes and Google search results feed such a graph — though Twitter may have more easily collectible info here than either.
- Web navigation: Facebook hasn’t proven it can drive shoppers to commerce sites the way Google can, but it’s becoming an important source of visitors to online media sites like the New York Times, CNN and HuffPo. Consumer platforms depend on habitual use, so Google can’t risk losing ground as an overall web-discovery vehicle.
- Communications: It’s unlikely social media will completely replace email, but both Google and Facebook are competing to be a user’s unified communications hub by integrating mail, chat and posts with contact lists and presence management. Such a hub would generate constant use and potential customer lock-in, and be a rich source of contact data.
- Identity management/authentication: Facebook tries to enforce a single, authentic user identity, but it isn’t very good at letting that user manage his relationships between different types of friends or groups. Google does offer a sign-on service, but its Profiles are mostly for search personalization. Authenticated identities could play a big role in payments systems and professional/career relationships.
- Ad networks: Google ad networks dominate search and are strong in direct-marketing display. In theory, Facebook’s Like network could serve context- and behavior-based advertising on sites web-wide. Facebook’s complaint that Google scrapes social information without explicit permission might be based on potential privacy legislation. One bill under consideration would give companies with formal consumer relationships more freedom to use data for advertising. That would give a company like Facebook an advantage over third-party ad networks.
Build, Buy or License?
Facebook doesn’t seem interested in building a conventional search engine, but Google sure is trying to build out some Facebook-like technologies. Google recently introduced +1, a competitor to Facebook Likes, where users recommend search results, ads and, eventually, web pages. Website owners will no doubt flock to +1 for its potential influence on Google search ranking. But, faced with yet another link-sharing option, users may ignore +1, especially since Google lacks an established equivalent of Facebook’s news feed to display links.
Neither company likes to license technology or data from other companies, with the exception of Facebook’s Microsoft partnership. Google seems to have some arrangement with Facebook that gives it access to Facebook company Pages, but the two have long bickered over sharing contact information.
Since they don’t like partnerships, how about acquisitions? Business Insider has a laundry list for Google, but two are big and might also appeal to Facebook:
- Twitter: Either company’s ad business could instantly monetize Twitter better than Twitter can itself. But neither may need to buy into Twitter, as it seems pretty easy to get access to Twitter data.
- LinkedIn: The professional social network is stingier about sharing data, has a working business model and could play an important role in identity authentication. But it’s about to go public, so would-be acquirers would have to act fast.