Facebook is facing the music — is Google calling the tune?

August 26, 2011

Pssssst — wanna know a secret? Facebook is feeling the heat from the surprisingly successful launch of Google+. There is vigorous competition from the search-and-advertising giant many assumed couldn’t shoot straight when it came to social media.

Some caveats: For one thing, I say “surprising” only because Google was arguably a three-time loser in the space. For another, it’s actually no secret that Facebook is, shall we say, finding it necessary to adapt to what might be a new world order. Third: Facebook still reigns supreme in membership and impact and pretty much every metric you (or they) would choose to use. Google+ hasn’t been with us even two months yet, for heaven’s sake, and while it’s amassed tens of millions of users there are no guarantees.

What I am talking about here is trajectory, and meme. You will pardon the pun, and excuse the mixed metaphor, but Google has finally caught a wave, and Facebook is hearing footsteps.

Facebook’s biggest concession to the new landscape came the other day, in the sincerest form of flattery: it copied Google+ features that were key differentiators, designed precisely to hammer a stake in Facebook’s perceived weak spots. The world’s biggest social network makes earnest-sounding public expressions of concern for member privacy, and has made changes against type. But the truth is that Facebook depends on members sharing with abandon. So a lack of clarity about the consequences of sharing, and a certain complexity when it comes to altering and even understanding privacy settings are, shall we say, good for business.

On Tuesday Facebook went as far as it has ever gone to simplify how we know what, and with whom, we are sharing, and to empower us to stop others from sharing things about us we’d rather they did not. The last time Facebook did something resembling this was early last year. That was a mild change in comparison, and in the face of a media-darling treatment of a quixotic project by some NYU students to build the anti-Facebook, called Diaspora. (For anyone who doubts the significance of that emotionally-charged name, by all means look up “diaspora“).

But that was then, when a benevolent monopolist could be seen as merciful for tossing out a crust of bread instead of the usual few crumbs. Since then, with no doubt that Google’s super-secret social network project was going to happen, there was that ugly affair which blew up in Facebook’s face, when they hired Burson-Marsteller to smear Google on (of all things) its commitment to privacy.

Now Facebook has decided that, after all, it really only comes down to three easy pieces to make sure you can lock down your intentions. This revelation came a mere 56 days after Google+ opened its doors to what remains an invite-only crowd.

Coincidendence? You be the judge.

The headline numbers in the social network wars are about membership, and the public meme is about the human value of privacy. But that’s a sideshow. This is about money, and the commercial value of privacy. It always is, and always was, even when Mark Zuckerberg was resisting pressure to monetize his customers too soon, or sell out. That brilliantly calm strategy wasn’t about a higher calling but about maximizing a higher future value. These were bets, double-downed, made in parallel with a site philosophy which made it dead easy to upload, share and hang out but not so much to remove, delete or reign in your circle of “friends”.

These daring bets are about to pay off, big time. Facebook almost certainly will IPO next year, and is currently valued by those lucky souls who can trade non-public shares at somewhere north of $60 billion. If all continues to go well, Facebook could easily be the most successful IPO of the digital age, rivaling Netscape and Google in the hearts, minds and pocketbooks of the investing digerati.

But some of that depends on having no credible competition disrupting the market and forcing prices down. That is exactly what is happening in a world that includes Google+. It’s a digital truism that prices seek zero. In this context it’s not dollars, but it’s sense: Google+ is making Facebook degrade the privacy and sharing rules it would prefer to employ. That could make Facebook less valuable to marketers. But it needs to do this to protect the larger interest of the franchise.

All of this is happening in the very few months before what, given all the hype, really needs to be a spectacular Wall Street debut. In the midst of all this, there is at least some evidence that Facebook’s valuation is softening, for what reason nobody can really know.

Coincidence? You be the judge.

Follow +John C Abell on Google+.


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Facebook is a prime example of humans doing things because they can, not because they should. Sadly, there is powerful technology under all those layers of blatant disrespect. Facebook and Google+ are both fresh booze that need many years in an oak barrel to learn the meaning of smoothness.

Posted by damienmargo | Report as abusive

Who is the lessor of two evils? Google makes its money on selling your personal information that you may or may not have willingly given them. For that reason, I would never ever use Google+, nor will I use Android OS. I also refuse to use Google maps, search and will only use Google Earth on a public computer.

Facebook, is well, a joke too. I do not need or want to share my life with the outside world. Any sharing with family and friends will be done directly. I also have grave security concerns about Facebook after my son’s business page got hacked.

Social networking is a fad that will leave us. Buy Facebook’s stock, only for a very short term investment if at all.

Posted by jeltez42 | Report as abusive

Surprisingly successful? Really? 4 weeks of sign ups (but no actual users) and then 5 weeks of FALLING traffic (and hardly any new sign ups) is successful?

Facebook it not in the slightest bit worried about Google+. Since June 29, they have signed up MORE new users than Google+ has. They had the best month EVER in July. And Facebook’s popularity is INCREASING while Google+’s is already spiraling downward.

Enough with these paid for advertisements for Google+.

Posted by lakawak | Report as abusive