Reality Check – 2011 Is Not the Year of Facebook!
An endless and ultimately pointless debate rages online as to if, when, and how social media (see Facebook) will overtake search (see Google) — such as this post on WallBlog. Seriously, I am not sure what is the point of this discussion. Search is search – people use search engines to find things that they want, need information on, or, in many cases, just for fun. Until social media (Facebook) can develop a search engine that can do something that search (Google) cannot – then the status quo remains. I have written at length regarding the evolution of search (which can be found here), and we are waiting for a breakthrough, or Rubicon moment, for search to evolve from its current incarnation to something that will align social media and search. That Rubicon moment will most likely be a quantum leap in semantic analysis ability – written about here.
Social media is a great platform to stay updated as to what your friends and family are up to – as well as an excellent platform for any narcissistic tendencies one might have. Social media is a great place to share content, and to view content others might have shared (some of the funniest videos I have watched have been via Facebook shares). Facebook is a great place to join groups, follow personalities, stay informed regarding updates from things or people you are interested in, but Facebook is terrible at search. A simple search of Google for ‘the atomic weight of cobalt’ returns the results in an orderly fashion – and very quickly we can find that Cobalt’s atomic weight is from 50 u (50Co) to 73 u (73Co). A simple search via Facebook’s search bar for the same query does not returns some newfangled or socialized search results, but rather a truncated set of results from Google’s archenemy – Bing. The user can click to ‘see more’ results, which takes the user from Facebook to Bing.com to show the complete list of Bing results – where we learn that Cobalt’s atomic weight is 58.93320. We have been told that the real power of social media is querying the community – where I can ask my friends or followers ‘What is the atomic weight of Cobalt?’ and they will rapidly reply back with the answer. I posted this question on Twitter – and after 10-minutes I had no replies even with the #help hash-tag. I did the same thing on Facebook, and after 19-minutes I had one reply, and the answer was wrong. After another 2-minutes I got the right answer from someone who Googled the question to get the answer. The search via Google took 0.20 seconds to generate the results – and the answer was found in the description of the Wikipedia entry (of course).
Unless there is some distinct advantage for Facebook users to use the Facebook search functionality – then Google continues to have the upper hand. The fact that Facebook uses Bing as the search solution serves, I am sure, as repellant for many users.
Google has an advantage in the social versus search war by being the owner of one of the largest, and profitable, social networks ever – YouTube. The vast majority of video shared on Facebook comes from YouTube, and the flow of traffic from Google and YouTube to Facebook is only matched by the flow of traffic from Facebook to Google and YouTube. In-fact – Facebook and YouTube seem to exist in a symbiotic relationship. These two Titans of the Internet are almost completely reliant on each other. Facebook derives so much of its traffic and shared content from YouTube, whilst YouTube relies on so much traffic driven from Facebook. In many ways – Google is well ahead of Facebook in the sense that they have really good search, they have hundreds of millions of users, and they have a huge social network and the largest video-sharing site online in YouTube. Facebook has users, but it has zero actual content in the same sense as YouTube has (most of Facebook’s content is private, and not shared network wide), and it has a second rate search engine.
The biggest obstacle Facebook has to become bigger than Google is advertisers. Facebook lacks quality advertisers with BIG budgets. A search of Google for the query ‘mortgage calculators’ brings up a load of blue chip banks all lining up ready to pay top dollar for your click. A search of Facebook for the same query brings up some ads for a steak and lobster coupon, another coupon, yet another coupon, and an ad to meet cute black girls. This is the difference between Google’s profit during 2010 of $8.51 billion and Facebook’s profit during 2010 of an approximated $600 million.
If Facebook is indeed going to overcome Google it has a very long way to go. One of the biggest hurdles it has to overcome is revenue. Facebook is an experimental ground for marketing testing, building communities, trying new things, all, or mainly all, without tangible results (money for advertisers or brands). Until someone works out how to make money from it (including Facebook themselves) then it will be the 2nd biggest website online with the puniest of profits.
The key of all business is that money keeps the lights turned on. The valuation of Facebook in the $60+ billion range seems highly fanciful – and, in keeping with the Wild West label the Internet has been bestowed with, is akin to a gold rush mentality. Facebook made a dollar – which means that someone else (not including Mark Zuckerberg) can make a million dollars, or a billion, or a trillion!!!!!
Reality check here – the financial viability of social media is unknown. Perhaps it will be possible for Facebook’s $60+ billion evaluation to be realized, but this is largely unchartered territory. We know, to some degree, that Facebook can make money – but can they make enough money to surpass Google…? As can been witness by the rapid and ultimately terminal decline of MySpace, monetizing social media is not easy (and MySpace was only worth $580 million in its prime). Imagine the task of trying to turn a profit on a company valued at $60+ billion from selling ads to meet cute black girls and lobster & steak coupons – not an easy task!
So, for now Google remains king. Facebook has everything except for revenue. Whether Facebook can overtake Google time will tell – but I am betting on that not happening anytime soon.