It’s fashionable to say social is popular, while old dogs like Google are on the decline.
You can cite a litany of failures in Wave, Google+, Orkut, Latitude, Buzz, or whatever.
And you might note that Facebook will earn $4.8 billion in display ads this year versus Google’s $4 billion– pulling ahead for the first time.
In the last year, Facebook has added 200 million users. The stock price is at $74, and the company is worth $206 billion.
Yet Google makes $30 per user per quarter, while Facebook makes only $6.
Twitter makes only $3, so a tenth of what Google makes and half of Facebook’s monetization.
96% of Google’s revenue comes from advertising, most of which is search.
And what advertiser doesn’t want to put their dollars where consumers are buying?
Here are a few things to consider for this tide to turn:
- Last click attribution is still strong: As long as people are using last click attribution, they’ll put money into branded search terms and other over-weighted sources of “conversions”. Heck, they don’t even know what last click is, since a conversion is a conversion. Multi-touch and assisted conversions don’t matter yet for the mainstream.
- Social networks are not just people posting personal statuses and pictures: Google and Facebook both know that whoever controls the log-in controls the content production. I believe recently, because of mobile logins, more people are logging into Facebook to communicate than mail platforms. But of the Four Horsemen, you could even say that Apple will win, since they’ll own the device, but that Amazon will win, since they own the credit card. So do you want to own the user’s content (Facebook), their logins (Google), their device (Apple), or their credit card (Amazon). The lower in the stack, the more you can pull the rug out from the others above you. And Facebook is at the top of this stack.
- People’s ingrained habits change slowly: A decade after ATMs were available, most people were still going into the bank with their check ledgers. Most small business owners still make orders via fax machines and advertise in the yellow pages. If you’re reading this, you’re a technology early adopter– not representative of the mainstream customer.
Google still has plenty of time to own the customer data.
They own a quarter of Uber, you know, plus are building self-driving cars.
Most people spend 22 minutes each way in their commute. Of those who go in a driver-less car, that’s 44 minutes a day to show ads to people.
You think wifi on airplanes or movie theater popcorn is expensive? Try valuing the captive audience in a moving capsule.
The telcos and mobile device manufacturers have battled it out on walled gardens, but where do you really think the consumer’s attention and wallet is?
It’s retail, not online. And the physical world is where Google is preparing to dominate.
The real social network is the shopkeeper who remembers the preferences of his best customers, not video snapchats.