Google Shaking Its Google+ Moneymaker

By Clint Boulton  |  Posted 2011-07-16 Print this article Print

Altimeter Group Founder Charlene Li told eWEEK that Circles, the manual social graph creation tool, and Sparks, the interest group feature, provide significant ad targeting tools for Google's advertising base.

"They don't have to "win" over Facebook; they simply have to have better quality engagement to command higher advertising rates," Li said. "Blows Facebook hypertargeting away."

IDC analyst Karsten Weide said Facebook remains the best platform with which to create a marketing dialogue between businesses and consumers, where any ad shown to a user is shown to their connections across a network of over 750 million users.

"This is what Google is trying to replicate, and must replicate to be successful in display advertising," Weide said. "Social networking functionality attracts more users, makes them return more often, open more pages and spend more time on a given service."

In ad business parlance, social creates more audience reach, more inventory, more engagement and better targeting, all of which translates into greater advertising revenue, he added.

Weide said Google's great brand and distribution-there are 1 billion searchers and hundreds of millions of users of other Google Web services-will help Google in this respect. Google could bolster + by adding tools that let developers run applications on Google+, similar to Facebook Platform.

Another trend in Google+'s favor may be the Facebook fatigue factor: Consumers may be tiring of only one major social-network distribution platform. And the advertisers want to be where the people are.

"What might help Plus is that there seems to be growing disenchantment among users, both with Facebook's utility and its penchant to force them to openness," Weide wrote. "Facebook's de facto SNS monopoly is potentially bad for consumers and bad for the industry." 

Page is certainly confident in Google+'s money-making potential, noting on the Q2 call that the company has "tons of experience monetizing successful products over time. Well-run technology businesses with tremendous consumer usage make a lot of money over the long term."

Advertisers and financial investors keenly watching Google's rising costs certainly hope so.



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