Google vs. Facebook: Clash of Internet Titans Likely to Follow IPO in May

 
 
By Chris Preimesberger  |  Posted 2012-04-01
 
 
 

Google vs. Facebook: Clash of Internet Titans Likely to Follow IPO in May


Google and Facebook have been hiking on remarkably parallel paths. The two most popular Web services in the world are about to engage each other on a whole new level, once the business-side playing field is leveled in the next few weeks.

Google raised $1.7 billion (and earned a $23 billion valuation) with its initial public offering in August 2004, when it was 8 years old. Facebook, born in 2004, will make that dollar amount and a lot more in May when it, too, goes public at age 8.

Both are hugely profitable because they attract some of the largest numbers of interactive users and advertisers on the Internet on a daily basis. But with Facebook expected to sell $5 billion worth of stock and obtain an Wall Street valuation in the neighborhood of $100 billion, Mark Zuckerberg's creation suddenly moves to a whole new major league of international corporations€”one with virtually unlimited financial power.

Google was created by Stanford University students on the West Coast, and Facebook by Harvard University students on the East Coast; now they are West Coast neighbors with headquarters only jogging distance apart. Curiously, both campuses are situated similarly, backing up to the San Francisco Bay.

Envious of Each Other's Power Zone

Google, for all intents and purposes, owns Internet search, serving an estimated 80 percent of the world's search requests. Facebook, for all intents and purposes, owns social networking and claims about 20 percent of all Internet page views, according to industry researcher Hitwise. Both are envious of each other's positions and have the leadership and resources to wage serious marketing wars in both sectors.

Google wants a bigger portion of social networking and has Google+ leading that offensive. Facebook wants to get better at search but has a long way to go to upgrade its rudimentary apparatus. How does Facebook plan to do this? Why, by hiring more search experts, that's how. And if they're from Google, so much the better. That's what Facebook did a year and a half ago when Zuckerberg lured Lars Rasmussen, creator of Google Maps, to its camp.

Up to now, Facebook has focused on acquiring information from users, slicing and dicing it, and selling it to customers, so search hasn't been a priority. The perfunctory text-entry search box at the top of each Facebook page enables users to find other Facebookers all right, but it's good for little else. It also will display random Web search results powered by Microsoft's Bing search engine€”the same one that now powers Yahoo€”but it's really not useful at all, and Facebookers do not seek out the service.

It Remains to Be Seen if the World Is Too Small for Such Internet Monsters as These


 

In February, ComScore reported that Facebook's 50 million daily users punched in 336 million search requests, certainly a large number in itself but barely on the radar against Google, which records billions of searches per day.

Based on sheer numbers of users, search is a huge business€”probably the best monetization of the Internet there is. But Google has a full decade jump on creating all those algorithms, building all those specialized applications and storing all those Web pages. It would be quite a trick for Facebook to gain any sort of market share there, although it is advisable not to underestimate Zuckerberg's business acumen.

On the other hand, in the fourth quarter of 2011, Facebook widened the lead it took earlier in the year against Google and now accounts for just more than of 12 percent of all time online, and this appears to be climbing, ComScore reported. Three out of every 10 Internet sessions include a Facebook visit, and Facebook accounts now represent 10 percent of all page views in the United States.

The word "Facebook" itself also was the top organic search phrase in 2010 with nearly 2 billion searches on that term€”three times greater than the next-most-searched-for term. Tells you something, doesn't it?

However, if Google search is a 25-year-old out of college that's energized to go-go-go, Facebook's version is a newborn that's still in wonderment at the world and learning how to read faces in the Internet environment. 

Silicon Valley is not a large region, and it remains to be seen whether it€”and the world at large€”is too small a place for two Internet monsters like these.

Is a Balance of Power Feasible?

Can there be a balance of power, sort of like the Cold War between the United States and the Soviet Union in the 1950s and 1960s? Or will each set out to destroy the other in an attempt at complete Internet world domination?

So far, there haven't been too many curses at each other reported, except probably behind closed doors regarding the inevitable patent lawsuits that most companies have to face at one time or another. It's hard not to expect that a real clash of the Internet titans will soon be at hand. But a battle to the death? Probably not.

There appears to be plenty of room in the ever-expanding Internet for services like those offered by both companies. The competitive environment has been a good and clean one up to now. What remains to be seen is what new company will surface this year (perhaps Pinterest?) and go public in 2020€”eight years from now€”to show us all something new.

Chris Preimesberger is eWEEK's Editor for Features and Analysis. Twitter: @editingwhiz

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