I'm not convinced of the exact characterization when Piper Jaffray analyst Gene Munster -- who loves Apple -- told Bloomberg TV that Google has "given up" on social.
Or in the paraphrasing from Silicon Alley Insider:
"Google has given up on social. Facebook owns the social graph, Google can't replicate it, and that race is over."
I disagree with the first sentence, fully agree with the second. Google hasn't given up on social, even if it seems like it should.
Google didn't buy a half dozen social software companies this past summer, including also-ran Slide, to give up on social. And I hope Google didn't buy them all just to give investors the idea that it was working on social.
I expect and hope Google will roll out +1 later this year, demonstrating some social networking competence heretofore unseen from the company. We don't need another Google Buzz-type bolt-on.
But to the second point, Facebook is the social graph, and the social graph is Facebook. There's no denying this. I believed this to be true a few years ago when Facebook began to quickly rise to 200 million, 300 million, 400 million and now 550 million-plus users.
People who have been trading data on Facebook for six or even one full year won't want to move their gigabytes of social slop anywhere, let alone Google.
That's fact today. Now here's the scary value proposition Munster underlined: Facebook is getting much better at predicting what users want, and as a result advertisers will switch their dollars to Facebook.
And here's the key nugget of explanation:
"The way people are buying things is changing. So advertisers are going to have to change their tactics to follow that trend, and that benefits Facebook."
I absolutely agree and that's bad news for Google. The shift toward socially driven e-commerce is part of what pushed Google to pursue Groupon so intently last year, and it's a big reason why Groupon declined: it's the top dog in a market with a super high ceiling.
Right now, Google is on the outside looking in. Its challenge? Leverage its core search properties to follow the social trends.
Google can't afford not to augment its search graph with social, but that doesn't mean it has to build out a huge network to earn money.
Of course, SAI continues its Google-buying-Twitter trope in its post. I don't particularly like the idea -- it would certainly lend credence to arguments that Google tries to buy its way into markets it likes -- but Twitter does have a growing social graph of its own.
Must Google buy Twitter to succeed in social? Surely there is another way to succeed in social without trying to grab the Facebook whale by the tail.
See Munster's clip here: