Why Google+ Has Uphill Battle vs. Facebook: Sean Parker

By Clint Boulton  |  Posted 2011-10-19 Print this article Print

To my mind, the best question put to Sean Parker (he of Napster fame) here at the show in San Francisco Oct. 17 was whether Google+ had a shot at challenging Facebook and its massive user base of 800 million people.

Citigroup analyst Mark Mahaney asked:

"What's the chance you think that 3 or 5 years from now Google+ really takes share from Facebook? Under what circumstances would that happen?"

Parker answered:

It's very tough to compete with network effects. I think that the way network effects work in a social networking context... in order to get the same value from a Facebook-like service, you'd first have to switch all your friends and you'd have to ensure that they actually switched but then each of those people would have to switch their friends because networks are all about interacting with your friends. If all of their friends didn't also switch, your friends would drift back to the original service and likewise for the friends of the friends of the friends. So you have this exponential switching cost when the network is at scale. So I think it can happen. Obviously, it happened from MySpace to Facebook, but it requires systematic, consistent product execution over a long period of time and I think it also requires the systematic failure on the part of the incumbent network. So Facebook would have to screw up royally and Google would have to do something really smart.

It was an excellent, well-conceived response. Parker, an early Facebook investor, had clearly thought of this before. But we also have a lot of precedent to look back on.

Microsoft Bing is a great search engine, but despite all of its marketing dollars and engineering efforts it has not made a dent in Google's 65 percent U.S. search share.

Sure, Google over a decade ago hijacked search from AltaVista and Yahoo, so it can happen. But Google hasn't screwed up search.

As to the "something really smart" that Google would have to do for Google+, I believe that is a wholesale, pervasive, serendipitous search service, where results seek out users based on signals users have fed Google through search.

It could be as simple as Google funneling Google Offers discounts through Google+ for Android or iOS when users are walking near stores and restaurants.

For example, an American Eagle Outfitters location can notify users that jeans they previously searched for are on sale.

A user can accept the digital coupon, tap and pay with Google Wallet and the transaction is broadcast on Google+, extending the Offer to the consumer's Circle friends. All of this would be opt-in, of course.

But again, with all apologies to Charlie Sheen fans, this isn't about Google+ "winning" against Facebook.

What it needs to win are more users and get them spending more time in Google+. Hence Google+ Hangouts and Google+ Games.

With Google's massive search backbone, Google+ versus Facebook is no zero sum game where Google will fall down a well if Google+ gets crushed. In other words, Google is no MySpace.

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