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Google+ and Facebook: another step in the war on profiles

Google+ and Facebook: another step in the war on profiles Reint Jan Holterman
Google recently announced Google+, its new social network site that aims to make sharing on the web more like sharing in real life. Google has long sought for a solid response to Facebook’s enormous success, and may finally have found it with Google+, after several deceptions with projects like Google Buzz and Google Waves.

Google+ is another move in the on-going war between Facebook and Google. At a minimum, it may slow down Facebook’s growth in terms of numbers of new users. If used well, Google+ could even break through Facebook’s social network hegemony and decrease the power of Facebook to the advantage of Google.

Google+ is not the first pass made by Google towards Facebook. For several years, both companies are battling each other over the control of the online user profiles:

Google moves against Facebook…

Last year, there was the news about Google’s investment in Zynga, the company behind the immensely popular Facebook game FarmVille. With this investment, which was rumored to be between 100 to 200 million USD, Google got a foot in the door at Zynga. This facilitated the (soon to be expected) introduction of Google Games and at the same time, gave Google deep insights into the usage patterns and payment streams of Facebook users.

In August 2010 Google acquired Jambool, the virtual currency platform which allows game developers to integrate payment systems into their (Facebook) games. Jambool is also the major competitor of Facebook Credits, Facebook’s own virtual currency system.

And in November last year, Google put a lock on Gmail data to avoid automatic imports of Gmail contacts in Facebook, after Facebook refused to export its contact data into other applications (such as those of Google).

…and how Facebook’s responsed

Meanwhile, Facebook didn’t sit still either and made a number of acquisitions, including a seemingly small but very relevant one, being Chai Labs as provider of a semantic search engine. Through the use of easy-to-implement Like buttons, Facebook has rapidly collected tons of structured (meta) data on every user. With Facebook’s Open Graph search, which is essentially a semantic search engine, Facebook offers advertisers a relevant context to base their ads on, using their target audience’s preferences.

And only a month ago, Facebook secretly hired a PR agency to run a “whisper campaign” against Google, urging reporters and bloggers to write negatively about Google’s social networking practices. Once this covert smearing campaign was revealed, it backfired and led to difficult explanations from the side of Facebook, and of course a lot of free publicity for Google Circles (which now proved to be a central element in Google+).

War on customer profiles

These examples clearly demonstrate that Google and Facebook are fighting a war. The goal of this war is nothing more and nothing less than absolute dominance over the profiles of online users. As the web continues to grow, it will become vital for content, search results and advertisements to be refined based on our interests, preferences, and needs.

After all, the added value of Facebook and Google is not simply the ability to show an online advertisement at the price of a packet of chewing gum. Their added value lies in bringing this advertisement to the attention of a targeted audience, based on the vast amounts of customer profile data that have been collected over the years by offering a free search engine and many other free online services.

The value of free

Oh, and by the way: there is no such thing as “free.” There are no free lunches. The only reason why these two companies have invested hundreds of millions of dollars in offering fast, reliable online services is that they anticipated that they would earn it back many times over. How? Through targeted advertising and by becoming the default financial intermediary for social commerce, with initiatives like Google Wallet and others. In fact, the price you pay for using free services provided by Facebook or Google is that they no longer give you 100% objective information, since someone else is willing to pay money to be able to influence you. And for this, Google and Facebook need your profile data.

What does this imply for my own business?

So if successful firms like Facebook and Google are seriously investing in ways to capture customer profile data, why shouldn’t your company do this as well?

Well, the short and simple answer is: you should. In the next two blogs in this series of three, I’d like to go into more details of the value of customer profiles for your business, and what you can do yourself to collect valuable customer profiles for only a fraction of the costs you currently pay to email marketing list providers and customer data brokers. Stay tuned!  :-)

Reint Jan Holterman (1972) has over 15 years of experience in the IT industry. He has fulfilled various roles at IT firms both in the Netherlands and the US, in the areas of software engineering, consultancy, product management, sales, business...

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