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How Facebook can topple Google

india Updated: Jul 09, 2011 12:42 IST
Puneet Mehrotra
Puneet Mehrotra
Hindustan Times
Highlight Story

Mark Zuckerberg is a man in a hurry. Not even ten days have lapsed since Google announced its social networking product Google Plus, and Facebook's Mark Zuckerberg played the master strategy of killing two birds with one stone by announcing the Facebook Skype tieup. The first one is pretty obvious, of getting close to Google's worst enemy, Microsoft which bought Skype last month, and second, not to be underestimated, to play the role of the kingmaker in the clash of the titans.

The Kingmakers
Let's face it. Facebook can never really be what Microsoft or Google really is. Social networking has its limitations and a peak beyond which it just cannot go. Google and Microsoft have utilitarian enterprise values. Till man exists so will software. Till software exists so will the demand for services provided by companies like Google, Microsoft and others. But in this battle, the Yahoos, Twitters and Facebooks of the world play a very crucial role, that of deciding who wins and who loses or who gets on top and who remains the underdog.

In my last column on Google Plus I had mentioned on how Facebook is the real thorn for Google. Let's understand this better. In the war between Google and Microsoft, guess who supplies the monetary assistance to Google for its ammunition to fight the mightiest software company on this planet Microsoft? It is the advertiser. Google monetizes content through Adsense. The guerrilla attacks on Microsoft by launching free versions of what's cash cow for Microsoft i.e. Operating systems, Word processors and Office tools are all financed by the advertiser. Everything good here. No one even came close to Google in terms of advertising. Google has literally become an advertising Mogul. Problem now is that Facebook is a far far superior platform for advertising. Reason for this is the profiling of users. Based on Geography, Interests, Demographics and the minutest detail no one comes even close to Facebook. They have the masses.

Solving the Revenue Puzzle
Facebook has the masses and the absolutely stunning profiling of its users. In other words, it has the stickiness to attract the advertisers. Google's war ammunition is supplied by the advertisers to fight Microsoft as is its growth. In other words, Google needs Facebook or an equally powerful social networking platform, something it has been trying for years now. Facebook lacks the enterprise appeal for obvious reasons, it has no software or utility value as such. Another crucial element in this battle is the Open Source. If Open Source seems small think of Wordpress, the world's most popular publishing platform or Linux just to get an idea of the power Open Source holds.

Microsoft has been trying to get them in its fold (read my story Microsoft strips to Seduce Linux when it did something unheard of, it opened its source code). For now Open Source is friendly with Google. Apparently, Open Source is one of the foundations for Google's success. Ironically, Google is one of the biggest privacy violators. Coming from the school they do, the least they could have was transparency. Facebook lacks the enterprise appeal and it also doesn't have the support of Open Source. Microsoft, even though shaken by free versions of its cash cows by Google has a solid revenue model which in spite of all pressures and turmoil are here to stay and Microsoft has proved that time and again. Microsoft Office is still the dominant market leader and so is their OS.

Google versus Microsoft is a saga that can be compared to none in the history of enterprise. The turnaround times of new products to outdo each other, new strategies can possibly be termed as some of the best case studies and precedent for future corporate battles. While in the earlier times corporate battles were fought over years or even decades, this is probably the first time a startup, Google, challenged the then mightiest company on earth, Microsoft and in less than 5 years of its launch Google became enemy no. 1 for Microsoft. Not many companies have enjoyed the success Google got so easily. It wasn't competing just on products, Google shook the very foundation on which the software enterprise model was based on. It changed the rules of the game. Facebook did the same for social networking, something Google and Microsoft tried many times but couldn't succeed. Facebook holds power for its mass appeal.

The Bottomline
In simple words, Facebook has the masses. What can hurt Google the most is the advertisers leaving Google for Facebook. The Facebook and Skype association is probably the best missile Microsoft has so far. It's time for some overhauling and clearing of rusted neuro pathways of Google, which did work at one time, if its wants to survive. For now its advantage Microsoft and a huge one at that.

Puneet Mehrotra is a business and technology columnist. www.thebusinessedition.com