Google+ is Google’s latest adventure into the social web thus far, and with Google staffers’ bonus now tied to its performance, the giant has truly turned its big naval guns at Facebook. Some are asking how Google are going to make money from Google+.
There are many questioning the business model. Google are not going to run ads on Google+ so the traditional model seems dead.
But what many forget about Google is the way they think. I read Jeff Jarvis’s ‘What Would Google Do?’ and two themes emerge. Google believes in destroying its own business model and they don’t care about money.
Yes, I know; Google not caring about money seems rich (sorry for the pun) but let’s focus on destroying the business model, as it’s the only way they believe they can evolve. If they don’t destroy the model, then someone else will. The idea is to be ahead of game.
If you think this theory of Jeff’s is a little crazy, then consider AdWords, the cash machine. Originally, advertising was sold with the traditional sales teams to select media agencies and blue chips. Apparently, marketing types and the blue chips couldn’t believe what they were being told when Google pulled the rug from under them and told them they’d have manage your own accounts self-service style and compete with any business. These guys were spending tens of millions on AdWords and Google said thanks but we don’t want your business. Look who’s laughing now. Incidentally, the AdWords model was pioneered not by Google but by Goto.com, later Yahoo search marketing.
Then there’s Larry Page and Sergey Brin two of the richest people in history, who pay themselves £250,000 each per year! These guys are interested in technical challenges, it was the investors that pushed Google to develop advertising after many years. No one seems to question why Google services and products, like Google Docs are free. Let’s not forget the hybrid electric car project. In the states Google provides phone calls for free – BT are really looking forward to that one here. On the plus side, it could save us at PPC Rescue several thousand a year.
As advertisers on AdWords, you have helped place Google in a position where they can and do challenge any businesses. The money has come from advertisers’ lack of understanding and subsequent financial wastage on AdWords. If AdWords accounts were well managed and controlled, Google would struggle to break even.
The decision not to place advertising on Google+ is a serious challenge to Facebook, but equally Facebook has become a thorn in Google’s side. Many of PPC Rescue’s customers are now reporting that Facebook based sales are out-performing Google SEO sales.
This rapid rise in Facebook’s importance for advertisers has not gone unnoticed. In many ways Facebook is AdWords of old, where cheap clicks are still possible. Facebook is messy and a clunky compared to AdWords (even the early versions), Facebook user pages are confused and inundated with adverts in contrast to the minimal Google+, but it works and advertiser are making money on Facebook.
Google would love to buy Facebook, but that’s unlikely, so Google feel compelled to attack and kill the model off and invent their own in its place. It doesn’t matter that it’s taken heavy investment and will continue to do so; after all, most AdWords advertiser are unknowingly wasting up to 60% of their budgets, so there’s no end of cash available.
Tom Anderson, a founder of MySpace explained Google +:
“…are you starting to see the ways that Google+ just makes Google a better, more integrated set of services? Google already has top-notch products in key categories — photos, videos, office productivity, blogs, Chrome, Android, maps and (duh) Search. Can you start to see/imagine what Google+ does for Gmail? Picasa? YouTube? Not to mention Search? The +1 system that Google now has control of (unlike Facebook Likes) can really influence and change the nature of their search…”
“…Everything gets better when it’s social. And unlike FB, Twitter, or anyone else, Google already has the most advanced set of products. And if I can clearly see where this is headed, then I think what we are getting is a much better Google. Does that kill FB/Twitter? Who cares? I’d use all 3, but more importantly, I’ll be using Google products I never used, or use them in new, better ways I never used them before.”
Google have planning to lock us all into their products and services; the more we are locked in, the more our work colleagues and friends will make of Google. This brings business benefit to Google.
Stealing social networking from Facebook will not be easy. Let’s not forget that Facebook’s founder is not wet behind the ears – the movie Social Network revealed cunning that Rockerfeller would have been proud of. The battle for Google could be very dangerous.
Facebook was never going to replace Google as the number one search provider, it’s the place we visit when we’re bored to check out friends, but the risk that Facebook could become are primary starting point for all our web activities is too great for Google.
Google+ and +1 provide Google with the answer to the webs biggest problem. How do you determine search result position? Up to now search has been determined by websites voting for websites, back linking by whatever guise necessary. Blogs etc are nothing more than a back links. The Panda update has attempted to remove content farms and restore relevancy but the real problem is the absence of the end customer’s view. It is still site owners and their SEO hired guns trying to cheat the system.
Google+ and +1 provide Google with the ability to get real searchers opinions of what is relevant. The access to searchers full electronic social profile via Google+ and +1 in work and at home will enable Google build preferred indexes of content for us all. Remarketing is already tracking or stalking us around the net. These days I don’t see many unique AdSense ads; it’s my clients’ remarketing ads following my every move.
In summary, the business model is to build a complete profile of us, enabling Google to expand in what every direction it chooses financed by the advertising on Google platforms that have become vital to our life. It turns out that government might not be bigger brother, it could be Google. The ‘Don’t be evil’ phrase rings a little hollow at times, and might be the biggest trick of all.
