Why Facebook Should be Afraid

So Facebook’s ‘awesome’ announcement of Skype integration and video calling for all Facebook users came and went. The mass-media promptly and lazily concluded that Facebook has successfully countered Google+’s main advantage and that Facebook will remain the social networking champion of the world forever.

They are, as usual, completely missing the point and subscribing to the hysteria that continues around Facebook’s user numbers and market valuation.

Google should never be underestimated. Many conclude that the failure of Buzz and Wave to catch on show that Google doesn’t ‘get’ social networking. They completely misunderstand how Google work and assumed that they were the best products Google could produce. That is completely and epically wrong. Most Google products are born out of employees’ free time (20% of their week can be allocated to pet projects) and if Google like them then they are given some ‘air time’ to see if they catch on. This is how Adwords was born, Gmail and many other huge successes.

By its nature, experimentation results in failures. However Google learns from its mistakes and uses analysis of massive data sets to figure out what went wrong and what could be better.

Google+ can’t really be described as launched. It is currently in a restricted beta phase … Google have learned from the past that they need non-Google employees to provide real market feedback and to listen to it carefully. Google are deliberately fixing any potential privacy issues first and foremost before allowing more users to get access and potentially have a bad experience. I’ve noticed a lot of other minor bugs have been sorted as well.

When Google DO turn on the taps, they’ll get 100million users in no time at all. If not the users Facebook has already alienated, Google’s existing user-base from Gmail, Google Docs, Picassa, Blogger, etc. will all give G+ a try. But even that shouldn’t worry Facebook too much … what should scare the crap out of Facebook is Android!

Google has 500,000 new captive Android users per day. 15million per month … and the rate of growth is still increasing. They will probably hit 1million activations per day early next year. Google, unlike Facebook, can integrate G+ into the very heart of the Android OS. Into the camera application, the maps application, the email, the contacts, the messaging, the calendar, etc. etc.. Facebook can only dream of the functionality that Google has available to it on their Android devices. Don’t forget that Google Music and Google TV are also coming soon!

Then there’s Google Chrome, the Web browser with >20% market share. If you add up all the users Google has available to it via its various products/services, you’re easily in the several 100 million.

Given that Facebook appears to have tied itself to the Microsoft mast, it seems unlikely that they’ll ever have the opportunity to compete with Google effectively in the smartphone space. Windows Phone 7 continues to fail to gain market share and I personally doubt Nokia will change that a great deal. Apple appears to be working with Twitter, but being Apple will not want Twitter to have too much influence/power over their users.

So, assuming G+ gains momentum and Google get behind it, I wouldn’t want to be a Facebook shareholder right now.