February 21, 2010

Is Facebook the New Google?

I ask that not in functionality alone but also in influence, scope, size of an internet company that is really changing the way we do business. Its growth in Market share reminds me of Microsoft’s growth with Internet Explorer as well as Google’s growth in search.

According to Hitwise in May of 2009 Facebook had 28% market share of U.S. social networks. In December it had climbed to 47%. What is interesting from this data is that twitter was only 1.46% in May and dropped to be in “other” at the end of the year. MySpace went from 31% market share in May ’09 down to 18% in December ’09.

Mark Zuckerberg, Facebook founder, is on the cover of the March 2010 issue of Fastcompany magazine. The cover story is “The World’s 50 Most Innovative Companies”. Guess which one is #1? You guessed it, Facebook. What does that mean.

It’s a very interesting article talking about growth in number of users. Facebook doubled its users to 350 million last year. Google has 800 million.

When looking for something to buy now how many times have you searched in Facebook to see if there was a fan page? Did you see if it was a two-way communication between company and fans? And did you join the fan page? Facebook’s advertising agreement with Microsoft is now incorporating bing search.

One of the reasons why Google has become such a giant is the fact that there are statistics galore to measure for ROI. If Facebook does a good job of that it really will be the company to watch. And the team at Facebook is putting plans in place for that.

In the Fastcompany article a Facebook staffer is quoted as saying, “We always have a big dragon to slay, and this year it is Google.”

One area I believe Facebook really needs to grow in now (and slay their dragon) is measurement. Allowing companies to see ROI from it’s advertising with Facebook and more importantly what’s happening when an admin of a fanpage posts information. Who’s watching? Reacting? Facebook is working on tools for measurement. Facebook Insights is being tested in various areas.

What is Facebook Insights? Admins of authentic Pages can now see data on the performance of each of their posts. Each post now displays (to admins only) how many impressions the post has received (how many times it has been displayed to all users) and its feedback percentage, which is based on how many comments and Likes have been left on the post. This will allow Page admins to see which content better engages their fans.

This is a great start for business to do more measurement around their fan pages, Measurement to me is the final things needed to propel Facebook past Google as the most influential (and successful) company on the internet.

So the answer to my original question; is Facebook the new Google? It may be on the way based on these four things:

  • 1.    Functionality; It has changed the way people socialize, and now do business.
  • 2.    Measurement; It’s working on the tools needed to really propel itself as another new way to do business.
  • 3.    Customers; Today is has over 350 million users, will it double its customer base again this year?
  • 4.    Revenue growth. Facebook became cash flow positive in 2009. Will their revenue growth match the fast growth of people using Facebook for social media as well as advertising? Will the advertising/search deal with Microsoft/bing payoff? The tools they have to localize ads based on activity are phenomenal. Google is still huge when you look at its $28 billion in ’09 revenue and a stock price of over $500. But with everything going right for Facebook can it be far behind in this category as well?

Watch out Google.

 

-John

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Comments

Hi Ted,
Glad you liked the post. I'll have to do some research on what is better for the advertiser "like" or "become a fan". My first impression would be "become a friend" is better as it reminds me of "opting in" to a email newsletter.

I just looked at my profile page on Facebook and the three ads on the right sidebar were for bing cashback sale, launching my yoga studio online (I didn't even know I had a yoga studio!), and a gift card promotion to move into an assisted living center.... hmm Maybe Facebook needs to work on their demographic data. ; )

John,

Great post! All of this is very current for me as I've been messing around with my Facebook Ad lately. I just started this about a week ago and am tweaking the verbiage for the maximum # of positive responses and Fans. Many ads on Facebook only give the option of "like" not "become a fan". Do you believe one is better than the other?

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