Is Google in Decline / Facebook on the Rise?

January 11, 2011 at 5:21 pm Leave a comment

An answer I wrote for Quora recently:

Google is not in an absolute decline, but it is in a relative decline. Google is the USA and Facebook is China. Our GDP can grow indefinitely, but at some point, we will be outpaced. That’s what’s happening with Google now. They are losing key people and being poached by Facebook and Twitter. Look at Google’s recent search results. Have you noticed how spam filled it is? Have you noticed the bad decision making to implement a lot of flashy, but meaningless services? This is the kind of stuff that companies do when they lose talent. Google used to be all about simple interfaces that provided exceptional value. Now they rely on gimmicks like page preview and other "services" that infuriate people without the ability to shut them off.

The SEOs have finally cracked the algorithm. Search results return nothing but spam. Even date searches don’t work properly. Pagerank is in need of a serious overhaul. But really, what can you do when you’re suffering from brain drain?

Mr. Mallin mentioned a host of reasons why Google and Facebook don’t compete. True, they provide different, non-competing products and services. Yes, it does appear that Facebook is but a one trick pony in the face of Google’s dozens. Yet, the problem with that analysis is that it doesn’t see the reality for what it truly is.

What is the reality?

First, ask yourself what kind of business McDonald’s runs. Hint: they are not in the restaurant business. At least, that is a grossly inadequate description of what they really do. (Google for the answer) Therefore, the same applies to Google and Facebook. Google is not a search company, or an email provider or a potential cloud computing company. Facebook is not a social network. At the very least, these descriptions miss the fundamental essence of what the companies are.

They are both truly nothing more than advertising companies. PERIOD.

The difference between them? Google is the world’s biggest advertising company in the world.
Facebook is potentially the best advertising company in the world.

All of the services that these companies provide are a red herring with regard to what they really do: aggregate data to sell you stuff. That’s not entirely a bad thing, either. We’re overdue for a renaissance in the advertising model. The reason we hate commercials is because they are either 1. not relevant to our interests or 2. not entertaining. The future promises to eliminate both of these problems. When a company knows that I’m a 30 something male with a post graduate degree, I am certain not to ever see a tampon advertisement. I consider that a good thing. Imagine if every advertisement you saw automatically lined up to your interests.

What if the advertisers knew what you might like before you even search for it?
Three things should have clicked in your head.

1. Google would no longer be as relevant an advertiser.
2. We already use this technology (e.g., Amazon recommendations) and
3. The recommendations will be based on your friends’ opinions.

This is the future that Facebook promises. This is the future that is simultaneously exciting and terrifying.

Google’s Pagerank was done by an algorithm made by a couple of geniuses from Stanford. But that’s the problem with pesky algorithms. They can eventually be outsmarted. Facebook aggregates data based on your friends and their preferences. Facebook, in essence, is one gigantic focus group made up entirely of people within your demographic: your closest friends. How can Google outsmart your best friend’s recommendations?

So back to the original question: is Google really in a decline? In absolute terms, no. They provide so many services where they are the best and have no competition: Gmail, Google Earth, etc. In relative terms, however, I’m not sure that they haven’t already lost the war.

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