Facebook board member Peter Thiel has an interesting take on the difference between Facebook and Google.
In an interview with Marc Andreessen, another Facebook board member, Thiel said the following:
“The bullish argument on Facebook, I would say, is that if Google sort of organizes the world’s information, there’s some sense in which Facebook has all the information about the world’s people. I’m still long the human race, so I think that Google thinks that data is more important, Facebook thinks that people are more important, and to the extent that’s right Facebook has every reason to become the more valuable of the two companies.”
He’s hedging a bit by saying, “to the extent that’s right,” so he’s not outright saying Facebook will be more valuable. But, he is saying that he’s “long” the human race, and of the two companies, Facebook is a better bet on the human race.
This is a simplistic, macro view of the two companies, but sometimes it’s helpful to have a simplistic macro view to build a thesis.
On a more nuts and bolts level, you could look at Facebook as a company that’s just getting started building its business. CEO Mark Zuckerberg said he wants WhatsApp, Instagram, Facebook Search, and Facebook Messenger can get to a billion users each in the next five years.
Typically, when a service has a billion users it’s lucrative. So, Facebook could have five strong business lines in the future each generating healthy revenues.
In ten years, Facebook hopes that virtual reality is a big thing via Oculus Rift, which it bought for $US2 billion.
Google isn’t sitting still, either. It’s betting on all sorts of crazy projects that could turn into massive businesses. But, Google has a more out-of-this-world approach to new businesses. It’s look at robotics, self-driving cars, nanoparticles to cure cancer, anti-ageing companies, and so on.
Those businesses are a little more abstract, a little less human, so if you buy into Thiel’s theory, then they won’t be as valuable as what Facebook is doing.
Here’s the full interview. The stuff about Google and Facebook is at the 58 minute mark.
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