Photo: marshillonline via flickr
Google has a problem, and we are not talking their impending turn as a Federal Pinata with the Department of Justice. Nothing the federal government could levy against Google with an anti-trust suit is anywhere near as threatening as the Like button from Facebook. Google’s financial empire is built on one simple word. “Intent.” However, Facebook’s Like button is quickly becoming the new “Intent” engine of the web.
Think about “intent” this way, if a website knows the intent of the user, they can display ads to the user that are relevant and timely. Which results in higher conversions and more money. With Google, users type their intent in the search box, multiple times daily, all year round.
As an example, if I wanted to buy a new TV set, I most likely will go to Google and type in “HD TVs” – I just told Google what I want. In return, they show me results they think are relevant, and also show ads about HD TV sets. In the end, Google make money because what I search for informs them what ads they’re going to show me. Thanks to users just telling Google what they want, Google hauled in more than $36 billion last year in ad revenue.
The reason why Facebook to date or any other social network before that could not be as profitable is that they could not figure out “intent.”
I login to Facebook and share pictures, post updates, reply to messages, etc. I have no interest in looking at their ads, because they mean nothing to me. No matter how much technology Facebook or any other social network puts into understanding their users, nothing beats having the user just tell you want they want!
However, that is all changing thanks to the Facebook “Like” button.
Google’s Nightmare Scenario
While Facebook doesn’t compete in search, they’re pitching investors on a $100 billion valuation largely based on their ability to compete with Google for ad dollars. And while they have a compelling point: lots of eyeballs and a good set of demographic data; the jury is still out on Facebook’s effectiveness as an integrated marketing platform.
But where things likely get interesting – and potentially devastating for Google – is in how the ecosystem around Facebook’s Open Graph evolves. When Like buttons were released into the wild, Facebook laid down a marker that people were willing to share their preferences in a pretty public way, and their skyrocketing usage has proven them correct. Maybe more importantly, Facebook created an entirely new “Big Data” set for personalisation and left it open to third parties to figure out how to best leverage it.
Facebook’s like button allows users to tell Facebook their intent. Users can like a webpage, a product, a TV show, etc. The Like button is Facebook’s answer to Google’s search box. Every big and small site on the web now has a “Like” button from Facebook. If I go to a site and don’t see a Like button, I wonder what’s wrong with the site.
If Facebook has its way, when I see a TV set I like on some retailer’s webpage, I will click the “Like” button. All of a sudden, Facebook and its army of partners know that I like a particular kind of TV. Next time I login to Facebook, I can be shown more relevant ads about TV set and deals I might find attractive. More so, anytime I login with my Facebook ID into another site, they will know what I “Like” and be able to deliver more meaningful products.
It is still early, but we are beginning to see some interesting things happen as Facebook’s data is married to other big data sets. Just this week, Glimpse by TheFind launched, and it does a nice job of tying people’s stated preferences for products, as expressed by Facebook Likes, to TheFind’s own index of 500,000 stores and some 550 million products. The intention of the app is to create a “discovery inspired by Likes” experience…in other words, retail window-shopping.
This is just one example, and I think we’ll see a lot of other iterations across different search verticals. I can certainly envision something similar happening with local data from Yelp or even Foursquare. Zoosk has done a pretty good job marrying Facebook demographic data with their own algorithms for matching potential online dates. Tickets and travel are other areas that could realise immediate benefits from social signals, and it’s only a matter of time before Bing or Facebook itself starts to integrate some really granular iterations of Like data, along with general purpose searches to produce some pretty compelling, targeted, and track-able ad programs. And this is what is really frightening for Google…
Actually, it’s why they introduced Google+…if you ask me, Google doesn’t care if you ever visit Google+, create some circles or use their hangouts. That’s window dressing. What’s important is the +1 button and the granular data it yields about the things that matter to you. And while Google can compel publishers to put the +1 button on their websites – by suggesting that SEO is impacted by +1’s (which incidentally creates some murky anti-trust waters of its own), no one can force you to click the +1. And as yet, no one seems to be clicking the +1, certainly not at any clip approaching the Like button. And if Google can’t gain access to the things you prefer, then Google’s ability to clearly dominate search and the ad revenue it generates could be in serious jeopardy.
This also could become a reason why someday down the road, Google pays a lot of money to buy Pinterest. Intent is well captured on Pinterest. Users tell Pinterest what products, places, things, people, etc they like by just pinning images of it. In fact, Pinterest is probably a threat to Google Images as I find more people going to Pinterest first to find high quality pictures of something. A Pinterest acquisition could help Google get back in the “Like” game and take out a competitor to their images search empire.
In the end, I hope Facebook’s Like button becomes a smashing success for Facebook and any third-party company that integrates with the Open Graph. Google has controlled the “intent” marketplace for a long-time without competition. With Facebook in the race now, a healthy and competitive “intent” ecosystem will evolve, resulting in more innovation from Google, and better products / services for both consumers and advertisers.