Why Google’s Survival Depends on Google+

Google needs Google+ to succeed. Failure is not an option. What is at stake is the survival of the company. To place a bet on the future based on the present, however, would be extremely  naive. Here’s why (I should add that everything written below is based on my opinion as an observer and not on insider information accumulated during my time with the company):

One of the favourite past-times of tech journalists and observers alike is to attempt to simplify the complexity that is Google by saying “Google is a [insert modifier here] company.” Common statements include: Google is a search company, Google is an artificial intelligence company, Google is an advertising company, Google is a data company, Google is an algorithm company, etc. etc. etc. All of these are correct in that they describe what Google has been, but they tell us very little about where Google is going. To add my own sentence to the mix, I would say that Google is trying to be a relationship company.

Before I explain this, allow me to extrapolate on Google’s evolution. In the beginning Google was nothing more than a search company and from this it derived it’s mission of “organizing the world’s information and making it universally accessible and useful.” From this mission Google derived new products such as Google News and Maps, which simply broadened the company’s conception of what is information.

Years later, how does something like android fit into this statement? The truth is that, far from organizing the world’s information, Android was designed, much like Chrome and Google TV, to protect Google’s core search business. If Google doesn’t own the platform it is very easy for competitors to dis-intermediate and offer different services that compete with Google. Think about it: if you’re on iOS and you use Siri, you’re already diverting some of your search traffic from Google to Apple. Furthermore, the more services that get in-between Google and the user, the more Google needs to share cuts of its advertising revenue. A lot of people note that Google doesn’t charge for Android, but if you calculate the advertising revenue that doesn’t go to Apple, you can safely say that Android is a money-making product. In order to continue to fulfill its mission Google needs a direct relationship with consumers, otherwise it risks losing access/relationships with its clients, and this access/relationship is what allows Google to make oodles of money and fund all of its disparate projects.

Google, therefore, places an extremely high value on the relationship it has with you. With Google+, however, Google wants to take that relationship to another level. Before Google was the quiet waiter serving you food without drawing much attention to itself. Now it wants to invite you over to its house for an intimate one-on-one dinner.

The reason for this change is that in the competition that exists between Apple, Amazon, Facebook and Google, the person who wins the relationship can continue to offer you different services and make money from you. For example, if you buy digital music, the truth is that you’re getting the exact same product for almost the exact same price from Apple, Amazon and Google, so where do you make the purchase? If you have an iphone and have bought into the Apple Universe, you probably buy you’re music from them. If, however, you use Google Music and then share you purchase with your friends on Google+, you’re directing that purchase to Google. All of this can be applied to E-Books as well.

What all of this means is that Apple, Amazon, Facebook all want your business and right now all of them have advantages and disadvantages compared to others. Amazon knows a lot about what you like to purchase, but it doesn’t know much about you, nor does it have a way to connect you to your friends so that you share purchases, reviews., etc. so that you all buy more. Compared to Amazon, Facebook has the opposite problem: it knows a lot about you, but so far it hasn’t been able to leverage that into a business model in which Facebook profits when you buy stuff (it does, of course, work for advertising).

Google knows a lot about you because of your search history as well as your interaction with its different services. Until it solidifies that relationship, however, its loyalty is based on the strength of the search engine (which competitors can and will replicate) and nothing else. By providing you with two integrated platforms upon which you run your life (Android and Google+), Google is hoping that, over the long term, you choose it over Amazon, Apple and Facebook.

There is a defensive component to Google + which became more evident with the release of “Google+ Your World” (Google is hit or miss when it comes to naming products). In order to stay relevant as a search engine, Google needs to understand how the relationships between individuals effect how you find and access information. Second, Google is an advertising platform, and Facebook’s rich data of personal information gives it a competitive advantage. If Google can get its +1 button all over the web and get you to start sharing on Google+ and talking about what you like/dislike, it too can replicate Facebook’s offering and thus become a one-stop shop for advertisers (For some Google’s dominance in online advertising is far more worrying than its dominance in search).

So what about my remark that it’s wrong to place a bet on the future of Google+ based on the present? This statement is based on understanding how Google releases products. Unlike Apple, which tends to go to market with carefully crafted and finalized products, Google’s moto is release early and iterate. Like Gmail, Google+ went to market early, received a fair amount of criticism, but was iterated upon fast. More meaningfully, by offering a service between Facebook and Twitter, Google+ forced Facebook to become far more open, and thus moved the center of the social spectrum completely. Back to my point though, what users cannot see in Google+ right now is what the product will become. Larry Page has faith that the engineers working on Google+ will take the users’ feedback and build a product that will eventually be superior to Facebook. In addition, if Facebook messes up and causes a mass evacuation of its service, Google+ will be ready to offer a new home where, through your interaction with Google’s varying products, you’ll already have built a profile and a history.

What makes predicting the future difficult is the pace with which Google iterates. Think about the initial Android phones: they were big, clunky, ugly, and useless. Now think about ice-cream sandwich and Google’s surpassing Apple in mobile market-share.  What happened to Android can easily happen to Google+: Google wont just imitate Facebook but also offer new services and functions which will cause Facebook to scramble and cause Twitter to question its existence (ok: maybe that’s harsh, but I think that  the future of Twitter is far from certain).

Google+, therefore, is fundamental in Google’s endeavour to strengthen its relationship with you and become the primary platform through which you search, discover, share, and most importantly, buy. Unlike other products which Google launched and then ended up abandoning, Google+ is here to stay. You might say they’re betting everything on this one horse and while Google has massive capacity to fail (Cough Cough. Wave. Cough Cough), they’ve also proven themselves extremely capable of surprising everyone (Android). My advice: pay attention to whatever Steve Baller says, and then bet on the opposite.

About Matthew Carpenter-Arevalo

A former Google and Twitter manager, Matthew Carpenter-Arévalo is the founder and CEO of Céntrico Digital, a managed marketing services company.

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