5 ms·

I'll take a stab at this one. Google's main source of revenue comes from ads that are driven by user want. I search for "car insurance" and Google gives me an

by mdasen 13y ago

I'll take a stab at this one. Google's main source of revenue comes from ads that are driven by user want. I search for "car insurance" and Google gives me an ad for GEICO. But that doesn't really tell me anything about GEICO other than that they have enough money to pay for my click. They could be excellent or they could be crap, but they do likely sell car insurance and I'm looking for car insurance. On Facebook, I may ask my friends "what car insurance do you have and how do you like it?" I get better information; I get testimonials from people whose judgement I trust (or at least I trust that their judgement isn't paid for, unlike Google's ad). This cuts into the heart and soul of Google's revenue - matching advertisers with user needs. Facebook hasn't done this to my knowledge, but let's say they classify those queries and responses. So, I post the question and my friend Julie replies, "I have GEICO and I love them". Six months later, our mutual friend Jeff sees an ad in the sidebar with a GEICO logo and that quote from Julie. Better yet, Jeff posts a picture of his new car and an advertisement comment appears using Julie's quote. This isn't about car insurance. Your friends will not be as good about filling search requests as Google for many needs. However, your friends might be better for the ones that pay. I have no idea if this graph is accurate, but it can be interesting to go through: http://www.wordstream.com/articles/most-expensive-keywords http://www.wordstream.com/articles/most-expensive-keywords. Attorney and Lawyer are the #4 and $6 most expensive keywords. I think I'd rather go with a friend's recommendation than a Google ad for something important like that. We've already covered insurance at #1. That's what makes Facebook a threat. Rather than searching, people ask the hive-mind on Facebook for a recommendation for a restaurant, insurance company, lawyer, etc. Friends and friends-of-friends comment and like different answers and while people are certainly fallible, at the very least is comes off as more trustworthy. If you were looking for wireless service in a new city, would a Google ad be the first place you looked or maybe how your friends in that city fared. Recommendations would certainly be skewed by the fact that they have too little data to have a good opinion combined with popular perceptions of the carriers, but would ad space that went to the highest bidder be more trustworthy? Now, when I search for the Battle of Gettysburg, I don't get ads. Same for when I search for Washington DC. Same for many other search requests - the type of requests that don't really have money in them; the type of requests I use Google for and would never really use Facebook for. The threat is that Google would become the place you go for the searches that don't pay while Facebook gets the requests for information that do pay. Worse, what if Facebook leveraged itself for videos as it did for photos? As the comment you reference mentions, Facebook's photo platform was worse, but its social aspect made it better for the way users wanted to use photos. Facebook's messaging platform makes it good to chat to a group of people who you know, but not super well - and everyone can see the whole conversation even if they were added later. Businesses are already setting up pages and giving Facebook nicely formatted data about the business. The worst part of it is that Facebook is good at what they do. They're not some company that can't handle the technological challenges. While one can call their business fluff, their engineering staff isn't. So, the company isn't going to go away via technical problems. I'm not saying that any of this will come to pass, but Facebook is certainly a threat to Google's revenue. Google makes its money off of ads that can be replaced by friend recommendations. Again, I'm not saying the replacement will happen, but I can see the threat.

gsz 13y ago
Do people really ask their friends for recommendations for things like insurance? For lawyers, and other local services, I can see perhaps. Product comparison and review sites, or even Amazon seem to me like bigger threats to Google than Facebook. I can also see them trying to do something about that (reviews appearing for some search results), although I don't think they're doing a particularly good job of it. Then again, how do I find those auto insurance comparison sites? Google, of course.
- weland 13y ago
  > Do people really ask their friends for recommendations for things like insurance? You'd be amazed at how many do. For anything, from insurance to computers. The provider of one's car insurance is a regular discussion topic among those of my colleagues who have a driver's license, and I've seen at least two or three people lamenting about how bad the services they got were and switching to another insurance company on a whim, based on nothing other than the success stories of a handful of people. Product comparison and review sites, or even Amazon, tend to be perceived as very broad and impersonal, while your bros know exactly what's best for you. I mean that's why they're yo' bros. I have little doubt that this is economically, and to some extent socially self-destructive, but so is a lot of what we see today :-).
XorNot 13y ago
I think this analysis is inaccurate. The thing about Facebook advertising, and the reason it struggles with monetization, is Facebook knows nothing of what people want. Moreover, there's a ton of stuff people will never post about wanting to Facebook (privacy is a big issue there - from friends and family). The best Facebook can do is classify people into narrower demographic bands, but then spam the range of advertising for that band at them. It is not good at it - I'm under-30, ergo clearly I should be sent ads for alcohol and travel. Regardless of time of day or what I'm doing at the moment. Facebook can also never not show you ads - they don't know intent, at the moment, so they have to try and catch the rare sellable moments throughout the day of a person, whereas Google knows when you search that you're searching for that exact thing right now. Which means they can filter a lot of ads which would otherwise make people suspicious of the advertising because they don't have to show you anything when they have nothing interesting to show you. Moreover, the type of advertising you suggest Facebook leverage is a giant catastrof* of possible legal issues with using people's likeness without permission. To what level of social graph depth are they going to do that? And who bears responsibility if 4 months after saying "I love GEICO" someone follows up with "Screw GEICO, they're a terrible company to make a claim with". Facebook doesn't get paid for not showing the GEICO ad anyway.

by mdasen 13y ago

gsz 13y ago

Do people really ask their friends for recommendations for things like insurance? For lawyers, and other local services, I can see perhaps. Product comparison and review sites, or even Amazon seem to me like bigger threats to Google than Facebook. I can also see them trying to do something about that (reviews appearing for some search results), although I don't think they're doing a particularly good job of it. Then again, how do I find those auto insurance comparison sites? Google, of course.

weland 13y ago
> Do people really ask their friends for recommendations for things like insurance? You'd be amazed at how many do. For anything, from insurance to computers. The provider of one's car insurance is a regular discussion topic among those of my colleagues who have a driver's license, and I've seen at least two or three people lamenting about how bad the services they got were and switching to another insurance company on a whim, based on nothing other than the success stories of a handful of people. Product comparison and review sites, or even Amazon, tend to be perceived as very broad and impersonal, while your bros know exactly what's best for you. I mean that's why they're yo' bros. I have little doubt that this is economically, and to some extent socially self-destructive, but so is a lot of what we see today :-).

XorNot 13y ago

I think this analysis is inaccurate. The thing about Facebook advertising, and the reason it struggles with monetization, is Facebook knows nothing of what people want. Moreover, there's a ton of stuff people will never post about wanting to Facebook (privacy is a big issue there - from friends and family). The best Facebook can do is classify people into narrower demographic bands, but then spam the range of advertising for that band at them. It is not good at it - I'm under-30, ergo clearly I should be sent ads for alcohol and travel. Regardless of time of day or what I'm doing at the moment. Facebook can also never not show you ads - they don't know intent, at the moment, so they have to try and catch the rare sellable moments throughout the day of a person, whereas Google knows when you search that you're searching for that exact thing right now. Which means they can filter a lot of ads which would otherwise make people suspicious of the advertising because they don't have to show you anything when they have nothing interesting to show you. Moreover, the type of advertising you suggest Facebook leverage is a giant catastrof* of possible legal issues with using people's likeness without permission. To what level of social graph depth are they going to do that? And who bears responsibility if 4 months after saying "I love GEICO" someone follows up with "Screw GEICO, they're a terrible company to make a claim with". Facebook doesn't get paid for not showing the GEICO ad anyway.