MappingTheWeb //

Google has always prided itself on aggregating user data. After all, their mission is “to organize the world’s information and make it universally accessible and useful”. A social network is a great way to acquire user information and data without bluntly asking for it. Millions upon millions of people have provided a detailed map of their lives in Facebook, for example. This information is priceless. Rather than fill out a lenghty, tedious registration form, users slowly complete their profiles over time.

At this point, Google really only has two options. It can:

1. Create a social network from scratch, or;
2. Acquire an existing social network.

With all due respect, Orkut just doesn’t cut it. I would even wager that the majority of North American Internet users have never heard of the service - never mind knowing that it is owned by Google. Furthermore, the percentage of English-speaking users is less than 8%, based on Alexa stats. 

An English-focused social network would tie everything together and create new opportunities for the company. The search giant would not only be able to leverage its highly successful Adsense platform, but also explore potential new revenue models. Further integration with existing social properties (i.e. Blogger, Picasa, Gmail, etc…) could provide a stunning value proposition for existing Google users, as well as potential new users.

There are two things that Google needs to do in the next year to maintain its current momentum and market position:

1. Reinvent itself.
2. Explore new revenue channels. 

Yes indeed, Google needs to reinvent itself. People like to cheer for the underdog. Google used to be in that position. It is no longer the case. Due to its control and substantial market share, Google is now the big kid on the block. With this dominating presence comes a certain level of community backlash and disapproval. Microsoft experienced this and continues to do so.

Google has always had a habit of not only meeting expectations, but also exceeding them by a wide margin. Product launches have caused phenomenal buzz. Product quality has been second to none. Google needs to continue this tradition to be successful and well-liked by the Internet community. Marketing can only go so far. The products must speak for themselves. The lack of innovation, launches, and recent news (acquisition aside) has put the company in a stagnant position. I am not being critical - I am just making an observation. Having said that, I think that big things are in the works. I expect to see a full office suite (obviously), as well as a surprise in the coming months. A social network? A Google browser? A Google wi-fi network? I don’t know, but I have high hopes.

Secondly, Google needs to rethink its revenue model. Putting all their eggs in one basket has worked well for them up until now. Increased competition, click fraud, and lack of diversification are all now working against the company. Something like 98% of Google’s revenue is derived from advertising. This is not sustainable over the long term. The company needs to explore alternatives. Who would have ever thought Rome would fall? What about Enron? The big guy is never at the top forever. Nevertheless, things can be done to hedge against a collapse. For Google, this starts with revenue diversification and perhaps even an overhaul of the current AdWords/AdSense system.

If Google is able to reinvent itself and adopt new revenue channels, I think it has the opportunity to stay on top longer than it would otherwise. I have confidence that the current management team will make the right decisions. Although I doubt any of them read this blog, I hope that they are thinking the same things as I. It would be a pity for Google to run the same course as Microsoft.

Once again, rumours are swirling about a potential Facebook acquisition. This time, Google is the culprit. Sergey Brin, co-founder of Google, has expressed interest in the exploding social network. This isn’t the first Facebook takeover rumour we’ve heard so far this week. Already, reports surfaced that Microsoft has been in talks with Facebook. In addition, acquisition talks between Yahoo and Facebook have been going on for what seems like forever. The future of Facebook is uncertain to say the least.

What would a Google takeover mean for the search giant? Access to a large, highly sought-after market and ownership of a respectable social network (finally). Orkut just didn’t cut it. What would a deal mean for Facebook? Lots of money for Zuckerberg and more targeted advertising.

Let’s be honest though. This is an information deal - it’s all about the data. Facebook is a marketer’s dream. The amount of information available is ridiculous. Regional, demographic, social - Facebook has it all. Google would simply be adding another database of information to their arsenal. It’s all part of their master plan to take over the world. Muhuhaha…

Other rumours are circulating that indicate Google is laying back and waiting for Facebook to come to them. Still, others are saying that Zuckerberg and co. are sticking with their initial plan of staying indepedent, shunning all takeover offers, and planning to go public later this year.

Perhaps this is simply another Google PR stunt to raise awareness about the company. We haven’t heard much from the company in the last week or so. Ha. Having said that, they fooled me when they bought YouTube. It seems that the search giant is always looking to buy the cream of the crop in any given space, not only to acquire a large user base, but also to generate excessive amounts of PR and buzz.

Money always seems to be the big issue when it comes to Facebook acquisition talks. Because the social network is growing at such a phenomenal rate, it always seems to have the upper hand in takeover talks. What this means is that it can call the shots - i.e. the only way Facebook will sell out is if they are offered a huge sum of money. As mentioned, Zuckerberg has indicated an unwillingness to sell. But we live in a capitalist society. If the price is right, it is pretty hard to say no. Don’t forget that Google has deep pockets and a track record of getting what they want. Will Google be the one to finally pull the trigger? Can we say hello to GooBook?

Facebook continues to grow at a staggering rate. Though it can already be considered a mammoth, it still has much upside left. The recent introduction of the Facebook Platform will simply promote further growth. The value proposition for any company looking to integrate is quite obvious - a massive, loyal user base. Just ask iLike. The ability to piggy-back off such a large network is a huge advantage for any early-stage companies.

With all this growth, positive outlook, and momentum, one must ask, “What is going to stop this Facebook train?”

An IPO: Going public isn’t as glorified as it’s hyped up to be. Priority quickly shifts from satisfying users (or consumers) to satisfying shareholders. In other words, less attention is focused on the user. Innovation and feature sets are set aside so that business development and revenue generation can manifest.

Going public isn’t a dream. It’s more of a nightmare - especially for a user-centric, consumer-based web company. This is the scenario faced by Facebook. Rumours and gossip continue to circulate about a pending IPO in late summer or fall. Simply put, the possibility is quite real. Though raising capital does provide the ability to bring on added resources, the dilution of equity and ownership is a strong argument against such a proposition. Anyone whose ever had to deal with numerous stakeholders knows that ensuring the happiness and satisfaction of everyone is near impossible. Financial obligations move to the forefront. This usually means that the user is left to the demise of a fiscally-conscious executive posse and a board of directors, rather than a team focused on the user experience.

Another extremely plausible case is…

Social media collapse: Think back to what happened to Digg. Should Facebook choose to betray users, hide or lie about an issue, or provide non-disclosure around a given policy, and users find out about the blunder, watch out. The very mechanism that spurred viral growth and adoption may work in a counter-productive fashion.

Here are a few other, less likely cases…

A sale: As is the case with many takeovers and acquisitions, the user base of the little guy gets disgruntled. All of a sudden, the policies and corporate culture of the start-up are subject to the red tape and bureaucracy of the over-arching big guy. Many users feel uncomfortable and betrayed in a situation such as this, and defect to a similar product/service where they feel more at ease.

Complacency: Though we have not witnessed this as of yet, a failure to innovate may signal troubles for the company. Having said that, this is probably the least plausible and least likely threat to the company. Time and time again, Facebook has displayed a strong willingness to provide innovative features . For this reason, I have my doubts about the complacency of the company - unless of course, Mark Zuckerberg finds more value in yachting and spending time in the Bahamas rather than company strategy.

What do you think will slow down Facebook’s exceptional growth?

A limited number of first-time entrepreneurs hit it big and sell their company for millions. Some might call this luck. Less frequently is an entrepreneur able to replicate this feat and sell a second company for a considerable amount. Almost never is one able to do this for a third time. At this point, luck cannot be taken into consideration - a formula has been established.

Niklas Zennstrom co-founded both KaZaA and Skype, two wildly popular Internet successes. He’s on his way to a third success - maybe his biggest yet - with Joost.

A great article was published by BBC the other day. It profiled the mindset and thought process of Zennstrom. This Swedish genius is THE disrupter among disruptive technology disrupters. He identifies an industry with problems and short-comings, then launches a company in an all-out attack. In particular, he has a keen interest in the Internet communication and media areas, as all of his disrupters have spawned from these realms. Here is a simple breakdown:

• Music - KaZaA
• Telephone - Skype
• TV - Joost

What’s next? Something in the radio industry - along the lines of Last.fm or Pandora?

On a side note, his luck with five-letter company names is almost uncanny. Superstition? Strategy? Coincidence? Only Zennstrom really knows.

One thing is for sure. Zennstrom likes being in a position of power. He likes disrupting. Some might call him the shit-disturber of the online world. He is quoted as saying:

“For me, a disruptive technology is only worthwhile if it gives people something they didn’t have or couldn’t do before.”

His motivation and determination are inspirational. He conquers one area, then moves on to another - methodically and systematically. His quest to make things “faster, lighter, or cheaper” is a main driver and source of energy. His never-ending search for the next ‘big thing’ has never been centered around a given product or area, but rather a mentality. Simply put, he wants to give regular consumers a better way of doing something they’re already doing. Thus, he is not looking to re-invent the wheel - just expand upon it.