A Public Facebook and the Longrun Google

So Friday is the big day that Facebook finally goes public for over 100 billion dollars. But one has to wonder if it is truly worth that much. Then I will compare it to Google+ and explain why I think it is in a better position.

First the IPO. Facebook has proven that it is the dominating force in social networking. A huge chunk of the planet currently uses it. But it hasn’t had the best of luck monetizing that success. Don’t get me wrong, it is profitable but no where near where it needs to be for this kind of valuation. It’s click through rate, a number representing the amount ads are clicked on a site, is dismally low and dropping. That is definitely not a good statistic to have on a site that is going to be reliant on advertisements. Not only that but because of its uncertainty of actual benefit to the buyer GM has decided to pull its ads off Facebook. While this is just one company now, I could turn into a mass exodus if Facebook doesn’t change something.

Onto Google+

I have been on Google+ since it was still invite only and loved the site. Unfortunately I ha stopped using it too regularly until very recently. What brought me back was its. Is mobile app.

The new app is amazing, and just makes me want to be on it and use it. This made it clear to me that mobile is the most important part of a social network now. (Facebook is now accessed more through its app than via computers). I always have my phone with me so I can always be connected and sharing/interacting, but it needs to be enjoyable. Facebook’s app on the other hand is awful. Everything takes forever to load and it is just a pain to use. The combination of these two mobile experiences have led me to almost abandon Facebook as I late while I am more active on Google+ than I have been since I started.

Google+ will be slowly integrated across all of Google’s offerings which sets up Google for long run success. This will happen slowly over time, and might not even occur to the average user it is happening. But it will slowly increase both the number of people who use it and how often they do. Because Google owns so many popular services like YouTube, blogger, Gmail, and others if it starts to add features that connect it with Google+ people will start to use them. But none of it needs to happen fast! Everyone wants it to either be a super success overnight or they label I a “ghost town” (which I totally disagree with). But I think Google understands that it will take time for people to adopt and adapt to Google+ and it would be better for them to do it right and not rush it. And again they are not pressured by a need to generate cash now because Google makes a ton of money without it.  It will become impossible to separate Google+ from the other Google products.

In the short term Google does not “need” to make money with Google+,or really ever. If it fails to find a way to make it a money making machine, Google will continue to exist and make a ton of money with ads for its search engine.

Facebook on the other hand needs to find a way to adequately monetize it’s huge user base. This will be exasperated by the IPO. Suddenly Facebook will have to answer to shareholders who want to make money more than anything, and this could lead to some unfavorable moves to try to monetize our data. This could potentially put FB in a spiral if they really piss people off, especially now that they have Google+ to leave to if angered. The one thing I think FB has now though is large amount of cash to do something with.

Like I said I think that FB is over priced and will likely see a drop in stock price in the short term (or a rise based on over hype and not real worth) and Google+ is in a better position for long run success and profitability. This does not mean I think FB is dead in the water. It is still a huge force to be reckoned with and will continue to be.

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