Google Takes On Facebook With Social Service

Google Inc. (GOOG), the world’s biggest Internet-search company, is making a fresh attempt at social networking with a service to compete with Facebook Inc.’s site.

The service, called Google+, looks similar to Facebook, with streaming updates of photos, messages, comments and other content from selected groups of friends, said Bradley Horowitz, vice president, product management. The service, which will integrate with Google’s maps and images, seeks to help people organize social contacts easily within groups of friends.

“Instead of coming directly at Facebook, which would be suicidal, I think they’ve recognized that they have to grow out from a niche -- and the niche here is people who want to be connected with a specific circle or a specific group,” Josh Bernoff, an analyst with Cambridge, Massachusetts-based Forrester Research Inc. “In that context this has a chance to be a small success.”

As Internet users spend more time on social-networking sites, Google is releasing new social features to lure Web surfers to its own services and expand advertising sales. Facebook, the world’s most popular social network, captured 13 percent of total hours people spent online in May, while Google attracted 10 percent, according to ComScore Inc.

Photographer: Emmanuel Dunand/AFP/Getty Images

Chief Executive Officer Larry Page is starting Google+ after missteps last year with the introduction of a social component to Gmail called Buzz. Close

Chief Executive Officer Larry Page is starting Google+ after missteps last year with... Read More

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Photographer: Emmanuel Dunand/AFP/Getty Images

Chief Executive Officer Larry Page is starting Google+ after missteps last year with the introduction of a social component to Gmail called Buzz.

‘Changing Quality’

“It’s something that is changing the quality of Google itself,” Horowitz said of the push into social networks. “It’s the Google you know and love, but now with people.”

Chief Executive Officer Larry Page is starting Google+ after missteps last year with the introduction of a social component to Gmail called Buzz. In March, Google reached a settlement with the U.S. Federal Trade Commission to resolve concerns it violated its own privacy policies.

Google also made an earlier foray in social networking with its Orkut site, started in 2004. While the service made inroads emerging markets such as Brazil, it hasn’t matched the growth of Facebook globally.

Executive Chairman Eric Schmidt, CEO for a decade before Page assumed the role, said earlier this month that he “screwed up” in the area of social networking. “I clearly knew I had to do something and I failed to do it,” he said.

‘Getting Started’

The new service will initially be available to only a limited set of users. The company has been testing Google+ internally and is now ready to gradually open up what it calls a “project” to the general public.

“This is a project that will span many years,” Horowitz said. “This is not something where we’re done. On the contrary -- we’re just getting started, laying some of the foundation and then many features will evolve.”

With Google+, users easily share information based on the circle of friends they think would most like to see a photo or read a message, such as immediate family or people who like a certain hobby or sports team. Once users sign up, they have a profile page with security settings that let them share or hide personal information, such as education or job descriptions. Contacts are suggested based on user e-mail accounts.

“What Google is doing is leveraging the fact that you have a lot of contacts in your e-mail; the biggest network you have is your address book,” said Charlene Li, founding partner and technology analyst at the Altimeter Group in San Mateo, California. “Friend management, contact management, has always been an issue when it comes to Facebook.”

Sparks, Hangouts

Other Google+ features include Sparks, which gathers videos and articles on topics of interests or hobbies, and Hangouts, which lets friends join video chat with multiple people at once. There is also a mobile version of Google+ for handsets running the Android software, and the company seeking approval from Apple Inc. (AAPL) to introduce a service for the iPhone. The mobile version enables text-message chats with multiple users and, with an opt-in, photos and videos are automatically stored in an online album for later access.

Shares of Google, based in Mountain View, California, rose $10.85, or 2.3 percent, to $493.65 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have fallen 17 percent this year.

Access to the social service will be on a tool bar that runs across the top of some Google products, including maps and images.

“We already have users,” Horowitz said. “This isn’t a startup that’s trying to acquire users. The users are here already. It’s just that the experience we’ve offered them is incoherent and disconnected.”

To contact the reporter on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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