Google Buzz Won't Weaken Facebook

For all its success in search, Google's efforts in social networking have fallen flat. Orkut, a community site Google started in 2004, has gained popularity in a limited number of countries, including Brazil. Dodgeball, a location-based game Google acquired in 2005, was shuttered last year.

Undaunted, Google is taking another shot at becoming a force on the social Web. On Feb. 9, Mountain View (Calif.)-based Google announced Google Buzz, a service for sharing short messages, images, videos, and links to articles on the Web.

Buzz mimics the look and many features of popular social media sites Facebook and Twitter. Because Google is adept at showing ads based on what a person does online, it may do a better job than other social networking sites at making money from advertising. And by making Buzz work with popular Google services such as Gmail e-mail, it may quickly gain large numbers of adherents. The verdict is out, though, on whether Buzz can do much to usurp the roles of Facebook and Twitter on the social Web.

Gmail's Social Network Potential

In coming weeks, Google will start making Buzz available to its Gmail users, who will discover the social service as a feature in their in-box. Gmail users will be able to write a message about what they're doing, or upload multimedia, and share it with everyone in their contact list. Then, certain friends and colleagues—those with Gmail and whom the user has allowed to view messages—can jump in with commentary. "There's always been this giant social network under Gmail," says Todd Jackson, project manager for Gmail. "For many users, a lot of the people they interact with are on Gmail already."

Indeed, Gmail has gained ground on rivals in Web e-mail. It had 176 million users in December, according to ComScore (SCOR). That left it behind Microsoft's Hotmail, which had 369 million, and Yahoo! Mail, with 304 million. Still, Google grew 44% over the same month in 2008—more than triple the average rate of growth for the category, according to ComScore. "There's a lot of momentum behind Gmail," says Matt Cain, e-mail analyst at researcher Gartner (IT).

Then again, the same can be said of Facebook. In February, the company said it more than doubled its number of users from the previous year, to 400 million. With such a mass of interconnected users, the company is extending its social influence across the Web—helping users find information, on many sites, through their friendships rather than more traditional means like search.The Palo Alto (Calif.) company may also be planning to move squarely onto Gmail's turf: On Feb.5, the blog TechCrunch reported that Facebook is developing a more full-featured Web e-mail product. Facebook spokeswoman Meredith Chin declined to discuss the company's plans regarding messaging.

Advertising Advantage

Analysts say Google could improve on at least one area of social media where Facebook and Twitter have lagged: advertising. While Facebook was expected to make more than $500 million in revenue from advertising in 2009, marketers have complained that ads on the site have lower performance than on other types of sites, like e-commerce stores or search engines. Twitter has only introduced very minimal advertising to its site.

With Buzz, Google plans to sell ads that are more relevant to individual users. It will serve text ads, alongside posts, that are automatically targeted to what users are talking about. The system is based on the same formula the company uses to place ads alongside e-mail messages. "You can think of this as more messages in your in-box that we'll show ads against if we have more ads to show," says Google's Jackson.

Still, the potential pool of advertisers may be more limited with Gmail because of the site's demographics. Compared with Facebook, which has begun to attract millions of older Internet users and people with relatively little technology savvy, Gmail "requires a certain comfort level with computers that the broader population doesn't have," says Palo Alto (Calif.)-based technology researcher Sara Radicati. Last October, social media analytics firm Rapleaf found in a study that more than half of Gmail users are under age 25—a younger skew than users of AOL, Hotmail, or Yahoo Mail.

Microsoft (MSFT) and Yahoo (YHOO) have built social sharing features into their Web e-mail services. Microsoft says that since letting Hotmail users pull in updates from Facebook and other social sites, roughly half of users, or 185 million, have done so. "We know people aren't looking for another social network," says Brian Hall, general manager of Windows Live. That's why the company "works with the partners that our current users already use," he says. Last year, Yahoo launched a social sharing tool called Yahoo Updates.

"Recommended Buzz"

Google pledges to add something unique to social. One original feature of Google Buzz is what it calls the "Recommended Buzz," which uses a computer algorithm to surface posts and multimedia that friends-of-friends found interesting. With the constant barrage of musings offered up by social media users, there "has become a relevancy and ranking problem," said Google Vice-President of Engineering Vic Gundotra during a briefing for journalists. With its background in search, that's the kind of problem Google is good at solving.

And the company plans to take Google Buzz beyond the walls of Gmail. Users can share a status update on the service through Google's mobile Web site, accessible via the browser on most mobile phones. And, through an application available for certain mobile phones, users can affix their Buzz messages to a geographical location using Google Maps. Eventually, the company says, it will also make available an enterprise version of Google Buzz for businesses.

Ultimately, Google Buzz can succeed without taking share from social network rivals, Jackson admits. "We don't think there is a finite pie where everyone is competing for a slice," he says. "We think over time the pie increases in size."

Augie Ray, senior analyst for social computing at Forrester Research (FORR), agrees: "Already you are seeing people use Twitter for some things, Facebook for some things, and LinkedIn for some things. This could be adopted in addition to—rather than switching from."