Google’s ‘Plus One’ Looks Like a Minus

It’s been almost four years since Google (NASDAQ:GOOG) shares peaked at $714, but you can’t say the company hasn’t been trying to find other avenues for growth. The search-engine king has branched out into everything from smartphones to self-driving cars.

Some of its initiatives have done well for the bottom line — the Android mobile operating system has taken an almost 40% share of the smartphone market since its release in 2008. Others have been less successful. The company’s $1.65 billion purchase of YouTube has kept millions of consumers aware of Google-owned brands, but it really hasn’t dented Google’s still-huge overall profit.

Then there are its efforts to penetrate the social-network scene. As consumers have migrated toward Twitter and Facebook, Google has scrambled to find its footing. Its Facebook-wannabe Orkut service hasn’t failed, but it has almost no presence outside of India and Brazil.

And more troubling has been Google’s attempt to transform Gmail and Google Account services into the social network Google Buzz, a move that infuriated users as well as the Federal Trade Commission, which began an investigation of Google based on Buzz’s violations of user privacy.

Now, Google is attempting to crack the social-network nut again.  The Wall Street Journal reported on Thursday that Google will add a program called “+1” or “plus one” program that allows users recommend useful search results to friends. In turn, those other users will, provided they are logged into Google’s services, see the recommended websites in search results.

At heart, +1 is intended to fend off the advance by Twitter and Facebook on Google’s contextual advertising business. As consumers begin to put their eyes on more social network sites than they do web pages, Google’s has to protect its search turf.

But Google’s +1 faces a challenge. Even though the tool is free of a central social network, it still requires the use of Google’s account services. And just like Google’s Buzz, it’s an attempt to infiltrate Google’s pre-installed user base as a gambit for breaking into social networks. And as they did with Buzz, users will likely balk at the idea.

Facebook, Twitter, and even different services like daily-deal business Groupon, have found success by letting users come to them. By impinging on how consumers engage Google’s services, they’ll likely ignore +1 much as they’ve learned to ignore Google’s contextual advertising.

Google’s advertising business isn’t in danger, but its latest effort in social networking seems destined to be another underperformer in terms of company profit.

As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at @ajohnagnello and become a fan of InvestorPlace on Facebook.


Article printed from InvestorPlace Media, https://investorplace.com/2011/03/googles-plus-one-looks-like-a-minus/.

©2024 InvestorPlace Media, LLC