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Google+ vs. The World – Can Google Beat Facebook?

Google+, the latest attempt by Google (NASDAQ: GOOG) to penetrate the social network business, went online Jun. 28. Not to be confused with Google Plus, a social Google account feature introduced earlier this year that allows people to rank Google search results for their contacts, Google+ is a social networking framework.

The features in the network’s “limited field trial” are all familiar. “Hangouts” are groupings for people with common interests where you can use Google Chat for Skype-style video calling; “Circles” are groupings of personal friends’ or business associates’ profiles; “Sparks” are a stream of webpage updates from various sites similar to an RSS feed; “Home” is a base of operations that incorporates familiar Google account features like Gmail and Google Docs.

The early design is sleek and simple, borrowing intentionally from Apple (NASDAQ: AAPL) in its marketing and interface aesthetics. (Original Apple Macintosh team member Andy Hertfeld is behind the Google+ design.)

After the embarrassing missteps that were Google Buzz in 2010 and Google Wave the year before, it looks as though Google finally has built itself a social network that can suit the tastes of a consumer populace still in the throes of iPad and smartphone fever.

Here’s the million-dollar question, though: Who cares?

It’s a question Google’s shareholders need to ask, excited as they might be at the prospect of Google reaching its tendrils into one more lucrative corner of the Internet. Like it or not, the social network business’ consumer base is well served right now. Facebook commands a membership of more than 750 million users, nearly seven times the membership News Corp.’s (NASDAQ: NSW) Myspace enjoyed at its peak back in 2006. Twitter, the micro-blogging social network that plays pilot fish to Facebook’s great white shark, hosts 200 million active users of its own.

It’s true there are close to 200 million registered Gmail accounts, but chances are the vast majority of those users (many of whom undoubtedly have more than one account with Gmail) are already registered with one of those other social networks. What could convince them to use Google+ instead of or in addition to Facebook or Twitter? Technology blog Engadget posted a series of impressions about the early version of the service, and although reporter Brian Heater called Google+ a “smooth, intuitive, and enjoyable” take on the familiar social network service, his summary implied that Google is simply offering a product that merely matches its competition rather than exceeds it.

There has been some early success for the service. The “Hangout” video calling feature of Google+ already has a following online and has received glowing praise from outlets like The New York Times. Even that might not be enough to lure away users from Facebook, however, thanks to that service’s new partnership with Microsoft‘s (NASDAQ: MSFT) Skype. Even if Google’s service provides a smoother video calling experience, the familiarity and strength of the Facebook and Skype brands will limit the impact of Google+ “Hangout.”

Google undoubtedly wants Google+ to replace Facebook, if for no other reason than control of the social network business would cement Google’s place as the leader in online advertising revenue. But at this moment in time, it seems the only way Google could capture an audience for its new service comparable to Facebook’s is by seeking it abroad. The majority of Facebook’s users are in North America and Western Europe. Google actually has had more success abroad with its previous social network efforts. Social network Orkut has a membership of more than 100 million users, the majority of which are based in Brazil and India. Google+ might have a chance in those markets.

In the U.S., however, Facebook is and will remain king for some time. For investors, Facebook’s impending IPO should have them salivating. That company’s omnipresence recalls Google just before it became the hottest new publicly traded company in 2004.

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/2011/07/google-plus-facebook-social-network/.

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