Google+ Is a Hollow Threat to Facebook

Over the years, Google (NASDAQ:GOOG) has been masterful in attacking new markets. For example, it found ways to dominate mapping, as well as online video (through the YouTube acquisition). But perhaps the biggest move was launching the Android operating system, which has been a worthy competitor to Apple’s (NASDAQ:AAPL) iOS empire.

Yet there is one important category that Google has yet to crack: social networking. Despite all its efforts, Google’s G+ offering just can’t get strong traction.

True, the service has signed up 90 million users since June. But sign-ups are just one part of a successful social network. The other critical element is engagement. In other words, do users stay on the platform for prolonged periods of time? This is vital, as it allows for much more advertising opportunities. It also means third parties — like social gamemaker Zynga (NASDAQ:ZNGA) — can enhance the platform by adding cool apps.

An article in The Wall Street Journal indicates that G+ is failing miserably, calling it a “virtual ghost town.” Whereas the typical G+ user spends a mere three minutes per month on the platform, Facebook users log around six to seven hours.

The stark contrast makes sense. It is a big hassle to start over again after a user has invested so much time on Facebook. What’s the benefit of making the switch? Sure, G+ has a cool video chat system (Hangouts), but that’s not enough reason for most people to abandon Facebook.

This doesn’t not mean that Facebook’s lead is permanent. There’s certainly room for more breakout ideas in the social space. One example is Pinterest, an online scrapbook that has been growing at a torrid rate. The site has been highly engaging and has seen exceptional success among females.

G+ still could be a huge success, but it needs something to differentiate itself. And this might be something that comes outside the walls of Google — again, the company has been extremely successful with its acquisitions.

Who knows? Maybe G+ could swallow Pinterest.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli. As of this writing, he did not own a position in any of the aforementioned securities.


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