Google takes on FacebookOctober 31, 2007: 12:58 AM ET
By Josh Quittner
If you can't beat 'em, join 'em. And if you can't join 'em, get all your friends to band together—and gang up on them!
In a move that some Silicon Valley pundits are deriding as desperate, Google (GOOG) has unveiled a plan to fight back against social network Facebook. A dozen companies, including social networks LinkedIn, Ning, hi5 and Google's own social network Orkut, have aligned together under Google's "OpenSocial" banner to "make the Web more social," said Joe Kraus, who's managing the project. Business software makers Oracle and Salesforce.com also joined the alliance.
The announcement was supposed to hold until Thursday, but the New York Times never agreed to the embargo and broke the news in today's edition (see here). You can read Google's press release, dated Nov. 1, here.
The goal is to lure software developers back to the open Web from Facebook and create standards for applications that can run on any social networking site. In June, Facebook opened its site to apps makers, allowing them to launch their own applications on its social network, and make money from them. Some 5,000 applications were launched enabling Facebookers to do everything from play Scrabble to engage in virtual food fights. And that caused the young site to take off, with membership growing at the healthy rate of 3% a week. It now has some 50 million members and is expected to unveil a new advertising platform next week that, many believe, will cleverly target "social ads" at users, mining their connections for useful information. If it works, it could be a huge breakthrough in online advertising.
And that's what's got Google taking the offensive. Google's business model hinges on selling ads targeted against search—a diminishing activity while people are cavorting within the closed-off walls of Facebook. Adding insult to injury, last week, Microsoft (MSFT) beat out Google and bought a minority stake in Facebook—valuing it at $15 billion. That secured Redmond's role as the social network's sole partner in international advertising, and potentially much more.
"It's a little bit of an apples to oranges comparison, but the full application we've built on Facebook took us six months to write," said Ali Partovi of iLike, one of the better-known music applications. "The one that we're demoing here took us a matter of days to write." (It also looked very slick.) Partovi said that since OpenSocial uses the common languages of the Web, it will also make it easier, and cheaper, to hire programmers. Developers such as iLike will continue to work with Facebook.
While a hand-full of demonstration projects will be unveiled Thursday, Kraus said the goal of the announcement today was to invite in the developers and get them started on rolling out new apps. He said it would be about a month before consumers started to see the first OpenSocial apps. Ultimately, the widgets could run on virtually any website that elected to participate.
"They were totally desperate," one Silicon Valley financier observed yesterday. "Google isn't making a dime from this. It was just a way of keeping people off Facebook."
Kraus said that Google's interest was in preserving the open Web. "By making the web a better place to be, Google ultimately benefits because people spend a lot of time on the Web searching," he said. Asked whether Facebook could join the alliance, Kraus said, "Obviously we would love to have them participate." He declined to say whether Facebook was ever invited, however.