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Can Facebook become the next Google?
Category : General 17 May 2010 03:19 AM | Industry News
Google built $25 billion on revenues from advertising business. However with Facebook being the identity gatekeeper about all your personal information like age, friends, sex, location can roll out more relevant information for you to the user. Unlike Google where the sponsored link appears only after a search query is entered, Facebook is set to display ads which are relevant to the interest of the user. Facebook ads will be more effective when they are integrated into the core product and relevant to the user.
The reason is social sites offer better targeting with keywords and demographic-specific ads. Think about the manner and type of information Facebook gathers. While Google knows you're in the market for a new home, Facebook knows what causes are important to you, which videos you like to share and how often you make recommendations to your friends. Social media advertising opportunities are yielding better-qualified, higher-ROI results compared to the Google ad network.
Additionally, Facebook recently announced that Bing is now the default search engine for its more than 400 million users worldwide, which puts the site in a position to enhance its advertising model even more. By offering search on the site, Facebook is now able to gather data that it can leverage immeasurably in the world of advertising: the way people think, what they care about and how this leads them to buying decisions.
Google’s ad business models are based on intent and relevance and not on discovery. The performance based AdWords and AdSense models are easier to measure and appeals to the logical / analytical minds at Google. The power of influence, discovery and brand advertising needs more right-brain thinking than Google’s left brainers are used to.
Also, instead of innovating and exploring new forms of brand advertising, Google’s strategy in that space over the last few years has been to adwordssimply buy DoubleClick which is the leader in old-school brand advertising (mostly banner ads). This basically means that there is no fresh thinking in this area at Google compared to Facebook, which understands the power of discovery and recommendation