Facebook Versus Google. It's About Scale

Posted on December 27, 2010 by Tony Uphoff

No question that in the search based web world the scale of Google has been breathtaking. One key question to ask though; are we still in a search based world? Feels awfully social to me these days. Facebook's model is scaling and will continue to for a couple of reasons:

  • Word of mouth. It's always been the most powerful form of marketing. Facebook's naturally viral model drives scale at levels we've never seen. Their traffic and current ad model scales for low CPM, transactional advertising and could challenge Google's throne in this area alone. Facebook has another advantage however. The power of someone(s) in your social graph "liking" a certain product has huge branding value for marketers and in turn opens up the potential for higher effective CPM's as FB scales. Google does not yet have a relative scalable answer as web advertising balances between lead gen and branding.
  • Facebook as a Service. The amount of revenue Facebook is generating in social gaming suggests that there are other, scalable, paid services companies can offer on the FB platform. Social gaming to "social services" isn't a big leap.
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