I read the blog post on e27 describing the war between Facebook and Google shortly after it came out and while there are a lot of interesting points, describing the difference as being “social vs utility” just did not seem to capture what I believe is the essence of competition between the two companies.
I always thought that Google vs. Facebook – and Yahoo! vs. Google before that, is really all about who owns Discovery on the web. I’ll define discovery as simply finding new content, whether you are looking for it or not. It could be new articles, new sites, new products to buy, new entertainment such as music or video or viral jokes. But in the end it is all about discovering something new and how you go about “discovering” it.
Being the best discovery product means that you get the most traffic. If you have the most traffic you have the largest audience, which means that you are very appealing to advertisers. As an added bonus, being the top discovery site means that other sites want to leverage your success to reach your audience and so are willing to pay (money or other value) to be on your platform and be associated with you. They will even distribute your product for free. This is what the battle between the giants, like Google and Facebook is about – advertising dollars and free distribution. Win the battle and you become the dominant platform for advertising and launching new products.
This is what these battles are all about, they are over utility – discovery utility.
Let’s look at a few examples of these discovery platforms:
Yahoo!: The original discovery platform used an editorial approach. I actually remember using Yahoo! when the URL was something along the lines of akebono.stanford.edu. Why did I use it at that time? It had the best directory of websites around. If you wanted to find a site, or later content, you went to Yahoo! to find it. They had editors, officially called surfers, who manually edited the Yahoo! site directory. When you wanted to launch a new site during the dotcom boom, there was only one “must buy” place to advertise and one directory you had to be in. If you had new content, there was only one place to have it showcased – on Yahoo!
Google: What more to say? Algorithmic, especially when you have a good algorithm, scales so much better than human editors. At a time when everyone was focused on being a media site and selling display ads against articles (contextual advertising – discovery based on what you read), Google remembered the reason why most people had been going to Yahoo!, AOL and Excite in the first place. It was not for news but to discover new sites and content (and get email). By emphasizing the best search results (discovery) and placing ads that matched what they were looking for to the side, Google soon displaced Yahoo! and became the top discovery platform. And everyone was placing Google search boxes on their websites.
Facebook: It started off as a site for discovering people, then for reconnecting with old friends, which led to people sharing photos, life info and eventually to share links. At the same time, algorithmic was reaching its limits – too much spam and too many SEO masters. So Google became less relevant and people began to discover more and more enjoyable content through Facebook. Then Facebook hired a lot of people from Google, introduced CPC ads (from what I hear it may not be the first time they copied from others), developed a platform for others to build on and a freely distributable product (the like buttons). And soon they too are now challenging Google to become the top Discovery throne and advertising platform.
Personally, I think all of these companies have all focused on utility. The utility they have focused on is discovery. Yahoo! did so via editorial, Google via algorithms and Facebook via social.
So keep that in mind as you build your business, there is true value in discovery – especially if you want to build a platform.
This guest post is provided by Patrick Williamson, a Singapore based independent consultant and startup advisor. He previously worked in business development at Yahoo! SEA where he worked closely with several Indonesian companies and a global product manager with the Symantec consumer product group in California. Check out Patrick’s insightful writing on startups, business, financing and entrepreneurship at PatrickSEA.com.
Insightful… Another example is StumbleUpon, whose very purpose is discovery. It has more than 10 million users despite pretty much flying under the radar.