Social networking: Should Web giants buy, build or integrate features?

Social networking: Should Web giants buy, build or integrate features?

Summary: Google ponders adding social networking features to Google Reader. Yahoo is weighing its social networking stance as CEO Jerry Yang cooks up the company's strategy.

SHARE:

Google ponders adding social networking features to Google Reader. Yahoo is weighing its social networking stance as CEO Jerry Yang cooks up the company's strategy. And every big Web player is trying to figure out what to do about social media.

It's not an easy question to answer. On the surface, perhaps Yahoo should just buy Facebook. But as Philipp Lenssen's post on a leaked Google video shows perhaps it makes more sense to build social features into products.

Is social networking a business or a feature? If you're Facebook and MySpace social networking is clearly a business that generates a ton of ad inventory. But there are only so many of those success stories. For giants like Yahoo and Google it may make a lot more sense to build social features into existing products. You can still generate the excess ad inventory and target better.

Another argument for building social networking features into an existing portfolio: What happens when social profiles are portable from sites like MySpace to Facebook to LinkedIn or any other site?

I honestly don't know if social networking is much more than a feature over the long run. My own behavior indicates that a) I'm either not social; or b) there's not enough on Facebook to keep me interested in the long run. It may be some combination of both, but I'm not joining any other social networking sites--despite dozens of invites to join new sites like Quechup.com.

Bottom line: Social networking fatigue exists. And I don't think the answer is building more social networking sites.

Topics: Networking, Browser, Google, Social Enterprise

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

4 comments
Log in or register to join the discussion
  • If you're Google or Yahoo, build it

    If the going rate for MySpace or Facebook were "only" a couple billion I could certainly see a case for just buying these properties outright. But obviously you're not going to get them for anything remotely reasonable in the current environment where the hype has driven their speculative values through the roof. Maybe if the market tanks and advertising budgets take a hit they'll become more open to the previously rumored numbers.

    I've said it before and I'll continue to say it, the ad revenue's just not there (and is not going to be there even with a strong behavioral-targeting platform) to justify an acquisition above the rumored buyout offers already made. Google (and especially Yahoo) already have their own MASSIVE user base of registered users. At this point I'd say just try to build a solid platform and hope it gains traction. If not, don't sweat the fact that you might be losing out on a big share of the social networking pie. The volume in that space might be high, but the value of that property from an ad revenue standpoint is poor (at best) and is projected to continue to garner only a small piece of the overall online advertising pie. Search and original content sources will continue to garner the lion's share of online advertising for the foreseeable future.
    RustyShackleford
  • RE: Social networking: Should Web giants buy, build or integrate features?

    If you're Google, build it. The Web is your Social Network.

    If you are Yahoo or Microsoft, buy it. You need to show the world you are still relevant and buy time to fix your problems.

    More here:

    http://smoothspan.wordpress.com/2007/09/13/social-networking-should-giants-buy-build-or-integrate-features/
    BobWarfield
    • Buy at close to $10 billion?

      Because that seems to be rumored theoretical price that MIGHT get the attention of Facebook's founder and original investors to reconsider their IPO plans (I personally believe a Facebook IPO would be the antithesis of Google's IPO, serving as a swift kick in the groin to the online advertising business.) Yahoo certainly can't afford to shell out $10+ billion right now. Microsoft and Google are the two main players with deep enough pockets for that. Yet I haven't heard much about either pursuing Facebook that aggressively (the Microsoft $6 billion rumor started from analyst speculation, not insider knowledge of any actual talks.) Between Google and Microsoft, Microsoft would be the only one I could remotely see interested in Facebook. If Google's going to shell out that kind of dough, they'd obviously rather write that check to the FTC. ;)

      I agree that the primary (and pretty much only reason for the foreseeable future) that you'd buy Facebook would be for "eyeballs." Because the ability to monetize those eyeballs in that environment clearly just isn't there to justify the current valuation Facebook seems to be holding out for. Microsoft has already had a nice long peek under Facebook's skirt by serving as their ad network. They know the bottom-line financial potential for the service as an ad-based company, yet there haven't been a whole lot of 'Microsoft to buy Facebook rumors' floating around. Even with a fantastic behavorial-targeting ad platform that delivers 3x the current results, that's still just 3x next-to-nothing.

      And I guess I sort of just jumped to the conclusion that social networks in this instance really just means Facebook given that we're talking about trying to go after marketshare and a large existing/growing user base. MySpace would likely cost just as much if not more. Maybe if you can pick up a solid existing platform like Bebo for a 'steal' then that might make sense depending upon how fast you can integrate it. For somebody like Yahoo though trying to integrate all their disparate properties with a new acquisition would seem even dicier than just building something of your own.
      RustyShackleford
  • RE: Social networking: Should Web giants buy, build or integrate features?

    Definetly social networks are a boring and tiring sites when they lose focus. The fatigue sets in when you run out of brain juice if you sign up with every social networking site you come across and tries to keep in update with them all. It is like a party animal visiting every pub in the town every night of the year! You sure would die or get depressed.

    But targeted social networking with focus, commitment and objectives will sure win the race if they are not created to depend only on ad monies. Everything will reach a saturation point at one or the other time. Ad revenue is also something like that.

    Time for new thinking and new angle.
    tadchikala