Seems like Facebook vs Google is heating up again. Though investors have lost more than 60 percent of their money invested during Facebook Inc (NASDAQ:FB)’s IPO, the social media giant is once again planning a head-to-head war against the web juggernaut, Google.
Back in 2011, Facebook Inc (NASDAQ:FB) grew by leaps and bounds, adding over 100 million users every quarter. That growth pushed the company’s IPO valuation to $100 billion. The Menlo Park, California-based company was aggressively hiring Google Inc (NASDAQ:GOOG) engineers, and threatened to grab a portion of Google’s ad revenues. It forced Google to be more social, and Larry Page tried to position Google as “a social destination.”
But this year, everything has turned upside down. The Facebook Inc (NASDAQ:FB) IPO was a big flop. The user growth is stalled. Revenues are disappointing. Now it’s Google+ adding 100 million users, and this year, Facebook’s market value is on the decline. And, earlier this month CEO Mark Zuckerberg said in a talk with TechCrunch, that Facebook Inc (NASDAQ:FB) is planning to bring its own search engine to generate more revenues. That shows desperation to grow after a disappointing IPO.
What does it mean? Social media hasn’t affected the search business at all. When Facebook and Twitter came, people flocked towards them, but that didn’t affect the popularity of the world’s largest search engine. Google Search continues to grow steadily. Social media grew so fast in the past few years, that people started believing that search has started to die, and social networks will rule the future. I agree that people spend a lot more hours on Facebook than they spend on Google’s search page. But the two are (so far) distinctly different businesses. People use social media to network with other people, but they go to Google when they want answers.
To grow further, both the giants had to intrude into each other’s territory, and they did. That’s when the rivalry began. Just a few months ago, Facebook Exchange was launched. This app allows advertisers to place targeted ads based on the user’s browsing history. It’s the ditto of Google’s Ad Exchange. And the recent attempt to enter the search business is another caricature of Google. Facebook Messaging is an imitation of GTalk, and Facebook Photos is similar to Google’s Picasa. Google has also gone social.
Facebook is now serious about getting a chunk of Google’s business. That’s why many investors think that Facebook Inc (NASDAQ:FB) stocks are attractively priced. But, competing with Google Inc (NASDAQ:GOOG) isn’t a cakewalk. Here is the infograph showing how Facebook stands in front of Google.