Endeavour Partners - Blog

My colleague, Moe, posted a fascinating chart from Alexa.com comparing page views for Google and Facebook. I dug a little deeper and made three observations:

Users look at more pages on Facebook (data from Alexa.com)

People spend more time on Facebook (data from Alexa.com)

It's Facebook that has the link

About 18 months ago I was at a wedding on the West Coast with some folks from Google.  An interesting topic of conversation was about “Who could unseat Google?” and, generally, the importance of search.  A major theme of this discussion was about how as technology and user behavior changes, the leaders in one era rarely make effective transitions to become winners in the next era.

Google bested Webcrawler, Northern Lights, and other online search companies, but – more importantly – search beat out directories such as Yahoo! and AOL as the preferred way to find and access information on the Internet.  Our little group agreed that none of the search contenders (Ask.com, etc. – there was no Bing yet) had a chance.

I argued that social networking in general and Facebook in particular were the biggest threats.  Hours and hours of online activity are occurring on Facebook where Google has no sway, no advertising opportunities, and no information about what users are doing.  More importantly, Facebook is becoming an important mode of content discovery:  People recommend books, sneakers, music, and movies to their friends.  It is also becoming an important method for spreading breaking news.  Facebook is, for example, how I found out about the Ft. Hood shootings.

Today, I saw some extremely intereresting data on Alexa.com that shows how this battle is playing out.  The following chart shows how each week Facebook and Google flip-flop as the Internet leader in total pageviews.  Facebook rules on the weekend; Google rules during the week:

Each weekend Facebook passes Google in pageviews; during the week Google reclaims the lead (data from Alexa.com)

This has been going on since Facebook caught up to Google back in August:

This pattern has been repeating since August of 2009 (data from Alexa.com)

Let me know what you think.  Will social networking displace search as the default approach to discovery on the Internet?  What are the implications for Facebook and Google if this occurs?

(By the way, this is the second time that Facebook caught Google in share of total pageviews.  The first time was during the 2008 Presidential Election.  After the election, Facebook’s pageview share dropped precipitously and took about six months to recover to their prior level.)

At the moment, we’re doing some research on the future of web services.

One of the things I was exploring was the economics of social networks and social gaming, when I came across this fascinating post from Michael Arrington on TechCrunch about the [alleged] economics and ethics of some Facebook games such as Mobsters and FarmVille:

Last weekend I wrote about how the big social gaming companies are making hundreds of millions of dollars in revenue on Facebook and MySpace through games like Farmville and Mobsters. Major media can’t stop applauding the companieslong enough to understand what’s really going on with these games. The real story isn’t the business success of these startups. It’s the completely unethical way that they are going about achieving that success

If an ecosystem is to survive and thrive, it must be built on a sound foundation; that includes a solid ethical foundation. Although these tactics may drive short-run growth and profits, they are not a basis for an enduring ecosystem. Users will become disaffected, word-of-mouth will suffer, and particularly in an environment such as Facebook, designed to facilitate communication amongst friends, information about these scams will spread like wildfire.

Clearly, some of those involved are a little sensitive about this:

[youtube=http://www.youtube.com/watch?v=2PhKRCkbX9A&color1=0xb1b1b1&color2=0xcfcfcf&hl=en&feature=player_embedded&fs=1]

For the avoidance of all possible doubt, this is not a critique of the games themselves. Rather it’s an indictment of (1) the people conducting the scams [like these] and (2) those who condone them.

Note: amended thus and [thus] to reflect continuing debate on this topic

Just saw the Fan Check virus scare posted by a Facebook friend:

Like many virus scares, Fan Check appears to be a hoax.  But this is the first such post I’ve seen on Facebook and it strikes me as an important milestone.  Viruses, virus scares, identity theft and even those annoying chain letter people are moving from the world of email into the world of social networking.

Facebook identity theft threats are particularly worrisome.  In some cases, imposters have taken control of people’s identities on Facebook.  In others, thieves have used Facebook to get at security details and passwords.

But the bigger implication from all this is that the scammers have recognized that social networking is where the money is.  Look for advertisers to figure this out, too.

Google is the leader in Internet advertising because it is currently the king of discovery.  Google search allows people to find nearly anything fairly quickly.  But search is only one form of discovery.  Amazon.com and other sites use referrals and recommendations to aid in discovery, but this is built on automation and algorithms:  People with similar likes and dislikes are analyzed to help identify things you may find interesting.  Facebook is positioned to revolutionize this approach, turbo-charging word of mouth as recommendations come from trusted friends.  The question is how to harness this massive network of friends without breaking down the level of trust?

If advertisers are half as creative as the crooks and thieves, then things should get interesting.