A question of eyeballs

The new facebook has been getting its usual level of pushback for its new interface design.  One of the more interesting, if not stark, comments that appeared on my feed was the following:

Is it a coincidence that facebook becomes more like myspace right when google+ becomes available?

 

The short answer: No.  The long answer:

Google and Facebook* aren’t direct competitors.  Google has two primary ad platforms, which is its core source of cash: search and display.  When you decided to join Google+, you checked off a box to allow your data/posts to be used in advertising. That data isn’t being fed back into social ads.  It is being fed back into search and display ad targeting data.  None of these ad types actually occur (for now) on Google+.  In fact, I believe all the display ads that Google handles never actually appear on a Google site.  Considering that the data from these individual sites are often fed back into Google, (alongside say Neilsen Data) for ad purchasing reasons, open web data becomes really important for Google’s continual functioning.  That data includes, from Google’s perspective, social data signals (which Facebook hides).  Google+ is a way of recapturing that data.

Meanwhile, Facebook makes its money through two very distinct ways:  Social Ads and Facebook Credits.  Both of these forms of revenue only work on Facebook (You’ll never see a Facebook ad somewhere that is not Facebook, and there are little or no practical uses of Facebook credits outside of Facebook).  In order to make money (or continue to make money) Facebook has to make sure you spend lots of time on Facebook, feeding data about stuff you like directly into Facebook (rather than the open web), so that it can make money.

As a result, Facebook has to become more like old AOL and MySpace.  It’s model hinges of eyeballs staying on Facebook for long periods of time. Similarly, at their peaks, Myspace and AOL developed models where they had people staying on site (or in their dialup provider’s playground) for long periods of time.  It was a  model where the viral development of eyeballs meant money.

This model eventually killed both services.  Because they were beholden to the eyeballs, they ruined their site architecture with “things” to do, things that bloated the experience (and in AOL’s case, made it expensive to use compared to a straight connection using a Cable Modem).  These “things” may have caused more interactions, but these very same interactions ended up driving users crazy and caused them to move onto the next service.  AOL and Myspace both mistook viral eyeball time as being meaningful only when time was spent on site.  Users, however, drove time on site by increasing social connections with each other.  When more features that didn’t help complete the goal (being with friends), users left for simpler services that did provide the same social stickyness with a simpler featureset.

Unless you are a magazine or a newspaper and can figure out how to place ads that match your content online, it never seems to pay in the long term to try and make money off of eyeballs.  There is always some who will regather those eyeballs as your service becomes uncool and unusable.  Facebook may be able to survive only because of their humongous demographic base- but except a slow attrition as people find alternatives that satisfy what they are looking for.

*Exception: If Facebook buys 33Across.  They have the cash cushion to do so.