Real-time social wars: where's the money?
So, I've been studying Facebook, FriendFeed, Twitter, and Google's Wave and other things for some time.
Last week I also visited Yelp, which is growing at a million new users PER MONTH.
Twitter is growing at about 4 times that rate. Facebook is growing about 2x that rate.
So, these are the big players. It's clear that they are getting massive adoption. I don't see that slowing down or stopping for any of these players.
But where's the money? To figure that out you've got to see where they are coming from. What is their usage model?
Facebook's? They built the rolodex of the web. They have the white pages. Sorry, Yahoo, you are toast there. TechCrunch reports that Yahoo wants to be the place people go for social search. That's done. Facebook is it. Strength? They are the white pages. Weakness? Not much interaction with brands and businesses.
Google's? That's where you go to search for most things. Especially businesses. Looking for Sushi in Palo Alto? You go to Google. I also go there to find people's emails, blogs, and Twitter accounts, but they don't have that locked up. Facebook, for most people, does a better job of finding blogs, emails, and phone numbers. Strength? Mobile integration thanks to iPhone. Breadth of usage, thanks to all the dozens of things Google does, from Picasa to Google Maps. Business listing and location is best of breed, but... Weakness? Google doesn't get social software. It just doesn't know what to do to make a Twitter. They bought Dodgeball and Jaiku and then squandered those purchases. The founders aren't really very social people and the culture there is very engineering focused, but not very human focused. Will they overcome that? My bet is no, but they will keep trying.
Twitter's? They understand how to get people to participate in public, which makes search possible. Plus simplicity and openness of their APIs make brands and celebrities hot and bothered (they tell me that Facebook and Google are too complicated to use in comparison). Strength? Publicness and engagement of both developers and celebrities and brands. Weakness? They don't have a good list of businesses like Google does and they don't have a lot of hooks that keep users engaged like Facebook does. They don't iterate fast enough to take advantage of new learning and they are -- so far -- squandering their lead in real time search (it has actually gotten worse over the past year instead of better). New APIs like retweeting and location have been announced, but not really baked into the service yet.
Yelp's? In cities where Yelp is getting adoption, they've found the best business integration of all of these and businesses are now paying to "offer" their users things to get new customers into the door. This is where the real money is and over the next year you'll see Facebook and Google figure this out. Strength? Best of breed business recommendations and best mobile experience for finding local businesses. Weakness? They don't have the general engagement that Facebook and Twitter have. Also, Yelp is only strong in a few cities and is in the midst of a landgrab that could be stunted if Facebook or Google ship a local business service soon.
So, where's the money?
Twitter seems to have moved away from the idea of competing directly with Facebook and Google over a business listing service. That's a shame, because Twitter has the potential to be a powerful business interaction service. We were just in a sushi restaurant in Boulder, CO, which is already using Twitter in an interesting way (we'll have a video about that up in the next week or so) but will you search for sushi in Boulder like this on Twitter? No. You might praise or complain about the restaurant on Twitter, though, and Twitter is moving to charging businesses for more features like group management tools (at Rackspace we use TweetRiver, other businesses use CoTweet, but I can imagine a world where Twitter does these features themselves, or acquires one of these companies and charges for extra features like these) or tools that give more insights into what's happening in the marketplace. Or, look at services like TweetMeme that are tracking retweeting behavior. That will provide an early warning system into Twitter for many businesses in the future.
I think Twitter is going to miss the real money, though. The real money is going to come out of those business listings. Yelp has it figured out. Facebook is stuck inside its walled garden and is doing everything possible to figure out how to become more public, so it can turn on search features. Even today Facebook hired "Mr. Open" David Recordon. If I were Mark Zuckerberg I would rebrand the public part of Facebook as "Facebook Public" and make it very cool to publish there. For the past few days I've been using the not-released-yet Facebook 3.0 iPhone app. You can see this "publicness" all over the place. Zuckerberg understands why Twitter got businesses hot and bothered and is doing everything possible to get his 300 million users there before Twitter figures out it needs to do a business listing and search service.
How will Facebook collect the cash? Well, go to Google and let's do that sushi search for Boulder, Colorado again. Did you see how that list works? Facebook needs that list. Twitter isn't even close. But what's missing? PEOPLE! Imagine if this list, when it's brought to you by Facebook, shows that #1 has been liked by 14 of your friends? Businesses get that for free. But what don't they get for free?
Yelp's "offers." Businesses PAY to "offer" things to customers to try to move up the list.
So, if you're the #3 business on the list, you might say "bring your iPhone in and you'll get free beer." Doing that will cost you money, both in the free beer and the advertising you'll pay Facebook or Google or Yelp to try to move up the list.
Google has the list. It doesn't have the humans or the offers. Yelp has the offers but doesn't have hundreds of millions of people. Facebook has hundreds of millions of people and the "like" system, but not the offers.
So, who will get there first? Now you understand the battlefield. Who will win the war?
My bet is on Facebook. Why? Well, they just hired the guy who built Gmail and the monetization system at Google.
