In light of the recent power shuffle at Google, I think this Saturday Night Live (SNL) clip featuring Mark Zuckerberg is important. Just hang with me for a few moments.
This SNL Appearance Represents an Important and Implicit, Market Signal. Zuckerberg and Facebook are accelerating the public relations momentum leading to the upcoming Facebook IPO. The subtle, market signal Zuckerberg and Facebook are sending:
Mark Zuckerberg Will be a More Visible and More Marketing/Public Relations Savvy CEO than Larry Page.
Here's my short list supporting my market signal hypothesis:
Give Zuckerberg credit for putting himself out in a high-profile situation like SNL. And remember, Jesse Eisenberg's portrayal of Zuckerberg in The Social Network is brutal.
Is Zuckerberg noticeably stilted and uncomfortable in the SNL cold open? Yes. Did he know this appearance on a such a high profile stage leaves him vulnerable to significant public scrutiny and criticism? Yes.
But, he had the guts and courage to do it anyway. And, with more practice and exposure to similar situations, Zuckerberg will get better. As a mid-twenties leader and visionary, he'll get more opportunities.
Zuckerberg carefully selected this particular media appearance (just as Steve Jobs carefully selected his appearances before/after his publicly disclosed illness). Here's Steve Jobs' now mythical 2005 Stanford Commencement Address. Don't tell me Mr. Jobs didn't carefully select this venue / moment at this particular stage in his life:
3. A pre-IPO, Facebook supplants Google as the cutting edge Silicon Valley place-to-be. Silicon Valley's brightest engineering talent wants a shot at wealth and riches too. They can achieve that by joining Facebook. The opportunity to achieve that once-in-a-lifetime dream shot is gone at Google.
Facebook continues stepping up its efforts to attract/recruit the brightest in Silicon Valley talent – at Google's expense. Here are two articles from The Wall Street Journal and The New York Times:
The Google-Facebook rivalry will intensify. This rivalry will touch every aspect of our online, media lives (desktop, mobile, publishing, entertainment, etc.).
Who will emerge as the winner.
Who will emerge as the next Apple.
Who will emerge as the next Steve Jobs (Zuckerberg or Page).
Who do you think it will be?
And, somewhere deep down inside, Steve Jobs must be smiling …
Part 7 of The Business Value Behind Social Media focuses on future opportunities in social media marketing and public relations (e.g., what's the next big thing). Chris Brogan, Charlene Li, David Meerman Scott, and Martin Giles (moderator) discuss future trends such as:
* Opporutunity #1: Responding to Customers and Influencing Business in Real-Time
* Opportunity #2: Giving and Gaining Our Permissions to Use Social Data
* Opportunity #3: Exploring Email Marketing and Online Communities
* Conclusion: The Implications of Gaining Permissions to Our Social Data is Why Google Fears Facebook
The panel's discussion takes place from 58:24 to 1:01:45 of the embedded video:
Opportunity #1: Responding to Customers and Influencing Business in Real-Time
The Real-Time Transformation of Traditional Marketing and PR (58:24 – 59:07). Real-time applications in marketing and PR fascinate David. He notes how social media is transforming the traditional, long-term planning / campaign process by contracting time. Long term campaigns are not going away. However, the future opportunity will be in engaging customers instantly.
Opportunity #2: Giving and Gaining Our Permissions to Use Social Data
Privacy Is Not the Main Issue Because Our Social Norms on Privacy Continue Changing (59:09 – 1:00:09). Our social media activities generate significant amounts of data. What advertisers and marketers can potentially do with this data is what fascinates Charlene. Gaining consumer permissions for what our data will be used for is the hidden opportunitity.
Charlene's Caller ID Analogy and Its Application to Our Social Data. When phone companies first introduced Caller ID, consumers complained the service invaded personal privacy. Now, consumers will only answer the phone if they know who's making the call. Charlene emphasizes our norms for what is private and how our data will be used changes daily. A prime example: Facebook frequently changing its privacy policies.
What Will Be The Accepted Norms for Granting Permissions. The opportunity is working out the accepted norms for granting permissions to our privacy data in social media (analogous to what credit card companies do with our purchasing data). If marketers and advertisers gain our permissions to use our social data, consumers will demand a transparent understanding of how this data will be used.
Opportunity #3: Exploring Email Marketing and Online Communities
Two Technologies Which Can Offer Much More (1:00:11 – 1:00:21). Chris is working on applications of email marketing with online communities. These are two, early 1990's online technologies that haven't gained a lot of traction. Therefore, he thinks these technologies have a significant upside.
Conclusion — Gaining Consumer Permissions to Social Data is Why Google Fears Facebook
Mark Zuckerberg's Power to Grant Advertisers The Permissions to Facebook's Social Data Scares Google. In my opinion, this is why advertisers are clamoring to gain permissions for Facebook's social data. I also contend this underlying phenomenon is what's driving Facebook's current $50+ billion valuation.
Why Advertisers Covet Facebook's Social Data. The data or "friend updates" we disclose in Facebook is information we opt-in to share with Select Consumers: Our Friends and Family. Our relationships and influence with these select consumers may be the more efficient and effective way for advertisers to influence consumer behaviors.
Therefore, Facebook's social data is extremely attractive to advertisers. And, this social data may be more valuable to advertisers than the search behavior data that's the foundation of the Google AdWords Pay-Per-Click (PPC) Model.
Google AdWords drives roughly 90%+ of Google's revenues. As a result, Facebook legitimately threatens Google's core business.
Here are resources I've researched and studied to support and understand why Google fears Facebook:
Facebook is Gaining Traction as the Doorway to Consumer Intent (not a Google Search). Facebook Connect allows consumers to login to almost any social networking related application. For the past decade, a consumer's stated online intent almost exclusively began with a search engine (e.g., a Google Search).
In my opinion, Facebook's strategic approach is the same but noticeably different: "To organize our personalinformation and make it selectively accessible and useful." At least for now …
The past 48 hours describing the power shake-up at Google provides the read-between-the-lines-evidence why gaining consumer permissions to social data impacts Google:
The future of consumer permissions will be a driving force in online marketing's near and distant future. Larry Page's (Google's new CEO) ability to contend with this driving force and the accompanying Facebook competitive challenge is the type of adversity Ken Auletta said that Google's founders had yet to confront.
I've been reading Googled by Ken Auletta and it's a fascinating history about the company.
The book highlights Google's engineering-driven or fact-based decision making culture. Auletta points out how former executives say that Google's founders don't value marketing. In fact, he writes: "Larry Page is aggressively disdainful of marketing and public relations."
This is why I'm surprised by Google placing a television ad during the February 7th Super Bowl. In case you didn't watch the game or haven't seen the ad online, here's a video clip from YouTube:
According to various sources, this television spot cost Google approximately $5 million to $6 million to air. Here are some good blog posts and articles you might want to check out:
1. Google sees Bing's search engine market share climbing and is carefully monitoring its progress against Google's core business
2. Microsoft's investment in Bing's advertising budget is sizable (~$80 million to $100 million)
3. Microsoft has taken a sound tactical approach in securing Bing partnerships (i.e., Bing is the default search engine in all HP PCs worldwide; exclusive rights to the online video coverage of the 2010 Winter Olympics being featured on the MSN homepage)
4. The Microsoft advertising warchest is sizable (i.e., ~$1.2 billion spent in 2008)
It will be interesting to see if Google will execute future "traditional" advertising campaigns. I'm looking forward to seeing their next moves and how marketing and branding may fit as part of their overall business strategies.
I've started reading Googled: The End of the World As We Know It by Ken Auletta. There's no question Google is reinventing and transforming the world of traditional media. If you're an online strategy nut or corporate strategy geek like me, you'll love this book.
I discovered this book from a Charlie Rose interview conducted on November 5, 2009. After watching the original broadcast and studying the online archive, I had to write a blog post about the key takeaways from their conversation. I also purchased Mr. Auletta's book from Amazon because I love learning how Google:
* Approaches and dissects problems * Views business opportunities * Drives and sustains innovation throughout its organization
Furthermore, Charlie Rose is the television industry's best broadcaster and interviewer. Check out this Fortune Magazine article: Why Business Loves Charlie Rose. The outstanding content and insights shared on Mr. Rose's nightly show make it required viewing. I also learn from Mr. Rose's preparation, questioning, and listening. He possesses that rare ability to comfortably engage guests and non-threateningly ask difficult questions.
Without further adieu, here are the seven (7) insights I learned by studying the conversation between Mr. Auletta and Mr. Rose. If there are additional viewpoints or lessons you think should be included from the November 5th interview, please share them in the comments section.
Insight 1: Ask Why Does It Have to Be This Way?
Google asks this fundamental question whenever confronting a problem or business opportunity. Their engineers challenge the status quo by starting with a basic assumption — the traditional analog world is inefficient.
Advertising. Wouldn't you want to know if people are reading your ads? Wouldn't you want to know if the people who buy your product(s) do so because of your advertising?
Packaged Computer Software. Why does computer software have to run from our hard drives or a computer desktop? Why can't it run off a computer "cloud" accessible through our web browsers?
Newspaper Publishing. Isn't there a more efficient way to publish and distribute newspapers?
Bottom Line: Google finds a way to drive out inefficiencies. This "engineer's mindset" is the core capability Google brings to solving all traditional problems.
Insight 2: Google and Microsoft are Different – and Alike
Cold Engineers Versus Cold Businessmen. Google isn't out to destroy the competition. Their engineering goal is to drive out inefficiencies. Contrast this mentality with Microsoft in 1998 (when it was investigated for antitrust concerns). Here, the US government questioned the company's intent to compete fairly with Netscape and Sun Microsystems.
Both Share an Inability to Anticipate Other People's Fears. Both Google and Microsoft are brilliant in solving problems. However, both firms don't understand why the US government and public would question their business motives. In Google's case, people now fear them the way people feared Microsoft in 1998. The recent legal proceedings between Google and the publishing industry regarding the digitizing of books is a prime example. Here's a recent article about how Google is attempting to smooth over relations with the publishing industry from The Washington Post titled, Google Allows Publishers to Strengthen Pay Walls.
Insight 3: No One Saw Google Coming (Not Even Bill Gates)
You Can't Anticipate What You Don't Know. In 1998, Mr. Auletta interviewed Bill Gates during Microsoft's antitrust trial period and asked what worried him the most. Gates replied: "I worry about someone in a garage inventing something that will displace Microsoft." Ironically, Larry Page and Sergey Brin are now Microsoft's most significant competitor particularly with their push to establish cloud computing and Google Chrome OS.
2006 was a Tipping Point: The $1.65 Billion YouTube Acquisition. Before this acquisition, it was unclear if Google was making money. With the YouTube acquisition, traditional media finally realized Google's broad ambitions and imminent threat as a future media company. Mr. Auletta said it best during the interview (paraphrasing): "Wow, they're coming after me (e.g., traditional media)."
Insight 4: Google Views Itself as a Media Company Not a Search Company
Become the First $100 Billion Media Company. Eric Schmidt says this is the ultimate goal. Currently, Google hasn't significantly monetized their product portfolio beyond search. However, you can't bet against them because of their involvement in a vast number of areas:
* Advertising: Google AdWords, Google AdSense * Telecommunications: Android OS * Television: YouTube * Books & Publishing: Digitized Books * Software: Cloud Computing, Google Docs
Make Money But Not at the Expense of Violating User Trust. Mr. Auletta finds this insight or clarity of thought extremely telling. At a young age, Brin and Page recognized the value of building user trust because they've received plenty of opportunities to make "easy money." For example, they declined Visa's $3 million offer to place a banner ad on the Google Home Page. Brin and Page declined becaus they thought the ad would be intrusive and disruptive to the user experience.
Insight 5: Google's Simplistic Home Page is a Nod to Steve Jobs and Apple
Google's founders admire Jobs' passion and his vision to simplify with "elegant design." The simplicity and clean look of the Google home page reflects Jobs' and Apple's influence.
Insight 6: How Will Google Handle Current and Future Challenges
Challenge 1: Expanding Revenues Beyond Search (aka The One-Trick Pony). Mr. Auletta points out how Steve Ballmer, Microsoft's CEO, criticizes Google's reliance on search-related revenues. But, I liked Mr. Auletta's anecdote that Eric Schmidt, Google's CEO, replied: "Yeah, but it's a pretty good trick." Still, Ballmer has a point. AdWords and AdSense accounts for $21 billion in revenues (out of $22 billion total). Mr. Auletta puts this number in context and explained that $21 billion is roughly equivalent to the advertising revenues for allU.S. consumer-related magazines. Also, Google's revenue is also equivalent to two-third's of U.S. newspaper advertising revenues.
Not too shabby for a one-trick pony …
Here's a video clip from the CNBC Original: Inside the Mind of Google. It talks about how Google is looking to expand its influence into the mobile market with its Android Operating System:
Challenge 2: Google is Concerned About Vertical Search Via Social Networks. I can personally confirm the power and appeal of search via social networks like Facebook or Twitter. I've commented on other blogs that the reason I find Twitter so powerful is because the people I follow on Twitter are often a better source of content than my own Google search. The authority of your Facebook Friends or who you follow on Twitter is why Google wanted to acquire Twitter.
In many ways, real-time search or conducting a search through Twitter is what Google would ask or propose to threaten their own offering. Google is asking themselves: "Why should you conduct a search through Google when you can solicit the trusted opinion of friends or people who share your common interests?" This idea is captured in one of the best articles I've ever read on Facebook as a potential threat to Google: Wired Article – Great Wall of Facebook: The Social Network's Plan to Dominate the Internet — and Keep Google Out.
Challenge 3: Convincing Top Talent to Remain at Google. Mr. Rose and Mr. Auletta discussed the challenge of employee retention especially when your top engineering talent (1) has no shot at attaining the top spot because you have young founders and (2) the opportunity for a big pay day has already passed. A prime example is Marissa Mayer, Google's VP of Search and User Experience. Even though she's achieved significant wealth as one of the original team members, she may want to forge her own path by leading her own company. Here's an article about Marissa Mayer from the New York Times titled, Putting a Bolder Face on Google.
Challenge 4: Trappings of Your Own, Phenomenal Success: Arrogance and Hubris. Right now, Google is not concerned about Microsoft Bing. They respect what Microsoft has accomplished with Bing and are aware of the Microsoft-Yahoo combination. However, Mr. Auletta thinks Google looks at Microsoft as "an old company" that won't move as quickly as Google.
Furthermore, when you're young and you've become successful so quickly, you begin to question why would anyone question your business motives (e.g., why's the U.S. government giving our company grief for wanting to digitize all books)? In 1998 and 1999, Bill Gates had the same attitude when the U.S. government investigated Microsoft for anti-trust concerns. Christine Varney, Head of the U.S. Justice Department's Anti-Trust Division, is investigating all concentrations of power and the tendency of Democratic-led administrations is to introduce more government regulation. As a result, Google has been beefing up its Washington office with legal talent. Check out this June 2009 New York Times article titled, Google Makes a Case It Isn't So Big. The story profiles Dana Wagner and his significant role in Google public relations on Capitol Hill.
Challenge 5: What Happens to Privacy? Will Google Continue to Not Be Evil? With every Google search we conduct, we leave a digital fingerprint or footprint (i.e., our individual IP address). Everyday, Google collects millions of data points about our online habits and tendencies. This is the reason why advertisers partner with Google. Advertisers want access to that information. What happens if advertisers make significant financial offers to Google to access to that information? This concentration of personal information on Google's servers is the biggest reason people fear it is becoming too powerful.
Here's another video clip from the CNBC Original: Inside the Mind of Google. It talks about how this very subject and includes Marissa Mayer's opinion on this issue: