[6ren]

Google's market cap is 188B, and they are changing everything to compete with Facebook. Google is based on information that people want. Facebook is based on the social interactions of people themselves. That's one giant leap closer to where the money comes from (people).

As for what need Facebook meets... it's communication (and communing): people connecting with people. This is the basis of many technological innovations (telegraph, phone, internet; some would include trains, planes and automobiles as "communication" technologies). There is plenty of need left unsatisfied. The question is, has Facebook perfected what can be gotten out of the internet yet? If not, that means they have room to grow. (one day they'll be blindsided by a new technology that better satisfies that need; but that's a different issue). And, if there is room to grow, are they going to retain leadership? e.g., will Google overtake them? (google serves a different need of customers, so I think google will win there, yet not beat facebook at the need it serves).

Big issue: some people thought myspace would be long-lasting, yet facebook toppled it. Facebook is very aware of this fact. They have some idea about what would make them vulnerable, and, like Microsoft being very aware that they won out over IBM, they won't be complacent.

That said, IPOing before google+ hits its stride is good timing...

[jcampbell1]

> That's one giant leap closer to where the money comes from (people).

That statement is backwards. Facebook sort of knows what I kinda like, but Google knows exactly what I want, right now. If I type "Escort midtown manhattan" and click the Google ad, Google will make about $4, which is more than Facebook will make during an entire year by guessing what I want.

Search ads are 1-2 orders of magnitude more valuable than perfectly targeted display ads.

* The escort example was to only prove the point that wants are where the money in advertising is, not people or interactions.

[jacques_chester]

> That's one giant leap closer to where the money comes from (people).

Actually, the money comes from advertisers.

Eyeball-hours are a fixed-sum game at any point in time (the sum grows over time). Eyeball-hours spent on Facebook are eyeball-hours not spent elsewhere looking at Google searches, Google products or Google-mediated advertising.

[6ren]

The value of one eyeball-hour is not fixed. The more targeted the advertising, the more effective and therefore valuable it is. In fact, for sufficiently well-targeted advertising, it doesn't need anything - as when you seek a product. Overture/goto made money like this (google used its ideas for adwords).

Consider advertising on TV and print media: you try to hit your demographic and hope for the best. Next is direct marketing: you can measure your success based on response rates. Then, internet advertising (eg google) accelerated this feedback to be instant.

But it's still hard to know what people want or need to buy right now - ideally, it would go far beyond your demographic (a huge set of which you are a member), beyond an ultra-fine-grained demographic (a tiny subset), beyond what you want right now, to anticipating your need so exactly that you don't have to ask. Like consultative selling (or perhaps a PA/butler), it stops being advertising and starts being a service in itself.

Google has a lot of information, and can do some of this really well; but Facebook is much closer to the user, and so has much more and better information about them, so they are better-placed to do this.

Google has the long-term goal of anticipating the information you want; and they are doing well (e.g. search suggest). But it's primarily aggregate prediction, not personalized. They can (and do) personalize it somewhat, but just aren't as well-placed as facebook, because they aren't as close to the user (people).

People are ultimately where the money comes from. That's how advertisers get it.

[chancho]

The more targeted the advertising, the more effective and therefore valuable it is.

But it's still hard to know what people want or need to buy right now

They can (and do) personalize it somewhat, but just aren't as well-placed as facebook, because they aren't as close to the user (people). People are ultimately where the money comes from. That's how advertisers get it.

So who's information is more valuable? Facebook's because they know more about you overall (your friends, your habits etc.) or Google's because they know what you want right now (because you just entered it right fucking there in the search box)

I'm leaning toward Google. If someone has a problem, they go to Google to search for ways to solve it, and as you point out, that's precisely when they're most amenable to advertising. People go to Facebook to connect with other people. Advertising will always be noise there. (Stupid mindless games notwithstanding.)

[jacques_chester]

You're right, I agree.

But I didn't say that eyeball-hours have a fixed value. I said that there is a fixed supply (at a point in time).

It is necessary to get the eyeball-hours in the first place. That Facebook may be able to wring more out of them than Google is important; but from Google's POV the attrition of its eyeball-hour supply is more important.

[6ren]

Eyeballs aren't necessary, if you accept that automated consultative selling is possible (unproven so far!). The model stops being advertisement-riding-on-content, and instead is a message sent directly to you (or that you request).

Well, I guess it must be somewhat possible, because overture/goto did it... (they aren't around any more because Yahoo acquired them, and their technique was adopted by Google - but no one else has done it, so maybe it's not workable any more. Perhaps because Google does it (i.e. it's a feature of Google search - just turn off adblock and ignore the search results - and Google has better access to users (eyeballs), so advertisers would prefer it.))

What I'm saying is that it doesn't really need eyeballs, but what eyeballs bring: access to you. There are other ways to gain that access (that aren't as good so far). It does need to know you intimately, so content probably helps (is crucial?). And you need to trust it. (Which you would do, if it turned out really to be fantastically helpful.) It also needs fantastic AI to predict your needs before you do...

My understanding is that getting info about users was the business model behind (the failed) Color. Maybe, in theory, content/eyeballs aren't strictly necessary for automated-consultative-selling, but perhaps it's the only effective way to get the information to model them, and to get access to them, in practice, at the moment.

This could change.

EDIT by coincidence, the frontpage has an example of non-content access to users: Curebit http://techcrunch.com/2012/01/27/yc-alum-curebit-raises-1-2-...

BTW: I agree eyeball-hours are a fixed-sum game. I wasn't contradicting that, but the assumption behind it.