Every time I open the newspapers or browse popular social media blogs, I see articles by so-called “analysts” (unfailingly with zero years experience in computer programming or social network design), “predicting” the future of my industry. With this week’s reports of Facebook topping Google in web traffic, the journalists have gotten their knickers wound up in nasty twist, with a few cowboys getting so excited they proclaimed that Facebook is on par with Google. Browsing through the entries in the national news and then the blogosphere I saw that the populist “analysis” centered on three tenets:
- Facebook have more traffic than Google and this continues to increase
- Facebook are creating a new killer OS (a delusion based on a recent quip by young Zuckerberg)
- Facebook’s targeted advertising is more effective than Google’s version.
In this series I will show that each of these assertions is false and argue that Facebook are nowhere near being a competitor to Google. Before anyone gets upset, I’m not arguing that Facebook is doomed. This year they will grow their user base enormously, incrementally add new features and continue increasing their profitability further into the green, perhaps even to $3 billion in advertising revenue. They’ll do fine. But they ain’t got nothing on Google.
Myth 1: Facebook have more traffic than Google and this continues to increase
This statement is both wrong and irrelevant – yet has been propogated throughout the media throughout the past week – including Newsweek and The Times.
To understand why it’s wrong you need to first learn a little about how domain names work.
Avoid if you don’t like set theory (or better yet learn set theory then read).
A website’s domain name (e.g. www.example.com) should be thought of as three sets, each of which is a subset of the set to it’s right. Taking the domain “www.example.com” and reading from left to right the first set (www.) is known as the subdomain. A domain (“example” in this case) can have many subdomains (e.g. www.example.com, mail.example.com or app.example.com), all of which are contained within the overall domain (“example”). Now the example domain (which contains all the subdomains) is itself just a subset of the top level domain, in this case (.com). Thus “www.example” is subdomain of “.com” just as “app” or “www” are subdomains of “example”. Differing entries at lower domain levels are all included with the superset to the right, but this relationship does not work in reverse. Thus app.google.com and mail.google.com are both included in google.com, but google.ie not included in google.com since as .com and .ie are different sets, each of which contains every single website or domain within that top level domain.
End avoidance warning.
Now, why does all this matter? One simple and important reason: Statistics for Google.com DO NOT include statistics for Google.co.uk.
Facebook only exists as “Facebook.com”, i.e. it only has one possible top level domain (.com in this case). Unlike Facebook, Google have many different top level domains (e.g. .com, .co.uk, .ie etc.). Thus we have Google.com, Google.co.uk, Google.ie, Google.de and so on. Each of these is a separate site drawing enormous traffic. At time of writing Google.ie is Ireland’s most used website, followed in second place by Google.com, and then third by Facebook.com. As you see the first and second spots in Ireland were held by two versions of Google existing at different TLDs. Whenever Facebook manages to end up in first place for a period this only means it is beating Google.ie or Google.com. It does not, however, mean it is beating the aggregate of the two. The only way to get an accurate picture of Google’s size is to aggregate the statistics for all these entries, something I’ve yet to see a journalist actually do. Indeed in the last week many prestigious publications (including NewsWeek and The Times) made the mistake of thinking Google.com traffic was representative of all their top level domains, thus exhibited an upside down understanding of the way domain system work. One last time for the audience: Google.co.uk is not a subset of Google.com
Even at this point the picture is far too simple.
Google owns a lot of websites besides it’s search core. Some of the biggest are Youtube, Blogger, Gmail, Maps, Docs, Translate, Wave, Picassa, FlickR, Ortuka. For a list of their acquisitions to date (92 at present) see the wiki List of Acquisitions By Google and to see a list of other service they provide see this wiki entry on Google Services. In calculating Google’s size (and quantifying the informational resources available to them), you really need to be taking all of this into account too.
Another dimension to take into account is when Facebook get their traffic. According to analytics firm Hitwise, Facebook was the “most visited site in the United States on Christmas Eve and Christmas Day”, beating even Google. There is a message here if we read between the lines: Facebook is where you go when your bored!
What is left unsaid is that Google is where you go the rest of the time. Surely your own experiences confirm this. If you’re busy at work you close down Facebook. If you’re finals are coming up in college you stop going on Facebook. In both these times your Google usage shoots up. You use Google when it counts.
More fundamentally, the idea of web traffic is misleading and needs further disaggregation. Traffic refers to a lot of different things – hits, unique visitors, time on site. With many of these statistics, less is actually more for Google. Google do not want you spending ages on their search site – they want you to find what you want and leave. They want you to solve your problem. If their results are good enough to give you the correct site in one second then that’s great. More time spend on Google’s site would indicate a failing on their part – you couldn’t find what you wanted so had to keep searching. Now Google ends up paying for not just one search query on your behalf but five or ten. Servers are expensive and the bottom line is that every time you click search you cost Google money.
So, the metric that counts is not simple traffic in Google’s case, but rather is the number of successful queries per day, success being defined as a user having solved their informational problem. As long as Google lead in this respect, it’s irrelevant to them where you spend the rest of your time online. So, in conclusion, even if Facebook oneday did top the Google aggregate in traffic, (something I see as possible in a few years), it still doesn’t even matter.
Next week I’ll deal with Mark Zuckerberg’s confusing quip that Facebook is a killer OS. It ain’t gonna be pretty….
Over the weekend a friend asked me why I blog and I thought to myself: what an excellent idea for a blog post. I’d like to make my motivations for blogging transparent so read on and find out why blogging has become as much a part of my life as regular exercise.
1) To Build Trust.
If you are working in the cloud, some of your co-workers, business partners or customers will never meet you. Most of these will still Google you before doing business with you – it’s a natural and understandable instinct. If someone Googles your name and finds nothings, or very little then you are an unknown quantity. If instead they find a blog, with hundreds of articles you have a personality. You have interests and a voice. People can get to know you through your writing, and can dig as deep as they like by looking through your archives. With my blog I hope that my current and future readers will become acquainted with my values, and from that infer information about my companies’ products.
I wear suits and I blog. Therefore I am trustworthy.
2) To Get Feedback on Ideas
The best way to develop an idea is through dialogue. Read through Plato’s Socratic Dialogues before you try to argue otherwise. When I blog, I have an audience of readers who think about what I say, then either comment, email or talk to me in person about the ideas. An added bonsus is that my readers learn about my interests and so bring them up with me when they see me in person, with such exchanges helping me develop my ideas further. My most valued readers will even tell me when I get something wrong – saving me from embarrassment or worse yet, from making a poor decision.
3) To Crystallize Thoughts
In an ideal world you would take half an hour aside everyday to think ideas through. We don’t live in an ideal world, and the truth is that the best way I know to think something through is to write about it. Mistakes in your logic become glaring as you type and the added knowledge that what you write will be read and judged by your readers ensures you keep strict quality controls . When I write, I don’t really have a clue what my conclusion will be until I’m nearly finished. I don’t write in chronological order either. I jot down ideas across the page, throw in various TO-DOs, then play around with the structure and content until it makes enough sense for me to hit “Publish.” The point is to get a reasonably firm conclusion about some topic out of my time spent writing – a new idea I can hopefully apply in the coming weeks.
4) Ego
Right know there are nearly 200 people who have read every single one of my posts. Some of my posts have 2000 readers. Not only that, but they spend a significant amount of time reading these posts. According to Google Analytics, my average reader spends 2:30 on each page. That’s huge. I feel flattered that in the age of the 10 second attention span so many people are willing to wait around to hear what I have to say, then come back for more the next day. It feels good.
5) To Demonstrate Knowledge
I studied law at University, yet I work with computers for a living. Someone might ask, rightly, how I can prove I have any expertise with the Internet since I have no qualifications in the area. My blog provides an answer to this – it lets people know I have thought a lot about what I am doing, and that I know the lingo and the ins and outs of my domain.
6) To Sharpen my Writing Skills
The secret to getting good at writing is to do a lot of it. Surprise surprise. That’s the secret to being good at anything – anyone who tells you otherwise is a liar. By writing regularly I improve my style and, since I hope to write a book in the distant future, I’ll take all the practice I can get.
Hopefully you can now see why I blog and perhaps get inspired to start blogging too.
People hate it when other people gets the better end of the deal. Most people hate it so much that they would willingly lose out on money just so that someone does not get a better bargain. To see what I mean consider this study: Two people were presented with $100. The first person got to decide how the money should be divided between the two and the second person gots to decide whether the deal went through or not. If the deal goes through then both people got the money in the division originally decided by the first person. If the deal did not go through then neither person gets any money.
Rationally the second person should always allow the deal to go through provided he gets more than 0%. Even if 99% went to person one and only 1% to person two, then person two should still allow the deal on the basis that 1% of 100 euro is better than nothing.
As is often the case with experiments in psychology, the results show us humans to be less than rational creatures. The second person was found to be likely to block the deal whenever the first person was got a much better deal. Thus, for example, when there was a 50/50 deal the second person would allow the deal, but when it was 70/30 he would veto the deal.
The second person would rather miss out on free money than be on the bad end of a deal. That’s humanity for you.
Now how can we, as businessmen and supposed practitioners of rationality take advantage of this information? An internet marketing guru, Eben Pagan, with an annual turnover of $20 million dollars in information goods, puts the answer simply: let the other party get a better deal than you. According to Eben, the richest people have a policy of letting other people take advantage of them. The trick is, however, that they are only being taken advantage of in a small way.
By way of example consider a restaurant in San Francisco that leaves a bottle of wine on every table and let customers help themselves to it. As expected many customers took advantage of the offer, taking two to three glasses on average. To the customers the restaurant owners appeared like stupid, since they were being taken advantage of. If paid closer attention, however, you would notice that the restaurant was booked out every night.
Want to get rich? Then let other people take advantage of you….or at least think they are.
In an ideal world everyone would share the full extent of their knowledge with others, creating a society with unimaginable wealth and progress. Unfortunately we don’t live in an ideal world; on this earth many keep their knowledge guarded. In a world like this you often need to keep your aces up your sleeves in order to stay ahead of the racing crowd.
At least that was my initial logic. I did then play devil’s advocate with two ideas which contrasted with this initial conclusion – firstly that you should be the change you wish to see in the world and secondly that some authors, particularly in the blogging realm (like Seth Godin, or Daren Rowse), argue that you are most likely to find success by sharing your best ideas freely and openly.
I brought up this dialogue when I was driving to Dublin with my aunt Sheila today. Her take:
“You should share knowledge only once you have vigorously* proved it to be true.” “That way”, she said, “you retain the leader’s advantage necessary in this guarded world long enough to reap the benefits, yet still remain true to your cause as now you have only shared knowledge vigorously shown to be true, instead of half baked barely tested ideas.”
*A vigorous truth, in my and Sheila’s eyes, is one which has been “shown” to be true multiple times – through repeat example and statistical soundness.
Watch this excellent screencast in which, Geoffrey Grosenbach, the owner of Peepcode, a web business which makes training videos for computer programmers, shares frankly and honestly all the lessons he learned selling intangible information products online.
Oxente-PeepCode.mov
Read the transcript here.
