The media is abuzz about how Facebook is Google's next big threat. Pundits declare that as Facebook's user base explodes, top dollar advertisers will pick Facebook as their primary online advertising channel.
I am going to stick my neck out and say, ads on Facebook will not survive in the long run and they are hardly a threat to Google's key word based search revenues.
Yes, estimates say Facebook pulled in more than a billion dollar in ad revenue this year. Major brands have been writing odes to Facebook as the next big thing for targeted ads.
In fact, Facebook is sitting on a data mine of personal information from 500 million plus unique users. Microsoft even bet a couple of hundred millions on Facebook's future.
Microsoft and everyone else, here is my 5 cents!
There is no doubt that Facebook is a great social networking site.
In general, I like the way it works and that they have built a great platform for application developers. However, what is questionable is Facebook's effectiveness as an advertising platform, which right now, is their primary source of revenue.
At this point, statistics about advertising on Facebook can be very deceiving.
From Facebook's own timeline, about 80 per cent of its users joined in the last couple of years. For the vast majority of these users, the novelty of Facebook as a service has still not worn off. They are just about getting used to frequent changes in its layout, privacy policies and new friends joining the party.
However, Facebook five years from now would probably have most of the online population aboard. What happens when your friends list looks as staid and static as the previous year?
What happens when people grow tired of umpteen mindless posts?
What happens when companies start invading your personal space with requests and banners?
Will Facebook still continue to be the hangout place on the Internet where people spend 25 per cent of their web time
In the long run, people get bored of their static social connections, just as in their real lives. A year ago, people sent gifts from Farmville by the hour. Today, their farms are dusty, dry and neglected.
Even if Facebook survives social fatigue, I am no fan of someone posting banners and advertisements at my digital doorstep. Facebook ought to be a private space where people spend quality time interacting with friends and family.
For all its targeting and profiling, most people I checked with hardly ever notice ads on Facebook, leave alone click on them.
On the other hand, Google presenting ads to its users exactly when it is being searched for, is far more relevant and hence, effective. It's a proven model that has raked in dollars through good and bad times.
In spite of all the competition, when it comes to searching for information about a product or service, Google still remains the first choice for a majority around the world.
The fact that Google knows exactly when an individual is looking for something is powerful contextual information.
Facebook's ability to glean such information from its users' database is limited to what an individual chooses to declare.
Facebook and Google will continue to tweak their services, both for users wanting a unique experience, and for advertisers wanting to maximise revenues.
But the very premise on which they are based, Facebook for social and Google for search, gives Google an edge on ad revenues.
Here's wishing Facebook the very best as a networking site. Advertisers must look elsewhere and Google should just continue doing its own thing!
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