Google, Facebook and the Innovator’s Dilemma
Outside Google HQ. flickr.com/photos/ozaking
Google is currently at a cross roads. They have recently changed CEO’s from an external hire to one of the founders, Larry Page. Google has recently announced cutting several high profile projects and has decided to focus on some of their core business objectives. This is a good thing for the most part. They have cut overhead and reduced expenses on products that are pulling the company away from what it’s best at; Data and Ads.
Google has been making an aggressive push into the social media landscape. They have done so for two different reasons. First, they have been pressured by investors and the media to move into social media. People are looking for an alternative to Facebook’s control and are looking to Google as one of the companies to do it. Second, social media is a ripe area to expand and attract new ad revenues in a hyper focused manner.
Google has not had a very high success rate with their social media websites. They completely failed with Buzz and have a very small user base with Orkut and are discussing killing this as well. Though Google initially had a wildly successful launch of Google+ there has been a mix of up and down months in terms of usage. One blogger argues that Google+ is going to be the end of Google and that they need to radically change their company to survive. In this I completely disagree and believe that Google is actually experiencing a classic case of the Innovator’s Dilemma.
The Innovator's Dilemma. Source: Amazon.com
In the book Innovator’s Dilemma, the author, Clayton Christensen, explains how the hard drive market was structured (see a history of hard drives). Effectively there were large companies that were meeting the demand of existing customers. At one point this was solely 14″ (bigger than a dinner plate) hard drives. Over time new entrants developed, as did the incumbents (typically late though), smaller versions with a smaller capacity. The large customers did not want this and the new entrant’s had to find new customers. Eventually, once the quality of this product reacted a cross over point the main stream customers switched to the smaller hard drive size. They were nearly the same in capacity at that point. After each of these changes in size nearly all of the incumbent firms were wiped out. This type of change occurs just as easily in the earth mover technologies as well.
I believe that what we’re seeing between Facebook, Twitter, Google+ and Diaspora (open source more secure version of Facebook) are incumbents competing against new entrants that have a different type of technology. Yes, everything that Google+ does Facebook could 100% replicate if they wanted. However, Facebook is looking down on Google for their efforts with Google+.
It appears that Facebook and Google+ are in a different product space. There are things that Google+ does much better than Facebook and that they could easily expand on. What Google+ needs is a large number of innovative users to really fully exploit the technologies. I believe this is happening. I have a few photographers on my Google+ and Facebook feeds, and I feel that Google+ does such a better job with Photographs than Facebook. There are communities that are developing unique ways of creating interaction with Google+ and uploads of photos. I don’t really take a lot of pictures myself, but it is significantly easier to get pictures from my phone and computer into Google+ than Facebook. It’s more intuitive and streamlined.
I can see Google+ becoming a social hub for collaboration and user created content. Google already knows how to manage user created content because of YouTube and it’s obvious that Google is going to fully integrate Google+ and YouTube in the long term (gmail as well). Google will have significant better collaboration abilities because of Google Hub and the Google chat features. There are various methods to connect with video and chat messages that Facebook doesn’t have.
Facebook. Source: flickr.com/photos/mostlymuppet
Google does run a big risk if all these integration efforts fail and drive away users of killing all of these services. However, if they don’t they have a huge increase in user created content and information about users to drive better ad targeting., which will significantly increase revenue.
Facebook on the other hand is the incumbent and already has a huge user base. Many of these efforts won’t increase the amount of ad revenue and will likely cost Facebook money. Within Facebook there’s been a well established way of doing business and changing Facebook to include features of Google+ would greatly disrupt these features.
These changes would also disrupt the current experts of social media as well. They will have to learn how to teach their clients how to use these new types of mediums. This could be a reason why there are people out there that want to see Google+ fail. I don’t think Google+ will fail any time soon. Users are finding interesting and unique ways of using the service.
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