Google Makes Facebook Look Socially Awkward

JULY 7, 2011   THE WALL STREET JOURNAL

By ROLFE WINKLER

Mark Zuckerberg might want to fast-track Facebook's initial public offering.

In what appeared to be a hasty response to the launch of Google's rival social-networking product, called Google+, Mr. Zuckerberg on Wednesday unveiled Facebook's new video-chatting feature. He called it "super awesome." Too bad Google made the same feature available in 2008. Indeed, Facebook suddenly looks vulnerable. This could be bad news for investors who have recently paid top dollar for stock in Facebook in private sales.

Rule No. 1 when launching a social network: Make everyone wait in line. Exclusivity was how, in its early days, Facebook built buzz. For more than two years, you couldn't get in unless you had an email address ending in .edu. Google is using a similar strategy with Google+.

Facebook should take note that Google used the strategy before to kneecap Yahoo in all-important email, a key driver of Yahoo's traffic. Then Google rolled out Gmail—but only by invitation at first.

Rule No. 2 is to deliver a better service. Adopting a new social network could prove similar to adopting a new email address: Many will try it out, but to keep using it, they have got to be given good reason. That Gmail offered significantly more storage space than typical Web mail meant millions were willing to make the switch. Similarly, Google+ offers upgrades on what many perceive to be Facebook's shortcomings.

Attempting to describe real-world relationships more accurately is a worthy goal, and Google's latest attempt at social networking sets it apart from the competition. But that doesn't mean it's easy to understand. Plus: will privacy issues arise? Liz Gannes joins digits.

For starters, Google+ gives users a handy way to organize their social contacts into different "circles"—friends, relatives, colleagues, etc.—with which they can share appropriate things. Though Facebook now offers the option to create "Groups," users broadcast their information to everyone by default.

Google+ also offers group video chats. That is why Facebook's announcement of one-on-one video on Wednesday seemed to fall short. Facebook has yet to introduce group video chat.

The biggest hurdle for Google+ is getting users, of course. But it is integrating the service with Gmail, which already has 240 million unique users world-wide, according to comScore. Meanwhile, the user experience on Facebook is a victim of the site's success. Users have accumulated so many online "friends" it can be difficult to organize them. And users often feel assaulted by too much or irrelevant social information, like Zynga game updates. Ultimately, Google+ is a chance for social networkers to start over.

This doesn't mean people will drop out of Facebook overnight. Gmail users didn't necessarily drop their Yahoo email addresses. Indeed, Yahoo Mail still has more unique visitors, but its growth has been stagnant, whereas Gmail continues to expand quickly.

Facebook is already showing the first signs of slowing growth. One research firm, Inside Network, recently reported that Facebook's U.S. users dropped six million to 149 million during May.

Add it all up, and Google+ looks like it will keep Facebook on the defensive.

Write to Rolfe Winkler at rolfe.winkler@wsj.com