The Google & MySpace Story

June 27th, 2006 by Greg Sterling | 5 Comments

The Google & MySpace Story

Back in May I wrote a post called “Google’s Social Awkwardness,” about how Google’s potential vulernability resided in its general absence of a “social networking” site (notwithstanding Orkut) and limited integration of social media into its portfolio of products and services. Since that time it’s done several things (e.g., Coop, Notebook) to be “more social” but certainly nothing like the investment Yahoo! is making.

Now comes a post from Robert Young on Om Malik’s site discussing how Google had the opportunity to buy MySpace for half of what News Corp. paid but passed. This is a fascinating revelation and suggests two things to me:

* Google truly didn’t “get” the social media phenomenon until recently
* Google’s seeming bias toward building vs. buying (generally speaking) may hurt the company from time to time

This would be one of those times . . .

Greg Sterling is the founding principal of Sterling Market Intelligence, a consulting and research firm focused on online consumer and advertiser behavior and the relationship between the Internet and traditional media, with an emphasis on the local marketplace.

Comments

5 responses so far ↓

Jason on Jun 27, 2006 at 1:21 pm

This might be a silly question, but how is Google’s lack of a “social networking” component a vulnerability?

After reading Robert’s post, my overall response is “so what?” Yes, it’s impressive that 8% of Google’s traffic may come from MySpace, but that doesn’t speak at all to the problems MySpace is going to have monetizing that traffic.
Loren Baker, Editor on Jun 27, 2006 at 1:52 pm

Good point EZBlogger, perhaps Google did not want another Orkut on their hands.

However, according to a Vanity Fair article on MySpace, the social network is expected to bring in $120 Million in advertising revenue in 2006, about 20% of the $580 million sale price to News Corp., and that’s without major sub-monetization beyond movie and entertainment sponsorships.

If Google can work with MySpace to effectively monetize the profiles and home pages of users, perhaps Google will get the best of both worlds; monetizing a cash cow while keeping their fingers out of the pie.

But if News Corp can transform MySpace into a Search Powered monster beyond its social networking capability and also distance MySpace from Fox News and other conservative News Corp channels (notice how much play MySpace is getting on FX as compared to Bill O’Reilly), why couldn’t Google?
Bo on Jun 27, 2006 at 3:04 pm

Google was one of the last to enter the search market, and they conquered it by building a better product. Why overpay for a frail, poorly-designed site like MySpace when they could not only reproduce it easily, but improve upon it?
Promotional Product on Jun 27, 2006 at 4:15 pm

whoa, I was watching this video about Googlezon! http://mccd.udc.es/orihuela/epic/ols-master.html
It shows how google is getting on a more personal level.
SUNJAY on Jun 27, 2006 at 5:01 pm

Google and MySpace are too far behind Yahoo to catch-up in social media. While MySpace does a good job of targeting 18-25 year old kids, what about the rest of the world? What about communcation tools? What about news,sports, finance,autos, shopping,music,etc? Both of these companies are 1 trick ponies that will go the way of the Lance Armstrong, ” live strong” yellow wristband in 3-5 years.