Does Google Finally Understand Network Effects?
It’s no secret that Google is eager to try and break into the social networking market, putting themselves in with the likes of Facebook, LinkedIn, Twitter, etc. What may be a tad more surprising however is how much Google has struggled at this task, all the way up until it’s recent unveiling of Google+. Google’s troubles in breaking into the market largely fall right in line with problems that we’ve studied in class, with the largest being Google’s failure to push beyond the first equilibrium point in the price vs. consumers graph.
Google’s first foray into the social networking market was with a side-project called Google Wave. Wave was, in its most essential form, a multimedia-sharing platform where people would create conversations called “waves”, which were threads of pictures, videos, audio and text messages between participants. Although this model doesn’t exactly parallel the Facebook model of having friends and walls and likes, this is nonetheless an attempt at making a “social” product, and as such is greatly affected by network effects. In the end, Wave was discontinued due to “lack of interest”, i.e. Wave never was able to break past the first equilibrium point in our now oh-so-common price vs. consumers graph.
There were two main reasons why Wave was never able to catch on. The first was that it was just darned-hard to understand, requiring numerous lengthy tutorials to actually learn how to use. And then, finally when you knew how to use it, you had to pray that everyone else whom you may actually want to talk to had figured it out as well. Secondly, practically no one even knew that Wave existed. No huge announcements were made about it and there was no real hype about it in the mainstream. Google left Wave as just another experiment in Google Labs, which had two huge effects. The first is that the only people who would stumble upon Wave are people who actually browse through the Labs regularly. I certainly don’t do that, and chances are you don’t as well. Secondly, by leaving it in the Labs section, Google was essentially indicating that it didn’t see Wave as a flagship project — it was exactly what its location would imply: an experiment. Understandably enough, not many people wanted to invest in creating a new profile on an experiment which may or may not take off. In this case, the “price” of setting up an account was simply too high to be able to break past the first equilibrium point. Due to Google’s shoddy management, Wave was practically doomed from the start. Unfortunately, Google’s next attempt would not be markedly different.
Google’s next attempt at social networking was called Google Buzz. To get Buzz, Google basically took Facebook and gutted everything except the ability to post statuses. It then slapped a new name on it and called it a finished product. As could be expected from the description above, the product itself was nothing particularly ground-breaking. The UI was lackluster and the only real thing to do on Buzz was share things, be it thoughts, pictures, links, etc. Any avenue for actual social interaction took a back seat. In addition to not being a particularly compelling product, it also suffered from Google’s poor advertising. Buzz was again relegated to the Labs and, again, no real effort was spent making people aware that Buzz even existed. Needless to say, Buzz flopped as well. An interesting point to note however is this: Wave’s main failure was its high initial price. Because few people ever used it, that price could never be justified and Wave just slowly collapsed. In contrast, Buzz required virtually no upfront investment, but it still failed — this time because it simply wasn’t a desirable product. It was a heavily stripped down Facebook and never made the case of switching from the former to the latter. And thus, no one did.
After of Buzz, Google decided to give social networking one last go-around. This time, it took the form of Google+. Although Google+ has only been around for a short amount of time, some important observations can already be made. The most obvious observations are those describing how Google has corrected its past mistakes.
Firstly, the initial investment in Google+ is very low. If you already have a Gmail account, then you already have a profile — all you need to do is fill it out. In addition, there are no monolithic tutorials. Google+ has numerous new features like Circles, Hangouts and Sparks, and each one is succinctly described in the space of one to two-minute tutorials.
The next thing that Google did correctly is make sure its marketing was up to par. Google built up a huge amount of hype prior to Google+’s launch and also did not relegate it to secondary-citizen status in the Labs. When Google+ was launched, it was claimed to be “experimental”, but was not shoved into the Labs with other experiments. The effect of this was huge — Google would never release a full-fledged, non-Labs product if they did not expect it to succeed, right? By not shoehorning Google+ into the Labs, Google showed the public its own confidence in its product.
Finally, the most important thing that Google did correctly was focus on the social aspect of the program. Almost all of the features in Google+ are related to things like talking to other people, as with video-chatting in Hangouts, or managing who is supposed to see your newest status, as in Circles. And not only were these features fun and useful, but they were all very easy to use.
All of these different factors combine to form not just another Facebook clone, but a separate, interesting product. Although Google+ hasn’t had enough time to fully run its course, initial results seem encouraging. In only 16 days, Google+ had already grabbed over 10 million users — a feat which took Twitter and Facebook almost 50 times as long to do. If this kind of growth can be sustained, the chance of Google+ finally bringing Google past the first equilibrium point is pretty high. Could this finally be what Google has been aiming for, though? We’ll just have to wait and see.
Some information taken from these sites:
http://www.techpluto.com/google-plus-vs-google-buzz/
http://www.atelier-seo.com/2011/07/google-adoption-rates-popularity-sustained-facts-figures-conjecture/