Company & Product Profiles

Google+ Added $20 Billion To Google’s Market Cap

July 10, 2011 by Erick Schonfeld Leave a Comment

How much is social worth to Google? Investors added $20 billion to Google’s market cap the first week after the launch of Google+ on June 28. A Morgan Stanley downgrade on Friday, brought the total down to $15.8 billion because of doubts whether Google will indeed be able to capitalize on new products such as Google+. But somewhere in between there, give or take a few billion, is how much more the market thinks Google is worth than before the launch of Google+.

On June 27 (the day before the announcement), the stock closed at $482.80. It rose to a high of $546.60 on July 7, for a $20.6 billion gain to its market cap (with 322.25 million hares outstanding). Then the stock dropped to $532 at Friday’s close.

Of course there are other factors at play here (the health of Google’s core search business, the overall market, etc.). In the past week, however, the most important new event for Google was it’s latest foray into social. And even though Google+ is still in a limited beta, the market is already rewarding the serious focus on social that it represents.

Bravo, Larry Page. If he can deliver on the promise of social, Morgan Stanley will be tripping over itself to upgrade the stock. Anyone want to guess what will happen to Google’s market cap between now and then?

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Filed Under: Google, Search Engine Marketing Tagged With: Blogging, Company & Product Profiles, Facebook, Google, search engine optimization, SEO, social, Social Networking

Epic Gif: The Facebook Google+ Slapfest

July 8, 2011 by Erick Schonfeld Leave a Comment

Oh, I could just watch this all day. We’ve been writing about the growing rivalry between Facebook and Google, with its new Google+ social network. But here you have it in gif form, with the Facebook and Google+ favicons superimposed on the dwarf from Game of Thrones (Google+) slapping the child-king (Facebook) over and over again. I am not sure why Google+ is a dwarf, but it doesn’t detract from the enjoyment of watching.

It kind if sums up visually the whole fight between the two companies. Don’t you think?

And where did I find this? On Google+ of course. It was created by graphic designer Ala’a Assamawy . Well played, sir. A meme is born.

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Filed Under: Facebook, Google, Search Engine Marketing Tagged With: Blogging, Company & Product Profiles, Facebook, Google, search engine optimization, SEO, Social Networking

Zuckerberg’s Not So Subtle Dig At Google Circles

July 7, 2011 by Erick Schonfeld Leave a Comment

Even as Facebook revealed some new chat products on Wednesday, the elephant in the room was Google’s latest attempt to create a social network, Google+. Mark Zuckerberg tried deflect direct comparisons by saying, “Every app is going to be social.”

But he did make one remark, which suggested how he really feels about Google+ and one of its main features, Circles. Zuckerberg didn’t mention Circles specifically but he did state:

The definition of groups is . . . everyone inside the group knows who else is in the group

This might seem obvious unless you’ve played with Circles. The Circles feature is how Google+ handles groups, but it is not completely intuitive and problems can arise when different Circles collide It is designed to let members set up different groups of people, or Circles, to share things with.

But Circles are one-way, or asymmetric. Everyone sets up their own Circles and nobody knows whose Circle they are in. Secret Circles would be a more apt description. Zuckerberg seems to be suggesting that they are not really groups because instead of everyone in the group knowing who else is in the group, it is the exact opposite: nobody knows which groups they are in.

Circles are so confusing that Ross Mayfield created the Slideshare below to explain it all. Facebook has a “symmetric sharing” model where two people mutually confirm that they are friends, and then can start sharing stuf with each other privately or publicly. Twitter has an “asymmetric follow” model where people Tweet out publicly and anyone can follow what they are broadcasting without that person necessarily following back. It’s one-way.

Google+, however, has an “asymmetric sharing” model where you can share one-way with people, but they don’t have to share back. It’s kind of like the Circle of Trust in Meet the Fockers (watch the video clip in the third slide), only not quite as funny.

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Filed Under: Facebook, Google, Search Engine Marketing Tagged With: Blogging, Company & Product Profiles, Facebook, Google, mark zuckerberg, search engine optimization, SEO, Social Networking

Why Mark Zuckerberg’s First Public Response To Google+ Is The Right One

July 6, 2011 by Guest Author Leave a Comment

Editor’s note: This guest post is written by Tom Anderson, the former President, founder and first friend on MySpace. It is adapted from a comment he made on Google+ and reprinted with permission. You can now find Tom on Facebook, Twitter, and Google+

Today at the Facebook news conference, a reporter asked Mark Zuckerberg what he thought of Google+. Zuckerberg responded by saying that lots of companies are going to build things like video chat, but Facebook competitors also have to build up their social graph first. Facebook’s job is to just keep innovating. It’s a perfectly reasonable response, and of course, he’s exactly right—the challenge is to get the user base, and make it easy for them to use your product. Done and done for Facebook. The integration looks great.

Some pundits are complaining that the technology is not new, but that’s besides the point. Case in point: at MySpace we launched what Zuckerberg is announcing in 2007 (try googling “myspace skype partnership”), and MySpace also had one-on-one video chat back in 2004. The point is that people weren’t really ready for it back then—now is the time, and Facebook has the user base. The large user base (750 million) paired with a simple integration of arguably the best voice/video tech (Skype) is what makes this news.

Zuckerberg also pointed out in his response to the Hangout question, that one-on-one video chat will be the more common use case (Google+ has “Hangout” which allows 10 users to video chat at once). Again, perfectly reasonable, and probably right. Many sites have group video chat, Google+ is not the first, nor is Hangout a game-changer. What you need here is the user base, which currently only Facebook has, and people will more likely talk one on one (like we do on the phone, duh).

The more interesting part of his announcement, I think, was the implicit response to Google+ in his intro leading up to the Skype integration. What Zuckerberg said is that Groups on Facebook are actively used by half of the 750 million user base. And “Groups” is really Facebook’s second attempt at “Friends Lists,” which Zuckerberg admitted last year, was not getting traction (people didn’t want to do the work of putting people into lists).

The Facebook Groups feature is designed in a way so that users who do care to do the work, can. Someone invites you, and you’re in the group without you having to take any action. (In fact, you have to do some work to get out of the Group!) Zuckerberg points out that this is how friend requests work as well—there’s always a select few who do all the friending, and the rest of us just follow along, with a much easier “approval.” Facebook’s Groups were designed in a way to overcome the friend list problem. They’ve grown quickly, even if 95% of the user base can’t be bothered to make their own groups.

And if you think about it, that’s the smart way Facebook has approached many things: build an app platform, and let the developer community do the heavy lifting. Create a translation platform, and let users translate Facebook in every language known to man. Create a Group feature, and let the 5% create the groups for the other 95%. It’s like Mechanical Turk, but we’re not getting paid. (Unless you’re Zynga!)

What remains to be seen, is which model will users prefer in the long run—Facebook “Groups”—which function more like an old-school Yahoo Group with a Forum built-in). Or Google+ “Circles”—which is more like an email distribution list meets Twitter with better commenting. The two are actually very similar, but each probably does certain things better than the other. Thinking about what each model does better is probably the key to unlocking what “model” is going to “win.”

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Filed Under: Facebook, Google, Search Engine Marketing Tagged With: Blogging, Company & Product Profiles, Facebook, Google, search engine optimization, SEO, Social Networking

The Only Backdoor Left To Sneak Your Facebook Friends Into Google+ Is Yahoo

July 5, 2011 by Erick Schonfeld Leave a Comment

Mark Zuckerberg may be the most followed user on Google+, but good luck trying to find any of your Facebook friends on Google’s new social service. Facebook is making it difficult for anyone to import their friend contact information into Google+. There is no direct contact import feature such as there is for Yahoo or Hotmail, and Facebook is clamping down on third-party services that made it easy to bring your Facebook friends into Google+.

Over the weekend, Facebook blocked a Google Chrome extension called the Facebook Friend Exporter. And in fact, Facebook changed its OAuth 2.0 API in such a way that it “suddenly removed email addresses from the queries without warning,” says Owen Mundy, creator of Give Me My Data. Other data can still be exported, just not your friends’ email addresses.

There still might be one back door open to sneak your Facebook friends into Google+. And that’s Yahoo. You can import your Facebook friends’ contact information, including emails, just fine into Yahoo. (First, you link your Facebook and Yahoo accounts, and then you import your contacts from Yahoo Mail).

I say “might” because I just tried it, and the Yahoo importer in Google+ didn’t even work for me in Chrome. But it did seem to work in Firefox (irony alert). Still, I couldn’t tell if it had actually imported my Facebook friends who are also on Google+ because most of those are also duplicated in my Gmail contacts. Other Facebook friends do not show up in Google+ (although their email addresses imported just fine into Yahoo).

While we’ve seen Facebook play these tricks before because they don’t want to help jumpstart competing services, I don’t really think it’s that big a deal. In this case, your email contacts alone (Gmail, Yahoo Mail, or Hotmail) should be enough to get anyone going on Google+. Your real friends are in both Facebook and Gmail, not to mention your other more occasional contacts, which you can start placing in different circles.

Although Facebook’s shenanigans aren’t good from the point of view of data portability, on the whole I think this is actually a good thing for Google+. If it were too easy to import your Facebook friends, then Google+ would simply become a Facebook clone, replicating your Facebook experience. By forcing you to create a new social graph from the ground up, Google+ has a greater chance of becoming distinct.

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Filed Under: Facebook, Google, Search Engine Marketing Tagged With: Blogging, Company & Product Profiles, Facebook, Google, search engine optimization, SEO, Social Networking, Yahoo

Google Takeout, An Easier Way To Take Your Data With You

June 30, 2011 by Erick Schonfeld Leave a Comment

Lost in all the buzz around Google+ is an important new feature rolled out alongside it that makes it way easier to take all your data out of Google. It is called, appropriately enough, Google Takeout. It’s got it’s own separate site and is also part of settings within Google+. In settings, you click on “Data Liberation” and then you are given the option to download all of your profile data, stream data, photos from Picassa, Buzz data, Circles and Contacts.

The Data Liberation group inside Google has long been making personal data portable, but up until now it’s been a clunky process involving APIs and going to each Google service separately to get it. With Takeout, all your Google data across its services is available in one place. You can download it and do what you want with it. (Although downloading it does not erase it from Google’s servers).

I downloaded all of my Buzz updates, just for fun, and it came in a 17.5 MB file. When I unzipped it, it was a folder filled with HTML documents—one for each Buzz update. I am not sure what I would do with that data, but it’s nice to know I can get it all. The contacts are probably more useful, and come in a more handy .vcf file which can be imported into other address books.

Data portability is a big battleground between Google and Facebook. And Google is winning right now with Takeout in terms of paying more than lip service to the concept. Facebook also allows you to download a zip file of your photos, friend lists, messages, and wall posts, but it is not in a format third party sites can use. So it’s not really free. Not that 99 percent of people would ever even want to do any of this. But it’s like the Data Liberation folks say in the video below: if you know you can take your data out, you might feel more comfortable about putting it in.

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Filed Under: Google, Search Engine Marketing Tagged With: Blogging, Company & Product Profiles, data portability, Facebook, Google, Google Takeout, search engine optimization, SEO, Social Networking

Why Google Health Really Failed—It’s About The Money

June 26, 2011 by Erick Schonfeld Leave a Comment

Editor’s note: This guest post was written by Dave Chase, the CEO of Avado.com, a health technology company that was a TechCrunch Disrupt finalist. Previously he was a management consultant for Accenture’s healthcare practice and was the founder of Microsoft’s Health business. You can follow him on Twitter @chasedave.

As reported on TechCrunch, Google shut down its medical records and health data platform. Since then, there’s been a lot of bits spilled offering explanations, but they all missed the most critical item. Money. Or in the language of healthcare—Reimbursement. I explain more below regarding why Google Health was doomed to fail in light of the legacy reimbursement model.

First, let’s recap some of the explanations offered up so far. These are all valid but miss the biggest point.

Adam Bosworth, who originally ran Google Health gave one reason: It’s Not Social. That’s true if one wants to create a weight management program or is simply interested in fitness-minded folks. Clearly that is important given the obesity epidemic, however there’s vast swaths of healthcare where being “social” isn’t appropriate or applicable in a doctor-patient relationship. In other words, being social is necessary but not sufficient to transform healthcare.

In the comments of TechCrunch’s original article reporting the shutdown, I gave my immediate take…

It’s tough, even for big companies, to focus on a bunch of different things. I’m sure they could have figured out how to be successful if it was as strategically important as Search or Chrome or Android or Social…but they have bigger fish to fry.

The Health space is a very difficult one. In many ways, it’s counter-intuitive for those who haven’t been in the arena from both the healthcare provider and consumer perspective.

As much as there’s a massive consumer-empowerment movement, in order to get ongoing and broad adoption of something in healthcare, one needs to lead with the clinicians.

If you are interested in more, I’ve written about this here.

One of the better analyses was done by John Moore of Chilmark Research.

Few consumers are interested in a digital filing cabinet for their records. What they are interested in is what that data can do for them. Can it help them better manage their health and/or the health of a loved one? Will it help them make appointments? Will it save them money on their health insurance bill, their next doctor visit? Can it help them automatically get a prescription refill? These are the basics that the vast majority of consumers want addressed first and Google Health was unable to deliver on any of these.

As much as we’d like to think it isn’t the case, the fundamental driver of most (not all) behavior in healthcare is the reimbursement scheme. As I described in an earlier piece on the “Do it Yourself Health Reform” movement, I spent much of my time as a consultant in the Patient Accounting departments of heatlhcare providers. The legacy reimbursement scheme can only be described as a Gordian Knot designed by Rube Goldberg.

I expanded on the insidious effects of the reimbursement model in the U.S. in my overview of The Most Important Important Organization in Silicon Valley No One Has Heard About. For those who would like to be optimistic about the reimbursement model changing, read about Health Insurance’s Bunker Buster. In the meantime, it’s critical to understand the current reimbursement model to understand why Google Health failed to transform the landscape.

To understand the impact, I’ll exaggerate to make a point—your healthcare provider doesn’t care about you unless they can see the whites of your eyes. Why is that? Today’s flawed reimbursement scheme only compensates the healthcare provider for a face to face visit. It’s hard to fault the primary care physician who has been put on a hamster wheel of 30-40 appointments per day and can’t even give their practice away upon retirement (that was once their retirement plan) for not wanting to deal with their patients sending email or sharing information from their personal health record.

Interestingly, in the transformative models I describe below, doctors consistently tell me that half to two-thirds of their patient interaction time doesn’t need to be face-to-face. They can deliver high quality medicine without being in the same room as them. Yet, the fee-for-service model causes this country to waste mountains of time waiting to get appointments and then in the waiting room in order to facilitate the face-to-face appointment.

The problem for a company like Google or Microsoft is their success is measured in the tens of millions. Those kinds of numbers are only present in the legacy reimbursement model. Frankly, Google could have done all the right things, but if the reimbursement model doesn’t change Personal Health Records will remain irrelevant for most healthcare providers. At best, we’re seeing Electronic Health Record vendors release so-called Patient Portals that are often driven more by a marketing objective than a clinical objective. Further, they are flawed in that they are a one-way broadcast of the silo’ed information from only one healthcare provider.

Is there any hope for individuals to be more involved in the healthcare system as Personal Health Records promised? After all, it’s clear that healthcare works best and costs least when the patient/individual is a partner in their care with their healthcare provider. Fortunately, I believe that we’re seeing the first waves of a tsunami lapping the shore.

It’s what I call the P.A.C. Tsunami. Patient-centered, Accountability and Coordinated. Today’s flawed fee-for-service reimbursement system is essentially the opposite of those three elements creating all the wrong incentives. In its place, we’re seeing the first waves. Both the Do-it-Yourself Health Reform movement and the government-driven health reform are creating incentives for what are called a Patient Centered Medical Home (PCMH) and Accountable Care Organizations (ACO).

We are already seeing dramatic success with the first editions of PCMHs in the models such as MedLion that were highlighted in The Most Important Important Organization in Silicon Valley No One Has Heard About article. ACOs have the right goals in mind but remain like Unicorns—fantastical beings no one has seen yet and have been described as stupefyingly complex in their design. In contrast, one can’t help but be optimistic when studying the results of PCMHs such as 40-80% reductions in the most expensive facets of healthcare (surgical, specialist & ER visits) or a pilot program in Ohio with Medicaid diabetics that scaled could save Ohio $500 million annually. Or consider the case of Denmark that was the first country to broadly adopt the PCMH model. It’s been so successful, they have reduced the number of hospitals in that country by over 50% as they simply don’t need that many hospitals anymore.

What does this mean for the tech community? I’d posit that as mobile technologies have fundamentally reshaped voice and data, there’ll be an equally radical transformation of healthcare. Just as legacy telcos had to fundamentally transform themselves or they’d be an artifact of history, so too will healthcare organizations transform (or die). With the transformed healthcare ecosystem, there are requirements for entirely new categories of software that a new generation of startups will develop. Exciting times indeed.

Image credit: Colin Dunn

Filed Under: Google, Search Engine Marketing Tagged With: avado, Blogging, Company & Product Profiles, Facebook, Google, Google-Health, health, healthcare, search engine optimization, SEO, Social Networking

Prediction: Facebook Will Surpass Google In Advertising Revenues

June 5, 2011 by Guest Author Leave a Comment

Editor’s note: Continuing our exploration of how Facebook could eat Google’s lunch, guest author Hussein Fazal makes the case for Facebook’s potential advantage in advertising. Fazal is CEO of AdParlor, an ad management and technology company for Facebook campaigns.

Not too long ago—the common perception was that Facebook advertising did not work. Why would a user notice an advertisement with a small image discretely tucked away in the right-hand column? In fact, most users were building up their “banner blindness,” and ignoring the right-hand column altogether.

However, much regarding Facebook ads has changed since then. Changes in profile design encouraged users to provide more complete information and advertisers became educated in the value of hyper-targeting. Facebook’s ad serving algorithm improved dramatically and the launch of the Ads API allowed for an additional layer of intelligence to be built on top of that. Gradually, right-hand column marketplace ads became more effective for all types of advertisers—while Facebook concurrently grew its sales team to push out premium ads to brands and agencies. With all this progress, eMarketer estimated Facebook’s ad revenues at almost $2 Billion in 2010 and over $4 Billion in 2011.

Despite all this success, Facebook’s revenues are still far behind the search giant, and claiming that they will surpass Google is a bold statement. However, there is a very clear path for this to happen and it is simply a question of when. The timeline will be dependent on how aggressively Facebook executes on their advertising products. The fundamental reason why I believe Facebook’s revenues will surpass Google is the untapped power of social advertising. The concept that your friend “likes” and endorses the content behind a particular ad unit changes the game.

Data from over a hundred billion Facebook marketplace (right-hand-column) impressions that AdParlor has managed shows indisputable evidence that social ads produce a significant jump in performance. In several cases, we have seen social marketplace ads double the Click-Through-Rate (CTR) and deliver 5-10x the volume of impressions at the same Cost-Per-Click (CPC) bid compared to regular marketplace ads on Facebook (plain-vanilla display ads not socially targeted). Combine that with a lift in brand recall (1.6X), message awareness (2X), and purchase intent (4X) and we can see why social ads is an extremely powerful product. However, to see the real benefit, we need to look beyond the right-hand column ads and see how social advertising can be applied in other areas. Data from Nielsen shows a similar trend:

Display Advertising

When looking at online advertising revenues as a whole, the IAB reports that roughly a quarter come from display. With over 2.5 million web sites having integrated with Facebook Connect and 10,000 new ones joining daily, Facebook is building up a huge network of external web sites with deep Facebook integration. The opportunity for these sites to display advertising that melds contextual and social is a stone’s throw away, and something that Facebook can aggressively turn on if it so chooses.

To take things further, as “like” buttons become ubiquitous across the web, user profiles are growing with data on what they do, buy, and endorse. While Google and others leverage re-targeting, Facebook will be able to take it one step further with social re-targeting. If my significant-other visits Nordstrom.com and “likes” a pair of boots, that advertisement could now follow both of us around the web.

Every few years, a new layer is built on top of traditional display advertising (contextual, behavioural, re-targeting) but we haven’t seen innovation in quite some time. Social will be the next fundamental change, and Facebook is positioned to take advantage of it.

Search Advertising

The same IAB report shows that roughly 45% of online advertising revenues come from search. The reason why search is so much more powerful than any other medium is because it targets users that have explicit purchase intent. For example, if I search for “car insurance,” I have a very real interest in making a high value purchase. Insurance providers pay big dollars to Google for these clicks knowing that they have a good chance of converting that user into a sale.

Alongside Facebook’s deeper integration with Bing, it is inevitable that at some point we will see advertising that combines the power of intent-based search with social recommendations. However, this will be dependent on how much users are willing to share and “like.” Perhaps aggressive campaigns by car insurance providers (“Get $100 off your premium if you ‘like’ us on Facebook”) will allow us to one day search for car insurance, and see which provider each one of our friends is with. This will undoubtedly be more powerful than traditional search.

Even with this layer of social, in order to be successful, search market share must be won. With Facebook’s social graph, they have the first real opportunity at dethroning Google and winning that market share. Whether Microsoft ends up selling their money-losing search business to Facebook as a starting point, or whether Facebook builds an independent search product from the ground-up, this is where the biggest impact will be made in increasing Facebook’s advertising revenues relative to Google.

Mobile Advertising

With over 250 Million active users accessing Facebook via their mobile device, Facebook is building up an audience on the hottest emerging platform. With free and popular iPhone, Blackberry, and Android apps available, Facebook has yet to serve up a single advertisement on mobile and doesn’t seem to be in a rush. However, things may be changing with a small but targeted recent acquisition. It will require some work to figure out the right format, but again Facebook is at a huge advantage with the user base it has and the social graph that connects these users.

The U.S. local online ad spend is estimated at $20 Billion – which is why Google was so interested in Groupon. Now combine local with mobile and social—and you have the blueprint to build a money-spitting machine. Facebook could theoretically serve you an advertisement like this directly on your phone—“You and your good friend John are a block away from each other, you both like Pizza and its lunch time, go to Pizza Hut together and save $5 on your order”—of course with less words and more pretty pictures.

Now that the mobile advertising dollars are finally starting to materialize, we still have not seen the hockey-stick curve that we all expected. This will occur when more innovative mobile ad products are built out—and again, Facebook is at a massive advantage.

When Facebook’s VP of Global Marketing Carolyn Everson said at Disrupt NYC, “We’re one percent done on our ad products,” it may not be an exaggeration. Ads that live within the Facebook site really are the beginning of where things can go. As Facebook gears up for an IPO, expanding its portfolio of advertising products through display, search, and mobile will change the landscape in each one of these areas. It becomes even more impactful when we think about how these different products can work together connected through the social graph.

While many people think about Facebook as a powerhouse due to the number of users on the site, the real power comes with the way they are mapping users to their friends and the products, people, and places that they “like.” When Facebook decides to turn up the revenue dial, they will be able to leverage this graph and create powerful social ads across multiple platforms to a degree of scale and sophistication that no other company can match. As these products develop, Facebook will command the lion’s share of online advertising dollars—and they will undoubtedly surpass Google.

Filed Under: Facebook, Google, Search Engine Marketing Tagged With: Blogging, Company & Product Profiles, Facebook, Google, search engine optimization, SEO, Social Networking

How Facebook Can Put Google Out of Business

June 3, 2011 by Guest Author Leave a Comment

Editor’s note: Guest author Ben Elowitz (@elowitz) is co-founder and CEO of Wetpaint, an online publisher with an audience of 10 million monthly uniques, and author of the Digital Quarters blog. Prior to Wetpaint, Elowitz co-founded Blue Nile, the online retailer of luxury goods. He is an angel investor in media and e-commerce companies.

I was surprised to hear former Google CEO Eric Schmitt publicly lament lost opportunities and missed chances to catch Facebook the other day.

I used to envy Google and the vast digital empire that Schmitt commanded. Google had one of the most intricate monopolies of all time. It had the most impressive dataset the world had ever seen; the most sophisticated algorithm to make sense of it; an audience of a billion users expressing their interest; and more than a million advertisers bidding furiously to reach those consumers at just the right moment.

What’s more, it had captured the ultimate prize: increasing returns to scale. Only Google could spread such huge R&D costs among an even more humongous query volume, all while offering advertisers the chance to reach most of the population with one buy. Google had earned its success.

It competed on being smarter.

It was.

And it won.

Google’s business strength was simply taken for granted; so much so that even deep-pocketed competitors like Yahoo and Microsoft stopped trying to outdo Google’s massive scale and core algorithmic know-how.

And that’s why I used to think that Google was unstoppable.

Until I realized one very important thing: despite the fact that Google goes to great lengths to keep its index fresh by indexing pages that often change every hour, or even every few minutes, and despite its efforts at realtime search (including searching the Twitter firehose), its dominant dataset is dead, while the Web is—each day more so than the last—vibrantly and energetically alive.

Indeed, Google’s revered and unparalleled dataset is increasingly dating itself as an ossified relic akin to the Dead Sea Scrolls—outshined by the freshness of the living, breathing organism that is the social Web.

Like dusty and determined archaeologists, Google’s massive bots crawl the Web looking for the artifacts of digital civilization. And what they find is fossils—in the form of pages and links: the leave-behinds of writers, contributors, and casual end-users who have deposited traces of themselves in the skinny crevices and dark recesses of the Internet. Google analyzes these remains, and yet it has almost no first-hand knowledge of any of the users who created this content—or those who are searching for it.

Enter Facebook.

Since its founding in 2004, Facebook has focused on enabling social connections, not on search. And yet, in the process, Facebook has created a platform that knows more than 600 million people, complete with identity, interests, and activities online. The company’s relentless and organic expansion—from an application to an emergent social operating system—has enabled it to know its users, not only on the Facebook.com domain, but also on other sites, as they travel throughout the Internet.

While Google has amassed an incredible database consisting of the fossilized linkages between most Web pages on the planet, Facebook possesses an asset that’s far more valuable—the realtime linkages between real people and the Web.

What does this mean, and what are the implications here?

Well, in a nutshell, Facebook has stored a treasure trove of distinctive data that, if fully utilized, could put Google out of business.

Yes, put Google out of business.

Here’s why.

Facebook’s data allows it to do more than just guess what its customers might be interested in; the company’s data can help it know with greater certainty what its customers are really interested in. And this key difference could potentially give Facebook a tremendous advantage in search when it eventually decides to move in that direction.

If Google’s business has been built on choosing which Web pages, out of all those in the universe, are most likely to appeal to any given (but anonymous) query string, think about this: Facebook already knows, for the most part, which pages appeal to whom—specifically and directly.

And, even more powerfully, Facebook knows each of our individual and collective behavior patterns well enough to predict what we’ll like even without us expressing our intent.

Think of it: Facebook can apply science that is analogous to what Amazon uses to massively increase purchase likelihood by suggesting and responding to every minute interactive cue. Whereas Amazon relies on aggregate behavior, Facebook adds in the intimate patterns of each individual—along with their friends and the behavioral peers they’ve never met all around the world. And each of them is logged in and identified as a real person.

When Google was born, its advantage stemmed from its ability to collect and analyze superior data. While other publishers looked myopically at each page on the Web as a standalone realm, Google found that the link relationships between those pages held more valuable relevance data than the pages themselves. All of a sudden, the isolated views of players like AltaVista and Yahoo began to look one-dimensional. And ownership of what is now the $20-billion-plus search advertising market was cemented.

In the last several weeks, Google has indicated how important Facebook-like social networks are to its still-vast ambitions. One proof point is the launch of the new +1 product; another is the company’s internal announcement that bonuses will be tied to success on the social Web.

It may seem that this is about capturing a new market opportunity. But, trust me, it’s not. In reality, it’s Google’s recognition that Facebook has the same kind of advantage over Google that Google is used to having over its competitors.

And Google is smart to be scared.

Very smart.

But, if the truth be told, it will take far more than +1 to measure up to the whole new human dimension of the Internet. After all, the human organism is home territory for Facebook and utterly foreign turf for Google’s algorithmic machine.

Photo credit: flickr/Ken and Nyetta