(HOST) From search engine to social
network, commentator Rich Nadworny says the virtual universe is
expanding again.
(NADWORNY) The U.S. goes through a crisis on
the default limit, the unthinkable happens in Norway, and what are
people buzzing about online? Why Google+, the new social media
network, of course. Now you may ask yourself "Do we really need
another social network to spend (or waste) time on? Aren’t
Facebook, Twitter and LinkedIn enough?"
A few weeks ago,
Google launched its new attempt to horn in on the social action with
the new site Google+. Previously Google had launched Google Buzz
that, after much fanfare, quickly disappeared from view. This time
Google took a different approach. It released access to the new
network slowly and selectively. It invited in people with large
followings and assumed, correctly, that they would blab endlessly
about it.
Now, to be fair, Google+ does have some features
other social networks don’t. It allows you to easily group people
into different circles, like one for family, one for friends and so
on. That makes it a lot easier to turn off some noise and tune in
more selectively. Google+ makes it easy to share photos and videos,
and it doesn’t put a limit on how much text you can write. It’s
built to encourage longer discussions.
But while that’s all
well and good, the real reason Google wants to get in on this action
is money.
We may be seeing a repeat of the dot.com bubble
with social media. Recently, the professional and resume social
network LinkedIn launched an IPO and reached a market valuation of
$9.1 billion, many times its actual revenue.
Twitter, which
barely has any revenue, just raised new financing based on a
valuation for the company of $7 billion. By the beginning of next
year, experts believe Facebook might be valued at $100
billion.
While Facebook’s revenue has increased
substantially, most of the social networks receiving funding don’t
really have a business model to support those numbers. But even if
they don’t, Google needs to be in on the action, as witnessed by
this week’s purchase of Motorola’s mobile phone business.
If
you’re on any of these networks, you may have noticed that we’re
not paying for any of them. We’re using them, but they don’t cost
us anything except time and distraction. One assumption is that the
social companies will be able to grow based on advertising and by
selling our data. After all, that’s how radio and television became
so successful. And while that certainly works to an extent, it’s
not clear just how much interruption and advertising we social media
users will stand for.
It will be interesting to watch how
megalith Google puts its creative weight into Google+. The bigger
question is whether any of these networks will actually be as
profitable in business as they are to their investors. I’m guessing
that not too many people would click "Like" for that.