Occupying the Internet, too?

Shortly after publishing my last rants on the strong concentration of global corporate control (see ‘Eye in the Sky‘), I came across this article on the Darren Herman blog.

Trying to figure out what the online media spend looks like, here is what he uncovered:

the digital media ad spend (search, display, mobile, etc) controlled by Google, Yahoo, Microsoft, Facebook, and AOL is about $40.1B

According to a recent ZenithOptimedia press release, worldwide digital advertising accounted for about $64.03B. That means that those ‘five sisters’ mentioned above, in that order, account for more than 60% of the worlds digital media ad spend. Moreover,

Google generates approximately 364% more revenue from advertising than it’s next closest rival, Yahoo!

To push this inequity even further, if you look at the comments in Herman’s blog post, Jon Steinberg (the President of BuzzFeed), points to another staggering statistic: 75% of all advertising spend is controlled by four advertising networks: WPP, Omnicom, Publicis and Interpublic (see his Flickr image here).

I’ll keep this in mind the next time I will be talking with someone of things such as concentration and dominant position. Apparently, these concepts also apply to the business models ruling the Internet. Which is something more difficult to occupy than any Wall Street.


Google Plus… Plus What?

Google has announced its earnings for Q3 2011. Impressive numbers, as always: two-digit percentage growth almost everywhere, and a pile of more than 45$B in cash. Everything comes off of search revenue.
The same good ol’ story.

Everyone was expecting a few more insights on the Android business and on the Googlerola affair. Nope. Not a single word.

However, they did confirm that Google+ has over 40 million users. And a lot of surprises still to show. Larry Page has outlined the significant effect he foresees Google+ will have on the company’s business.

Our ultimate ambition is to transform the overall Google experience — making it beautifully simple, almost automagical, because we understand what you want and can deliver it instantly.

This means baking identity and sharing into all of our products so that we build a real relationship with our users. Sharing on the web will be like sharing in real life across all your stuff. You’ll have better, more relevant search results and ads. [ed.: see a previous post on the possible implications of Google’s +1]

Of course, now comes the hard part: developing Google+ in a manner that leads it to attain a critical mass of users and makes it a real contender to Facebook.

On this side, IMHO, success is far from certain:

  1. Google+ Has 40 Million Users, But How Many Use It?
  2. Google+ will never beat Zuckerberg on his own turf. There are plenty of reasons, all well summarized in this article on Gizmodo
  3. Data analytics company Chitika recently published results of a study that revealed that Google+ traffic has deflated, following a spike after the social networking service came out of a limited beta on Sept. 20, and fallen back to the usage level it had before becoming publicly available
  4. It also looks like there are some Googlers not sharing the optimism of their CEO. A couple of days ago, a Google engineer named Steve Yegge mistakenly published publicly a post in which he leveled some sharp criticism at Google+, calling it “a knee-jerk reaction, a study in short-term thinking” in large part because it lacks a strong developer platform.
  5. Until now, the approach of Google to social networks has been, to say the least, controversial. Orkut is used in Brazil only (but Facebook is growing at a light-speed pace), and they have just decided to shut down Buzz.

So, how is Google going to conquer the world with Google+? Is the Big G really going to put Google+ at the center of its existence and rebuild its other products around it? It’s sounds radical, but that’s precisely what Google seems to be willing to do. Page said

We shipped the ‘Plus’, and now we’re going to ship the Google part.

Recommendations are key tools in marketing, and +1 and Google Plus could really become the automated version of word of mouth that is supposed to sit atop search engines. Nonetheless, it’s a gamble to build your core business on a social network that’s a few months old and only has 40 million users. But it will be fascinating to see Google strive to make Google+ the formidable pivot of the ecosystem that Page envisions.

Meanwhile, sit down and relax: we still have to see what the outcomes of Facebook’s “curated search” patent will be…