Gmail goes social as Google takes on Facebook

Tue Feb 9 2010, 08:55 AM

Google is seeking to fend off the growing threat posed by Facebook by enhancing social features on Gmail via a new service called Google Buzz. The plans appear to be a response to Facebook's increasing focus on search, communications and media sharing. This focus threatens to challenge to Google's dominance of the web, as does Facebook's close relationship with Microsoft.

The plans involve creating a stream of updates posted via the Gtalk chat function in Gmail, emulating the feeds that have taken pride of place on Facebook for some time. Google hopes the popularity of its cloud-based email service will help it gain a foothold in social networking. Google may also be hoping to benefit from tying in its other properties by linking Gmail to both YouTube and its Picsa photo network. Yankee Group analyst Carl Howe says Google’s attempts to tie its properties together may give it an edge.

“Google seems to be trying to build a network effect among its properties that sites like Facebook or Twitter will not be able to match,” Howe tells StrategyEye. “Google also has some proprietary technologies it can incorporate from Google Wave that are already running and tested and might give it a leg up on its competitors.”

Despite its size, analysts believe Google will have a hard time breaking into social networking because of Facebook's overwhelming popularity. Google has attempted to create social networks based on its existing services before, but products such as Google Profiles experienced only limited success. Google also owns social network Orkut, but despite some success in Brazil this has failed to make an impact in key markets in the US and Europe. Charlene Li, founder of technology consultancy Altimeter, says Google has struggled to enter the social networking space because of its culture.

"The biggest issue is that Google as a culture worships ‘the algorithm' and people are notoriously difficult to incorporate into [algorithms] because of the limits of processing large amounts of real-time, social data," Li tells StrategyEye. "That said, Google's ability to master algorithms will be their strongest advantage in the social front - let other players enable the content, but Google will place its technology on top of the APIs to make them more functional." 

Google is under increasing pressure from Facebook as the way in which many users engage with the web shifts from simple search to more social activity. Facebook is reportedly introducing a full-blown email platform to replace its much maligned messaging system, potentially challenging Gmail.

Facebook's continuing links with Microsoft - the firms recently enhanced their search deal - also pose a threat to Google. The social network provides an alternative arena for search which is in many ways independent from the market Google dominates. Microsoft's Bing now has control of this market, and Google will struggle to displace its rival.

Li says the partnership between Microsoft and Facebook is strong and mutually beneficial. "Both talk about the partnership in a very sincere, respectful way and I believe it," she says. "Facebook sees Microsoft as a strong partner against players like Google, and the same goes for Microsoft - their interests as partners are aligned in that respect."