With Slide Acquisition, Google Continues Building a Credible Social Threat to Facebook

Google has not spent significant money or effort on its social efforts, relatively speaking, until recently with its Zynga stock purchase and acquisition of Slide. The company ended up not buying Twitter or Yelp last year, or investing in Facebook for that matter, back in 2007.

And now, Google is focused on growing a strong team of talent to finally build the credible social platform rival to Facebook. The product is still unclear, sounding something like a combination of Facebook’s home page and profile features and a developer platform.

But given the deep bench now coming together, along with the products and money Google has on hand, Facebook is getting its most serious competition yet — and seems to be acting accordingly, reportedly going into “lockdown” to further develop products ahead of whatever Google launches.

Google closed the acquisition of Slide today, with dual announcements on Slide’s site and Google’s main blog — a deal reportedly worth $182 million plus $46 million in employee bonuses. Joining the company to help lead the social effort will be Max Levchin and other well-known Silicon Valley executives with experience at PayPal, and a group of variably satisfied employees, who have battled to this outcome after five years of building a variety of social widgets and applications, most notably on MySpace then Facebook.

The list of incoming talent has been growing quickly. Mike Cassidy, cofounder of Xfire and his team from travel startup Ruba are possibly helping to lead social and gaming development at Google, including Angela Strange, who is now a gaming product manager at the company. Google has also been pulling in a variety of others with social experience, like open web advocates Chris Messina and Joseph Smarr.

In-house shuffling has also reportedly put top Google executive Vic Gundotra in charge of the overall effort, an escalation in priority compared to past years, when social looked more like a set of market-testing experiments — social network Orkut, OpenSocial, Friend Connect and Wave.

What we don’t yet know is what specific new products Google will introduce, and how these new teams will organize around them. It is clear, however, that the Slide team will play a central role in any new social initiatives. From Google’s announcement today:

Slide has already created compelling social experiences for tens of millions of people across many platforms, and we’ve already built strong social elements into products like Gmail, Docs, Blogger, Picasa and YouTube. As the Slide team joins Google, we’ll be investing even more to make Google services socially aware and expand these capabilities for our users across the web.

Levchin and company have built everything from PayPal’s payment system to social games, and have direct experience with the many changing social trends and platform rules that have shaped this industry. It became one of the top early developers on Facebook in 2007 and 2008, relying more on apps like Top Friends that were more about self-expression than the complex social games of today; it managed to reinvent itself, not for the first time, and has developed solid titles like SuperPoke! Pets.

Adding the Pieces Together

Given that Google is trying to create a social platform that in some way rivals Facebook, we wouldn’t be surprised to see products, platform policies, payment systems and other aspects of Google efforts reflect what Slide’s team has found optimal as a social platform developer.

A viral, internally developed social product — one of Slide’s core strengths — has been Google’s missing piece, while its portfolio of non-search initiatives has been going strong for years. Google’s string of productivity apps, like Gmail and Docs, have been getting often unrecognized traction with organizations large and small. Acquired companies like YouTube and Blogger have continued to lead in their categories. Android and Chrome, the mobile-focused operating system and browser, have in their own ways given Google another level of access to web users.

The product stitching has already begun, with the company slowly rolling out upgrades like a unified Google profile for all of its many products. Sure, Google has not had more than a middling hit with its most serious internally-created product to date, Buzz. But Facebook executives told us a year ago that Google’s forays into social are among the best threats it faces.

Beyond a strong product lineup and experienced product leaders, Google’s other advantage here is money, as it has billions of dollars at its disposal. It already has bought into leading social game developer Zynga, for example, and it could theoretically acquire any number of other independent gaming and social companies.

Add up what it has, and Google is in a strong position to silence the ongoing critique that it is only really good at search, and the accompanying sniping at its executives’ innate strategic and product abilities.

Google can redefine many of the assumptions that Facebook has made about what users want. It can easily tie in its productivity apps with a version of Buzz, for example, immediately making a social product useful to organizations in a way that Facebook and third parties on its platform have struggled to. It can take a page from Hi5, MySpace, Yahoo and Facebook’s other social platform rivals, making space for third party monetization service companies and creating clear platform polices around what developers can and can’t do. Slide, in particular, knows the pain of Facebook changes, like the removal of profile boxes, massive downgrades to news feed virality, invite request allocation changes, and a long list of others.

As with Android, providing a credible alternative could greatly benefit Google, even if some sort of advanced combination of Buzz, games, Android, Search, Apps, etc. doesn’t displace Facebook’s market share. Manufacturers and carriers who run Android, for example, can decide to include Google’s social features to help spread mobile apps — a nice stab at Apple’s unproven efforts to make its own iOS platform a faster-growing and lucrative place for social developers.

There are countless other tie-ins that a Google-based identity service and social platform can have with other Google properties and partners. It is up to Google’s expanding lineup of experienced Silicon Valley product and engineering leaders to make use of the tools that Google has to offer them.


Here are a few possible scenarios that could unfold:

Failure: Facebook continues to increase its market penetration where it is already strong, and nails remaining markets like Russia, South Korea, Japan, India and Brazil. Google cannot add up its pieces to be more than the sum of its parts, and we see confusing products like Friend Connect and Wave launch, but not make those visceral, photo-heavy, fun, personally relevant connections that Facebook has. In this case, it’s hard to see what else would stop Facebook from going on the attack against Google in a variety of core areas, including search products (or at least better options for search advertisers).

Indirect win: Facebook’s growth is measurably slowed in key markets around the world, including the US and Western Europe, as users across age groups and other demographics decide that they both want to use Facebook and the alternative the Google offers. You can imagine an advanced version of Buzz becoming a more important place for people to perform social productivity tasks, for example, attracting engagement and strengthening advertising and subscription revenue for Google even as Facebook stays strong in gaming, photo sharing and other “fun” areas. Google may discover that it can carve out a core part of the market, and create a multipolar world for developers instead of one social graph controlled by Facebook, without fundamentally disrupting Facebook.

Direct win: Google stitches everything it has together in a way that siphons social developers off Facebook, and grows traffic to the degree that Facebook stops growing or even falls before hitting a billion users and sees its revenue growth curtailed as a result. In this scenario, Google could simultaneously turn Android into a far more social developer platform than what Apple is managing to do with iOS. One can imagine a centralized identity for Android based heavily on the other identities that users have created through Google properties, forming the basis of how apps and information get shared — entirely separate from what mobile competitors that Facebook, Apple, and smaller startups like Twitter, Yelp, Foursquare etc. are hoping to do, and possibly creating a platform layer. One day, you can see Google’s partners at manufacturers like Motorola and carriers like Verizon deciding that they want to promote “Social Android,” a souped-up version of the Android operating system that puts users a click away from getting work done or playing their favorite mobile-social games.

We think Facebook is already too big to be displaced in the way that Google likely hopes, but we expect that Google will be able to launch a high-quality product and make it popular, partially disrupting Facebook’s growth.