Why Google Will Dominate Facebook

Let me try to keep this short and sweet. All this talk about Facebook putting a dent in Google's advertising revenue is wrong. Way wrong. I have to assume it's coming from people reading news, staring at charts, and listening to FB's product evangelists. Basically, people who aren't living in both companies revenue streams. Let's call them disconnected analysts.

When I started advertising on Google in 2004, $30/month proved good ROI for me. Eventually it had to get bumped to $60, then $120, $200, $500, $1000. On and on it went. It's tens of thousands of dollars now. Per month. Only Google is getting that kind of quality revenue from me. And I am small enough to say with confidence that Wall Street will never care about my business.

When I started advertising on FB, $10/week did the job and proved good ROI for me. Here we are 5 years later, and it's still at $10/week. Meanwhile FB's user growth in the U.S. is terrible. And the users they do have are checking in less often, and posting even less often. FB's content is littered with terrible, zero value, click bait content. FB launched their own video service, and Wall Street feared for Youtube's future. The problem is - those who want to get paid for video content hate FB video. So instead they upload to Youtube, then paste their Youtube video on FB. Guess who gets that money?

When people are looking to buy a product or service, where do you think they go? Facebook? Nope. They go to the GOOG for that. They might ask their friends for a recommendation on Facebook, but they SEARCH for it on Google.

Here's where Facebook comes in handy. If you want to know what your best friend from high school ate for lunch today, go to Facebook. If you want to see 10,000 pictures of your friend's kids, go to Facebook. If you want to know who the people you barely care about are voting for in the next election, go to Facebook. Looking for a quick laugh from the latest viral video? You can see that on Facebook, in a video hosted by Youtube.

Come on people. Long term, Facebook doesn't hold a candle to Google's empire.

Friday, July 17, 2015 in Wall Street
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