Why haven't major companies like Google, Microsoft, or Yahoo succeeded in creating social networking platforms?
68 Answers
I worked for a large Internet company that missed the boat on social networking, despite having key ideas such as opening up the social graph and universal login (Facebook Connect) and Web-wide sharing to your social graph (Like) back in 2006/7.
The big reasons that I think we missed it:
I agree with the comments above about the original constraining factors (e.g. Harvard students) helping Facebook develop usage patterns. Much as Twitter's 140 character defined how people use Twitter, the constraint of having common interest patterns defined usage that helped later users "get" how to use Facebook.
One of the other problems big organizations face: true innovation is really hard to test in focus groups. Most people can't think that far outside of what they know. Whenever I tested social concepts in focus groups (3-4 years ago), they tested poorly because people couldn't relate. "Who cares that John Smith is at the Mets game tonight?" was a typical reaction. It only resonates when it's someone you know.
Another common reason is legal concerns. When you're making real money, you worry about protecting it. Think about something like YouTube. Many large company legal departments would shoot that down for fear of putting the existing business at risk. But when that's all your startup does, you push forward. Heck, in many cases, getting sued by Big Bad Business is a marketing strategy.
I wrote a post about YouTube and innovation a few years ago:
http://blog.agrawals.org/
The big reasons that I think we missed it:
- Short-term revenue focus. These projects weren't going to generate revenue that hit in the quarter. Any financial payoff was years away, whereas the expenses were now.
- Interdepartmental conflict. These ideas didn't fit cleanly in one silo or another. Delivering them required threading the needle among multiple product and engineering groups, which is always difficult in large organizations.
I agree with the comments above about the original constraining factors (e.g. Harvard students) helping Facebook develop usage patterns. Much as Twitter's 140 character defined how people use Twitter, the constraint of having common interest patterns defined usage that helped later users "get" how to use Facebook.
One of the other problems big organizations face: true innovation is really hard to test in focus groups. Most people can't think that far outside of what they know. Whenever I tested social concepts in focus groups (3-4 years ago), they tested poorly because people couldn't relate. "Who cares that John Smith is at the Mets game tonight?" was a typical reaction. It only resonates when it's someone you know.
Another common reason is legal concerns. When you're making real money, you worry about protecting it. Think about something like YouTube. Many large company legal departments would shoot that down for fear of putting the existing business at risk. But when that's all your startup does, you push forward. Heck, in many cases, getting sued by Big Bad Business is a marketing strategy.
I wrote a post about YouTube and innovation a few years ago:
http://blog.agrawals.org/
Peter Deng
Views · Upvoted by Ed H. Chi, I'm a research scientist at Google. and Ankur Pansari, Sales Enginer at Google from 2006-2007
- Prioritization and determination. I don't think these big companies wanted to own this space as much as Facebook did. Social networking didn't fit neatly into Google's mission of "organizing the world's information and making it universally accessible through search." In the case of Microsoft, I don't think they saw social networking as something that would help "people and businesses will fulfill their potential." I'm not sure what Yahoo was doing—they seemed to lack focus all around.
- Approach. When the big players finally decided to really compete in this space, their approach was wrong. Social networking is very human. Social interactions are complex, and building a good product requires a lot of attention to detail. As an outsider, it seems that these big companies thought, "How do we get people to use this? How many features can we cram in?" instead of "What is the best experience for users?"
- Too much baggage. Most importantly, these big guys also had a lot of internal constituents to worry about. I can imagine whenever someone at Microsoft had a new idea, they were asked to talk to the director of Windows Live to get approval and have a 3-year plan for integration. Googlers probably needed to build on top of Orkut and work within existing paradigms even if they were wrong. And of course, the big companies probably needed to make sure the advertisers were taken care of before launching. Just build the damn thing and iterate.
I think this is generalizable into other companies/verticals as well; focused startups have an advantage over bigger companies that are less focused or have more baggage. Move quickly and focus on the product.
Disclosure: I currently work for Facebook. These views are my own and are not representative of those of my employer.
Bernard Moon,
Views
Piggybacking on what Peter and Aaron said and drilling down a bit, I would say additional factors are the lack of design and marketing influences in Google's product development process. Google's engineering driven culture is the reason for its success, but also a factor in its failure in some areas. I'm not saying Google should be design driven like Apple, but a little balance is good. I also heard some product managers complain how influence tilts towards the engineers.
And once you're behind in the market, spending on advertising is a good avenue to catch up (i.e. Microsoft's Bing) but this goes against Google's mantra of zero marketing spend. Only recently has Google started to spend significant amounts of ad/marketing money to compete in the enterprise space, but it could have done this with Orkut while trying to upgrade and improve it.
The amazing fact that is sometimes forgotten is that Orkut is a top 50 site worldwide, number one is Brazil and India, and essentially the business/name card for everyone in Brazil. This is done with zero marketing. Sort of a shame that Google didn't place more emphasis on developing and marketing Orkut early on while MySpace and Facebook were just starting out.
And once you're behind in the market, spending on advertising is a good avenue to catch up (i.e. Microsoft's Bing) but this goes against Google's mantra of zero marketing spend. Only recently has Google started to spend significant amounts of ad/marketing money to compete in the enterprise space, but it could have done this with Orkut while trying to upgrade and improve it.
The amazing fact that is sometimes forgotten is that Orkut is a top 50 site worldwide, number one is Brazil and India, and essentially the business/name card for everyone in Brazil. This is done with zero marketing. Sort of a shame that Google didn't place more emphasis on developing and marketing Orkut early on while MySpace and Facebook were just starting out.
I worked at Google in 2005 and briefly on the Orkut team. I encountered an environment that viewed social networking as a frivolous form of entertainment rather than a real utility, and I'm pretty sure this viewpoint was shared all the way up the chain of command to the founders.
At that time, hardly anyone at Google actually used Facebook, so they just didn't understand what people were getting out of social networking products. Incredibly, many people on the Orkut team did not use their own product (let alone Facebook) outside of work. By contrast, everyone I know who worked at Facebook was a passionate user of that product.
Ultimately, I believe Google didn't succeed at social networking because of this widespread misunderstanding of the value in social networking products.
At that time, hardly anyone at Google actually used Facebook, so they just didn't understand what people were getting out of social networking products. Incredibly, many people on the Orkut team did not use their own product (let alone Facebook) outside of work. By contrast, everyone I know who worked at Facebook was a passionate user of that product.
Ultimately, I believe Google didn't succeed at social networking because of this widespread misunderstanding of the value in social networking products.
Pedram Keyani,
Views
I agree with almost everything Aaron said but I think Peter hit the nail on the head with his comment about too much baggage. When you take several groups with different objectives and ask them to paint one vision you get a product with lots of solutions that don't actually solve any meaningful problem.
Having worked on orkut and now Facebook, I can say that the approaches are like night and day.
Having worked on orkut and now Facebook, I can say that the approaches are like night and day.
