By Rick Aristotle Munarriz
November 2, 2007
Thanks for the add, MySpace.
News Corp.'s (NYSE: NWS) popular website is the latest dot-com heavy to lend its support to Google's (Nasdaq: GOOG) OpenSocial platform for social-networking sites.
OpenSocial allows developers to create widgets that users can add to their profile pages. Instead of developers learning multiple APIs (application programming interfaces), they only need to learn one and can develop widgets to use across various sites. The move comes months after Facebook revolutionized the social-networking industry by opening up its site to third-party widget makers.
The Facebook move sparked the inspiration of developers big and small. Shortly after Facebook's May announcement, companies like Amazon.com (Nasdaq: AMZN) were on board with applications to allow Facebook users to slap book reviews on their pages.
The attention worked wonders for Facebook, ultimately winning it a Microsoft (Nasdaq: MSFT) investment last month that pegs the fast-growing social networking website's value at a whopping $15 billion.
With battle lines drawn, Google has plenty of reasons to hop on the coattails. History is on its side. It wasn't the first search engine. It wasn't the first provider of paid search. However, Google has been able to trounce Yahoo! (Nasdaq: YHOO) on both fronts by simply building better mousetraps. With Microsoft as a Facebook ally, social networking is just one more battlefield for Google and Microsoft to go at each other.
Google is doing it right. It could have limited OpenSocial to its Orkut social-networking site, but it's too clever a copycat to settle for a lay-up when a slam dunk is in order. Landing the non-Facebook leaders like MySpace, Bebo, and Hi5 will give OpenSocial a wider audience that may draw more developers.
It won't make Facebook irrelevant, but it should steal some of the valuation thunder that continues to build at the campus-friendly hotbed of Facebook.
So was Google truly interested in outbidding Microsoft for a piece of Facebook? One could argue that Google was just setting a trap, getting Mr. Softy to overpay for its stake before pulling the valuation rug out from under Facebook.
Nice mousetrap, Google. Again.
More Google cheese:
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