Google Prepares for Its Fight With Facebook

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The social media world was abuzz over the weekend with news that Google (Nasdaq: GOOG  ) would launch a new social networking tool called "Google Circles" at the South by Southwest Interactive (SXSW) conference in Austin, Texas.

ReadWriteWeb's Marshall Kirkpatrick first reported the story on Sunday morning. Tech luminary Tim O'Reilly would add to the buildup when, on Twitter, he not only admitted to having seen Circles but also said the service "looks awesome." Cue hysteria.

But it wasn't to be. Within two hours of Kirkpatrick's story going live, Liz Gannes at The Wall Street Journal confirmed there would be no launch at SXSW. Geeks would have to wait, though how long is unclear. All we know for sure is that no one denies Circles exists, which means Google's long-awaited fight with Facebook for social supremacy should begin soon enough.

Color me relieved. Whatever Circles ends up looking like (click here to get Kirkpatrick's explanation of the design and possible features), Facebook and Google have been dancing around each other like two boxers jabbing their way to an opening.

Neither has landed a haymaker, though Facebook at least took a shot when it announced attempts to combine email and messaging into a cohesive, threaded whole inside the Social Network. Circles could be The Big G's counter.

My guess is it'll pack a wallop. Why? History. Google is at its best when developers are given the freedom to try new things, fail, and then try again.

Android may as well be a case study in this method of continuous improvement. After years of fits and starts, Google has finally won over users who in years past wouldn't have considered an alternative to Nokia (NYSE: NOK  ) or Research In Motion's (Nasdaq: RIMM  ) BlackBerry handsets.

Similarly, Circles would be Google's third try at a social media platform after failures with Wave and Buzz. This try should be better, if only because the idea makes more sense strategically. As Kirkpatrick explains it, Circles is being built to organize your social sphere into "circles" where you define who sees what. Privacy appears to underlie the platform's guiding principles.

No way is that a coincidence. Facebook has famously struggled with privacy issues, dating back to its intrusive and short-lived Beacon commerce platform. If Google can position its offering as the one that gives users and businesses the most fine-grained control over their slice of the Social Web, it could prove to be a huge win.

Do you agree? Disagree? Let us know what you think about Google's social media experiments, the likelihood of Circles succeeding, and whether anyone can knock Facebook off its perch using the comments box below.

You can also rate Google in Motley Fool CAPS and keep tabs on the company by adding the stock to the My Watchlist tool, our free, personalized stock tracking service.

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Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He owned shares of Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool owns shares of Google and is also on Twitter as @TheMotleyFool. Its disclosure policy is glad you're here. Care for a drink?

Read/Post Comments (6) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 14, 2011, at 4:28 PM, bobyk3 wrote:

    I am on Facebook, however, if Google comes up with something better and *simpler*, I will switch.

    I get a ton of updates in Facebook from people I care less. I am also friends with nephews etc and I wish I dont see their usage of F words to their friends. The whole group concept is missing in facebook.

    Also, I dont like Facebook making decisions on my data. Facebook decides whether to share my phone number, etc.

    They share my data with bing. I think the problem is that Facebook really depends only on social to make money and given their 70 billion valuation, they have no choice but to sell user data.

  • Report this Comment On March 14, 2011, at 4:45 PM, Borbality wrote:

    I like the idea (and i'm long GOOG) but it seems like facebook could just make its filter more user-friendly, let users make their own groups and automatically filter out grandma if you want to say some bad words or show a picture of what you drank last night.

  • Report this Comment On March 14, 2011, at 4:46 PM, Borbality wrote:

    to bobyk3: Funny you should mention phone number. This morning when I logged into gmail it said I needed to put in my phone number in case my account is hacked or if I lose my password...

  • Report this Comment On March 14, 2011, at 5:17 PM, iomelots wrote:

    Hey, I'm all for it! Facebook is so difficult to work with, if ANYONE comes up with a more user-intuitive service I'm there. Also, with the never-ending parade of status updates, comments and photos of mostly complete strangers, it doesn't even feel like my facebook page is MINE! Google can surely do better!

  • Report this Comment On March 14, 2011, at 5:45 PM, bobyk3 wrote:

    Borbality: Giving phone number is one thing, selling it to a third party without permissions or with default permissions is what I don't like about Facebook.

  • Report this Comment On April 04, 2011, at 10:55 AM, nuijel wrote:

    Doomed before even starting. Whatever twist Google will set up, FaceBook will be able to replicate it fast enough. With Facebook network effect, any attempt at technically outsmarting them is doomed.

    A counterstrike would thus have to do something that Facebook cannot do. If Google, Yahoo and Microsoft team up to set up an open social network, their combined network scope and the boost to innovation, as the playing field will be opened to start ups, may create a lasting competitive advantage over Facebook, which has no incentive to open up.

    The problem is that this would be less profitable, so the three big companies keep pursuing the ever more elusive dream of having their own private social network, and by so doing reinforce Facebook advantage.

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