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Google Desperately Tries to Counter Snapchat

By Leo Sun - Oct 9, 2017 at 8:19PM

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Google’s rumored attempt to challenge Snapchat Discover could fall flat.

Alphabet's (GOOG 0.08%) (GOOGL -0.07%) Google could soon launch "Stamp", a platform that clones the popular "Discover" media tab on Snap's (SNAP 4.09%) Snapchat. A recent Recode report claims that Google will even pay publishers to create content for Stamp, indicating that it's concerned about the social media network's creeping reach into online news.

Google reportedly tried to buy Snap for $30 billion last year. Snap is only worth about $18 billion today and trades below its IPO price due to ongoing concerns about its slowing user growth, widening losses, and intense competition from Facebook's (META 2.77%) Instagram Stories.

Snapchat's mobile app.

Snapchat. Image source: Google Play.

With Google now also gunning for Snapchat, it seems like Snap investors should be worried. However, I believe that Stamps will likely represent another failed attempt by Google to break into the social media market.

Why Google needs to "get" social

As the world's largest search engine, Google accumulates information from user queries, then uses that data to create targeted ads for companies. This business model assumes that the things users search for reflect their interests, which can be used to create better advertisements.

However, social media companies evolved that model by mining data that users voluntarily provide via their personal profiles, check-ins, liked or followed accounts, and user-to-user connections. By offering advertisers deeper insights into their consumers, social networks emerged as a growing threat to Google's core business.

Meanwhile, an increasing number of social media users started relying on Facebook as a primary news source. A 2015 survey by eMarketer found that 70% of millennials in the US logged onto Facebook to read news posted by other people -- a figure which likely grew over the past two years. Snapchat's introduction of Discover that same year, which provided channels for top media players like CNN and ESPN, was another indicator that Google -- which aggregated stories from other sites -- was losing relevance as a primary news source.

Why Google failed to "get" social

Google tried to leverage its dominance of the search market to expand into the social media market, but it repeatedly failed. Orkut, its first social network, didn't gain any traction outside of Brazil. Its first photo-sharing platform, Picasa Web, was rendered obsolete by Facebook and Instagram. Its microblogging site Jaiku was crushed by Twitter.

Dodgeball and its successor Latitude both let users track down their friends' locations, a concept that was considered creepy instead of revolutionary. Google Lively tried to mimic Second Life with avatar-based chat rooms, but the limitations of the technology turned it into a gimmick instead of a virtual world.

A young woman takes a selfie at the beach.

Image source: Getty Images.

Google Wave's collaborative features were confusing, and Google Buzz caused huge privacy headaches by automatically turning all of a user's Gmail contacts into social connections.

Google+, its answer to Facebook, failed to find an active audience, and was eventually split into its Photos app, the Streams news feed, and a Pinterest-like feature called Collections. Last year, Google launched Allo and Duo to respectively counter WhatsApp and FaceTime, but those two platforms already had huge first-mover's advantages.

Many of these products flopped due to two reasons. First, Google launched so many different products that it was difficult for any single platform to gain enough momentum to challenge companies like Facebook. Second, Google often built social media products with its own needs in mind, instead of making them welcoming platforms that users would voluntarily provide their personal data to -- a concept that Snap and Facebook grasp but Google still struggles to understand.

Why Stamps will likely be another failure

Google's long list of social media failures is filled with "me too" ideas instead of innovations. These platforms frequently overlap each other -- as Allo is doing with Hangouts -- and scatter users instead of uniting them together under a single social umbrella.

Stamps, in its rumored form, could cannibalize the "Stream" remnants of Google+ and its News & Weather app. Or the users of those apps won't budge, and Stamps will fail to reach an audience even as Google pays publishers to create content.

Simply put, Google doesn't seem to realize that Snap's Discover owes its popularity to the 173 million daily active users who regularly use the core app's messaging features. Whether or not Discover would be popular as a stand-alone app without the support of Snapchat's messaging platform is highly questionable, but Google plans to find out anyway.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Leo Sun has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Facebook, and Twitter. The Motley Fool has a disclosure policy.

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