Facebook; Twitter; LinkedIn; YouTube; WordPress: these companies, built from the ground-up, are mainstays in social media. None of them were created by a large tech company, and all but one remains independent.
It’s an interesting phenomenon, when you think about it. Large tech companies have had limited to no success creating their own social media home runs. In an era where communication is increasingly taking place on these channels, the inability of these digital giants to build social networks is rather striking.
Two titans in particular are making social media headlines for different reasons: Yahoo has decided not to create it own social network, but is instead striking partnership deals with Facebook and Twitter. Google on the other hand, not only bought YouTube, but it is attempting to carve out its own piece of the social media pie with Google Buzz.
Partnership vs. in-house development; content vs. technology; Yahoo vs. Google: which company has the right social media strategy? What are the goals of both companies in the social realm? Do either have a chance against new and nimble startups like Facebook and Twitter?
Let’s take a look, shall we?
The Yahoo Strategy: Partner in Order to Drive Traffic
In 2006, Yahoo made a $1+ billion bid for Facebook. As we all know, Yahoo failed to close that deal and the story ever since has been the rise of Facebook and the slow decline of Yahoo, who was nearly acquired by Microsoft for over $40 billion in 2008.
Now with new leadership (led by CEO Carol Bartz), Yahoo is trying to make a turnaround and bring back some of the authority it once commanded. The Internet portal is turning to social media as a cornerstone of its growth strategy, but it isn’t focused on acquiring a Twitter or building its own social network, but on creating partnerships that integrate every facet of Yahoo into social networks, primarily Facebook and Twitter.
In September 2009, Yahoo announced that it would integrate Facebook Connect in its most popular web properties. The goal was to truly make Yahoo your portal to the web by not only delivering news, email, and finances, but also your social graph and the status updates of your friends. On the flip side, Yahoo would also benefit from the traffic bump that comes with sharing articles and content on Facebook’s news feed.
Yahoo has continued to push this partnership strategy in recent months. Two weeks ago, Yahoo partnered with Twitter to give users access to their Twitter feed from within Yahoo, update their status, and integrate Twitter content into the company’s search and media properties. A few days ago, Yahoo Mail hooked up with Facebook, the first integration between Facebook Connect and Yahoo.
Yahoo seems content in partnering with the major social services, rather than compete with them. Social media efforts like Yahoo Buzz, the tech giant’s answer to Digg, which hasn’t made a dent in the social voting powerhouse, have likely left a bitter taste in the mouths of its executives. Yahoo is now focused on using social media to generate traffic, eyeballs, and engagement times.
The Google Strategy: Dominate
Google’s strategy goes in a completely different direction to Yahoo’s approach; its strategy is also all over the map.
Like Yahoo, Google doesn’t have a good record in social media. Google Friend Connect isn’t even close to Facebook Connect in terms of adoption, Orkut never made inroads in the U.S., Blogger has nowhere near the traction of WordPress, and other acquisitions such as Jaiku and Dodgeball haven’t panned out.
You’d have a very good argument if you said that Google’s only social media hit has been YouTube, and that “only” cost the company $1.65 billion. Google has a lot more social properties than many people realize, but it’s a hodgepodge of acquisitions (Blogger, YouTube, Picasa) and internally-created services (Orkut, Google Knol, Friend Connect). The company’s batting average, though, has been pretty poor, especially by Google’s standards.
That was before Google Buzz, though. With the launch of its most advanced social product yet, Google’s strategy has finally begun to emerge, and it is a good one. If Google can stir up adoption for Buzz (which it has via Gmail), keep that engagement (this remains to be seen), and launch a standalone version of its social media tool, it can carve out a piece of the (very large) social media pie. Linking or integrating it to YouTube, Picasa, Orkut, Friend Connect, and its other social tools could provide a boost to those services as well.
There’s no reason to believe Google will succeed with Buzz, given Google’s social media track record. However, Buzz is the most complete product Google has put out yet and has some strong engagement numbers. It’s riskier than Yahoo’s strategy, but the payoff could be be titanic.
Google and Yahoo Are Very Different Companies
Yahoo’s strategy is focused around integrations with already-popular social services, while Google is focused around building and acquiring its own social media powerhouses. While Yahoo does acquire social media companies (e.g. Flickr) and Google has some strong partnerships (e.g. Twitter in Google Real-time search), that’s not the focus of their respective social strategies.
The reason their approaches to social media are so different has little to do with their leadership teams or the quality of their decision-making. No, it boils down to one simple truth: Google and Yahoo are very different companies.
I argue that Yahoo is, for the most part, a content company, while Google is focused on technology. There was a point where Yahoo was known for its tech innovations, but that mantle has long since passed to Google, Facebook, Twitter, and others.
I explored this phenomenon in my first Social Analyst column, Content vs. Technology: What MySpace and AOL Have in Common. MySpace and AOL were also tech giants, but at some point lost their technology edge (MySpace lost to Facebook, AOL lost to DSL and Cable Internet) and thus began to focus on ramping up content creation and driving traffic to their web properties. Yahoo falls into the same camp.
Because of this key difference between Yahoo and Google, it’s no surprise that they are implementing different approaches. Google’s is focused on building technology that will drive adoption, revenue, and information through its doors. Yahoo’s focus is on bringing more eyeballs to this content and keeping them on Yahoo for longer periods of time.
Who Has the Right Social Media Strategy?
Now for the big question: is Google or Yahoo doing better at social media? Which one has the right social media strategy?
If you’ve read this column carefully, you can probably guess that I’m not going to outright declare that one company is “right” or that one is “wrong.” What I want you to take away from this week’s column is simple: your long-term plan and company composition should determine your social strategy.
Yahoo is simply better at content than Google. Yahoo Finance is, in my opinion, simply a better product than Google’s version. Its array of hosted news content is bigger, and it owns properties such as OMG, which is doing well as a celebrity news hub.
Google doesn’t write its own news or acquire a newspaper for a simple reason: it’s just not their focus, and they wouldn’t be very good at it. Would it make any sense for Google to focus on using social media to drive traffic to its content? The answer is no.
On the flip side, Google’s technology prowess trumps Yahoo by large margins. Google can build better technical products (e.g., Search, Gmail, Buzz, Android, Chrome) in a shorter amount of time than Yahoo can, and it can iterate faster than almost any large-scale public Internet company (its rapid privacy changes to Buzz is one good example).
These things are no longer Yahoo’s strength. So does it make sense for Yahoo to try to build a social network to rival Buzz, Facebook, or Twitter? Could it really keep up with any of them over the long haul? I severely doubt it.
So here is my conclusion: neither company’s direction is “wrong” because each one requires a different social strategy to succeed. Based on their strengths, Yahoo and Google are implementing the right strategies.
Now it’s just about executing them.