Should Google Be Scared of Facebook and Pandora?
Google (NASDAQ:GOOG) closed the book on the protracted Viacom (NYSE:VIA) dispute when a judge ruled that YouTube was indeed living up to its end of the bargain and broadcasting by the rules as dictated by the Digital Millennium Copyright Act. For Google, that means the $1 billion on the line can be spent in other areas of interest. Should Google concentrate on mobile ads where Facebook (NASDAQ:FB) and Pandora (NYSE:P) are gaining ground?
The question can be approached from multiple angles. On the one hand, Google could shrug off the challenge of Pandora as it represents an area outside of its concern. Google is (primarily) world champion of search engines and figures to largely ignore the radio industry. It has a major foot in the game with YouTube, but the site is not as user-friendly for consumers looking for a music-first platform. Pandora, in that respect, will always get its due, whether or not it makes headway via its Windows 8 phone collaboration with Microsoft (NASDAQ:MSFT).
However, there is real cause for concern in the recent launch of Facebook Home, which promises to extend well beyond the basic “likes” and “friending” functions users have to come to enjoy. In Home, Facebook has a platform that could nudge Google aside in several markets by controlling the search function itself…
Though Facebook Home made its debut on Google’s Android OS (with a shout-out from Mark Zuckerberg), the relationship would seem tentative for the time being. It will become interesting when the first ads start appearing on the Facebook Home pages. Once this salvo is fired, the friendly pats on the back could turn into drums of war.
At stake are key global markets where consumers are about to buy their first smartphone. Will they opt for a Google phone or a Facebook phone? While neither is an operating system in itself, both companies are pushing to convince users they are a one-stop shop for all things Internet. Facebook has already shown its formula for making that happen, and Google is countering with its Free Zone platform overseas. Google is determined to keep its eye on the ball, as the next generation could just as well be saying “just Facebook it” when they want to make an online search.
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