Google v Facebook – a perplexing obsession
Google and Facebook are rarely out of the news these days and there is little tech bloggers like more than to ponder the outcome of a titanic battle between these two huge online brands.
Efforts this week by Google's outgoing chief executive to dismiss the notion of a great rivalry have only served to encourage more debate about what the future holds for the two firms.
Speaking at the World Economic Forum in Davos, Eric Schmidt said constant talk of Google versus Facebook was something he struggled to understand.
"Facebook users tend to use Google search," he pointed out. "Facebook's ads business does not displace our advertising. I'm somewhat perplexed by the obsession because I don't think the facts support it."
Rather than Facebook, Schmidt identified Microsoft as Google's main competitor.
"Microsoft has more cash, more engineers, more global reach. We see competition from Microsoft every day," he noted.
Google and Microsoft are clearly direct competitors and are going after one another's core business. Google has launched its apps platform offering individuals, businesses and non-profits a cheaper alternative to Microsoft Office. Microsoft, meanwhile, is pushing hard to win users over to Bing and break Google's dominance of search.
But Facebook is hovering there in the background. Microsoft entered into two major tie-ups to help differentiate Bing. The first was with Yahoo, the second with Facebook. The world's largest social network might not have any plans to launch its own search engine, but access to the preferences of its 500 million members could still have significant implications for the future of search.
Similarly, Facebook's advertising platform, while nowhere near Google's scale, is a key revenue driver and something that is only likely to grow.
Schmidt is probably right that Facebook members use Google as their preferred search engine – most web users search on Google. But Google's continued investment in improving its search offering and its diversification into a huge range of other products and services are intended to win the battle for eyeball time.
Facebook is surely a competitor in this regard. Google and Facebook are the top two websites in most developed markets, accounting for huge chunks of global search queries and online minutes.
Last year, Hitwise had Facebook as the most visited website in the US, ahead of Google. If someone is on their Facebook page, posting an update, reading their newsfeed or playing Farmville, they're not looking at Google's ads.
Finally, Google is competing with Facebook for talent. Attracting and retaining best engineers and executives will be crucial to Google's continued success, and Facebook is after a lot of the same people.