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Monday, 27 October 2014

4 Reasons Why Google and Facebook Are Dying

Given Google and Facebook's popularity it may be hard to believe that they will one day become obsolete and forgotten. But nothing lasts forever - and the digital world changes particularly fast.
It's clear to me that Facebook is already peaking and may already be in decline mostly due to simple loss of interest. Google now appears to be approaching to its peak too. After they peak, the demise of both businesses is inevitable - and there are compelling signs that we are already seeing the beginning of the end for both internet giants.
These are four of the main reasons why Google and Facebook are sure die out over the coming years:

1. Consumers abandoning Google and Facebook.

Instead of Googling for answers and products, we're increasingly sourcing them from trusted apps on our mobile devices so that Google is cut out of the picture.
People are already searching for images using Pinterest, rather than Google images and buying on Pinterest will soon be mainstream. That's just one example of major digital players from whom we will buy without using a search engine, let alone Facebook.
Buying on Facebook never really took off and that's surprising because it could have saved Facebook if they had pushed to get it right. Facebook founder Mark Zuckerberg sold of $2.3 billion worth of Facebook shares way back at the end of 2013 which is a strong indicator that the man who knows the most about Facebook may have had his own doubts about its financial future.
Huge numbers of people already begin their buying process on established marketplaces, notably Amazon and eBay. (We've already seen Google take action against eBay and I wouldn't rule out some hostility towards Amazon in the difficult years ahead).
Online shopping will continue to grow. But small, local specialist shops are making a comeback as people seek high service levels as well as bespoke and artisan products and services closer to home.

2. The next generation

Young people don't want to be on Facebook - it's not cool. It's where parents hang out and talk. The next generation of social networkers are opting for newer networks like Instagram.
Meanwhile, new social networks continue to emerge, as new generations of people familiar with social networking become a new wave of social network creators.
It seems certain that we will see an ever-increasing number of social networking platforms, increasing competition for established players like Facebook. In the world of social media all things quickly become boring and are soon forgotten.
As for Google in the social networking scene? Google Plus? Nobody cares. Nobody ever really cared and Google has repeatedly tried and failed to launch a successful social network. They're falling further and further behind in terms of product innovation as far as search and social are concerned.
We're sure to see more search engines in the future too. As yet, Google has not had any serious competition but they are failing to innovate. The basis of Google's search algorithm has barely changed since the search engine was launched. It's still all about links and that's not likely to change for another decade. By then, I predict that it will be too late for Google. A more interesting search solution will have emerged and taken over. 

3. Ads

Google have not only failed to innovate radically in their algorithm. They're also failing to innovate as a business, at least in their advertising business, where it really matters.
Nobody wants to see ads everywhere. Especially boring ads. We don't actually need them in search engine results and we certainly don't want to see them interrupting our social conversations. Google's whole purpose is to take other people's content and slap ads on it to make money from the work of others.
Unfortunately, both Google's and Facebook's business models are completely reliant on adverts - and not just adverts but extremely boring adverts because neither Google or Facebook has bothered innovating to produce more compelling advertising solutions. As a business model, plastering ads where people happen to be looking could not be much further from innovation.
In content marketing and even native advertising we're seeing marketing content that people don't mind consuming - because it's compelling, useful or entertaining. Many of the corporate success stories of the 21st century will be the businesses that follow the trend away from advertising and towards content.
(Speaking of native ads, I would not be surprised to see Google penalising those in the future, along with other forms of content that are far superior to what Google offers to brands in its advertising solutions. We've already seen Google talking about devaluing links for infographics - which everybody likes - even though Google always says that producing great content is the right thing to do. Google are hypocrites and the reasons for their hypocrisy are clear. It's not just greed, they're scared. They look ahead and they see the end of the road for their business. Instead of innovating their way out, they lash out. Not just at the competition but at their customers. Businesses. In the form of Google penalties. Nobody ever created long-term success by battling with their customers. Google has got it wrong.
Both Google and Facebook are both still intent upon spamming us with image terrible ads, even plain text ads. In the modern, content-driven era that is simply incredible and inexcusable. It's like a hangover from the web as it was in the 1990s.
Seriously, Google and Facebook, is that really the best you can do? We don't want your boring ads. Nobody does. You've both had the time and resources to come up with something better. You have the best talent but you just haven't bothered to innovate in fundamental ways - because you can make easy money taking people's content and blasting us with boring ads. It's not cool - and it's certainly not nearly as clever or innovative as you both like to appear.

4. Replacements

While Google and Facebook fail to innovate, we're seeing plenty of innovation from emerging rivals. Google's search engine advertising business is being eroded by a range of other research options and Facebook was never viable as a search engine. Now Facebook is being rapidly replaced as a social network too.
A whole raft of apps, including WhatsApp, Snapchat, Pinterest Instagram and others are becoming the social networks of choice for younger users. (It is interesting to note how much digital activity is now focussed around image sharing).
Not too long ago, Myspace was the dominant social network and Yahoo was the dominant search engine. One thing you can be sure of in this industry is change. It's the nature of technology to constantly evolve and online innovation has never been easier.
What will happen?
Google missed its profit estimates in 2014 due to slower than expected growth in advertising. I see that as the beginning of a downward trend in profit growth that will inevitably lead to a decline in profits. It's also interesting and important to note that Google's CPCs are falling. (CPCs are Google's cost per click - the amount of money they make each time somebody clicks on a Google ad. That's the main source of revenue for Google.
But Google will remain dominant until it is replaced by a more interesting solution or a range of alternatives. The Google-killers may already be in the design stage.
While I'm at it, it's also clear to me that Apple's days are numbered. They just sell phones and there are plenty of better smartphones available.
Twitter user numbers are also in decline, for similar reasons. But Twitter its sheer simplicity and usefulness may help insulate it from total disaster. Twitter has also been much less aggressive in its push away from organic business content and towards advertising. That could provide a big advantage. Because Twitter has not yet taken advertising to the extent where it alienates both users and brands. Ad overkill may prove to be the greatest of Facebooks mistakes.
In time, of course (and perhaps more swiftly than we think) all of today's major web giants, including Google and Facebook, will be marginalised and forgotten, as bigger, better and more trendy services chart their own journey to greatness. In time, and in their turn, those newcomers will also begin to fade.
But users won't be adversely affected. There will inevitably be other and better search engines and social networks. Over the course of this century we will see services that we cannot yet imagine.
I find that very exciting.


Simon said...

Interesting thoughts. I agree about the growth of content moving things away from Google, but I think you underestimate the ability of innovative companies such as Google and Apple to break new ground and come up with new technologies and solutions. And although the Facebook we know these days may die away, remember they own Instagram so have probably already seen the future in it.

Ben Acheson said...

Thanks for commenting Simon. Have Google or Apple really innovated? I think not. Google certainly buys innovative companies - but their search technology has barely changed at all since the very start. As for Apple? How have they innovated post-Steve Jobs? I see no innovation whatsoever, not even basic technological progress. They're just another smartphone maker. The product is nothing special. It's the brand people pay for.