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“Vampire Squid” Followup

January 2, 2012

A few days ago, I briefly reviewed an article on Forbes.com about Google’s expanding internet dominance. The author, Agustino Fontevecchia, has published a follow up post titled “Facebook Vs. Google: The Battle For Internet Dominance.” This article builds on the last by explaining why Facebook represents a threat to Google and discussing the dynamics of that relationship.

Fontevecchia argues that Facebook’s isolation of its data from Google’s search engine vision constrains the value of Google’s search engines. This is because the sheer volume of web data that falls within the domain of Facebook is so enormous and valuable that its absence from Google’s search results is a meaningful omission from the overall web population of data. In the author’s words:

“Facebook has posed serious problems for Google, most notably by walling off the social network’s content from Google’s search engine,” explained Baird’s equity research analysts in a note on Friday.

The problem for Google is that its business model relies on its ability to “index the web.”  Thus, when Facebook walls off its site, it’s essentially blocking a significant, and growing, portion of the Web.  “Google’s index has been faced with an ever-increasing blind spot for search,” wrote the analysts.

[all italics are mine and denote a quotation]

How important is this? In the past, perhaps not so much. But with Facebook’s explosive growth, things are changing: “But Facebook is creeping up.  Mark Zuckerberg’s social network has risen to become the second-most important online property, behind Google.” Moreover, the post notes that “Furthermore, Facebook could jeopardize Google’s online dominance by developing its own search capabilities.

This article is an interesting examination of the marketplace and what’s to come. Take a look and see how you think the balance tips.

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