Social Media Watch

Google, Facebook go beyond social, beyond identity

Besides, is it really 'identity' if they don't really care who you are?

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It didn't win either company any fans. (Facebook retreated to making proving identity optional; Google canceled their real names policy just last month.)

Then came the new strategy

At some point in the past year or so, Facebook seems to have had an epiphany. They realized that to win in the mobile space, they didn't need a walled garden. They didn't need a social layer. And they didn't need people to prove their real identities.

What they needed was a pseudo-identity layer, plus an ad layer.

By psuedo-identity layer, I mean they don't actually have to know who you are. They just need to know that you're the same person associated with the various signals harvested on different apps. It doesn't matter that you're Bob Sacamano who lives on Elm street in Lodi, California. What matters is that you're the person who's into fitness, according to your fitness app, pizza, according to your restaurant finder app, and Italian cars, according to your web surfing habits, and that you interact mainly with these 14 specific people and spend your time mostly in those five locations.

This idea is a refinement of Google's social layer idea. Instead of trying to glue everything together with explicitly social behavior, Facebook simply tries to harvest whatever behavior they can, convert that behavior into signals, then serve up contextual ads wherever they see that user showing up. Social interaction is just one of many categories of user behavior that generates signals useful for serving relevant advertising.

So it's no longer about building social features into apps. It's about collecting personal information from many apps and serving ads on many apps.

How many apps? The more, the better. And that's why Facebook has been on a buying binge. They bought the Instagram photo sharing company for $1 billion, the WhatsApp messaging app company for $16 billion and the Moves fitness app (that tracks your every "move") for an undisclosed sum.

Google gets on board

At some point, Google got on board with the new strategy, too, gobbling up conspicuously non-social apps to be plugged into the contextual advertising Borg. They acquired the smart thermostat and smoke alarm company Nest for $3.24 billion (and since that acquisition, Nest bought the Dropcam cloud-based home security camera company), the mapping app Waze and, most recently, Emu, a messaging app with Google Now like smart assistant features.

(Note that the thermostats, smoke detectors and cameras aren't apps, they're controlled by apps that can harvest personal information of value to advertisers.)

The new strategy for monetizing social and mobile explains all the uncharacteristic behavior that both companies have been engaging in lately. For example, Facebook is not only buying apps, they're spinning apps out of its core product. For example, first Messenger was a chat feature in the Facebook app. Then it was also an optional separate app. And as of this week, the Messenger feature was removed from the main Facebook app. If you want to use Messenger, you have to use the app.

I don't think it has occurred to most analysts, columnists and other observers that Facebook can expand this strategy to ridiculous extremes. For example, within a year or two, Facebook could create, spin out or buy a hundred or two hundred apps, including game apps. All these apps could harvest personal data, and all could serve ads through Facebook's mobile ad network.

It also explains Google's sudden change of heart about Google+. The company is clearly less uptight about the social network. They've let go of the real names rule, for example. And there are solid rumors that they'll spin out their magic photo tools -- just like Facebook spun out Messenger. They realize that it's no longer necessary to cram everything into a single site. It's OK to let people roam free, as long as they roam via Google apps on mobile devices that can both harvest personal data and serve relevant advertising.

While neither company is going to give up its garden, walled or otherwise, and Google isn't going to give up it's "social layer," the fact is that social is taking a back seat to other behaviors that generate signals useful for the future of contextual advertising.

Mike Elgan writes about technology and tech culture. You can contact Mike and learn more about him at You can also see more articles by Mike Elgan on

Copyright © 2014 IDG Communications, Inc.

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