It's not immediately apparent how Facebook and Google are direct competitors, except perhaps in terms of reputation for "cool." But the two companies are directly competing for the most valuable asset of all: customer time. And everyone knows that Google's attempts to take on social networking haven't met huge success. From Orkut to Buzz, the company has been struggling with this for quite a while. But Google may have just hit on a viable strategy to head off the real competitive threat from Facebook.
Google and Zynga
Capturing time and attention is the reason Google has been investing in alternative social networking. But that's been a difficult space for Google to attack directly. On July 10 news broke of Google's latest attack on Facebook's share of time: a $100+ million investment in Zynga, the social game company behind Mafia Wars, Farmville, and Frontierville among others.
The apparent purpose of the investment is to launch Google Games later this year, a social gaming site that will prominently feature Zynga's very popular games. As we know, many people are excited about the revenue potential of social games and virtual goods. Zynga alone is reportedly operating at close to a $300 million run rate for the first half of 2010, placing it on a trajectory to reach a billion in 2011. Others are praising the deal because it will help Google improve its "graph" of social connections and therefore its ability to compete directly in social networking. But neither the direct revenue from gaming and virtual goods nor a stronger social networking position are the real prizes here. The real prize is the share of time that Zynga controls—a share of time that was almost exclusively spent within Facebook.
Time Magnets = More Money
Can social gaming make a dent into Facebook's share of time where Google's social networking products have failed? I think so—because social games are a time magnet. A February survey by PopCap Social Gaming Research found that 23% of social game players play 16 to 30 minutes at a time, 27% reported playing 31 to 60 minutes at a time, and 22% said that they spent one to two hours playing games in a single session. That's a lot of customer time and attention to enable monetization—and a lot of time that players on Google Games won't be spending on Facebook.
Given that hours in the day are fixed, every minute that Google captures is a competitive victory over Facebook. This is just one small battle in one industry in the war for time and attention that will be the competitive battlefield that defines winners in losers in many industries over the next decade.
Adrian Ott has been called, "One of Silicon Valley's most respected, (if not the most respected) strategists" by Consulting Magazine. She is the author of The 24-Hour Customer: New Rules for Winning in a Time-Starved, Always-Connected Economy (HarperCollins 2010) and CEO of Exponential Edge Inc. consulting. Follow Adrian on Twitter at @ExponentialEdge
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