Late yesterday, Google announced perhaps the biggest change it has ever made to its massive network of web services: Starting in March, your search and surf habits across all of Google's products will be combined to form the mother of all behavioral profiles. On March 1, Search will know the contents of your email and the videos you watch on YouTube. If you use Google Docs for work, Search will know which company you work for and which industry you work in. Via Google Reader, Search and YouTube will know what content you like to consume. And of course, the kicker: Google's ad networks -- AdSense, AdWords, DoubleClick -- will have full access to all of your search and surf habits from every Google web service.
Just so you understand how big this is, Google is by far the largest web property in the US: 153 million Americans hit the search engine alone in 2011 -- the single largest website in the US -- with YouTube coming in fifth, with 100 million uniques. This story is repeated all over the world, and in some cases it's even worse: Google "only" has 65% of the search market in the US, but in many European countries (Germany, France, England, etc.) that figure is closer to 90%. YouTube, likewise, is incredibly popular all over the world. The figures for services like Gmail and Google Docs are harder to come by, but they both have hundreds of millions of worldwide users.
This on its own is fairly shocking, but not all that surprising. Personally, I thought Google already did this -- I mean, if your entire company is based on targeted advertising, commingling all of your data makes complete commercial sense. If we mix two other factors into the equation, however, it quickly becomes apparent that Google is FUBAR.
The slippery slope
First, you can't opt out of these changes. Basically, on March 1, Google is combining 60 out of its 70 privacy policies to form a Main Privacy Policy, which mandates the sharing of data between services. If you use one of these 60 services (which includes almost everything except Google Chrome), there is no option for you to continue using the old privacy policy that existed when you signed up. If you have a Google account, you must accept this new privacy policy if you want to continue using Gmail, Docs, and so on. You must allow Google to share your data between its services.
Second, it was just two weeks ago that Google turned on Search Plus Your World(Opens in a new window) (SPYW), a massive reworking of its search engine that heavily biases social content from Google+. You will have no doubt noticed that, by default, Google now pollutes your search results with images, likes, and shares from your Google+ Circles. Meanwhile, of course, Google+ is now front and center across almost all of Google's websites, and on earnings calls Larry Page is bragging that the fledgling social network now has 90 million users (though of course he gives no indication of how many daily users it has, or whether the engagement is anywhere close to Facebook).
Now, it's obvious where Google is going with this: It wants to be more like Facebook and Apple, both of which have a completely-unified, walled-garden approach -- and both of which are enjoying huge leaps in revenue and profits, while Google falls short of quarterly expectations. Nothing happens on an Apple device without Cupertino's knowledge, and as a result Apple can perfectly tailor its devices for its users (and ratchet up record-breaking quarterly earnings in the process). Facebook -- because everything is centralized under the facebook.com domain -- enjoys unprecedented access to the surfing habits, likes, shares, and messages of its users. On the other side of the fence, with a slew of discordant, disconnected properties, Google seems to be flailing. SPYW and the March 1 privacy changes(Opens in a new window) are simply the next step in Google's (rather messy) attempt to weave everything together, before it loses any more ground.
<Insert maniacal cackle here>
If you want confirmation, here's what Larry Page -- Google's CEO -- reportedly said at a staff event celebrating the launch of SPYW:
“This is the path we’re headed down – a single unified, ‘beautiful’ product across everything. If you don’t get that, then you should probably work somewhere else.”
According to Pando Daily(Opens in a new window), this ultimatum and the complete corporate about-turn that SPYW represents has already resulted in Googlers fleeing the company for more pleasant climes. Remember, Google built its entire empire on a search engine that espoused relevancy above all else. Google's unofficial corporate motto -- "don't be evil" -- is meant to remind Googlers that the consumer, rather than the shareholder, is king. With SPYW, Page's tyrannical declaration, and the upcoming privacy-destroying switch-throw on March 1, Google has sold its soul to the capitalist devil.
In other words, Google has pushed in all of its chips in an epic gamble to beat Facebook at its own game. Google has abandoned its bread and butter in search of greener, tighter-targeted, socially-relevant pastures. The thing is, though, Google doesn't actually have a choice in the matter. Going social is the right play. Indexed search has peaked. Apps -- be it web apps or native mobile apps -- are the future, and the only way to index them is through social sentiment, which Google can't currently do... until it links all of its services together on March 1.
Why is Google FUBAR, then? Because it is biting the hand that feeds it. Indexed search might have peaked, but it's still huge, and still propelled Google to over $10 billion in revenue this past quarter. To become Facebook, Google must forsake almost everything that brought it success in the first place. It must irreparably alter its fleet of successful web properties to become more Facebooky. It must alienate users with weird, ungooglesque features. It must force Chrome and Google+ down the throats of users who are simply looking for a brilliant search engine.
The path towards Facebookness is fraught with strife. Facebook, as the incumbent with almost a billion active users, has a huge head start. Facebook can push onwards, continue to reap the truly monumental power of its network effect, and innovate without user backlash. Google on the other hand now has to spend the next year or two maneuvering its gribbly juggernaut between anti-trust, fair trade, and privacy allegations -- all while trying to keep the users happy with a search engine that's no better than Bing. Google is FUBAR.
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