Google Attempts to Take Down Facebook With ‘Search Plus Your World’ Feature

Is Google trying to gain access to Facebook’s data? By Dan Lyons.

Google this week made a brazen move when it rolled out a new search feature called “Search Plus Your World,” which brings up results based not only on what’s out there on the Web but also on what you and your friends are doing on the Google+ social network.

The idea, Google claims, is to deliver results that are more personalized and therefore more relevant. Critics say, however, that Google is simply pursuing the same strategy that once got Microsoft into hot water—using a dominant position in one market to gain ground in another.

Microsoft’s problems arose when it tied its Internet Explorer browser to its Windows operating system, a move that helped put browser maker Netscape out of business and made Microsoft the target of a lengthy and damaging antitrust lawsuit brought by the Department of Justice.

Now Google could be facing the same kind of trouble, since it appears to be using its market-leader search engine (which delivers roughly two thirds of all searches in the United States) to prop up its fledgling social network, Google+, which has 40 million members and is trying to compete against Facebook, which has 800 million members.

The howling began almost as soon as Google introduced the new feature earlier this week, from bloggers, pundits, and privacy groups, including the Electronic Privacy Information Center (EPIC), a watchdog group that says it is considering filing a complaint with the FTC.

Even louder complaints came in from Twitter, whose executives claim Google is unfairly pushing them down in its search rankings, in favor of Google+. Google and Twitter used to have a “partnership,” meaning Google paid Twitter to get access to its data so that it could include Twitter data in search results. But that partnership fell apart last year—although Google says Twitter can renew the deal if it would like to.

But what about Facebook? Strangely enough, so far it has said nothing. And its silence speaks volumes about what Google might really be up to with this “Search Plus Your World” gambit.

My theory goes like this: Facebook is sitting on a gold mine, a trove of personal data from 800 million people. Think of that data as a precious ore that lies deep under the ground, stuff that can be mined, processed, and turned into money.

And so far, Facebook has only begun to extract value. In 2011, the company might have done $4 billion in revenue. But that’s just the beginning—many more billions could be extracted from this data.

Better yet, unlike a gold mine with a fixed size, Facebook’s “claim,” or potential revenue from this data, keeps growing as more people join the service. The data Facebook is sitting on represents the biggest and most valuable mountain of data ever amassed.

Google wants to get at that claim. Leave aside the “don’t be evil” rhetoric for a second and just think of it this way: there’s a big pile of money sitting out there, and money is what corporations are all about, and Google is a corporation.

But there’s another angle: Facebook, right now, represents the biggest threat to Google’s existence that has ever come along. For example, Facebook won’t let Google search through its data. The site is walled off. (Think of it as Facebook putting a big fence around its mining claim.) So Facebook could be, in effect, attempting to build its own private Internet—and one that Google has no access to.

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This could be devastating to Google. Because its business model is built on the notion of an open Web where everything is available to everyone, and where Google’s little bots can crawl over everything, extracting value from the data.

Google, in other words, needs to crack that fence around Facebook—for its own survival.

If Google can’t get at that mountain of data that Facebook is building, and if the mountain keeps getting bigger, and if other companies start building other walled-off mountains, then eventually Google starts to dwindle away.

This explains almost everything Google does outside of search. It’s all about preventing people from creating little mini-Internets that Google can’t search.

The Android mobile operating system exists almost solely because Google couldn’t risk having Apple, Microsoft, and others create mobile ecosystems where Google search wasn’t used.

Google doesn’t make money on Android—at least not directly. Instead, it gives Android to handset makers at no cost, just to make sure that hundreds of millions, and it hopes someday billions, of people are using devices that have Google search on them.

Google argues that everyone in the world would be better off if all data is available to everyone. No more walled gardens. No more private mini-Internet.

But Facebook is not persuaded by Google’s argument, and for good reason.

Look at what happened to media companies. Newspapers and magazines fell for Google’s line and made all their content available to Google. In part they felt threatened: the fear was that if they didn’t let Google crawl and index their content, they would become essentially invisible on the Internet. Nobody would find their content.

So they played along. In theory this was supposed to be a win-win, since Google would be sending them traffic and they could make money on that traffic. In the end, however, the payoff was a bit lopsided. Media companies went broke chasing digital dimes instead of analog dollars. Google became a company with $30 billion in revenues—and with obscene (nearly 30 percent) net profit margins.

The people running Facebook aren’t as easily gulled as newspaper companies—if only because some of them, such as COO Sheryl Sandberg, were the ones running Google when it ran roughshod over the newspapers.

Sandberg and her colleagues know what Google did to media companies, and they do not intend to suffer the same fate. They’ve told Google: thanks very much, but we’ll keep our precious data to ourselves and do with it as we please.

Who can blame them? Facebook put in years of hard work and spent huge amounts of money building the world’s biggest network of people. Why should Google be allowed to just walk in and start digging through that data?

Facebook does let some companies gain access to its data, but apparently demands ridiculously high prices, so much so that in 2010 Apple walked away from a potential partnership after Facebook demanded what Steve Jobs called “onerous terms.”

Microsoft has made a deal with Facebook that lets Microsoft draw on Facebook data when people do searches on its Bing search engine. Terms are private, but Microsoft is probably paying through the nose. The software giant has lots of money and is desperate for any way to get an edge on Google and catch up in the search market.

Google and Facebook reportedly explored a deal in 2009, but could not agree on terms.

Faced with a roadblock, Google last year came up with a workaround. It launched Google+, a great-looking social network that was in some ways better than Facebook. The site now has 40 million members (some estimates have that number even higher, as much as 62 million) after six months on the market.

Now Google aims to use Google+ to gain leverage with Facebook. Here’s how it might work: Facebook whines to the government that Google is engaging in anticompetitive activity, and Google counters by asking for access to Facebook’s data, and says it will gladly include Facebook results alongside results from Google+.

Basically, Google is trying to use a 40 million-member network as leverage to gain access to an 800 million-member network.

And if Facebook refuses, how can the government tell Google not to crawl its own stuff just because a competitor refuses to share?

An antitrust hearing might be just what Google wants. As Eric Eldon on TechCrunch puts it, Google might even argue that Facebook has been engaging in anticompetitive behavior by building a monopoly in social networking and then striking a deal with Microsoft but refusing to strike a deal with Google—thereby abusing its monopoly power.

If this is the case, Facebook can put up or shut up. Facebook can let Google dig through its data, or keep the fence up and hope that Google+ doesn’t become so big and attractive that people start abandoning Facebook and using Google+ instead.

Google has already presented a similar line of reasoning to Twitter, after that company began whining about Google’s new move. In an official statement, Google commented that it was “a bit surprised by Twitter’s comments about Search plus Your World, because they chose not to renew their agreement with us last summer.” Since then, Google says, it has “observed … instructions” from Twitter not to crawl its data.

In other words: put up or shut up. Let us crawl your site, preferably at no cost, or go build your own search engine and stop complaining about what we do with ours.

This is Google playing hardball, in a market with tens of billions of dollars at stake. This is a battle over the future of the Internet, and who will rule it. This is Google flirting with an antitrust investigation and betting that it can come out the winner.

The days of peace and love and “don’t be evil” are over.