Google’s Response to Facebook Taking Shape

by StockJockey

Sunday, October 28, 2007 - 6:04 pm

Was Google interest in Facebook only a bit of competitive posturing? We had pondered it last week, but had missed an article on TechCrunch that would have connected a few dots.

Apparently on November 5th Google with open up Orkut’s API to outside developers:

Google plans to open up Orkut as a Platform, with fewer restrictions than Facebook. As an example, they say, application developers may be able to host applications on their own servers (Facebook does not permit this). Other Google services will be made available as well “If the plan succeeds, users might begin to see applications combining Orkut with Google Maps that would show where friends are located.”

Orkut has a lead on Facebook outside of North America....Orkut is 1/4 the size of MySpace (Comscore shows a much closer race), but they’ve recently taken the lead in the Asia/Pacific region. Orkut is also very strong in Latin America, with double the traffic of MySpace and Facebook combined. TechCrunch

An article in Forbes this past Friday fleshes out the situation, and it looks like we could have a firefight on our hands soon…

But Google may have passed on the deal for a very good reason: The company may already have all the pieces it needs to patch together a homegrown social networking site--one that could even trump Facebook.

“They don’t need Facebook, otherwise they would have bought it.” Georges Yared, head of Yared Investment Research said. “Google can sit there, smile and say, ‘Look at what we did, we made Microsoft pay $240 million for a tiny stake.’” Meanwhile, Google has a lot “sitting in its back pocket,” Yared said.

Google’s first homespun networking site, Orkut, which debuted in 2004, has gained traction in Brazil and India. Although it has stirred up some controversy--because people have used the network to form racial and religious hate groups--it is becoming increasingly popular in emerging markets, such as Asia.

And then there is the iGoogle and the Apple, Inc. angle to the story. Google is playing catch up in North America, but will probably push ahead with the limitless resources now that the die has been cast. And perhaps karma will catch up with Zuckerberg, who allegedly"borrowed" the idea for Facebook from a couple of Harvard students who had hired him to work on their site, ConnectU

We are not sure where this leaves LinkedIn, but it is game on for Google. And General Zuckerberg will have to earn his stripes in the months ahead.
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