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Why did Google Plus fail as a social networking site?

Why did Google Plus fail as a social networking site?

Principles of Microeconomics
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter22: Frontiers Of Microeconomics
Section: Chapter Questions
Problem 6PA
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Refer to the images 'Facebook versus Google Plus'. And answer the question below Why did Google Plus fail as a social networking site?
Table 4.5 Facebook Users Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Facebook User's (Millions) Sources: Facebook Merkter 1 5.5 12 50 100 350 500 788 900 1171 1334 1517 1654 Hours per User per Month 2 3 5.5 7.5 8.5 10 10.5 11 Having observed the success of Facebook, other companies tried to develop their own competing social websites. Most notable was Google, a software powerhouse that certainly had the resources to compete with Facebook. In 2011, Google launched Google Plus, a social networking site that looked much like Facebook. At first it seemed it would be a huge success-more than 25 million people joined in the first month, and many more users joined later. But then the number of users dropped off dramatically, and by July 2015, Google Plus had fewer than 20 million users, compared with Facebook's roughly 1500 million. (See Table 4.50) A year later Google gave up on social networking and no longer used Google Plus as a social networking site.11 What happened? Why did Google Plus fail so badly? On its face (sorry for the pun!), it seemed superior to Facebook in that it was easier to customize and offered better privacy options. And of course it had the financial resources of Google behind it. But it lacked something important: a large number of users relative to Facebook. When Google Plus entered the market in 2011, Facebook already had close to 800 million users, which gave it an enormous advantage. Any potential new user will naturally gravitate to the social networking site with the most users, namely Facebook. The extremely strong network externality created a winner-take-all market, and Facebook was the winner.
Transcribed Image Text:Table 4.5 Facebook Users Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Facebook User's (Millions) Sources: Facebook Merkter 1 5.5 12 50 100 350 500 788 900 1171 1334 1517 1654 Hours per User per Month 2 3 5.5 7.5 8.5 10 10.5 11 Having observed the success of Facebook, other companies tried to develop their own competing social websites. Most notable was Google, a software powerhouse that certainly had the resources to compete with Facebook. In 2011, Google launched Google Plus, a social networking site that looked much like Facebook. At first it seemed it would be a huge success-more than 25 million people joined in the first month, and many more users joined later. But then the number of users dropped off dramatically, and by July 2015, Google Plus had fewer than 20 million users, compared with Facebook's roughly 1500 million. (See Table 4.50) A year later Google gave up on social networking and no longer used Google Plus as a social networking site.11 What happened? Why did Google Plus fail so badly? On its face (sorry for the pun!), it seemed superior to Facebook in that it was easier to customize and offered better privacy options. And of course it had the financial resources of Google behind it. But it lacked something important: a large number of users relative to Facebook. When Google Plus entered the market in 2011, Facebook already had close to 800 million users, which gave it an enormous advantage. Any potential new user will naturally gravitate to the social networking site with the most users, namely Facebook. The extremely strong network externality created a winner-take-all market, and Facebook was the winner.
Example 4.7 Facebook versus Google Plus The social networking website, Facebook, began operation in 2004 and had a million users by the end of the year. By early 2011, with over 600 million users, Facebook became the world's second most visited website (after Google). A strong positive network externality was central to Facebook's success. facebook Email or Phone J Log In Forgot Password? Sign Up for Facebook 0 To understand this, just ask yourself why you would join Facebook rather than some other social networking site. You would join because so many other people have joined. The more friends that also joined, the more useful the site becomes for you as a way to share news and other information with friends. Conversely, if you are the only one of your social circle who does not use Facebook, you may find yourself out of the loop with respect to news and upcoming events. With more members, there are more people to meet or reconnect with, a bigger audience for your photos and opinions, and generally, a larger variety of content for you to enjoy. In Table 4.50, you can see that as the number of Facebook users has grown, the time the average user spent on the site grew as well.
Transcribed Image Text:Example 4.7 Facebook versus Google Plus The social networking website, Facebook, began operation in 2004 and had a million users by the end of the year. By early 2011, with over 600 million users, Facebook became the world's second most visited website (after Google). A strong positive network externality was central to Facebook's success. facebook Email or Phone J Log In Forgot Password? Sign Up for Facebook 0 To understand this, just ask yourself why you would join Facebook rather than some other social networking site. You would join because so many other people have joined. The more friends that also joined, the more useful the site becomes for you as a way to share news and other information with friends. Conversely, if you are the only one of your social circle who does not use Facebook, you may find yourself out of the loop with respect to news and upcoming events. With more members, there are more people to meet or reconnect with, a bigger audience for your photos and opinions, and generally, a larger variety of content for you to enjoy. In Table 4.50, you can see that as the number of Facebook users has grown, the time the average user spent on the site grew as well.
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