© 2019 Gautam Malyala

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Platform Power: How Google and Facebook are the hubs of New Media

Introduction

In today’s world, it is perhaps difficult to imagine life without the various internet services offered by tech giants like Google and Facebook. Besides their flagship services, namely, Google’s search and Facebook’s social network, the two technology platforms own and operate numerous other services that are regularly used by over a billion people every day.  It may then come as a surprise that their rise to prominence has been a relatively recent phenomenon. Google and Facebook set out with unique objectives, however, there are some striking similarities that they share in their approaches to growth and expansion. They are widely considered to be very close to one another in the way they function, with one key difference. As Hoefflinger puts it in his book, Google’s mission is to organize the world’s information to make it universally accessible with its search engine, while Facebook aims to build a social network that organizes the world’s people to make them more accessible.  Though these constituted the core functions of the two platforms, time eventually revealed their scope to be far greater. From education to entertainment, and social movements to business development, the uses of services offered by both platforms have crept into nearly all aspects of human life. Google and Facebook are described as ‘Integrated platforms’, as they serve as platforms for transactional and innovation functions (Evans and Gawer, 2016, 14). On one hand, Google and Facebook offer various services such as messaging which allow users to transact between one another, while on the other hand, they have a growing community of third-party developers who develop various applications, making these platforms hubs of innovation as well.

In the world of the internet, it is hard to think of many companies that have achieved the ubiquity of Google and Facebook. The sheer scale at which they operate is perhaps the most striking similarity between the two. Google and Facebook are widely considered to be the icons of the Web 2.0 in that they leveraged the large, growing user-base of the internet as the prime driver of their growth. These were forms of participatory media where the content would be produced and consumed by the same people—the users.  In this article, I will examine 3 major attributes that they share in their strategy to gain pre-eminence in the digital world today. 

COMPUTING AND CRUNCHING POWER


At the time when Google was founded, Yahoo was at the forefront of search and arguably even at the forefront of the online experience for most people. Founded by Stanford graduates Jerry Yang and David Filo, Yahoo relied on a team of editors and classifiers to label and organize pages in the complex and steadily growing web into a logical directory. Google founders Larry Page and Sergey Brin, who were also Stanford graduates, identified many drawbacks with Yahoo and other existing search directories. Simple searches would cast wide nets, fetching thousands of results that needed to be scoured manually to determine their relevance to the search. They established that existing search engines were not comprehensive and lacked the ability to account for relevance of search results. While adding a human touch may have created some semblance of order, Yahoo’s dependence on human intelligence to organize the web had clear limitations with regard to subjectivity and scalability (Greenberg 2015).  The reliance on human editors made sense in the short-term, but the dizzying, exponential rate of the web’s growth made this infeasible in the long-run. At such an enormous scale, it became clear that human intelligence was not only ineffectual, but it also increased the scope for error. It seemed as though the feat of making sense of the rapidly growing web was far beyond the ability of skilled teams of editors, regardless of how big these teams were.

Page and Brin thus had the ambitious plan of centering their search engine on artificial intelligence. This underpinning feature that enabled computers to organize the web of information with minimal human intervention was what distinguished Google from the rest and also proved to be a more scalable solution. Google’s search would be premised on the PageRank algorithm, a system of ranking pages based on their popularity and relevance. The principle behind the algorithm is akin to the concept of citations in the academic world. Much like the number of citations determined the academic impact of a researcher or journal, the popularity of webpages and websites was determined by the number of links that pointed to them from other sites or webpages. Using the example of the large number (Vise 2017, 37) of citations garnered by Nobel Prize winners, Page pointed out that citations were important metrics as they reflected the consensus regarding the significance of works in the academic community. The concept of citations was applied to the web by using hyperlinks, which allowed easy connections between relevant webpages and also helped map traffic on the web. By 2007, Google’s search had taken a lion’s share of the search engine market with searches on Google sites accounting for 55.2% of the total searches in the U.S (Comscore 2007).

Complementary to its unique and effective search engine, Google’s advanced IT infrastructure is another feature that undergirds its continuing popularity. Having full, independent control over its infrastructure has been an integral part of Google’s strategy, right from the beginning. Right from its operating platform and database, Google developed proprietary technology for its infrastructure to ensure that it reaped a number of benefits from its strategy of self-sufficiency right from the outset. Billions of dollars were invested in using proprietary technology to build nearly everything, right from the underlying infrastructure to its operating platform and database (Iyer and Davenport 2008, 61). Not having to rely on the technology of third party vendors meant that Google had complete control over the design and capabilities of its infrastructure. In addition to that, the infrastructure was scalable by design, with a seamless capability to add new computer clusters or increase space and computing power to accommodate new services. Google’s massive scalable platform was not only a hub for its own services, it also allowed third-party developers to add features and applications. On average, Google handles over 5 billion searches every day
Similarly, a crowning glory for Facebook has been the news feed feature that it added to its arsenal in 2006. The feature was a continuously updating, vertical scrolling column with information and updates about the goings on in each user’s circle. It served as a dynamic, personalized newspaper that was unique to each individual, displaying updates only from channels that they chose to follow. In theory, the idea was simple, however, making it a reality was a task of unprecedented complexity. Facebook intended to make a news feed that was responsive and agile, while regularly updating its design and features based on user engagement insights. 
As described by Hoefflinger, with the advent of smartphones and high-speed internet, Google and Facebook emerged as dominant providers in the two major ‘lenses’ of the online world ( (Hoefflinger 2017). The first lens of ‘what you do when you know what you want’ corresponds to Google’s search, which people use when they want to search for specific information. On the other hand, the lens of ‘what you do when you don’t know what you want’, corresponds to Facebook’s news feed, which people scroll through out of general interest in social news and events in their network. 

COSTS: FREE FOR USERS, FEES FROM ADVERTISERS


At first glance, Google can be recognized for its flagship search engine and the various other free services it offers, while Facebook is widely known as the world’s largest social network. However, upon closer examination, one can observe a striking resemblance. At the core, Google and Facebook are big data companies that thrive on the value of the large-scale user data that they amass. The two platforms are able to stay ahead even though a vast majority of users avail their services for free. This is perhaps because it is a frequently ignored fact that the billion users of their services are actually not their main customers. In fact, the billion users with Facebook profiles can be seen as a continuously engaged audience, with marketers and advertisers vying to gain visibility for their products and services, at a fee. There was energetic demand and interest for the kind of data that companies like Google and Facebook were sitting on. As user activity increased on these platforms, sellers had an opportunity to gain access to a new advertising audience for their products—a digital audience. With more users, there was scope for wider reach, and in turn scope for higher revenue. Thus, Facebook and Google could charge these sellers higher fees for an increased reach with an increasing number of active users. Google and Facebook had already found an easy way to ensure this continuing increase in the number of users—they offered their services for free and to complement that, direct and indirect network effects prompted more users and developers to get on board (Zhu and Iansiti 2019). They had become like virtual versions of public spaces— places frequented by the general public for free, with opportunities for advertisers to display their content to gain visibility for their brand for a fee. In this case however, the term ‘visibility’ would take on a new definition.  The visibility could be optimized and limited only to relevant audiences that platforms like Google and Facebook were able to identify based on the heaps of data that they garnered on the online activity, profiles and interests of users. A new form of advertising called ‘targeted advertising’ was born, and it soon became the primary way to reach audiences. With its powerful and widely-used search engine, marketers pay Google to place ads that are relevant to search queries of users in Google search results. Ads in search results are widely dubbed as prime ‘digital real estate’ for marketers, and they bid in competitive auctions for rights to position their ads on results pages for searches that use specific keywords (Ferguson 2005, 43). Another way Google earns its ad revenue is by offering ad placement services to other web publishers to monetize their own web content services. This revenue model emerged as a major disruptor in the publishing industry, as more and more content publishers sought to give users free access to their content while earning revenues from display advertising with Google’s AdSense service. With AdSense, ads can be displayed to users on multiple websites that they visit, as Google continuously gains insights from the behavior of users based on the online content they engage with. AdSense is a unique, personalized model of ad delivery that marketers find particularly attractive as ads could actually follow users from site to site, making multiple impressions, and simultaneously collecting more data on users based on their online activity. (Tucker 2014, 105).
Facebook provides advertising opportunities for marketers in various forms, including display or video ads that run in users' news feeds or down the right side of the page when viewed on the desktop. Facebook’s acquisitions of new platforms such as Instagram, have brought additional scale and access to new audiences with new options for format and delivery. (Dempster and Lee 2015, chap. 10).
The advertising avenues on Google and Facebook are popular among marketers not only because of the unprecedented accuracy with which they enable them to reach their target audiences, but also because of the comprehensive range of pricing options that are available to cater to all budgets. Google’s total advertising revenue from its various services in the last quarter of 2018 was $32.6 billion (Murphy 2019) while Facebook’s total revenue was $16.6 billion (Facebook 2019) 

CONTINUAL USER ENGAGEMENT

At the outset, Google and Facebook offered web services that provided a novel way for users to accomplish simple tasks with the use of the internet. Today, the two platforms have a firm grip on the global market with the services they offer through their various subsidiaries, along with their flagship services. In fact, these services are the principal mediums through which most people experience the internet today, with Google being the most widely used search engine and Facebook being the most popular social network. So, in the fast-moving age of digital innovation with the steady threat of disruption, the sustained dominance of Google and Facebook has certainly been no small feat. As businesses that earned most of their revenue through advertising, Google and Facebook needed the sustained engagement of their audience. 

Through the course of their expansion, the two platform giants shared two notable similarities in their approach—one being the multiple strategic acquisitions to expand their reach and the other being a series of measures to ensure user engagement and user retention.  
The two platforms built on the initial successes of their services by pursuing an aggressive campaign of expansion with numerous acquisitions. Over the course of its existence, Google and its parent company Alphabet, acquired over 200 companies. Some notable acquisitions include YouTube, Motorola, and NestLabs. Facebook on the other hand, acquired over 70 companies (Crunchbase 2019), with the most notable acquisitions being Whatsapp and Instagram. Acquisitions helped both platforms in expanding their core advertising businesses and in deepening their expertise in key technology areas. Google’s acquisition of YouTube allowed it to secure a valuable place in the flourishing space for online social activity and expand its advertising business by gaining access to a large, engaged video audience. Similarly, the acquisitions of WhatsApp and Instagram propelled Facebook to a commanding position in the social media and messaging space, and Whatsapp is the most used messaging app in the world today with 1.5 billion monthly active users globally. These major acquisitions helped them expand their reach, and Google and Facebook gained access to new audiences. Their aggressive campaign of acquisitions was complemented by a comprehensive strategy to sustain the engagement of their growing audiences. Their websites and applications are tactically designed to enhance user experience and minimize user effort. For instance, Google uses a single sign-on feature that not only reduces the effort it takes to log in on each browser window but also allows Google to collect valuable data on its users based on their activity on other windows. Similarly, Facebook uses a single, persistent sign-on across devices that is able to clearly associate user sessions and interactions with specific users without ambiguity (Dempster and Lee 2015, 156). With the growth of smartphones over the last decade, single sign-on features have been especially useful and easy to implement and this can be seen in the case of Google Now, Google Maps and Facebook’s Messenger app. Smartphones have also played an important role in increasing user sessions by incentivizing users to return to platforms for updates. 

 

Both platforms are also known to exemplify some of the best practices in user experience design. Google’s search for instance, has the ability to process an erroneously typed search term and still return search results relevant to the intended query. Google search is in fact known to be one of the most accurate spell-checkers covering almost all living languages, and continues to evolve using data from billions of search queries every day. The extraordinary spell-checking ability of Google search is a result of Google’s strategic use of what is known as ‘data exhaust’ to build it (Mayer-Schönberger and Cukier 2013, 112). By analyzing the trail of data left by searchers, Google uses artificial intelligence to detect patterns that not only help in identifying common typing errors but also in predicting queries before they are fully typed—the function of the popular ‘autocomplete’ feature. The novel approach to spell-check thus served more than one purpose, and Google further extended these advanced spell-checking and autocomplete capabilities to Gmail and Google Docs and more recently to predictive text on Android smartphones. 
In a similar vein, Facebook’s algorithms are designed to learn from the trail of data left by users through their actions, and allow Facebook to adapt its interfaces accordingly. One such example is the order and placement of content on Facebook’s news feed, which is determined by a relevance score that is calculated using multiple variables such as recentness, popularity, type and the relevance of the user that shared the content . Based on patterns from the user’s previous actions on the platform, Facebook’s algorithms can also determine the close friends in a user’s network and display content from such friends at the top of the user’s news feed. 
Lastly, by design, Facebook provides numerous incentives for its users to return to the platform with notifications on social updates. Similarly, Google’s introduction of the new ‘feed’ feature on smartphones is designed to display content that is predicted to be relevant to specific users based on their previous activity and engagement on the search engine. In what is widely considered to be Google’s own version of the popular news feed that has been a mainstay for Facebook.  

 

CONCLUSION


Google and Facebook are among the most valuable companies in the world today—Google is valued at $309 billion and Facebook is valued at $159 billion, as of 2019. (Handley 2019). The full picture, however, goes beyond the mere figures. The unparalleled power and influence that the two platforms exercise on societies all over the world is far less fathomable, and has emerged as a subject of debate in recent years, during which both platforms have attracted controversy on a number of ethical concerns including privacy, security, copyright infringement and neutrality. The Cambridge Analytica scandal in 2018 involving Facebook was a landmark event that revealed the monumental impact of the platform on society. It had emerged that Facebook exposed the data of millions of users to data-mining firm Cambridge Analytica, which was able to exploit this data for targeted advertising for a political client in the 2016 United States presidential election. This had major implications, and it is widely believed that Facebook’s actions played a role in influencing the outcome of the 2016 presidential election, raising numerous concerns about its role as a medium. In the same year, Google was under scrutiny for its alleged bias against Conservative voices, and over its potential plan to build a censored search engine in China. The controversies became subjects of international attention as chief executives of both companies were called to testify before members of the U.S Congress, and the lengthy hearings that were widely followed by digital audiences on their own platforms. The Congressional hearings demonstrated that the impact of Google and Facebook have not been limited to the economic sphere, but have extended well into social and political spheres with far-reaching implications, reflecting the need for new regulation in this area.  
In spite of the controversies, both companies continued to experience revenue and user growth, demonstrating a strong and loyal user base. The services of Facebook and Google are at the center of the online experience for a lion’s share of users on the internet, and this has had major implications on information flows in societies. Globally, Google and YouTube are the most visited websites in the world, and also the most used search engines. Google along with its subsidiary YouTube accounts for 92.96%  of global search traffic as of September 2019 (Global Stats 2019). Facebook on the other hand, is the world’s most used social network with 2.45 billion monthly active users as of September 2019.

 

The ability of Google and Facebook to achieve such dominant positions has been extraordinary, especially in a digital landscape that has been characterized by continuous disruption. In what is widely believed to be a level-playing field created by the web, the pre-eminence of one or two platforms would have been difficult to anticipate. Numerous advantages such as network effects, strategic acquisitions, a perpetual free-to-use model, and technological self-sufficiency are among the main factors helped propel these platforms to where they are today. In addition to that, a distinguishing feature of both these platforms is that they began not as businesses, but as technological solutions to day-to-day problems, which were monetized only after they were found to be viable, and this is an approach emulated by many platforms to this day.

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