Google’s integration of Google+ and profile information into personalized search results is creating quite a stink. Twitter complained. The Electronic Privacy Information Center sent a letter to the FTC. Charges of favoritism and its being anticompetitive monopoly swirled. Let me make a perhaps contrarian argument that, rather than squabbling, Twitter and Facebook should do some serious negotiating with Google and license data to the search giant in exchange for big fees and reciprocal data sharing.
Longtime search watcher John Battelle and I seem to be in the minority that believes a little cooperation could enable each company to play to its strengths and grow its own business. Cross-licensing would make the core products of each stronger and would still maintain competition in areas like unified communications, identity management and creating the most powerful interest graph. No doubt licensing would be complicated. Possibly, to avoid privacy concerns and assuage regulators, each company must get access to the other’s data only after it has been anonymized. Each could combine its own data with the anonymized data to offer opt-in personalization features (e.g., relevant search results, info filtering, preferred content) and targeted marketing to its own users. That might require a third party to act as clearinghouse for the data exchange.
Consider the needs and objectives of the players involved:
Google. Google needs to incorporate social signals into its search algorithms to improve quality — especially in the face of thinning bad content-farm results — and individualized relevance. Google doesn’t need Google+ to succeed as a destination and to compete head-to-head with Twitter and Facebook for technologies like +1s, video chat and company pages to thrive and add to its other products. Google says, somewhat snarkily, that it is willing to negotiate.
Twitter. Twitter might ultimately make more money from licensing than advertising, and it used to license its full-feed “firehose” to Google. This is a different situation than Twitter’s licensing to a company like Jive Software or even to resellers like Gnip and DataSift. It should demand large royalties from Google, which should be able to pay. As Twitter builds up its advertising business, comparing aggregated search info with its own interest data will deliver better analysis on predicting purchase behavior. And if Twitter is developing search for its own feed, more power to it. Google’s interest in real-time search has waned, likely because that kind of service is more important for news than commerce.
Facebook. Facebook has stayed quiet during the current fracas, but though it licenses data to Microsoft, it reportedly rebuffed Google. Battelle’s source tells him that Facebook wanted stricter privacy assurances than Google offered, but I suspect it was more about two-way data sharing — that is, getting access to Google data in return. There is no need for Facebook to compete with Google in the general-purpose search business: It would be hugely expensive and a bad fit for its brand. Like Twitter’s, Facebook’s ad targeting could be improved by aggregated search data, but it doesn’t necessarily need large licensing fees. However, Facebook does need its company pages to be found by searchers, and that is already one area it allows Google to index. Google must assure Facebook that there is a level playing field on company and brand promotion.
Potential deal breakers
Besides failing to negotiate terms they all can live with, what might prevent such licensing?
- Perhaps Google does want a competitive social network destination site for brand-oriented display advertising. So far, YouTube is really its only property for that purpose.
- Possibly Facebook wants to build an ad network that utilizes its data and its distributed Facebook Connect technologies like Comments and Likes. That would directly compete with Google’s ad networks.
- Facebook’s data sharing with Microsoft hasn’t helped Bing gain search market share versus Google. So Google may not value social signals enough to cut good deals.
But what’s the harm in negotiating? Maybe all the drama is just to get the companies to the bargaining table. There’s no telling what’s really going on behind the scenes. But data licensing between any of these companies would make their current products stronger, even without some complex three-way solution.