Wednesday, January 28, 2004

Google, Blogger and now Orkut

Google has gotten to be a really interesting entity. Last year it bought Blogger. Also last year there were rumors that Google was interested in buying Friendster. This happened around the same time that the rumors of Google going public by means of an eBay-style auction started circulating. Let's not even get into the rumors about Microsoft buying Google.

For those who aren't familiar with Friendster, it quickly became a wildly popular site that puts people together through social contacts: "Friendster is an online community that connects people through networks of friends for dating or making new friends." It was a brilliant idea. A dating service without the sleazy component of dating services. You meet people the way you do in real life: through people you already know. Kind of like the difference between meeting someone at a bar versus having your sister set you up with a friend.

But last October, Friendster spurned Google and turned down a $30 million offer. The question many have asked is "Why was Google interested in Friendster in the first place?" It could be because there is huge upside in keyword search and text ads that still have untapped potential. It could also be that any site that can generate large numbers of members with indexed information is a valuable search tool resource.

Enter Orkut. Orkut is: "an online community that connects people through a network of trusted friends." Sound familiar? Google is keeping quiet about Orkut, which is the brainchild of Google employee Orkut Buyukkokten. At this point Orkut is only "an affiliate of Google." So, why isn't Google going full throttle ahead with this? "One reason why Google is not plunging headlong into the social-networking market by providing more direct backing to Orkut may be the continued uncertainty about whether social networking sites can morph from online phenomena into money-making businesses." (eCommerceTimes)

Now we're maybe getting a picture of Google strategy with Blogger as well. They wanted the Blogger technology, employees, and customer base. In short, Google wanted a sizable chunk of that blogging presence. But, oh my, how do you make it profitable? There you have it in a nutshell: blogging is an online phenomenon that is very hard to morph into a profitable enterprise.