RBC came out with a very interesting analysis today that looked at how much Facebook and Google were complements or on a collission course and it got quite some attention among tech blogs (e.g. SI). RBC’s conclusion:
Complementary (For Now): Google and Facebook are two of the fastest growing and largest companies on the internet, and thus far, Facebook’s ascendancy has likely helped Google gain share. 45% of monthly unique users go directly to Facebook (as a starting page), up from 39% a year ago. At the same time, Google is now driving 64% of Facebook’s uniques, up from 51% a year ago. Google.com, on the other hand, has a consistent 66% of its uniques as a starting page, same as a year ago. Google’s uniques via Facebook are growing at 188% y/y, and now represent 19% of Google’s traffic (up from 9% 12-months ago).
The problem of that analysis lies in my opinion in how they interpret the Comscore numbers they use. The Comscore “entries / exits” analysis tracks what sites people visit before and after visiting a particular site. While some of that traffic is actively driven from one site to the other (e.g. Google driving search traffic to content sites), most of it is just the sequence of how people use different sites (e.g. AbeBooks always had tons of people coming from Amazon before visiting AbeBooks and tons that left for Amazon after a visit to AbeBooks). In my opinion, only actively driven traffic through links creates dependencies between sites and Facebook is likely to depend much more on Google for that (e.g. people search) than Google depends on Facebook (Facebook probably only drives significant traffic to one of Google properties, YouTube, through video sharing).
So while the RBC analysis might be looking at the wrong facts to analyze the Facebook versus Google situation, Facebook being a potential threat to Google is probably one of the more interesting questions in the Internet space at the moment. My take on that question is that Facebook will be more threatening than complementary to Google in a few ways: recommendations, videos, news items shared by friends will take away traffic from traditional search (“social search”), Facebook will also most likely gain share in people search over time and could also dominate the search for products & brands over time. What are your thoughts?