"In fact, if you're looking for hindsight vs reality, I don't think Google and Facebook really were competitors -- until Google decided to build a copy of Facebook's product."
Respectfully, I think you're putting the cart before the horse. Google saw Facebook as a potential identity platform and de facto backend for the entire web. It might have been paranoid in its assumptions of just how much of Google's lunch Facebook could have eaten -- but the move into social was very much a defensive move, not an offensive one. They weren't trying to eat Facebook's lunch; they were trying not to get theirs eaten.
It's (still) not a stretch to think that advertisers would transfer dollars on a zero-sum basis from AdSense to a Facebook-credentialed web. As for AdWords? That's a harder lunch for Facebook to steal, but it's not inconceivable.
"Google acted out of some combination of fear, insecurity..."
Smart companies should be afraid and insecure, to some degree, about potential competition. I highly recommend Andy Grove's excellent book "Only the Paranoid Survive."
"...pressure from Wall Street..."
Just the opposite. Wall Street wanted Google to keep milking the cash cow and trying to expand its market share overseas -- which is a pretty typical Wall Street-pleasing playbook. Wall Street likes steady expansion of existing markets; Wall Street hates big bets in unproven products or markets.
Google saw Facebook as a potential identity platform and de facto backend for the entire web. It might have been paranoid in its assumptions of just how much of Google's lunch Facebook could have eaten -- but the move into social was very much a defensive move, not an offensive one.
I realize this is what Google felt, and what also seems to be accepted wisdom in the Valley, but I just don't get the logic that leads to cloning Facebook.
I do sometimes forget the whole thing about how the "advertisers (not the users) are the customer," so maybe I was wrong that they weren't competitive from that point of view.
Are we approaching a world where Google, Facebook, Apple, and Microsoft each have their own phone, tablet, set-top box, search engine, email service, maps service, login, and "universal identity" for the web? Why does every tech company past a certain size need one of all of these things to be "competitive"?
"...pressure from Wall Street..."
Google execs were always in search of the "next billion-dollar product," so their stock would keep going up, so their employees' options would go up. It's a direct consequence of the mindset that company health equals X% growth that if you are taking over the planet in one category, you have to take over the planet in another category before long or be declared a failing company. Companies like Google try to shape the numbers as best they can to tell the story Wall Street wants to hear, but it's difficult and in the long run leads to extreme contortions.
Respectfully, I think you're putting the cart before the horse. Google saw Facebook as a potential identity platform and de facto backend for the entire web. It might have been paranoid in its assumptions of just how much of Google's lunch Facebook could have eaten -- but the move into social was very much a defensive move, not an offensive one. They weren't trying to eat Facebook's lunch; they were trying not to get theirs eaten.
It's (still) not a stretch to think that advertisers would transfer dollars on a zero-sum basis from AdSense to a Facebook-credentialed web. As for AdWords? That's a harder lunch for Facebook to steal, but it's not inconceivable.
"Google acted out of some combination of fear, insecurity..."
Smart companies should be afraid and insecure, to some degree, about potential competition. I highly recommend Andy Grove's excellent book "Only the Paranoid Survive."
"...pressure from Wall Street..."
Just the opposite. Wall Street wanted Google to keep milking the cash cow and trying to expand its market share overseas -- which is a pretty typical Wall Street-pleasing playbook. Wall Street likes steady expansion of existing markets; Wall Street hates big bets in unproven products or markets.