Bloomberg News

Google Halted Social Network Invites After ‘Insane Demand’

June 30, 2011

(Updates with number of users in eighth paragraph.)

June 30 (Bloomberg) -- Google Inc., the world’s biggest search engine, shut down the invite mechanism for its new Google+ social network after “insane demand,” said Vic Gundotra, head of social efforts, on the company’s website.

Google unveiled the service June 28 in a fresh attempt to compete with Facebook Inc.’s site. Google+ looks similar to Facebook, with streaming updates of photos, messages, comments and other content from selected groups of friends.

Chief Executive Officer Larry Page is starting Google+ after missteps last year with the introduction of a social component to Gmail called Buzz. Google needs to fix the invitation glitch quickly if it wants to effectively challenge Facebook, the world’s largest social network, said Josh Bernoff, an analyst with Forrester Research in Cambridge, Massachusetts.

“The utility of a social environment depends on your ability to invite people to it,” Bernoff said in an interview today. “If you want to try this out but your friends are not on the system and cannot get on the system because of the blocking of the invitation, it’s not a very good test.”

The social network will initially be available to only a limited set of users, Google said when it introduced the new feature. The company said it has been testing Google+ internally and is now ready to gradually open up what it calls a “project” to the general public.

‘Field Trial’

“We launched Google+ in a field trial in order to test the product out and gather more feedback,” Google said in an e- mailed statement. “As part of the field trial, we may open and close Google+ to new users at any time. We’re thrilled so many people are interested in trying out a new approach to online sharing.”

The company declined to comment on user numbers in the Google+ test.

Overall, Google’s site had 1 billion visitors in May globally, making it No. 1, according to market researcher ComScore Inc. of Reston, Virginia. Microsoft Corp. ranks second with 905 million and Facebook is third with 714 million.

As Internet users spend more time on social-networking sites, Google is releasing new social features to lure Web surfers to its own services and expand advertising sales. Facebook captured 13 percent of total hours people spent online in May, while Google got 10 percent, according to ComScore Inc.

“It’s good that Google is taking a slower approach,” Mike Hickey, an analyst with Janco Partners Inc. in Greenwood Village, Colorado, said in an interview today. “The last thing they want to do is plug in 10 million people and have a sour experience for them.”

Google’s shares rose $8.81, or 1.8 percent, to $506.38 at 4 p.m. New York time in Nasdaq Stock Market trading. The stock has declined 15 percent this year.

In March, Google reached a settlement with the U.S. Federal Trade Commission to resolve concerns it violated its own privacy policies with its Buzz service.

Google also made an earlier foray in social networking with its Orkut site, started in 2004. While the service made inroads emerging markets such as Brazil, it hasn’t matched the growth of Facebook globally.

The new service, which integrates with Google’s maps and images, seeks to help people organize social contacts easily within groups of friends.

--Editors: Lisa Rapaport, Stephen West

To contact the reporters on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net Zachary Tracer in New York at ztracer1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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