Google Buzz Won't Weaken Facebook

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With Buzz, Google plans to sell ads that are more relevant to individual users. It will serve text ads, alongside posts, that are automatically targeted to what users are talking about. The system is based on the same formula the company uses to place ads alongside e-mail messages. "You can think of this as more messages in your in-box that we'll show ads against if we have more ads to show," says Google's Jackson.

Still, the potential pool of advertisers may be more limited with Gmail because of the site's demographics. Compared with Facebook, which has begun to attract millions of older Internet users and people with relatively little technology savvy, Gmail "requires a certain comfort level with computers that the broader population doesn't have," says Palo Alto (Calif.)-based technology researcher Sara Radicati. Last October, social media analytics firm Rapleaf found in a study that more than half of Gmail users are under age 25—a younger skew than users of AOL, Hotmail, or Yahoo Mail.

Microsoft (MSFT) and Yahoo (YHOO) have built social sharing features into their Web e-mail services. Microsoft says that since letting Hotmail users pull in updates from Facebook and other social sites, roughly half of users, or 185 million, have done so. "We know people aren't looking for another social network," says Brian Hall, general manager of Windows Live. That's why the company "works with the partners that our current users already use," he says. Last year, Yahoo launched a social sharing tool called Yahoo Updates.

"Recommended Buzz"

Google pledges to add something unique to social. One original feature of Google Buzz is what it calls the "Recommended Buzz," which uses a computer algorithm to surface posts and multimedia that friends-of-friends found interesting. With the constant barrage of musings offered up by social media users, there "has become a relevancy and ranking problem," said Google Vice-President of Engineering Vic Gundotra during a briefing for journalists. With its background in search, that's the kind of problem Google is good at solving.

And the company plans to take Google Buzz beyond the walls of Gmail. Users can share a status update on the service through Google's mobile Web site, accessible via the browser on most mobile phones. And, through an application available for certain mobile phones, users can affix their Buzz messages to a geographical location using Google Maps. Eventually, the company says, it will also make available an enterprise version of Google Buzz for businesses.

Ultimately, Google Buzz can succeed without taking share from social network rivals, Jackson admits. "We don't think there is a finite pie where everyone is competing for a slice," he says. "We think over time the pie increases in size."

Augie Ray, senior analyst for social computing at Forrester Research (FORR), agrees: "Already you are seeing people use Twitter for some things, Facebook for some things, and LinkedIn for some things. This could be adopted in addition to—rather than switching from."

Douglas MacMillan is a staff writer for Bloomberg BusinessWeek in New York.

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