Google's Orkut: A World of Ambition

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In a move that goes a step further than Facebook, Google may make Orkut's code available with fewer conditions in a bid to motivate developers, especially the thousands who already write applications for services such as Google Maps. For starters, Google may allow developers to host their Orkut applications on their own servers rather than the site's. It's noteworthy that a lot of third-party programmers for other Google sites live in the U.S., a weak market for Orkut. As such, easier restrictions may "go toward creating more awareness [of Orkut] from U.S.-based developers, and that may lead to U.S. user-base growth," says Alex Fletcher, an analyst with software consultancy Entiva Group.

If the plan succeeds, users might begin to see applications combining Orkut with Google Maps that would show where friends are located. Earlier this year, a Google-funded student group at Carnegie Mellon University created a prototype of a messaging tool that can enable users of Gmail, Calendar, and even Orkut to arrange impromptu meetings with friends. Google hasn't said how or when it might deploy the application.

Toward Multiple Network Access?

But there are grander possibilities: If developers can host their Orkut applications elsewhere, that means they can create Orkut widgets to embed in other social networks. For example, an Orkut widget for Facebook might enable Facebook users to see whether their Orkut friends are online through their Facebook pages.

Or, Orkut itself could conceivably become a hub for accessing multiple social networks in one place, a concept demonstrated by another Google-funded Carnegie Mellon group last year in a project called Socialstream. "We don't know what they will use," cautions Brad Myers, project adviser and a professor of human-computer interaction at Carnegie Mellon.

But there are signs Google sees wisdom in a concept like Socialstream. In September, Orkut introduced an array of new features, some similar to those offered by other social networks. One addition was Updates from Your Friends, a box that alerts users to new photos or links to YouTube videos their friends have posted. Another was Feeds, which enables Orkut's pages to display information posted on other sites—such as a blog from Google's Blogger or Six Apart's LiveJournal, or photos from Google's Picasa and Yahoo's (YHOO) Flickr—albeit only those that allow syndication of their content.

Other new features may be forthcoming: In the past year, Google has hired several experts who focus on making Web sites easier to use, and they've been plugging away at Orkut. One is Jeffrey Veen, co-founder of the consultancy Adaptive Path, who helped with the design of the sites Blogger, Six Apart's TypePad, and Flickr. People familiar with the matter tell BusinessWeek.com that Veen is also working on adding more social networking features to other Google sites.

Revenue Growth Questions

It also may be with Orkut in mind that Google acquired a mobile social network called Zingku in September. Zingku allows users to share photos snapped with mobile phones and to set up gatherings via text messaging. "Mobility is very popular in the Philippines and India," says Trip Chowdhry, an analyst with Global Equities Research. "For that customer base, a mobile [extension of Orkut] makes sense." Chowdhry also notes Orkut could prove useful in driving users to Google Apps, the online word processing and spreadsheet programs that compete with Microsoft's (MSFT) business software.

But even if Orkut continues to grow in popularity, it may be hard for Google to translate that into significant new revenue growth. Advertisers in developing markets, where Orkut is strongest, remain cautious about social networks. In Brazil, Orkut was recently forced to pull ads that some users found offensive. So while Google may benefit from showing more ads to Orkut members who are driven to Google Search or Google Apps, direct revenue from Orkut may total just $50 million a year, estimates Chowdhry.

There's no doubt, though, Orkut is showing it can compete with MySpace and Facebook overseas. Now Google needs to show whether it can ride that momentum into the U.S. and Europe, where the real marketing dollars are.

Kharif is a writer for BusinessWeek.com in Portland, Ore.
With Josh Schneyer in Brazil.