Without question, Facebook and Google services have become integral to the lives of many marketers and advertisers, with many relying on these platforms for their daily operations. However, despite their glorified positions amongst other search and social media platforms, Facebook and Google have both overcome certain obstacles that threatened to taint their image. Would these challenges see people diverting from these popular sites and using other services? It seems unlikely.
One of the main reasons these platforms are so successful stems from the sheer volume of users actively using their services on any given day. Currently, there are 2.4 billion active users on Facebook, and Google reports an astonishing 3.5 billion searches taking place per day. Considering the world’s population is seven billion and counting, both of these figures account for a decent chunk of humankind.
Undoubtedly, these statistics are a sign of incredible success. However, it hasn’t always been an easy road for these companies. Both Google and Facebook caused controversy by being drawn into (or the instigators of) certain scandals. Fortunately for the multibillion-dollar companies, they have also been able to overcome these scandals and maintain their spots at the top. These controversies have, however, also brought new light to certain policies and issues regarding digital policies. Read on to see how we got to where we are now with Facebook and Google.
The Trials and Triumphs of Facebook
Undeniably, Mark Zuckerberg has faced some obstacles throughout the growth and development of his company, Facebook. He fought hard and was for a long time the youngest billionaire in the world. That is until Kylie Jenner recently bumped him from the top. Although Zuckerberg could definitely not match Kylie’s insta-fame and prowess in beauty matters, you can’t say the kid’s not smart.
Mark Zuckerberg, Child Genius.
Did you know, before he even hit Harvard and created today’s most iconic social media site, Zuckerberg had developed his own private messaging software? And did you know that he created his own music shuffling platform that was essentially the precursor to Pandora, Spotify and Apple Music all before college? I’m guessing not.
At the tender age of 12, Zuckerberg developed ‘Zucknet’ through Atari Basic. Zucknet was a program used for direct messaging over computer networks. The program was used predominantly at his dad’s dentist office so that he could communicate discreetly with staff, and with his family. Whilst still in his high school year, Mark envisioned the existence of a media system that adapted to the tastes of the listener. Synapse was his next biggest project and was a media player that enabled users to listen to songs recommended to them based on their listening preferences.
What’s even more surprising and interesting is that major companies, such as AOL and Microsoft, expressed their interest in purchasing his software and hiring the prodigy following the development of Synapse, and Mark politely declined.
Harvard and The Birth of Facebook
Zuckerberg’s Harvard years were filled with success and legal trouble. If you’ve seen The Social Network (2010) then you’ll know the famous idea to create Facebook (or The Facebook as it was called then) was conceptualised shortly after working on a similar project called ‘Harvard Connection’ which was designed by fellow students Divya Narendra, and twins Cameron and Tyler Winklevoss.
Harvard Connection, however, was a site focused on connecting single Harvard elites. It was shortly after agreeing to help them work on their project that Mark dropped it in order to pursue The Facebook.
Fortunately for Zuckerberg, The Facebook became a major success. The site enabled users (then only Harvard students) to create a personal profile, upload images, and communicate with others. By the end of 2004, two years after starting at Harvard, Zuckerberg dropped out of Harvard to focus on his company and website, which now had 1 million users.
Unfortunately for Zuckerberg, his success left a sour taste in some of his peer’s mouths. In 2006, Narendra and the Winklevoss twins sued Zuckerberg for theft of intellectual property and demanded he pay for their business losses as a result. Ultimately, this led to Zuckerberg settling on paying the Harvard Connection creators $65 million. Although, this figure was steep, it pales in comparison to Facebook’s annual revenues in 2019.
The Cambridge Analytica Scandal
By now, we’re all aware of how consumer data is used on Facebook and similar sites, and we have the Cambridge Analytica scandal to thank for that. Cambridge Analytica was a political consulting firm that worked on Donald Trump’s 2016 election campaign. The company, which has since been shut down, highlighted how effortless it was to acquire the data of millions of profiles from Facebook.
As mentioned, there are over two billion people worldwide on the site today. Facebook’s users have greatly surpassed the social purpose it once had. Today Facebook is an important aspect of consumerism, business and marketing. There are over three million active advertisers on Facebook, and 70% of those are outside the US. On top of that, there are 80 million small and medium-sized business pages. Nowadays, it’s customary to market products online, and it’s also incredibly fruitful as a marketing effort. Hootsuite reports that 78% of consumers have discovered products on Facebook, and 30% of marketers believe Facebook brings the best digital ROI.
Unfortunately for Facebook, they still haven’t been able to escape controversy. In recent news, Facebook has been fined US$5 billion… or approximately AUD$7.1 billion due to privacy-related concerns. YIKES. It seems that the lines are blurred when it comes to who has access to our data on Facebook, especially when there are third-party apps involved. The Federal Trade Commission labels the old data policy as being “deceptive” to Facebook’s users and the new settlement will see the removal of Mark Zuckerberg’s power to control privacy policies. Time will tell just how secure our data and privacy will be with the new policies… So stay tuned!
Undeniably though, Facebook has become a money-making machine. Despite all it’s scandals and obstacles, it’s still managed to grow in recent years. For 2019, their first quarter saw a profit of $15.08 billion. That definitely must be a kick in the guts to the Winklevoss’.
The Trials and Triumphs of Google
We all use Google today to complete most tasks and answer most queries we encounter, but have you ever wondered how Google started? Although it seems like Google has always been around, there was no such thing as Google before 1997. Read on to learn more about Google’s trials and tribulations.
Did you know Google’s original name was ‘Backrub’? Yeesh! That’s the name Larry Page and Sergey Brin, two Stanford University colleagues, gave Google during its original development in 1996. The pair met in 1995 when Larry Page was a PhD student and was assigned to show Brin around the campus. Despite having some original differences, the two formed an ultimate partnership. Backrub referred to the way in which the search engine functioned – by ranking links in order of importance depending on their number of back-links. After a year of working on their project on Stanford grounds, the pair launched Google.com in 1997.
Why Google? The name is a reference to the word ‘Googol’ which is a mathematical term for the number 1 followed by 100 zeros. Page and Brin believed this word reflected their mission to “organise the world’s information and make it universally accessible and useful”. Funnily enough, another one of their unofficial mottos was “don’t be evil”, which changed to “do the right thing”, which is a little ironic for some considering some of their less than admirable actions.
After Google was born, it took a little work to get it off the ground. Page and Brin were also conflicted on their roles as business people – they had always been determined that they wanted to be academics. Google.com officially became Google Inc. in 1998 after a $100,000 investment from Sun co-founder, Andy Bechtolsheim. The duo hired two more employees and upgraded from their Stanford Dorm to a friend’s garage in California (small steps!).
From there, they struggled with investors and were turned down multiple times by people who I’m sure are reeling from their decision even now. Let’s never forget Yahoo, Google’s biggest competitor at the time, refusing to purchase Google for $1 million in 1997… and $3 billion in 2002. In 1999, Kleiner Perkins Caufield and Byers, and Sequoia Capital agreed to an investment of $25 Million into Google and take a seat on the board of Directors (which at the time would have been around a ping-pong table). This investment acted as a catalyst for many new additions and developments to Google which seemed to emerge left, right and centre. Adwords, Doodles, Google Images, Google Maps, Chrome, Google Adsense, Google Analytics, and countless applications that we know today formed over the decade (and a bit) that followed.
The European Commission and Fine
One of Google’s most recent scandals that have been plastered over the news includes its debacle with the EU and the resultant European Commission. The commission addressed advertising practices by Google which were allegedly illegal in Europe. The practices were dubbed “antitrust” and “anti-competition” practices and earnt Google a fine of 1.7 billion Euros (basically pocket change).
So what did Google do that was so wrong? The fine was imposed on Google for breaching the EU’s competition rules. They forced phone manufacturers to pre-install the Chrome browser onto Android phones, a practice that the EU competition commission decided this was to cement their dominance as a search engine. It is a well-known fact that Google holds dominance over the search engine market, especially in Europe. Statcounter reports Google’s market share in Europe at 93.56%. In other words, they would have done just fine without the Android-gate. This has, however, raised questions over whether Google’s dominance and power have the ability to hinder the efforts of other emerging competitors. Will there ever be a search engine greater than, or as great as, Google? I guess we’ll just have to wait and see.
Google currently stands as the most preferred search engine amongst competitors, and it’s been there for a while. Around the globe, Google holds 88.47% of market shares within the search engine market, 90% on mobile. I know what you’re thinking. What on Earth is the remaining 11.53% using? According to Statistica, nearly 5% of the global population is using Bing, and Yahoo is still holding on with just over 3% of the population.
So what does Google mean to marketers? In Google’s 2018 Economic Impact Report, the search engine announced that they helped 1.3 million businesses generate $335 billion worth of economic activity. According to Google themselves, they estimate that for every $1 invested in Google Ads, businesses make $2 in revenue. It’s clear to see why SEO and SEM campaigns are more important than ever before.
Now onto the exciting stuff – how much Google earns. It has been announced that Alphabet, Google’s parent company, made $36.34 billion in their first quarter in 2019. Their financial report also outlines that Ad sales rose by 15%. Overall, their 2018 market value sat around $560 billion. And to think they couldn’t sell the business for $1 million in 1997!
From their humble beginnings to where these mega-corporations are now, it’s inspiring to see where you can take a business with a little bit of talent, a little bit of luck, and a lot of determination. Thankfully, these corporations exist to make our business endeavours easier and more impactful. Though Facebook and Google by no means have a perfect track record, the world of marketing and advertising wouldn’t be the same without them.