If you’ve been disconcerted by the news that Facebook was conducting a smear campaign against Google, perhaps a little look at the financials might clear up a few key points.
Both companies have already been in fierce competition for online ad dollars for a few years. Google makes the majority of its income from search ad programs like AdWords and AdSense, but as the incumbent in online advertising, it has to watch its back very carefully.
Facebook’s ad revenue hit an impressive $1.86 billion for 2010, and the site may account for as much as one-third of display ad impressions. For 2011, Facebook is expected to bring in $4.05 billion in advertising revenues worldwide, $2.19 billion of which will come from the U.S. market.
Also, given Google’s recent launch of +1 ? a half social, half traffic-generating web search feature ? Facebook might be feeling even more pressure to make sure users are wary of the tool and less likely to use it without overthinking it. After all +1 is a Facebook Like competitor. And both +1 and Likes can generate valuable data used in ad targeting. So if Facebook can convince the web-surfing world that Google is negligent about user privacy, +1 won’t be as valuable as Google might otherwise hope.
Ultimately, these two corporations are not making web apps for the pure joy of protecting user privacy; they’re in it to make money. And if Facebook can grab a bigger piece of that pie, it certainly will.
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