A new social network was born: Google +. It just came into the arena with a clear mission and rival: Facebook.
Google + builds on four conceptual elements: Profiles, Photos, Home and Circles. Circles encompass different relationships and it allows sharing resources in a graphical manner. In addition, Google + also provides Sparks (interests), Hangouts (meetings with users belonging to your Circles) and Huddle (an IM tool). Finally, it also relies on the Stream, a copycat of Facebook Wall.
But the big question is: how much did it cost to develop Google +? Born at the same time that My Space was sold to an advertising network called Specific Media by $35 Million (despite the $580 M paid by Rupert Murdoch in 2005), Google + plays with very different numbers.
According to Forbes, it actually costed Google + the very amount Murdoch paid in the good old days of Myspace. The calculations are literally as follows:
~ 500 employees working on Google+
- ~$250K in average all-in comp for each of them including stock-based compensation (I think this is too low but I’ll go with it)
- $125 million in annual labor-related costs and stock-based compensation for the Google+ team
- Google+ also relies on or uses in part technology and people from three acquisitions
- $123 million for On2
- $158 million for Widevine
- $179 million for Slide
- Add up the $125 million in comp plus the $460M in acquisitions and you get $585 million, which I believe understates what Google has spent – and certainly understates the eventual cost
So what do we have here? Well, according to most analysts, yet another desperate attempt by Google to find the punchline in Social Networks. Even though, Google has always been about algorithms and search, the Mountain View company has seen recently how Facebook was catching up with increasing revenues from advertising. Time to fight back in the Facebook patch.
What will happen now? Nobody knows, but for sure I am already waiting anxiously for my Google + invitation!!
