Last Updated Apr 26, 2010 2:23 PM EDT
If we're going to envision how this race plays out, it's necessary to delineate what these services actually do and what they don't. The point of Facebook's Like button is to create a registry of everything its users like, so that it can sell that data to retail partners and drive better targeted ads. It's a simple and cursory way for Facebook to poll its users on their tastes and profit from the results. That said, they're not making any money on each individual Like; the Likes are only valuable once they're aggregated into tranches and sold.
Google's new system is both more detailed and more aggressively monetized: it involves serving product reviews anytime a Google result shows you something you can buy. Unlike Facebook's Like system, Google's doesn't have a social aspect; it serves product reviews from strangers who've rated those products on other big retail sites.
Google's upstart service is powered by Bazaarvoice, which provides the backend product-ratings functions for over 800 branded websites, including Best Buy (BBY), Costco (COST), Dell (DELL), Macy's (M), P&G (PGP), Panasonic (PC), QVC and others. The company claims to have served more than 100 billion pieces of customer-generated content in its five-year existence; when you see a product rated "five stars" on, say, BestBuy.com, you're viewing a piece of Bazaarvoice content. All those ratings will now show up in Google results. (Read Google's official blog post on the partnership here.)
For Google, this will mean three major add-ons:
- Full-length product reviews in Google Product Search
- Product ratings in search results
- Product ratings in Google ad units
In a sense, both systems have the same goal, but they're starting from opposite ends. Facebook is emphasizing the social aspect first; you'll be able to see everything your friends have "Liked" on retail partner sites like Levi's, for example, as long as you're logged into Facebook. But you can't get an in-depth review, even if your friend wrote one on that site, and those "Likes" are a little bit like dust in the wind; they'll presumably get swept away as newer Likes roll in over the years.
Someday, however, I'm betting Facebook's Like system will collect more granular data, and perhaps make it searchable, much the way Twitter has been making its tweet database more robust over the last couple of years with search, hashtags and so on. Lastly, they'll leverage all those Likes to funnel purchases to retailers who pay them.
Google's system starts with all that in-depth information, but no social feature; even if one of the reviews it serves up happens to be written by someone in your Google Contacts list, the system doesn't know. When I spoke to Bazaarvoice's principals last week, they said they couldn't reveal the product roadmap for SyndicateVoice, their name for the Google product. But they did admit it would be a logical progression for the system to someday link with information from Google's social graph, making it more like Facebook's system.
Until Facebook and Google build out these Like-machines to their fullest capacity, it's easy to envision a hybrid shopping experience that uses both systems side-by-side. If your browser is logged into both Facebook and Google, querying Google Product Search will occasionally send you to a Facebook partner site where you can see your friends' "likes" as well as Google-served ratings.
At some point, though, both sites will want to own their users' entire shopping experience from start to finish -- and that's when the rivalry is going to bloom like an Icelandic volcano. Facebook will have a good head-start on virtual goods because of its Facebook Credits system is geared towards that kind of stuff; products like apps, digital media, and software might be Facebook's province. Since most of Google's product reviews are for physical goods (think of Bazaarvoice's partners: Best Buy, Macy's, Dell, et al) then Google may find itself with an upper hand on shopping for big-ticket items.
Amazon (AMZN) may play a Ross Perot-type role in this rivalry, thanks to its deep investment in both physical and virtual retail -- and its urgent need for a new game plan. Strategic partnerships will also be a factor; the gravity of a partner like Bing, Apple (AAPL), Target (TGT) or Wal-Mart (WMT) could funnel in the masses and tip the scales. But of all the competitors involved, Facebook has the most to lose; everyone else is independently profitable and well-diversified. That this could be Facebook's do-or-die scenario might just be the impetus it needs to succeed.