Best of the Week
Most Popular
1.US Paving the Way for Massive First Strike on North Korea Nuclear and Missile Infrastructure - Nadeem_Walayat
2.Trump Reset: US War With China, North Korea Nuclear Flashpoint - Video - Nadeem_Walayat
3.Silver Junior Mining Stocks 2017 Q2 Fundamentals - Zeal_LLC
4.Soaring Inflation Plunges UK Economy Into Stagflation, Triggers Government Pay Cap Panic! - Nadeem_Walayat
5.The Bitcoin Blueprint To Your Financial Freedom - Sean Keyes
6.North Korea 'Begging for War', 'Enough is Enough', is a US Nuclear Strike Imminent? - Nadeem_Walayat
7.Bitcoin Hits All-Time High and Smashes Through $5,000 As Gold Shows Continued Strength - Jeff_Berwick
8.2017 is NOT "Just Another Year" for the Stock Market: Here's Why - EWI
9.Gold : The Anatomy of the Bottoming Process - Rambus_Chartology
10.Bitcoin Falls 20% as Mobius and Chinese Regulators Warn - GoldCore
Last 7 days
Here’s Why Turkey Can’t Stay Out Of Syria - 25th Sep 17
Hidden Gems Shows A Foreboding Stock Market Future - 25th Sep 17
10 Reason You Should Use Ridesharing To Save Money - 25th Sep 17
Commodities King Gartman Says Gold Soon Reach $1,400 As Drums of War Grow Louder - 25th Sep 17
Stock Market Mixed Expectations, Will Stocks Continue Higher? - 25th Sep 17
22 charts and 52 questions that will make you Buy Gold - 25th Sep 17
Speculation Favors Overall Higher Silver Prices - 25th Sep 17
The Advertising Breakthrough Revolutionizing Gaming - 25th Sep 17
Stock Market Forming a Reluctant Top - 25th Sep 17
Grid Forex Strategy - All You Need to Know - 25th Sep 17
Catalonia, Kurdistan, Patriotism, Flags and Referendums - 24th Sep 17
Two Key Indicators Show the S&P 500 Becoming the New ‘Cash’ - 24th Sep 17
The Felling of Sheffield's Big Street Trees 2017 - Dobcroft Road - 24th Sep 17
Advantages of Forex Trading - 24th Sep 17
Stocks, Gold, Dollar, Bitcoin Markets Analysis - 23rd Sep 17
How Will We Be Affected by a Series of Rate Hikes? - 23rd Sep 17
Fed Quantitative Tightening Impact on Stocks and Gold - 22nd Sep 17
Bitcoin & Blockchain: All Hype or Part of a Financial Revolution? - 22nd Sep 17
Pensions and Debt Time Bomb In UK: £1 Trillion Crisis Looms - 22nd Sep 17
Will North Korea Boost Gold Prices? Part I - 22nd Sep 17
USDJPY Leads the way for a Resurgent Greenback - 22nd Sep 17
Day Trading Guide for Dummies - 22nd Sep 17
Short-Term Uncertainty, As Stocks Fluctuate Along Record Highs - 21st Sep 17
4 Reasons Gold is Starting to Look Attractive as Cryptocurrencies Falter - 21st Sep 17
Should Liners Invest in Shipping Software Solutions and Benefits of Using Packaged Shipping Software - 21st Sep 17
The 5 Biggest Bubbles In Markets Today - 20th Sep 17
Infographic: The Everything Bubble Is Ready to Pop - 20th Sep 17
Americans Don’t Grasp The Magnitude Of The Looming Pension Tsunami That May Hit Us Within 10 Years - 20th Sep 17
Stock Market Waiting Game... - 20th Sep 17
Precious Metals Sector is on Major Buy Signal - 20th Sep 17
US Equities Destined For Negative Returns In The Next 7 Years - 3 Assets To Invest In Instead - 20th Sep 17
Looking For the Next Big Stock? Look at Design - 20th Sep 17
Self Employed? Understanding Business Insurance - 19th Sep 17
Stock Market Bubble Fortunes - 19th Sep 17
USD/CHF – Verification of Breakout or Further Declines? - 19th Sep 17
Blockchain Tech: Don't Say You Didn't Know - 19th Sep 17
The Fed’s 2% Inflation Target Is Pointless - 19th Sep 17
How To Resolve the Korean Conundrum  - 19th Sep 17
A World Doomed to a Never Ending War - 19th Sep 17
What is Backtesting? And Why You Need Backtesting System? - 19th Sep 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

Google Plus: Learning from Buzz Failure

Companies / Google Jul 15, 2011 - 02:29 AM GMT

By: Jeffrey_A_Tucker

Companies

Best Financial Markets Analysis ArticleAbout 14 months ago, Google released what turned out to be the biggest flop in the company's history. It was called Buzz. The idea was to leverage its email war chest to create a social network to compete directly with Twitter and Facebook.

It released Buzz all at once and activated it immediately. Buzz even prepopulated its networks with the user's most commonly emailed friends, whether that was your pastor or your drinking buddies. That was the strategic error that revealed the underlying problem. All in an instant, worlds crashed, and people went absolutely nuts trying to shut it off.


It was almost like a random group of acquaintances had all shown up to the same party, which under some circumstances could be one's worst nightmare. (The scene reminded me of a party once hosted by a friend who recently emigrated from Russia. It included the Swiss ambassador and his wife, the manager of the apartment complex, and a homeless bum that happened to be standing around earlier that day. It was an odd evening to be sure!)

It was not easy for users to shut Buzz off. It seemed impossible to control privacy or the flow of information. The first stage was alarm. The second was anger. The third was fury. It was clear within hours that the seemingly infallible company had taken a giant misstep. It was even worse than that: it seemed like confirmation that Google had lost its edge to upstarts like Twitter and Facebook. Suddenly the advantages of these two competitors seemed more obvious.

As Peter Klein notes in The Capitalist and the Entrepreneur, "the market is quick to penalize error as it is discovered; no hearings, committees, or fact-finding commissions are required."

Google quickly apologized, pulled back, and announced a huge corporate settlement of sorts: it would donate $8.5 million to Internet-privacy groups as a way of showing good faith. Many people will be surprised to learned that Buzz did in fact survive; it remains a favorite means of communicating for young kids whose parents let them have email but not Facebook or Twitter (parents feel that they have to draw the line somewhere and so this kind of thing, however arbitrary, is rather common).

Fast forward to July 2011. Google has its status back. Not only that: it has released a product that many people are already speculating will deal a serious blow to social-media domination by Facebook and Twitter. It is called Google Plus or just G+. A cartoon flying around the web has Mark Zuckerberg of Facebook giving a lecture and asking for questions. The first question is "Can you send me a Google+ invite?"

The rollout this time has replicated the slow rollout of Facebook. You need an invitation to sign up. Actually, it's not really true that you need an invite, but Google brilliantly acted as if it were true. The clamor to get on has been incredible. With the same ferocity that people begged to get out of Buzz, people are begging to get on G+. Google managed to harness the power of all its own users to advertise a new product to new clients.

That's learning from failure. And that's only the beginning of what Google learned. The big problem with Buzz was the clash of private worlds. For college girls, mom was on the same network with their boyfriend, and past boyfriends were there with current and possible future ones. It was all too aggregated in ways that people spend their entire lives avoiding.

"At last, rationality comes to social networking!"

G+ is completely different. Moving in for the first time, you are encouraged to create "circles." (If you can believe it, G+ actually manages to avoid using the word "friend" altogether!) These circles can be labeled according to the worlds in which you move: office, home, church, school, party time, camping, sports, etc. The same person can be in more than one circle. When you post, you post to these circles by choice through a quick click.

At last, rationality comes to social networking! Another way of putting this is that G+ has refined social media to make it ever more an extension of individual interest. If this sounds like a contradiction, consider what Mises says in Human Action: "man becomes a social being not in sacrificing his own concerns for the sake of a mythical Moloch, society, but in aiming at an improvement in his own welfare."

If the problem with Buzz was its presumption of homogeneous friend networks, Google surely noted that Facebook's infrastructure has the same problem. It aggregates everyone as either friend or nonfriend. Whether it's family, an acquaintance, a business associate, a teacher, or your psychologist, they are all in the same category. People have made fun of this for years, but mostly we've gotten used to it.

Still, this is the number-one complaint made about the culture of Facebook. There are ways around it, but they are tricky. You can create groups of friends and move people around within them. This works for some people, but most users are way beyond the point of making this viable.

G+ saw an opportunity here. It corrected not only the failure of Buzz but also the mostly hidden failure of Facebook. With G+, there is no such thing as a random friend. Just as in real life, everyone with whom we associate has a particular role. Your brother can be just your brother or he could also be a business associate, a fan of classical music, an associate from church, and a hunting buddy. He could be some or none. It is up to the end-user to decide.

The humiliation and hurt that comes with de-friending someone is completely gone. If you have had a falling out with someone, you move them from this circle to that one — or remove them from all circles. There is no brazen and stinging announcement. The person merely ceases to receive updates from your posting feed. Peace at last!

These are all gigantic advantages that G+ has over Facebook. There can be no question that Google learned and copied many aspects of its new platform from Facebook. It was a typical case of market emulation, doing what the successful company has done. But in a market setting, it is never enough merely to copy. One has to improve in order to give users a reason to join what they had previously not joined or to switch from one setting to another. This process of learning and improving is ongoing every minute in the market economy.

The ball is now in Facebook's court to repair its infrastructure to disaggregate its friend label, not just as a quirky add-on, but in a way that makes the repair integral to its system.

Here is a great example of how the market economy turns failure into success. Good managers come to understand that mistakes in a company are part of the data of history and cannot be undone. The only way to avoid them completely is to shut down innovation and change, to embrace stasis and therefore to die. Mistakes are far better because they provide a road map for going forward, learning more and then changing more.

Think of the big picture here. All this fierce competition, all this innovation, all this frantic code work to create the perfect digital world that replicates and improves on human association in the real world — what is the point of all of this? It is to serve you and me something that we want and can use.

"It turns out that capitalism doesn't operate at all the way people once thought it did."

And think further of this oddly unnoticed fact: G+, Twitter, Facebook, and all the rest are completely free to end users. You and I are being courted constantly day and night, not to cough up money but to shell out those precious commodities of time and attention.

It turns out that capitalism doesn't operate at all the way people once thought it did. It is not a system that permits the captains of industry to extract money from workers and peasants so that the fat cats can accumulate and keep it for themselves. Not at all; if anything it is the reverse. The captains of industry are desperately clamoring for us to pay attention to them and we agree to do so provided they find ever more creative ways of making us happy at their expense.

Capitalism in the digital world is not the Marxist nightmare but rather the closest thing to utopia that we workers and peasants can experience in this world.

Jeffrey Tucker is the editor of Mises.org. Send him mail. See Jeffrey A. Tucker's article archives. Comment on the blog.

© 2011 Copyright Ludwig von Mises - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

shivakumar
31 Jul 12, 08:51
bullion and base metals

i want to know information about bullion metals and base metals movement in coming months such as august and other coming months


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife