Google spawns social networking service
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Last modified: January 22, 2004, 6:00 PM PST
By Stefanie Olsen
Staff Writer, CNET News.com
Google tip-toed into the hot market of online social networks with the quiet launch of Orkut.com on Thursday.
The search company, which is expected to go public this year, is flexing its power with its Internet fans by constantly offering new services, including comparison shopping and news search. Orkut could be the clearest signal that Google's aspirations don't end with search.
"Orkut is an online trusted community Web site designed for friends. The main goal of our service is to make the social life of yourself and your friends more active and stimulating," according to the Web site, which states that the service is "in affiliation with Google."
A Google representative said that the site is the independent project of one of its engineers, Orkut Buyukkokten, who works on user interface design for Google. Buyukkokten, a computer science doctoral candidate at Stanford University before joining Google, created Orkut.com in the past several months by working on it about one day a week--an amount that Google asks all of its engineers to devote to personal projects. Buyukkokten, with the help of a few other engineers, developed Orkut out of his passion for social networking services.
Google spokeswoman Eileen Rodriquez said that despite Orkut's affiliation, the service is not part of Google's product portfolio at this time. "We're always looking at opportunities to expand our search products, but we currently have no plans in the social networking market."
Still, Google owns the technology developed by its employees, Rodriquez said.
Google regularly throws out new products and services to see if they stick. Google News, for example, began as the personal project of Google engineer Krishna Bharat in 2002. While Google still runs news search in "beta" form, it is gaining a wide audience on the Internet and is prominently promoted on Google's home page.
Orkut, if adopted into the Google family, would signal a dramatic shift in the company's direction, similar to its acquisition of Pyra Labs and Blogger, a tool for self-publishing to the Internet. The goal of a social networking service is a far cry from Google's long-stated mission of organizing the world's information. Instead of helping connect people to information on the Web, it would be helping people connect with other people.
It also once again raises the notion that Google aspires to become a portal like Yahoo, something that the company has long denied. Google already helps people shop, read news, thwart pop-up advertisements, get stock information and publish to the Web. With a social networking component, at the very least, it would likely feed investor demand for a public offering because of its diversified assets, financial analysts say. Investors expect Google to go public sometime in the spring.
Social networking sites like Friendster and Meetup.com are attracting fevered attention from Silicon Valley celebrities. Tim Koogle, Yahoo co-founder and its former chief executive officer, recently joined the board of Friendster and invested more than $1 million, along with former PayPal CEO Peter Thiel and Google board member Ram Shriram. Venture capitalists Kleiner Perkins Caufield & Byers and Benchmark Capital have already invested $10 million in the site.
eBay founder Pierre Omidyar also recently invested several million dollars and joined the board of directors of Meetup.com, a networking site that fosters offline meetings between interest groups and is fueling political organizing for presidential hopefuls Howard Dean and John Kerry. The Evite invitation service has moved to compete with Friendster, too.
Google itself has offered to buy Friendster, according to sources. Google declined to comment on rumors.
Still, the attention is inspiring me-too efforts by Internet mainstays. Personals service Match.com is planning to enter the market, Piper Jaffray senior analyst Safa Rashtchy said. Yahoo is a likely candidate, too, for creating a social networking service on top of its Yahoo Groups service, Rashtchy said.
"I'd be surprised if Yahoo's not thinking about this already," he said.
The allure is in hosting a never-ending party of online connections, and eventually inspiring people to pay for it. Social networks are increasingly inciting people to spend hours online with their sites. Friendster, for example, had roughly 1 million people spend an average of 35 minutes on its site in November, according to figures from Nielsen/NetRatings, a market researcher. That amount bested time spent with Yahoo Groups, which was about 29 minutes.
Even though social networks have drawn interest from Web surfers and investors, the business model to sustain them has not been proven yet. Sponsored search listings are Google's primary means for making money, and although such text ads are peppered throughout sites like Friendster, people click on ads more often when they are searching for something.
One trend that could affect the market opportunity for social networking sites is consumers' growing willingness to pay for online services such as dating. Yet it's uncertain that online networking will prove indispensable in that regard.
For Buyukkokten at least, social engineering is a passion and the evolution of similar projects. He created two social networking sites--Clubnexus and Incircle--while at Stanford to help students stay connected. "The spirit of Orkut speaks to what engineers are capable of doing here at Google in that 20 percent of time," Rodriquez said.
CNET News.com's Jim Hu contributed to this report. |
