Finally Google made the big step to enter the social networking market. (Here my first thoughts and impressions on Google+. ) There were quite a lot of rumors about it and of course everyone saw it coming. In the actual discussions, there seems to be a lot of confusion about why social networking is actually so important to Google. Most people seem to believe that the reason is advertising. So far I agree with them. But most people also think that advertising on the web will at some point become less important than advertising in social networks. This is where I don’t agree. Of course, if Google would stay out of social networking, they will most likely lose some share in the ad market. However, losing market share in a growing market does not necessarily correspond to a loss in revenue.
In my opinion, the real thread to Google is that Facebook will soon be able to attack the success story of AdSense / Adwords, delivering not only ads to the rest of the web but delivering high quality / highly personalized ads. This would not only attack Google’s market share but pose a serious thread to the revenues of Google.
In his article on All things digital, Ben Elowitz states that the time spent on social networking sites is growing where the time spent on the rest of the web is declining a little. Have a look at the graphic he created:

He also says that, nowadays, for every minute on Facebook, people spend eight minutes on the web. If the trend on this graphic continues, people might soon spend as much time on the web as on Facebook.
In many articles you can read that this is an attack to Google’s market share in the advertising space. But if you look carefully on the graph, the time spend on the web is not really dropping. The time spend on social networking sites is just exploding. Furthermore, there is still much more time spent on the web. From this perspective, there is no danger to the revenue Google creates from advertising. But that is exactly the thread to Google.

Advertising on the rest of the web is still much more profitable than advertising on social networks.

If Facebook continues to attract advertisers, they could easily create an ad program that is similar to Google Adsense. Many Facebook-users provide the network with detailed information about their interests. Thus, Facebook will be able to deliver highly personalized advertising to any user on any website. They don’t even have to care about the websites content. Even if the user would not have a Facebook-account, Facebook could still be able to predict the topics of interest for users of a website and again deliver highly personalized ads that do not necessarily have to correspond to the content of the website. I strongly believe that this is the real thread coming from Facebook to Google and this is what Google is afraid of!
What is your oppinion? Why do you think Google had to enter the social networking market?