Facebook and Google are increasingly going head to head -- for users, functionalities and the advertising dollars that sustain either site.

Facebook’s first triumph comes at no fault of Google’s, whose traffic increased by 9% over the same period last year. Facebook’s traffic, in contrast, nearly tripled, joining fellow social media giant MySpace as one of two sites who have ousted Google from the position of most trafficked site for a full week (last done in September 2007).

Of the Facebook’s second triumph over Google, Hitwise analyst Heather Hopkins writes,

“Hitwise data indicate that visitors from Facebook.com are more loyal to News and Media websites than are visitors from News.Google.com. In particular, among the top 5 Print Media websites in the week ending March 6, 2010, 78% of Facebook.com users were returning visitors compared to 67% from Google News. The figures are almost identical for Broadcast Media, with a 77% returning rate for Facebook.com compared to 64% for Google News.”

Returning visitors prefer news provided through Facebook over Google. For example, 81% of visits to CNN.com in the week to March 6, 2010 were returning visitors while 84% of visitors to CNN.com that came from Facebook.com were returning visitors and 72% from Google News were returning visitors.

Though this may seem surprising at first glance, a closer look at a couple different aspects of either site, I think, reveals why this outcome is natural, if not obvious.

2 Characteristics to Consider: Facebook versus Google News

1. Fan Pages & News Feeds: Facebook fan pages are the perfect way for media outlets to consistently reach a targeted, interested audience with their content. Not only is membership opt-in, but new content posted to a given page is streamed into fans’ News Feeds. The only similar offering that Google provides is Buzz, which is a comparatively cluttered, less user-friendly experience in its current form.
2. The Variety of Google News: What makes Google News so appealing to me (and other news junkies, I assume) is that it provides myriad, varied sources that cover the same topic. In other words, there are always a lot of choices on Google News. It’s no wonder, then, that readers are choosing major media outlets less frequently through Google News. In fact, I think it’s a testament to the strength of major media outlets’ brands that they attract so many loyal followers through Google News, despite the available choices.

Beyond structural characteristics, I think it’s also fair to say that context matters. In an online environment surrounded by friends, users are more susceptible to make choices that are consistent with ‘loyal’ behavior. While this may seem like a stretch, considerable research in advertising reveals that cognitive priming of context does, indeed, affect how messages are received.

On that note, I’ll end this post with a funny but relevant cartoon about social media that I came across. Enjoy, and please feel free to share your thoughts!

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Pricing iPad e-magazines provides new opportunities for publishers to get it right this time.

Subject to ongoing battles over who has rights to what, one thing remains certain to both publishers and Apple–content will cost something, unlike most e-newspaper counterparts.

Certain newspapers, like the Wall Street Journal and the New York Times, have successfully employed partial pay or pay wall (i.e., pay after a reader has visited more than a certain number of times within a given period) models. WSJ.com boasts over a million pay subscribers for its online content. But, a million pay subscribers certainly isn’t the norm for most news content providers, and even WSJ articles can be accessed for free through backdoor sites like Google News (much to the chagrin of Rupert Murdoch).

Pulitzer Prize winner and former Chairman of Dow Jones & Co. (which publishes the WSJ) Peter R. Kann eloquently describes the decline of print newspapers, the emergence of the ‘free model‘ of online content, and the pricing challenge most newspaper publishers face:

“… by the time Internet editions arrived, the prevailing philosophy in most publishing companies already was that customers could not be expected to pay much for content, that it was easier simply to rely on advertising. The new Internet editions were merely the ultimate extension of that trend: free news to the consumer, total reliance on the advertiser.

But that didn’t quite work out as expected. Online advertising, given virtually unlimited supply and also given clever new competitors like search sites, has been nothing like publishers posited. Online edition ad rates and online edition ad revenues are only small fractions of those in traditional print. And as print advertising continues its steady decline, online advertising cannot come close to compensating.

The print editions still have customers willing to pay for at least a discounted subscription, but there are fewer of the customers as free online editions peel them away from print. And so the publishers are left to juggle their twin products—the old one in inexorable decline and the new one in commercial denial—and pray the future may be somehow different.”

Sadly, many print newspapers seem to be going the way of the dodo, drawing cries of death of the medium, at least as we knew it, from many.

Unlike their faster-moving counterparts, books — in all forms — are doing quite well, financially-speaking. According to the Association of American Publishers, book sales increased year-over-year by roughly 4 percent at $11.2bn for the year. Of those, about $170m were e-book sales, marking roughly 177 percent growth over last year. While not insignificant, e-books grabbed only a little over 3 percent of the total book sales.

Beyond the cost of e-readers, some, like PC World’s Tony Bradley, criticize what they perceive to be e-books’ bloated pricing model. Bradley writes,

“Media businesses–whether music, movies, books, magazines, or newspapers–seem to cling to a pricing model that fails to account for the significantly lower overhead of digital distribution. These entities seem hung up on pricing narcissism, rather than realizing that production costs are different and distribution is almost universal–changing the economics entirely from traditional models.”

Bradley suggests a revenue-focused model, which (to me) makes sense:

“Basically, publishers should be pricing digital distribution based on what it would expect in net revenue from the traditional distribution method, not based on some calculated percentage of the traditional retail price. I don’t know the exact numbers, but If Wiley is only going to net eight dollars when it sells a printed version of my book, then it should create a digital pricing scheme that nets the same.”

Some, like BNET's Eric Sherman, predict that the iPad will 'kill publishing.'

Unsurprisingly, many publishers like Murdoch seem more prone to employ beefier pricing models that hinge on how much people are willing to pay. Can you blame them for wanting a bigger margin?

That said, e-magazines provide a whole new opportunity to find a happy pricing medium that pleases both publishers and readers. Needless to say, the removal of frequent, full-glossy print production costs will reduce publishers’ overhead significantly, allowing them to price e-magazines lower than their costly print counterparts. Better content and more innovative design — enabled by the iPad’s functionality — will allow for the creation of quality multimedia experiences that readers/viewers are willing to pay for.

Central to paid e-magazines working is leaving old models behind–from both a production and consumer standpoint.

Content and design worthy of pay

In many ways, the term ‘e-magazine’ is too antiquated to encapsulate the multimedia, dynamic possibilities of content production and distribution through the iPad. It’s a given that video and audio should be integrated among text, but navigation through content should move beyond a page-by-page linear progression.

The navigational structure of each issue could take on unique properties, linking different portions of content to one another and external sources. Typefaces, sizing and layout could vary dependent on the content and what would be most aesthetically gripping to readers/viewers/listeners — much like magazines are now. To do this, however, developers would play an increasingly important role, taking on tasks akin to layout and design editors of magazines–but with more design elements at their disposal. It’s not just a matter of positioning text, pictures and headlines anymore. It’s creating a dynamic, multimedia experience with which readers and viewers can interact and experience with multiple senses.

In other words, publishers need to envision a medium that consumers are willing to pay for. If publishers utilize the technology to its fullest and give readers/viewers great content in a way they have never experienced it, I predict they will not only make good money, but they will also reverse magazines’ downward trend in recent years. Granted, that’s easier said than done. It may be the case that old magazine houses are too entrenched in their old ways to look into the future, and it may take a disruptive innovator in their industry to catalyze forward motion.

Shifting consumer focus: from price to value and cost

Most good sales people will agree that it is key to shift clients’ focus onto value, as opposed to price. A closer examination of  this notion and  re-reading Kann’s article in WSJ casts some light on how this is relevant to publishers’ making money with their content.

Entrepreneur.com‘s Barry Farber writes,

“…there are customers worth working with, whom you can help understand the difference between price and cost. Price is what they pay for the product or service; cost is what the investment is over the lifetime of doing business. Can you help your customers grow their business in a way they never thought possible?”

In the case of publications, readers and viewers are in the ‘business’ of personal edification. And if publishers can convince their audiences that they convey quality content in a quality way, the cost of an e-magazine becomes an investment in personal edification.

Looking at the difference between e-books and e-newspapers (and WSJ‘s content contrasted with many e-newspapers), the difference is quality. Books take a significantly longer time to write, and readers are thus willing to pay extra for the value of the writer’s labor. The WSJ has unique, quality reporting and a distinct brand, and hence people are willing to pay for the content over free content available on Joe Schmoe’s blog. Admittedly, this is an oversimplification of the issue at stake, and free content isn’t necessarily bad (achem…this blog).

To end, here’s a video demonstration of Wired’s iPad e-magazine, in current form. It’s looking pay-worthy, in my opinion.

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Beyond Status Messages: Google's push into social sharing of updates, photos, videos & more.

Leaked yesterday in The Wall Street Journal, Google announced the deployment of Google Buzz, its exciting foray into providing its own real-time social media platform.

Other Google Social Media Endeavors

To say, however, Buzz is Google’s first social media venture is not quite right. In 2004, Google launched Orkut, its proprietary social network, to little fanfare and minimal Stateside impact to this day. According to demographic reports, over 50 percent of users hail from Brazil, roughly 20 percent from India, and a measly 17 percent from the US.

Interestingly, Google’s nascent real-time social media search has received considerably less media coverage (largely obscured by its release of Google Goggles on the same day and the existence of rivals like Collecta and Bing Twitter), although its ultimate impact on the largely untamed social media landscape, I think, could be tremendous. Echoing Michael Arrington’s sentiment, social media now feels like search did a decade ago. Perhaps Google can be the transformative force in real-time media, as it was in taming the vastness of the internet. Arrington writes:

A decade ago most of us were using AltaVista or something similar for search. No one was really complaining very much about the huge amount of spam and other noise that cluttered the results because we didn’t know there was a better way. Then Google came along with Page Rank, and had a profound effect on the quality of Internet search. Suddenly (and it really was that sudden), we couldn’t imagine going back to AltaVista and searching pages of results for the thing that Google gave us immediately.

…

The online social landscape today sort of feels to me like search did in 1999. It’s a mess, but we don’t complain much about it because we don’t know there’s a better way.

Google Buzz

Google Buzz may very well be the piece of social media that “unites the clans,” so to speak. While Gmail has allowed its 146 monthly million users (as of July 2009) to update Gchat statuses, this functionality lacked the timeline-view that allows one to view her friends’ update history, akin to viewing friends’ feeds on Facebook and Twitter. While Buzz links to external sites like YouTube and Picasa (which it owns), it also links to Twitter but doesn’t link to Facebook.  After a brief look at some of its other features and factors like competing ID systems, it becomes clear, I think, that Google is taking a big swing at Facebook with Google Buzz.

Multimedia sharing and viewing interface. A demonstration of Google Buzz’s multimedia viewing and sharing tools (see the video posted below) reveals moderately superior tools to Facebook’s. With roughly 15 billion photos (and adding 100 million/mo.) Facebook is quickly becoming the front-runner of user-generated online photo repositories (second only to ImageShack, which is growing at a much slower rate). It’s Facebook’s game to lose, and integration of Picasa into Buzz, which will ride Gmail’s coattails, will breathe new life into Google’s picture-posting positioning (say that three times fast).

Sharing privately and publicly & integration into Gmail. Unlike Facebook or Twitter (I think), Buzz will allow users to share updates with specific users (and only them, if the user so chooses), and will send responses immediately into one’s e-mail inbox. Beyond the benefit of automatically signing up users for Buzz, utilizing its integration into Gmail places Buzz updates in a much more interesting space than a mere update — part broadcast, part e-mail, part private message, all multimedia. A Google buzz communication may altogether become a new medium for communicating content-rich  messages to one or many users.

And further, the demographic ubiquity of Gmail versus the relatively older crowd of Tweeters may make it the preferred broadcasting medium over Twitter, placing it in direct competition with Facebook.

Mashable’s Adam Ostrow, however, makes an interesting point:

… Gmail has historically added people to your contacts based on e-mail interactions. Hence, this contact list often varies significantly from your friends on social sites where relationships need to be made explicitly.

In other words, your Gmail contacts aren’t necessarily the same people you want to share status updates, photos and videos with. This is an issue that shouldn’t be overlooked in evaluating the new features Google is soon to unveil.

True story, Adam — but neither Facebook nor Twitter allows updates to reach a specific group of people (as I said, I could be wrong; it seems that the closest thing is Facebook’s multi-user messages). Separately, it’s oftentimes the case that Facebook users don’t want all of their Facebook friends (which include, in many cases, family members, co-workers and others who you’d prefer not to see the “less professional” side of you) to see their updates, and so end up not posting their updates altogether.

That’s my two cents on Google Buzz thus far. Please feel free to send/share thoughts and other articles as the subject gains more media traction. Until then, bask in the glow of Buzz’s demo video below.

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