Game Changer: Why Google bought Aardvark for $50 million

Posted on February 11, 2010 by amit

As confirmed by TechCrunch, Google today announced that they’ve bough Aardvark for $50 million – brilliant move by the Goog. I’ll get to the why after a little background.

Google still dominates the most lucrative percentage of marketing dollars spent on the web:

4193096604 2f03a3f538 Game Changer: Why Google bought Aardvark for $50 million

But recently they seem scared. Google is a one trick pony, with the Adwords serving as their main source of revenue. They’ve tried over and over to replicat it’s success but have failed miserably with Youtube, Dodgeball, Jaiku, Lively, Orkut and Wave. I visited Google’s New York offices in Jan 2007. The most memorable moment (besides the organic salmon burgers in the cafeteria) was when one of the engineers said that Google was the only site in the world, whose goal was to minimize time spent on it. At the time I was blown away – “Give the people what they want.”

Fast forward to today – for most searches related to products, services or experiential recommendations – Google fails:

googfail 1024x516 Game Changer: Why Google bought Aardvark for $50 million

People no longer trust the anonymous, SEO optimized, affiliate marketing driven, possibly automated, blog post. The next web is built on relationship driven, public, recommendations. Google’s biggest threat is not another search engine, but a change to the underlying way that people search. Enter Facebook and Twitter. I no longer search for news, it finds me (goodbye RSS).  It’s no surprise Google has made numerous plays at Twitter and FB has changed it’s whole strategy because of Twitter. They are all fighting for the same role, to be the underlying real-time, social operating system on the web.

Eyeballs and CPM ads are finally being replaced by microtransactions and quantified actions. Subscriptions are the new black. G used to be the gateway to the web.  Now, more sites are reporting an increasing trend of quality traffic from Twitter and FB.  The top brass at Google knows that social is critical.

Purchasing Aardvark is a brilliant (third or fourth) play into the social arena. With Buzz just released, Google now has a captive audience of 176mil (in Gmail) to test, position and improve social search (before it’s too late).  People don’t want to be sold to, but will gladly buy products based on recommendations by people they trust.  The line between advertising and content is blurring.  The key is being able to monitize recommendations (companies would gladly pay 2% of a product’s price for a sale).

What will be interesting to see is if either Facebook, Twitter or Google is able to do it alone (doubtful – but maybe FB), whether some big-time M&A will happen (Goog buys Twitter), or whether they will be forced to open up to each other, each find their respective niches, and continue to compete on the fringe (likely).   What do you think, with Buzz + Aardvark will they be able to achieve monetizable, real-time, social search before FB and Twitter?

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Related posts:

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  3. The Transition to Real-Time, Social Search
  4. Slides from Social Media Training Sessions
  5. B2B Social Media Marketing
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  • Interesting Post. I don't really think that Google has failed miserably as yet. Every time I see a Google related acquisition, I invariably notice that in the end it funnels in more data for Google to analyze, dissect and eventually use to sell more ads. Though it may be a one trick pony, it’s quickly making sure that no one else can master its tricks. Some day Google might just end up resembling Big Brother me thinks.
    As far as the social web is concerned, I suspect that Facebook will not be the force that it is today, say 5 years down the line. I'd say the best analogy to Facebook that I can give is to look at the various MMPORG successes and declines in the past - Second Life, Ultima and the decline of services like tripod, geocities etc. All of these were massively popular in their glory days and look where they are today. I think the social web will increasingly move to apps on your desktop (tweetdeck for eg) or one shot communication hubs that aggregate everything that you have (think buzz) rather than logging into multiple social websites. Besides, eventually people will tire of the constant online interaction. And signs of this are already showing. Most of the people that I know no longer spend as much time on facebook or orkut as they did 2 years ago. In my opinion, the social web is still trying to find a durable interaction model and twitter, facebook, buzz etc. are just fads on the quest to a solution. Look at IM/Chat, see the kind of evolution it took to get to where we are today.
    Eventually, as far as Facebook is concerned, I think Mark will cross the invisible line and lead to people leaving in droves for other services and slew of privacy related lawsuits that will ring the death knell on facebook.
  • I mean Lively failed, Youtube/Wave are arguable the others we're not really sure what Goog did. I'm very bullish on Facebook, the reason being they will eventually be everywhere on the web. You will no longer have to go to Facebook, Facebook will be on every site. The next big play by FB is their currency system. This will make it dead simple for you to make payments on any site on the web, goodbye paypal and google checkout.

    I agree with your desktop theory of aggregation, but if FB can be the underlying social glue tying it together they will succeed. Their biggest concern, as you rightfully mentioned, is privacy issues.
  • Actually IMO success/ failure depends more on how Google measures them rather than how you and me perceive it. That being said, yeah I'd agree that some of the stuff they launched didn't really take off as we expected.
    I don't really see FB surviving in its current avatar say 5 years down the line (I may be wrong though). It's still very much a social networking site more than anything else. And if history teaches us anything, the public is fickle...they might just abandon FB for the next big thing - like indian users did to orkut when FB hit Indian shores big time. At its core, it basically keeps track of your identity and your connections and any conversations you may have with them. But importantly it does so within its own closed garden.
    Google if you really look at it offers pretty much the same, but in a significantly less polished interface. But it goes beyond that, thanks to its many acquisitions. I was amazed seeing how easily I could link up youtube, google reader, maps, feedburner, flickr etc with Buzz or how easily normal chat connections, email connections and my orkut profile linked together.
    FB isn't as connected. Don't know if its possible to chat with my facebook connections when they are online, from outside of facebook for example – say through pidgin.
    Besides this Google uses Open ID, making integration with Google a lot easier as opposed to using Facebook connect IMO. Still some areas like Facebook Pages don't have an equivalent in the google world as yet, nor do games like Zynga's monster hit Farmville. But if Facebook moves to the desktop in a form like tweetdeck in the long run, then don't think these factors may matter as much.
    End of the day I'd say the jury's still out on Facebook (both for or against). Time will tell. And it will certainly be interesting to see how Facebook evolves over the years.
  • Google does make it easy to link up the other services, but they key for them will be getting integration with FB. Google has 176 mil gmail users, FB has 400 mil users, half of whom login every day. That's ridiculous.

    No one uses Google ID, Facebook connect is spreading much quicker. I think FB will eventually become your defacto identity on the web, there is already too much built up (all the photos you're tagged in, all the connections you've made). A few caveats though, they are being pushed hard to open up and let you export all this data, and like you rightfully mentioned privacy concerns being huge. Some more big blunders and people could hit the kill switch. I also think there will be a counter movement of people (mid 20's hipsters) leaving this social networks in droves in a few years. We'll see...
  • Ankit
    If i one looks at a product integration standpoint Buzz + Wave + Aardvark makes great sense. However Aardvark needs to be much better in design - I have subscribed to them and interaction is very limited. Privacy for me still continues to be a huge issue for Social Engines - Google has introduced changes in Buzz however I believe they need further modification. A service like Aardvark on the mobile in India will be huge. It can completely change consumers use mobile
  • I love the aardvark chat bot, it's awesome. You're right about privacy being the biggest concern and the mobile usage for Aardvark could be incredible.
  • A cough man
    What the fuck is Aardvark? I clicked the link you posted, and I asked it just that. It told me that my question is too short to be answered. So, slightly frustrated they couldn't identify their own company name, I asked a bit more... "what the fuck is aardvark? I want to know what the fuck this site is about...", and I was told "Got it! just sign up first and I'll tell you" which makes me think "scam!!!".

    I was about to give up and just post this, but I thought, what the hell, I'll google it. Several frustrating links about the animal or travel, one about visual basic, and finally an article talking about the website launch. The example question is answered by "some dudes out there who watched the game"... high authorities on any subject I'm sure. So, without having ever used it myself, I'm wondering, can I get answers from actual experts or just from "people in the Aardvark community"? And, perhaps more importantly, why would I ever sign up for this service either way? Why not just do the research myself? How lazy can a person possibly be? I guess we'll have to leave that one for Bamberger...

    Personally, I'd be much happier getting better organization/presentation of search results than asking the common idiot to do my work for me. Asking an expert would be appealing, but why would legitimate experts submit themselves to becoming a free, real-time help-desk? Experts want to be paid for their time, or use it to answer their own questions.

    My verdict is still out on Buzz. I made one post and responded to one. Not sure if it will go further than that...

    Anyways, enough ranting, back to work. Sorry for the language... you know my devil tongue. Give me a couple years dicking around in the movies, then you, me, and E M Smith can co-found a couple million dollar start-ups.

    - Andrew
  • hey buddy, thanks for your comment. I think a lot of times, especially on the go and especially when it comes to products or recommendations you are much better off getting the answer from real people then from a search engine. I don't think it's about finding legitimate experts to necessarily answer your questions, but they can at least point you in the right direction. Next time you spend more then 5 minutes searching for something on Google, try Aardvark. (I'm down on your startup with eqsmith).
  • A cough man
    I think product recommendations are exactly why I want expert opinions. I don't necessarily need an Olympic gold medalist to tell me what ski gloves to buy, but I don't want to hear from some guy who fancies himself a skier just because he had fun hitting on divorces in Aspen last winter. There is actually an outdoor gear website that offers this service along side selling the goods (though I can't remember which one at the moment). It's probably just REI employees chatting online, but at least I have some assurance of their authority on the subject, even if it is slightly biased. I'm sure Aardvark is more interesting than I'm imagining it. I'll never sign up for it though.

    Get your ass out to the west coast one of these years. San Fran 2012-ish.

    Off to the opening ceremonies. They got these Olympics on.
  • also, i will be headin to SF sometime soonish... finally the winter olympics are stupid except for the biathlon - ski ski shoot shoot ski shoot
  • A cough man
    this is way more interesting than any track and field event:
    http://i.a.cnn.net/si/2006/olympics/2006/writer...
    http://www.pinedaleonline.com/news/2007/03/thb-...

    and hockey is basketball for men with testicles.
  • It's not just gonna be some random/anonymous person answering your questions (the current google static search model - random blog posts), it will be someone you either directly have a connection with, friend of a friend, or someone who the community rates as really knowledgeable in the area (high reputation within that niche). If one of my friends answers your questions, you can ask me, hey does this guy know what he's talking about. You will get multiple answers also, so you dont have to trust one person. It's also not about always getting the "right" answer, but getting the resources to help you find the right answer.

    I remember a long time ago Google said their goal was to show you just one answer for your search query... that to me seems really scary, isn't this better?
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