One of the biggest mysteries in technology right now involves Google's (NASDAQ:GOOG) social service, Google+.
On the one hand, Google claims it has a big success on its hands, with 500 million accounts, 235 million of them active, and 100 million contributing to the main Google "stream." On the other hand, the service has become a joke among the digerati, with some wondering whether it exists at all.
I use G+ regularly and it exists. I've gotten a steady stream of readers wanting to follow what I do, here and elsewhere, and some comment threads I've participated in are extensive. But the half-life of discussions are very short, much of the content seems re-purposed from Pinterest, and I'm suspecting many of the people who are most active there are being paid in some way.
For investors, there are two ways to look at this. Either Google+ is "growing at Facebook speed," as Wired says, or it has built an impressive Potemkin Village, a false front that's not nearly as active as it appears.
My own view is that G+ is mainly devoted to gigging Facebook (NASDAQ:FB), to limiting that company's gains while the company moves strongly in other directions. While Facebook and Twitter continue to snap at one another over Instagram, for instance, G+ has quietly launched a photo-sharing app named Snapseed.
Investors will ask whether G+ handles monetization in a smarter way than Facebook has. The company has published its API so that marketing companies like Expion can make use of it in their campaigns. It has been strategic in publicizing its Google Hangouts, which most famously brought MC Hammer and Psy together for a hugely profitable effort at the American Music Awards. It has also been pushing an international story with G+, and used Google Translate to effectively connect people who use different languages.
It's all "cool," but Wall Street wants to know how it brings money into Google. This is the same question that caused Facebook stock to crash after its IPO and, now that it's answered, has some wondering whether Facebook hasn't gone too far and whether its efforts are sustainable.
The best news here is that G+ is a sideline for Google. Whether it's a "Facebook for grownups" or "a global Facebook" isn't material. With Google the money comes from the search engine, the growth comes from mobile, and you don't have to base your investment decision about the stock on what it's doing in social. If the company can just be a strong No. 2 in the space, it will prevent rivals like Microsoft's (NASDAQ:MSFT) Socl from gaining any traction. And that's good enough.
That mission seems to be accomplished.
Disclosure: I am long GOOG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.