Why Facebook Is Not A Threat To Gmail

Includes: FB, GOOG, ZNGA
by: Modernist

Zuck: Yeah so if you ever need info about anyone at Harvard

Zuck: Just ask.

Zuck: I have over 4,000 emails, pictures, addresses, SN

Widely reported IMs from Mark Zuckerberg highlight the reality that Facebook's (FB) "modern" email service is not going to take over Google's Gmail (GOOG). While we're on the subject, let's just throw out there that Google+ is not going to threaten Facebook as a social network, and Facebook's unremarkable platoon of engineers is not going to defeat the army that is Google Search.

Okay, back to email, which is arguably more of a battleground as it exists somewhere between social identity (Facebook) and big data (Google). Let's consider the Oatmeal hierarchy of email addresses. It poked fun at what your choice in email service says about you. Unless you have your own website, Gmail is at the top of the @ hierarchy. To generalize, Google Mail is the popular brand of choice for people who generally know what they are doing online. This hasn't changed since Oatmeal pointed it out in 2010. So email is Gmail's game to win right now.

But as the premier social network and a place where a lot of people spend a lot of time, should Facebook be considered an impending threat? I think we have to consider the consumers.

What do consumers associate with Facebook? A place where you go to be public. What is email? The most intimate of message mediums. Email unlike chat is generally saved forever -- and unlike text messages, which grew up under the casual convenience of cell phones, email holds a certain degree of weightiness from the residue of its predecessor, snail mail. So, how public do you want your intimacy?

Google has had its share of privacy issues, but Facebook's issues are more like scandals. I personally deactivated my account long ago, with Facebook's inconsistency in meeting privacy promises representing a major reason (the other one is that Facebook checking is a drain of time).

The truth is, it's kind of unfair to Facebook to hold it to this standard of privacy, because Zuckerberg has always been about transparency. But studies have shown that trust is inspired by, if nothing else, consistency. While Zuck may have consistently stayed true to various iterations of his own identity, he has been inconsistent in promising consumer identities the protections worthy of an intimate relationship.

I'm still bullish on Facebook, because the company helps create things like Zynga (ZNGA). Rumor is that Zynga will trade like a proxy to Facebook as Facebook nears IPO. If you like that rumor, consider buying Zynga on its current "weakness" -- not because Facebook is going to replace Google, but because it doesn't have to. And while you're at the growth stock market, consider picking up some Google. That is, if you value engineers.

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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.