Battle of net titans leaves little room for new innovators

As Facebook and Google seek to outdo each other, can smallerfirms find a space for themselves?

FACEBOOK SOUGHT to seize the initiative from Google this week, byannouncing something "awesome" to match the search engine's sneakpreview of its Google+ social software. In the end, the something"awesome", introduced by Mark Zuckerberg himself, was largely groupand video chat.

Was it awesome? Well, it's not the sort of thing that sets thetechnorati on fire. "Isn't this what AOL had in 2004?" was thetemplate for their sarcastic response. But that doesn't necessarilymean it's not significant.

Video chat has been hovering on the fringes of usability for sometime: even Apple has struggled to make it accessible to the averageuser. Facebook, which has reached the milestone of 750 millionactive users, connects families who may not have been able to useSkype (which provided Facebook with the technology) or other videochat systems.

But what stood out at the press conference was the elephant inthe room.

Zuckerberg never referred to Google by name, but seemed to circlethe topic.

After listing the capabilities of other companies, he threw in"search" almost as an afterthought.

When he explained why others should be building on Facebook'sinfrastructure, he said Facebook believed "individual entrepreneursor entrepreneurs that focus on one specific thing will always dobetter than a company that's trying to do a million differentthings".

Curiously, that line echoes what Google's founders said in theearly days of their company: "It's best to do one thing really,really well." It was one of the "Ten things we know to be true" thatstill lie at the core of what Google does (one of the others was theinfamous "don't be evil" adage).

So who wins in this battle? Will Google win, despite the factthat it is reaching into an area in which traditionally it has notdone very well at all - social software? Or will Facebook win,despite the fact that it needs to invite and keep dozens of othercompanies within its own private ecosystem?

It's impossible to say, but I will say that there has been moreexcitement in the social networking space in the past two weeks thanI've seen in the past year.

After a period of extreme growth in social networking, pioneeredby Facebook and echoed by Twitter and companies such as Spotify andLinkedIn, it seemed like we were entering a gentle decline.

Each company appeared to be reaching the limits of itscapabilities to innovate and was becoming happy to occupy its ownniche. Now that's changed.

Zuckerberg referred to the "launch season", implying that thecompany would have more announcements in the next few months.

It seems clear that Google is planning announcements at a machine-gun pace for the next few weeks and perhaps months.

Apple will launch iOS 5 this autumn, with Twitter integration.Spotify will be reaching into the US market.

LinkedIn's March initial public offering price is still goingstrong, and the billions it brought the company will need to bespent soon.

Social networking sites have become, for the majority of internetusers, ubiquitous. The transformation from an oddity to a fad to abackground assumption happened as quickly as it did for e-mail andthe web.

But what happens next is the fascinating part. Up until the lastfew weeks, the assumption was that the next few developments wouldbe entirely generated by Facebook and its satellite companies.

Now it seems that the infrastructure is more unstable than that;companies may be drawn away from Facebook to orbit Google'sofferings. Facebook will have to come up with better terms to drawthem back.

There's a part of me that's sad that it's come to this: a battlebetween internet giants, rather than a sudden Cambrian explosion ofsmall companies seizing the crown.

During all the hoo-hah, nobody recalled one of the first groupsto suggest implementing something like the circles in Google+:Diaspora, the peer-to-peer Facebook competitor.

Similarly, when Facebook announced Skype was providing its videochat infrastructure, few people recalled that what drives thatcompany's technology is its users sharing their bandwidth to keepSkype's data flowing.

We're happily throwing all our personal data into huge silos keptby third parties.

It's migrating off our personal computers into domains controlledby large companies. At least two of those companies, Facebook andGoogle, offer their services free to the end user. That sounds likea good deal, until you start asking who their real customer is.

People may trust Google more with their data than Facebook, butthey aren't necessarily correct in that trust.

The net is becoming more centralised.

It's drifting away from its roots as a person-to-person networktowards a person-to-person-via-giant-internet-conglomerate.

But maybe, just maybe, while the giants fight each other,there'll be a chance for a few small mammals to get a piece of theaction - and run with it just as Larry Page and Sergey Brin,Zuckerberg and Evan Williams did so many aeons ago.