Facebook finally has a serious competitor. At least, that's what social-media investor Sergio Monsalve thinks. Venture capitalists such as Monsalve see early signs that Google+, which has picked up more than 25 million users since launching in June, is headed down the right path.
Google Inc's infant social network, which counts Facebook CEO Mark Zuckerberg a member, has met skepticism so far. Some are waiting to see if it can maintain the rapid momentum of its first months.
Others see reason to be optimistic. Monsalve, who has invested in various consumer-Internet start-ups, is among a group of VCs who see promise. If Larry Page's brainchild - which some say mimics better than Facebook the instinctive categorising of friends that occurs in real life - fulfils its early promise, it will come at a pivotal moment for its bigger rival.
Facebook is widely expected to go public as early as 2011, barring further market ructions. The emergence of a serious challenger - when it now has none - will almost certainly give some investors pause, maybe even hurt its valuation.
"It's much richer, much more interesting pieces of content" compared to what he typically sees on Facebook, says Monsalve, who invested in recently-acquired MyYearbook.com and worked closely with MySpace in its heyday when he headed marketing at Photobucket. The question in the near future will be how much - if at all - Google+ cannibalises time on Facebook.
"It's not like for every minute on Google+, you spend a minute less on Facebook," says Lou Kerner, an analyst at Wedbush who owns Facebook shares and likes various features in Google+, including that it is an open network with much of its information available to anybody. "You might even spend more" in a recommitment to social networking in general, he argues.
Just two months after its launch, the impact of Google+ on Facebook is hard to gauge. If a sense develops that Google+ keeps gaining serious momentum, that's when it could hit Facebook's valuation, venture capitalists say, Users can assign their contacts to one or many circles- from family and work to hobby groups such as book clubs - and select which comments to share with specific circles.
"Google+ does a nice job of allowing more purposeful sharing," Hornik said. While Facebook also allows users to segment friends, it's a less straightforward process.