Google threw in the towel on Google+ but its social problems aren't going away
Google's growth has slowed as people use mobile more than desktop. Google still reels in much more revenue than Facebook on mobile advertising overall, but according to Morgan Stanley research, Facebook is on track to start winning more new ad dollars than Google. And new research from eMarketer predicts that Facebook-owned Instagram will surpass Google and Twitter in terms of US mobile display ad net revenues by 2017.
Stream Ads
Social streams offer extremely valuable advertising space, and yet Google has no social stream to sell ads against (though it does offer content discovery through YouTube, where Google has seen significant revenue growth).
"Social is where Google has really dropped the ball," Motley Fool analyst Justin Moser tells Business Insider. "And as we move more into an app-driven mobile world, it's facing more headwinds in its core search platform."
Time to buy?
The idea that Google should by Twitter became popular last month. Early Twitter investor Chris Sacca said that Google never understood social and that it would be an "instant fit." Google would finally have a social product, get a new ad-stream, and have access to a different kind of real-time search relevancy.
With Google making this major change to Plus that focuses more on its core users rather than growth and uniting identities, that debate could gain some steam once again.
"With Twitter's earnings just around the corner and questions regarding leadership there I wouldn't be surprised to see more speculation regarding a tie-up between the two," Moser says.