No Friend of Facebook

It's a mistake to discount Google(GOOG) and Google's entry into the social space.

Google is the undisputed czar in online advertising. It knows how to sell ads online. If there is a way to profit from social media, you can count on Google grabbing market share.

If you have any questions about Google's ability to take on a market leader, just ask Yahoo(YHOO) and Research In Motion(RIMM) how their market leadership fared after Google stepped into the ring.

Yahoo was sent to the back of the class but RIM was taken to the woodshed. Google does a very good job, but it didn't rise to the top because it is great. Google rose to the top because others failed.

For example, Yahoo still to this day doesn't have a simple method to display and buy Yahoo ads. Why not?

With RIM, I could go on all day. For business people, holding a BlackBerry was a status symbol, a demonstration that whatever you do it's important enough that you need one. A BlackBerry still sends a message about your status, only it's not a status you want to articulate.

RIM's and Yahoo's fate wasn't sealed overnight. RIM was provided ample notice that power-users wanted a larger screen, a camera and other features. Yahoo failed in providing a friendly ad interface in the way Google provides users.

Both RIM and Yahoo were managed by extremely intelligent, knowledgeable people who became billionaires building companies from scratch. They appeared to have everything going for them until Google walked into the room.

Not unlike a newly minted 28-year-old billionaire with absolute control of Facebook. (For more of my ideas, see 10 Profitable and Oversold Stocks Ready To Move Higher.)

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.