Just How Overrated Is Google Plus?

Ten million people can't all be wrong, can they? According to one crafty estimate, Google's GOOG new Google+ social networking service will hit 10,000,000 users some time on Wednesday. Good lord. This is a huge bump in numbers from only a few days ago, when Google+ really started experiencing the benefits of exponential growth in users. In 36 hours, they gained an estimated 2.2 million users, a 30% jump in the time it takes to make a decent slow-cook spaghetti sauce. It seems like the market sure is buying into the notion that Google+ is going to be a big hit. The stock has been up, including a 1.5% bump today. But are investors buying the short-term gains, or do they see Google+ eventually surpassing Facebook? Mark Zuckerberg may laugh off the possibility, but don't discount Google's ability to be incredibly disruptive when they feel like it. Mark Fidelman of Seek Omega lays out his case here for why Google+ is better than Facebook. While he makes a good argument, I am not sure I agree. For one, no one knows how accurate the 10,000,000 users figure is. It has some statistical analysis behind it, but I doubt I could get the methodology past a half-decent dissertation adviser. We certainly have no idea how many of these users are simply curious, drive-by gawkers who came to see what the fuss is all about. That's how I got a Google+ account on the first day: so I could take a peek and maybe write a story for Benzinga. The entire experience was so underwhelming that I logged off and found something more interesting to do: organized my niece's toy chest. Alphabetically. Twice. A lot is made about Facebook and its appalling lack of security, and the idea that businesses have invaded that social media space, making it a larger scale form of user-assisted junk mail. And sure, if you're in my Mafia Wars mafia, you probably get 30 spam messages a day about joining the battle. But when Google+ grows, it will eventually have all the same pitfalls. That's the monetization of social media. It's not like companies set these things up for their own enjoyment! Second, it's a danger to have one company control so many aspects of the online experience. Google already has great email and integration with documents, music, and, well, everything. Giving them the Facebook market share too seems unwise. Third, can you trust Google to do it right? I mean, look at their directions for getting users from China to Taiwan. Try this experiment. How Google Says to Get From China to Taiwan

• Open Google Maps' Directions.
• Type in "China" as the starting point.
• Type in "Taiwan" as the destination.
• Scroll down and read step 48.
• Try not to laugh.

ACTION ITEMS:

Bullish:
Traders who believe that Google is back and on its way up might want to consider the following trade:

• There is a lot of buzz building around Google+ and if these numbers are correct, it is justified. The stock looks pretty good here. The valuation is still extremely reasonable, and an argument could be made that it is cheap. The stock has rallied 4.54% over the last month. Buy GOOG.

Bearish:
Traders who believe that Google is going to head back down may consider an alternate position:

• From a technical perspective, GOOG has been trending down. This may just be a dead cat bounce. Also, there is no way that Google+ can compete with Facebook. It is too little, too late for GOOG in social networking

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