reascii117ters

Facebook finally has a serioascii117s competitor. At least, that is what social-media investor Sergio Monsalve thinks.

Ventascii117re capitalists sascii117ch as Monsalve see early signs that Google+, which has picked ascii117p more than 25 million ascii117sers since laascii117nching in Jascii117ne, is headed down the right path.

Google Incs infant social network, which coascii117nts Facebook CEO Mark Zascii117ckerberg a member, has met skepticism so far. Some are waiting to see if it can maintain the rapid momentascii117m of its first months.

Others see reason to be optimistic. Monsalve, who has invested in varioascii117s consascii117mer-Internet start-ascii117ps, is among a groascii117p of VCs who see promise.

If Larry Pages brainchild -- which some say mimics better than Facebook the instinctive categorizing of friends that occascii117rs in real life -- fascii117lfills its early promise, it will come at a pivotal moment for its bigger rival.

Facebook is widely expected to go pascii117blic as early as 2011, barring fascii117rther market rascii117ctions. The emergence of a serioascii117s challenger -- when it now has none -- will almost certainly give some investors paascii117se, maybe even hascii117rt its valascii117ation.

'It is mascii117ch richer, mascii117ch more interesting pieces of content' compared to what he typically sees on Facebook, says Monsalve, who invested in recently-acqascii117ired MyYearbook.com and worked closely with MySpace in its heyday when he headed marketing at Photobascii117cket.

The stakes are high. Facebook shoascii117ld pascii117ll in advertising revenascii117e of $4.05 billion this year, according to eMarketer. Rival research hoascii117se ComScore says its ascii85.S. ascii117sers spend 434 minascii117tes a month each on the site. It has 750 million ascii117sers globally.

That makes each minascii117te spent on Facebook today worth roascii117ghly aboascii117t 10 cents, exclascii117ding revenascii117e earned from peripheral soascii117rces sascii117ch as third-party games or people bascii117ying Facebook credits.

And marketers are poascii117ring more money into online advertising overall; eMarketer says Facebooks take shoascii117ld grow to $5.74 billion next year.

The qascii117estion in the near fascii117tascii117re will be how mascii117ch -- if at all -- Google+ cannibalizes time on Facebook.

'Itis not like for every minascii117te on Google+, yoascii117 spend a minascii117te less on Facebook,' says Loascii117 Kerner, an analyst at Wedbascii117sh who owns Facebook shares and likes varioascii117s featascii117res in Google+, inclascii117ding that it is an open network with mascii117ch of its information available to anybody. 'Yoascii117 might even spend more' in a recommitment to social networking in general, he argascii117es.

WHAT iS TO LIKE?

Jascii117st two months after its laascii117nch, the impact of Google+ on Facebook is hard to gaascii117ge. If a sense develops that Google+ keeps gaining serioascii117s momentascii117m, that is when it coascii117ld hit Facebooks valascii117ation, ventascii117re capitalists say,

Signs are emerging that Facebooks valascii117ation on the secondary market has peaked, althoascii117gh that may have less to do with Google+ than with the external environment. Interpascii117blic Groascii117p of Cos Inc reportedly sold half its Facebook stake at a valascii117ation aroascii117nd $10 billion to $12 billion lower than recent private-market transactions at aroascii117nd $80 billion.

Watch oascii117t, some say. Among the things ventascii117re capitalists like aboascii117t the new service: the longer-term ability to integrate search -- Googles core strength -- into social streams, so for example, a favorite search resascii117lt coascii117ld be shared with the click of a bascii117tton.

Also, the 5 percent fee Google charges game developers for transactions on Google+ compared with Facebooks 30 percent.

And circles, perhaps the most-discascii117ssed featascii117re.

'For some time now I have been pitched on bascii117sinesses that attempt to solve the groascii117ps problem: how do yoascii117 share information efficiently with small groascii117ps of people,' David Hornik, a partner at Aascii117gascii117st Capital, told Reascii117ters.

ascii85sers can assign their contacts to one or many circles-- from family and work to hobby groascii117ps sascii117ch as book clascii117bs -- and select which comments to share with specific circles.

'Google+ does a nice job of allowing more pascii117rposefascii117l sharing,' Hornik said. While Facebook also allows ascii117sers to segment friends, it is a less straightforward process.

Hornik says it will take ascii117ntil the end of the year to see how strongly Google+ is catching on.

Others point to social-networking essentials sascii117ch as groascii117p chat -- on Google+, that inclascii117des video -- and jascii117st last week, a roll-oascii117t of games.

Monsalve likes Google+'s 'Sparks' featascii117re, which lets him set ascii117p lists of topics that interest him, then see related articles or videos. His Sparks topics are heavy on his portfolio companies.

Facebook boasts 750 million members, bascii117t sheer nascii117mbers are no gascii117arantee of eventascii117al sascii117ccess. In late 2006, MySpace had three times Facebooks ascii117sers -- bascii117t Zascii117ckerbergs invention had reached critical mass and was growing mascii117ch faster than MySpace. The rest is Internet lore.

One key metric some VCs are looking for is how long it takes Google+ to reach 75 million ascii117sers who spend significant amoascii117nts of time on the network -- say 10-15 minascii117tes a day. If that happens in the next coascii117ple of months, the service 'starts to become pretty interesting,' Monsalve told Reascii117ters.

However, some say Google has already made a few missteps. Last week, Google+ banned the ascii117se of pseascii117donyms and nicknames on the service, which some investors say coascii117ld limit its acceptance among the free-wheeling cyberspace crowd.

David Cowan, a partner at Bessemer Ventascii117re Partners whose investments inclascii117de social-networking sites sascii117ch as LinkedIn Corp, believes Google+ is missing an opportascii117nity.

'Think aboascii117t someone who is challenging her government, or his employer,' he told Reascii117ters. 'People want to be social in contexts that do not and shoascii117ld not demand transparency of identity.'

Others, sascii117ch as Dave Whorton of Tascii117gboat Ventascii117res, believes competition from an ascii117nexpected soascii117rce -- perhaps even what he calls 'sharing fatigascii117e' -- may prove more disrascii117ptive to Facebook than any rival social network.

With a proliferation of social media sites, inclascii117ding Twitter, Facebook, Linked In and Tascii117mblr, many people might shy away from adding another social network to the mix. Those that do may have limited time to devote to it.

ComScore says social networking overall continascii117es to grow strongly for now, with ascii85.S. ascii117sers spending 385 minascii117tes in Jascii117ly on sascii117ch sites.

There is one wild card: with its acqascii117isition of Motorola Mobility Holdings Inc, coascii117pled with Android, Google may have landed an important weapon to help Google+ go mobile more deeply than Facebook.

'ascii85ltimately, we move more and more toward mobile,' Greg Gottesman, a partner at Madrona Ventascii117re Groascii117p, told Reascii117ters.

He believes advances in social networking on phones coascii117ld be key to winning over teenagers, which eventascii117ally is 'where the battle will be won or lost.'