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+Paul Allen  is predicting between 515 million and 550 million registered +Google+  users by the end of 2012. He also estimates that Google+ currently has around 285 million users.  

Update  +Vic Gundotra confirmed at Google I/O this morning that   users  have upgraded their Google accounts to +Google+ accounts, 150,000,000 active users, 75,000,000 daily users.
 
On the Eve of I/O 2012, Google+ Is Nearing 300 Million Users

Some people think Google+ is a ghost town. Other (shall I say smarter?) observers realize that Google is building a company town (providing all the infrastructure necessary) to create a boom town in the not-too-distant future.

See this excellent Read Write Web article from earlier today: http://goo.gl/WphF5

Google is already providing the population growth, with more than 1.2 million new registered users every day. Tomorrow Google+ will have by my count (approximately) 285 million users. Before the next Google earnings call, they should pass 300 million. By the end of this year, I'm forecasting that Google+ will have between 515 million and 550 million registered users.

Google I/O starts tomorrow. Developers will be learning about new opportunities to build applications, products and services that will take advantage of the hundreds of millions of users, profiles, and circles. The boom times are a-coming.

Some people think that total registered users don't matter, or don't matter very much. They are looking for engagement. In that case, you can note that Hitwise said total visits to Google+ jumped by 27% in March, and Compete.com reported recently that unique visitors to Google+ rose by 10.32% in March May. My own tracking of user profiles, profile pics, and usage of circles shows a steady increase in users of the service, which ought not to be dismissed lightly, given Google's commitment to their social layer.

Google's strategy is both simple and brilliant:

1) Registration - Register as many people as possible who use any Google product for Google+.

2) Circles - Let people create their own circles, and then invent algorithms and roll out notifications and suggestions to help users get all the right people into the right circles (this means family, friends, coworkers, etc) - this will increase sharing within Google+ and will give Google own its own social graph.

3) Social Signals - Roll out +1 and other social functionality on as many web pages as possible, to capture user interests.

4) Monetization - Use the social signals generated from the massive social graph (who likes what and who knows whom) to increase the click through rate on search ads 

5) Repeat 1-4

Given the growth rate of Google+ registrations, it is quite likely that by the end of 2013 Google+ will have 1 billion registered users. If nearly half of the users upload a pic, fill out their profile, and add people to their circles, Google will have quite the social graph. And that's where the revenue opportunity really kicks in.

Google does not need a ton of activity on Google+ itself in order to dramatically increase it's revenue. They just need the social graph and the social signals that can be used in paid search ads.

Placing ads on search results pages, connected to keywords the person searched for, just happens to be the best context for advertising in the history of the world. Placing ads on a social web site where people are trying to communicate and share with family and friends just happens to be one of the worst.

At SXSW in March, Vic Gundotra indicated that early testing of +1 data in search ads generated a 5-10% increase in click through rate. (I was surprised to see only a couple of tech or financial writers even catching this incredible glimpse into Google's strategy and revenue potential for Plus.) If half of Google's search ads eventually have +1 social cues embedded in them, and CTR improves by 10%, Google's ad revenue would increase by more than $2 billion per year.

But social ads can potentially provide a much, much greater lift than 5-10%. Facebook Sponsored Stories are reportedly worth 2-3x as much as other Facebook ads. Such ads contain names and pics of friends who liked an ad. Imagine if such an ad format works for Google on paid search.

Let's assume that eventually Google is able to roll out ads on their search results pages that are fully enhanced by social signals (name and pics of friends who +1'd a particular advertisement or product). And let's assume that eventually half of all Google's keyword searches lead to socially enhanced ads, and that they double the click through rate of traditional sponsored links. These socially enhanced ads could also be rolled out through the Google AdSense network which accounts for 27% of Google's revenue. This could add tens of billions in additional revenue for Google a few years down the road.

And Google would never have to place ads on Google+. An ad-free social experience may give Google the ability over time to provider a better user experience than Facebook and to eventually catch Facebook in total users and in usage. But Google's revenue potential for its social layer does not depend on this.

Both companies are in a strong position to reach a billion users, have incredible usage on the web and on mobile devices, and to build developer ecosystems that will enable entrepreneurs to deliver products and services to massive user bases. I still think that in the long run, the company that plays best with the developer community will come out on top.

And so I'll be paying close attention to the live streamed IO talks tomorrow to learn how many steps Google is taking in that direction now. I'm hoping there will be some giant leaps forward in addition to the small steps they've taken previously such as the enhanced Hangouts API that was rolled out in March.
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