SummaryGoogle made an architectural decision to require real names, rather than pseudonyms, on Google Plus. The result is a platform that encourages better reciprocal acts and thus creates more value, for users as well as Google, than one based on pseudonyms.
Much has been made over the choice Google made to require real names, rather than pseudonyms, for Google+ users. There has been speculation that Google did it to increase the value of a user for advertising purposes. While I agree it was done to increase the value of a user, I don't agree is simply about advertising (although there is that).
To start, let's talk a bit about reputation. Consider the following diagram from a paper by Mui et al entitled A Computational Model of Trust and Reputation:
We define reputation as the perception that a person creates through past actions about her intentions and norms. Trust is a subjective expectation a person has about another's future behavior based on the history of their encounters. Reciprocity is a mutual exchange of deeds (such as favor or revenge). Social benefit (or harm) derives from this mutual exchange.
If you want to build a system where entities can trust one another, you need a system where reputations can be created since reputation is the foundation of trust. And reputation depends on identity. You cannot have both privacy and reputation since establishing one necessarily diminishes the other. If we are to build a perception about a person's actions, we need to know who that person is.
You're probably thinking, "yeah, but I can build a perception about a pseudonym as well as a real name" and you'd be right. There's just one problem. In a paper entitled The Social Cost of Cheap Pseudonyms, Friedman and Resnick argue that pseudonyms are single-sided: positive reputation's stick but negative reputations don't. You can see why: people just dump any pseudonym that has a negative reputation.
Real names are more valuable than pseudonyms because they more strongly encourage people to behave well and the result is increased social benefit. In the case of a platform like Google+, users perceive that your system is creating more social benefit if there are stronger reputations that lead to more trust that encourage positive reciprocal acts. For example, real names reduce spam because your reputation as a spammer is going to follow you. You can't just create identifiers willy nilly, use them until they acquire to much baggage and dump them.
There are downsides, of course. Negative reputations don't stick to pseudonyms because its easy to just "start fresh." Heaven knows that the Internet has allowed many people to be someone online who they could never be offline. There are discussions that people are more likely to engage in when they are pseudonymous.
I believe Google's policy requiring real names is an architectural decision aimed at fostering a particular kind of social interaction and excluding others. They may change it at some point, but for now requiring real names is likely going to make Google+ a different place than Twitter even though both allow asymmetric follow. The overall value of the platform--not just for advertising, but in how much people use it and what they use it for--will be higher as a result of the policy.