Especially Google and Facebook area extremely well positioned to know what is happening. They have a market research machinery never seen in history. If there's a new trendy thing catching up, they can see it coming and they know exactly who is interested. As long as governments don't intervene, they are in quite strong position to just acquire threats (or develop something similar).
Apple has piles of cash, but I think their business is kind of fragile. The valuation is based on being able to create products which sell for very high premium. I don't see them going away, but they might dropped from their top position.
For the Facebook and Google I believe the major risk is some backslash from legislation/privacy. Something like this would not wipe them out, but it might seriously damage the business. For example with Google there could be pressure to separate the search and advertising or to allow other companies to also offer ads on the search platform.
Google hasn't in it's entire history shown an ability to make money on anything besides advertising. What happens when everyone has ad blockers, they do most of their searches through mobile and Facebook eats up more advertising revenue because they can do better targeting than Google since they know more about their users?
Facebook -- Facebook is already seen as a place for old people. Once your grandmother is on FB, teens don't want to use it. A whole generation of people are growing up using everything but FB.
Apple -I don't see it dying but I do see it shrinking.
Amazon- because of network affects, the cost of building warehouses, etc. It's will be hard for someone to kill Amazon.
I asked a tween relative whether they or anyone they know uses FB. They answered, "No one." They said they all use Instagram, though. So the current tween generation is still on an FB platform, just not FB itself.
I don't see Facebook going away. It's such a good tool for organizing groups of friends and getting back in touch with someone you haven't seen in awhile. Tweens aren't using it because they don't need those features, they just want to share things. Once they start to grow up and move away from their hometowns, I think they would start using Facebook unless another platform exists in the same space (which as far as I know doesn't).
One of the reasons I feel the governments should look into Facebook acquiring future competitors that it feels will be competitors. In the last few years it has either acquired or copied growing social apps that it see will be a future threat.
And while the US has been slow to act, other countries are already massively stepping up antitrust and privacy enforcement. While most of these big tech cos are based here in the US, international regulation has a massive effect on the bottom line.
>Apple has piles of cash, but I think their business is kind of fragile. The valuation is based on being able to create products which sell for very high premium. I don't see them going away, but they might dropped from their top position.
I’m a fan of Galloway, his YouTube stuff for L2 is great, but Amazon is beating Apple because of the Echo? Apple is now the number one watch company by revenue in the world.
Apple have been selling premium computers for 39 years. The Desktop OS market is impossible to break into. The Mac and DOS/Windows ecosystems have owned it since the 80s. Chrome is making headway, but only in a small niche.
Aside from a few exceptions, I don't wish death on any big companies. I would nevertheless like to see each of the named company's dominance reduced substantially if only to see what the alternatives look like once afforded some breathing room. As much as network effects are an inevitable part of the human condition, I rail against the behavior as the very small market actor I am. In my day-to-day market activities, I regularly seek out less-dominant vendors and service providers.
Of the named companies, I am most comfortable with Amazon. Most interactions I have with Amazon yield a tangible service predicated on me being the customer. While some alternatives provide better browsing and discovery, there are few online shopping sites that provide the convenience and immediacy of Amazon.
Apple would presumably also treat me as the customer, but I don't like the design of their devices or software and there are good alternatives. As a non-customer, Apple's existence doesn't offend me, but I do find them tedious and the amount of media attention they capture can be exhausting.
Facebook and Google don't have business models that permit them to consistently treat me as the customer, so I do what I can to avoid their services. What services they do provide (for "free") are of low value to me. I can interact with friends on a wide array of communication media. I can search the Internet via other engines. I can send and receive email from my personal mail server.
Assuming their futures mimic their present—which is probably a bad assumption—of these four, the disappearance of Facebook, Google, and Apple would be of little or no consequence to my life.
Disagree with the author’s point of view on Netflix. I think it is quite a fragile business, with no monopoly whatsoever. I’m not much of a movie/series consumer though so might be biased about it.
I don't know, they have their own high quality content, and their TV back catalog is good. I would think they have a brighter future than many television companies, especially ones like HBO/Showtime and other special subscription companies.
That said, they have less of a safety net than the others, with no cable deals to fall back on (which are steadily eroding from underneath the others anyway). However, they seem to be very good at knowing how to run their business, so I wouldn't count them out unless some outside forces take effect.
Their name has been synonymous with streaming for a decade, which will keep them entrenched at least a while longer than they would otherwise deserve.
I think if they had a serious stumble, Amazon would just buy them anyway.
I’m not sure how long they get to keep their back catalog. Has anything been licensed indefinitely?
Their business is certainly going to only continue to increase in competitiveness for the foreseeable future. My primary concern, from Netflix’s view, would be Amazon being comfortable buying video content at a loss forever.
> I’m not sure how long they get to keep their back catalog. Has anything been licensed indefinitely?
At a minimum, they have their original series^1. I would assume that, as part of paying for the various shows to be created, Netflix has rights forever.
That's a fair point, but what happens if the various big studios decide to pull their content like Disney has stated they will and create their own Netflix? They just launched Movies Anywhere, so it seems like they're willing to partner up if they need to protect their businesses.
And at that point, Netflix would be indie content and a few real good Netflix shows. Don't know if people would shell out $10 per month essentially for the Netflix shows unless they can churn out high quality ones quicker.
i think if they stumbled, google would be the buyer. or maybe microsoft.
amazon already built their version of netflix, the only thing they would need to acquire is the original content, and consumers seem to be so fickle over content anyways a licensing deal with the real buyer would be better business strategy. (probably).
I think the streaming movie/TV market is the same as any other commoditized market -- the businesses that survive need to find a way to differentiate themselves or offer something nobody else does.
I think the original content is what will keep Netflix alive in the long run. There are a lot of other places to see movies and TV shows, but you can only see Netflix original content on Netflix (unless you pirate it).
I agree with you on Netflix. 5th horsemen candidates on my short list: Microsoft and SoftBank. Tesla if they can stop burning money and cut out the hype? Verizon as a long stretch.
Microsoft was founded in 1975, 42 years ago. People underrate them, but I'd say they're quite resilient. And now they're the #2 player in the cloud segment, so they should cover for their Windows cash cow just fine :)
I find it interesting that many similar analyses very often omit Microsoft. Yet it also has astonishing breadth of offering along with very deep vertical integration that is a characteristic of modern monopolies 2.0.
Microsoft can clearly become another IBM and survive long term. But, it's less clear if they can stay a major 'tech' company as they have a very poor record outside of OS/Office /Enterprise applications.
AKA web/phone/tables/console gaming/peripherals/etc are effectively break even in terms of revenue.
Only if they stop giving it back to their shareholders. Since they started their buyback program in 2012 Apple has 'returned' over $222 billion to shareholders [0]. Presently they are issuing debt to finance the buybacks & dividends. If they are not careful they may end up like IBM.
It's true that Apple has mountains of cash, but in all likelihood, a failing Apple-sized tech giant would end up acquired by an adjacent company (see Motorola or Yahoo or Sun Microsystems
) before they ran out of money.
Rats. I was hoping they would all go away within 5 years. Thought maybe the extra 0 was a typo. Disappointed. How can serious people still be on Facebook more than five years from now? This is demoralizing enough for me to subscribe to USA Today, the paper version, because it's an improvement. Pie charts and all.
Facebook is just social networking web site. People can get bored and use some other web site.
Amazon is only a shopping web site and a hosting company. There are popular companis like Amazon, such as AliBaba and DigitalOcean. There is nothing special about Amazon.
Google is a search engine, smart phone OS, mail, maps, video service, web browser. Looks like Google has way more chanse than Facebook and Amazon.
I think you underestimate the value of all the product reviews on Amazon. While I doubt that I've been influenced by ads on Google, I'm influenced all the time by the reviews on Amazon. Yeah, Amazon needs to do better about the fake reviews (and they are working on it, it's gotten better).
But there is a huge amount of value tied up in those reviews. I'd argue that it creates such a network effect that starting up a competitor would be really hard. Possible but Amazon would have to stumble.
I was thinking about how cumbersome it would be to change phone platforms if I got tired of iPhone or Android, and then how much effort I wouldn't want to spend if my Amazon device controlled all the lights, TV, audio, and temperature in my house.
I think more than the individual effort of changing systems, its the network effect that keeps people tied down. A new platform or service could disrupt that easily. What if you didn't need to carry a phone (VR/AR/?), or what if all homes came with those systems built in.
The reason there never will be a "fifth" horseman is because these four giant fishes keep devouring the little ones (startup acquisition/acqui-hire). Just because things happened in past a certain way, that does not necessarily mean those events can always be used as a predictability model for future. Stock market is at all time time. Are we headed towards crash? Maybe not. Maybe this is the time where we are setting new standards. Yes, all these four have slowed down their momentum of innovation. But that innovation also goes hand-in-hand with general intelligence and thirst for innovation from the general public. I hope to see one them entering into consumer health monitoring and diagnostics, beyond heart BPM or steps counting. I will give them another decade before I give up on them. I hope the author made some good bucks towards the end. He raised a good debate.
Who's to say the next horseman won't resist the advances from the big Four? Zuckerberg retained control for a long time, and it's not inconceivable that the Next Big Thing won't get acquihired.
I think Snapchat is a good example. The founder(s) still have a controlling interest in the company (or they did up until the IPO, at least). They want to build a company rather than sell it off. That's why they IPO'd, for instance.
I would feel nervous about applying old company rules to these companies. Nothing will be around forever, but if any companies ever (so far) might last, I would pick these ones.
Apple has piles of cash, but I think their business is kind of fragile. The valuation is based on being able to create products which sell for very high premium. I don't see them going away, but they might dropped from their top position.
For the Facebook and Google I believe the major risk is some backslash from legislation/privacy. Something like this would not wipe them out, but it might seriously damage the business. For example with Google there could be pressure to separate the search and advertising or to allow other companies to also offer ads on the search platform.