[rsbrown]

In my opinion, this is another in a long line of companies over the years that have underestimated the importance of the role of technology in their business. Furthermore, even companies that are technology-based will still struggle if they don't see themselves as a technology company.

For example -- as PG has written -- Yahoo saw itself as a "media company" rather than a technology company. Contrast this with Google.

From first-hand experience, I've seen how eBay is managed as a retail brand, rather than a technology company (and relied for years on acquisitions over home-grown tech). Contrast this with Amazon.

Once Netflix established itself in the marketplace and began executing their technology strategy, Blockbuster was doomed. I'm biased (because I'm a software guy), but I strongly believe that you are hobbled right out of the gate if you're not fully invested in growing your company's software tech.

[ttunguz]

Completely agree. This trend is happening in a bunch of different places.

Advertising agencies, historically relationship driven, are now building demand side platforms to acquire media using technology.

Brokerages went through this transition during the eTrade boom.

Video games is currently being disrupted with companies like OnLive, Gaikai and OTOY. GameStop is trying to prevent their total loss of share by offering digital content purchasing in store.

Books - Kindle

Music - iTunes

et al

And so on.