As I have written in previous predictions, I’ve been focusing on the Internet Big Five lately, and expect that to continue this year, as the group, collectively, are something of a “character” in my upcoming book (as is Twitter, the “free radical”). Other characters include “The Government” and “Corporations,” so expect predictions about those players in the next few days. But today, I want to focus on the Big Five as a whole. I’ve been staring at these companies, trying to understand their strategic imperatives, which is why I found myself making yet another chart.
This one focuses on core product lines where all (or most) of these companies are playing. For me, these product lines, taken together, are the basis of what we might call “the operating system of our lives.” And since the book is about how we will be leveraging our lives over digital platforms in one generation, it struck me as important to assess where each of the Big Five is right now (what they have already built) and where they are weak (what they need to build to compete).
As you can see, I’ve laid out the same five companies, listed top to bottom by market cap. From left to right are columns of various product lines or offerings that I’ve determined are crucial areas that any player in the “OS of our life” must address. I’ve keyed each company against each product line with one of four scores, from “Strong” – where a company already dominates – to “Weak” – where a company either does not play, or has an anemic offering. The terms “Developing” and “Improving” demonstrate that the company is making progress in that area, from either a weak position (“Developing”) or a middling position (“Improving”).
The product lines I determined were worthy of inclusion mirrored many of the territories found in the Web 2 Summit Points of Control map, with some key additions. Starting from the left: If you’re going to be the “OS of life,” it helps if you have experience building operating systems. Next, it’s critical that you have the ability to distribute products and services, in particular entertainment, to folks on your platform. This means dealing with Hollywood, and the Big Five are in various states of disarray with regard to that issue. Third is Productivity Software, which some of the Big Five may well just punt on (Facebook and Amazon, perhaps). Fourth is Advertising Solutions – where all of the Big Five are either major players or developing solutions. Next are Tablets and Phones, which perhaps could also be called a distribution play but are far more than that. After that is Search, which kind of started this whole Web 2 thing back in the day – I gave Apple a “developing” here because of Siri, which I view as a search interface. Next up is Social, which is pretty self explanatory, Payment, a key point of control, and lastly Voice, which I believe (perhaps wrongly) as a critical aspect of user interface.
Why on earth did I go to the trouble of doing this? Well, because it helps me Think Out Loud about how these companies are going to play out over the next couple of years. If you buy that all of these companies need strategies in most of the areas I outline above, then looking for relative weaknesses and strengths of each is an interesting exercise. In fact, if you really squint, you may well see some patterns in future M&A (the subject of my next prediction post, in fact).
I could go on for pages about how I came to each score. For example, I gave Facebook a “developing” in OSes, even though the company really doesn’t have an OS like Windows or iOS. Why? Because I view Facebook as an OS layer on top of the Web, though of course not in the classic sense. And why did Amazon get a “developing” in Voice? Because it just bought a company in the space, just like Apple did with Siri in 2010. I’ll spare you the details of all the rest, but very much invite your comments on the chart. I labeled it “Draft 1” for a reason. What categories of product did I miss? Were my scores fair? Comment away, please!