The Internet Big Five By Product Strength

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).

Here’s the chart:

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!

Update: I spaced on Xbox/Kinnect, and have updated the chart wrt to Ent/Dist for Microsoft, thanks for the input!

28 thoughts on “The Internet Big Five By Product Strength”

  1. I am not sure what goes under distribution …. but I don’t see anywhere to represent the Xbox and its move into the media center space (competing with google tv, apple tv, …).

  2. John, Microsoft cannot be “weak” in entertain. Xbox is the ultimate media center for gaming, digital content such as TV and on demand videos, movies etc. At least can compete with Apple so far. 

  3. Not sure why Amazon is rated weak for search and Facebook is rated strong. Can you explain? My experiences are vice versa.

    1. I have Facebook as “developing”, not strong. Facebook is very focused on one aspect of search – the one that matters to it: people search inside its own domain. It also has a very large discovery purpose for its users, something I suspect they will wake up to shortly. It’s in conflict with their domain-specific business model, but once they launch their third party ad network, I expect some form of discovery-search loop across the wider web will be very important to the company. I think they get that.

    1. I agree, though in a way, “productivity software” is a proxy for that. But I think I may rethink that…thanks.

    1. For me, “Entertainment/Distribution” is more than just having a dominant gaming platform (which they do). It’s also having a platform to sell and distribute media and entertainment at scale, which is where I’d say Amazon, Google, Apple, and Facebook have more traction.

  4. John, this is a very useful framework and assessment.  Believe there are three addit’l capabilities that are crucial differentiators, especially in mobile: (i) cloud storage; (ii) mapping and location capabilities; (iii) algorithmic capabilities.  Some of these, of course, are already “product lines.” 

    These additions may reflect my bias re: the importance of SoLoMo (, location ( and Digital Signals (, but curious what your thoughts are.  Agree also with you re: Voice ( – AI may prove to be the more important differentiator, however.

    Dr. Phil Hendrix, immr and GigaOm Pro analyst

    1. Thanks for the input. Agree on cloud. I think algorithmic is interesting, but perhaps assumed – you do have to be good at it, just like processing infrastructure. Mapping is very interesting as well, I had to stop somewhere though….otherwise one could have added any of another ten or so capabilities (and perhaps we should).

      1. Perhaps the question is which of these will prove to be “core,” strategic, differentiators, etc…. also, not all “capabilities” become “product lines,” and some (like Voice, location, etc.) will become deeply embedded features.  

        Re: analytics, NYT just published a note speculating about Amazon’s plans to offer their analytics/algorithms as a service to companies and developers…Will Amazon Offer Analytics as a Service? –

  5. Hi John. Useful analysis – thanks. I wonder if you’d come across the term ‘vertical stack’ – I think it’s a useful way of thinking about the strategy of the big players (I haven’t included Microsoft for various reasons). It’s a bit less product focused than yours, but I think goves a slightly different and therefore perhaps useful additional perspective. I wrote about it here:

  6. Picking up this thread because I’ve been vuisualizing basically exactly this chart in my head for months now[!] So glad to see someone finally put it down on paper [umm: electrons]. Flattered to be so in sync with your thinking too. Would definitely echo the cloud emphasis over productivity software, cloud is so much more. And where is Big Data here? Surely this should be included…Agree with Phil on geo, why not lump it w mobile? Why do you suppose Fast Company left Microsoft out of their otherwise very similar analysis? 

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