Monday, May 07, 2012

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The Doomed Internet Asifa – Part 1

by Reb Akiva @ Mystical Paths

thumbnail (3)Who understands the Internet of today?  How about the Internet of tomorrow?  How valuable is it for the Jewish religious community to start focusing on solving last year’s problem?  How about the problem from 5 years ago? …

(Forbes Magazine) There are good reasons to think Google and Facebook might be gone completely in 5 – 8 years.  Not bankrupt gone, but MySpace gone.  And there’s some academic theory to back up that view, along with casual observations from recent history.

Organizational ecology puts forward that managers don’t really matter all that much. Organizational outcomes have much more to do with industry effects than who the CEO is and the choices he or she makes.  As I age and watch what’s happening in the world of Internet and mobile, I can’t stop thinking of organizational ecology…

More and more in the Internet space, it seems that your long-term viability as a company is dependent on when you were born.

Think of the differences between generations and when we talk about how the Baby Boomers behave differently from Gen X’ers and additional differences with the Millennials.  Each generation is perceived to see the world in a very unique way that translates into their buying decisions and countless other habits.

In the Internet world, we’ve really had 3 generations:

  • Web 1.0 (companies founded from 1994 – 2001, including Netscape, Yahoo! (YHOO), AOL (AOL), Google (GOOG), Amazon (AMZN) and eBay (EBAY)),
  • Web 2.0 or Social (companies founded from 2002 – 2009, including Facebook (FB), LinkedIn (LNKD), and Groupon (GRPN)),
  • and now Mobile (from 2010 – present, including Instagram).

With each succeeding generation in the Internet, it seems the prior generation can’t quite wrap its head around the subtle changes that the next generation brings.  Web 1.0 companies did a great job of aggregating data and presenting it in an easy to digest portal fashion.  Google did a good job organizing the chaos of the Web better than AltaVista, Excite, Lycos and all the other search engines that preceded it.  Amazon did a great job of centralizing the chaos of e-commerce shopping and putting all you needed in one place.

When Web 2.0 companies began to emerge, they seemed to gravitate to the importance of social connections.   MySpace built a network of people with a passion for music initially.  Facebook got college students.  LinkedIn got the white collar professionals.  Digg, Reddit, and StumbleUpon showed how users could generate content themselves and make the overall community more valuable.

Yet, Web 1.0 companies never really seemed to be able to grasp the importance of building a social community and tapping into the backgrounds of those users.  Even when it seems painfully obvious to everyone, there just doesn’t seem to be the capacity of these older companies to shift to a new paradigm.  Why has Amazon done so little in social?  And Google?  Even as they pour billions at the problem, their primary business model which made them successful in the first place seems to override their expansion into some new way of thinking.

Social companies born since 2010 have a very different view of the world.  These companies – and Instagram is the most topical example at the moment – view the mobile smartphone as the primary (and oftentimes exclusive) platform for their application.  They don’t even think of launching via a web site.  They assume, over time, people will use their mobile applications almost entirely instead of websites.

We will never have Web 3.0, because the Web’s dead.

Web 1.0 and 2.0 companies still seem unsure how to adapt to this new paradigm.  Facebook is the triumphant winner of social companies.  It will go public in a few weeks and probably hit $140 billion in market capitalization.  Yet, it loses money in mobile and has rather simple iPhone and iPad versions of its desktop experience…

The failed history of Web 1.0 companies adapting to the world of social suggests that Facebook will be as woeful at adapting to social mobile as Google has been with its “ghost town” Google+ initiative last year.

iphone3gThe organizational ecologists talked about the “liability of obsolescence” which is a growing mismatch between an organization’s inherent product strategy and its operating environment over time.  This probably is a good explanation for what we’re seeing in the tech world today.

Are companies like Google, Amazon, and Yahoo! obsolete?  They’re still growing.  They still have enormous audiences.  They also have very talented managers.

But with each new paradigm shift (first to social, now to mobile, and next to whatever else), the older generations get increasingly out of touch and likely closer to their significant decline.  What’s more, the tech world in which we live in seems to be speeding up…

The bottom line is that the next 5 – 8 years could be incredibly dynamic.  It’s possible that both Google and Facebook could be shells of their current selves – or gone entirely.

They will have all the money in the world to try and adapt to the shift to mobile but history suggests they won’t be able to successfully do it.  …

thumbnail (2)It’s a lot easier to start asking Siri for information instead of typing search terms into a box compared to thousands of enterprises ceasing to upgrade to the next version of Windows.  Google’s 76% market share.  Facebook’s 900 million monthly users.  They just aren’t as sticky as they seem.

And does anyone think the pace of change is going to increase in the next 5 years versus the last?  That we’re going to see fewer innovations, fewer start-ups trying more stuff on cheaper and more powerful processing power?  In all likelihood, we could have an entirely new way of gathering information and interacting with ads in a new mobile world than what we’re currently used to today.”
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If older web companies like Google and Facebook may not survive an Internet generation of 5 years because they can’t related to the changes of the Internet of today, how do you think the Asifa is going to?

Internet and web filters?  491 MILLION iPhone and Android Phones sold in 2011, and 60 MILLION iPad and Android pad sales, and are estimated at 657 MILLION smart phone and 100 MILLION pad sales for 2012! 

Can you say apps?  Social.  Touch.  Location based.  Full time access. 

Manage tomorrow’s problem, not yesterday’s.

More, G-d willing, tomorrow.

2 comments:

Tali said...

Fascinating food for thought.

I don't have an iPhone or apps, nor do I have any desire to acquire such things. Does this mean I'll eventually be the Mobile equivalent of those li'l old ladies who think their computer's CD drive is actually coffee cup holder?

Bob Miller said...

It would help a lot if the mushrooming information now exploding across our consciousness through ever-better gadgets was actually true! But so much of this info-glut is false or misleading at best. Every chance to communicate is a chance to spin.

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