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Tech’s ‘Frightful 5’ Will Dominate Digital Life for Foreseeable Future
- sgt101 11y agoerrm - badiu? tencent? Also the Foreseeable Future is quite a short time in this context.
- 50CNT 11y agoSecond that, Baidu(perhaps) and Tencent(certainly), and maybe Alibaba holdings as well. These companies are operating in a country where massive investments are being thrown around, and a product might go from 0 to 90% market penetration in half a year, mobile payments work, and massive fulfilment infrastructure. Wouldn't be surprised if they weren't already eyeing the American market, and suddenly decide to go on a massive acquisition spree. Only that many more C2C startups in China they can buy up or invest into.
- kcorbitt 11y agoThe title says it all. "Tech’s ‘Frightful 5’ Will Dominate Digital Life for Foreseeable Future." But since we're talking about technology, "foreseeable" translates to about two years. ;)
- johansch 11y ago(Microsoft was dominant for 1-2 decades.) I think it's more likely we'll see at least another 5-10 years of dominance of the "Frightful 5".
- icebraining 11y agoExactly; it's really a sign of times when "much of the last half-decade" is considered significant when judging who owns a market.
- Shivetya 11y agoWithout good patent reform they can pretty much stymie any true threat. Then when the threat is mitigated they can snap up the technology increasing their buffer.
- wobbleblob 11y agoTwo years? I was just wondering if that article was two years old.. What about Samsung, Foxconn, Baidu, Tencent, Alibaba, JD.com How dominant are the frightful 5 outside of North America and Western Europe today?
- serge2k 11y agoDoubt it. These companies are going to be around a while.
- Cthulhu_ 11y agoThe problem, IMO, is that any new tech startup that may one day grow to be as these ones, get taken over (for exorbitant amounts) by these very parties once they're starting to gain some traction. In fact, that seems to be the business case for a lot of startups.
- AndrewKemendo 11y agoIf you look at any massive company, in the history of business, they all grew and gained market dominance via acquisition.
- malandrew 11y agoBut there is a difference between maintaining dominance through smart strategic investments (like Google acquiring DoubleClick, Android or Keyhole or Facebook acquiring Oculus) and defensive investments because you missed some boat in your segment of the market (Facebook acquiring Whatsapp or Instagram)
- elcapitan 11y agoForeseeable future, unless .. black swan. And so on.
- akanet 11y agoHonestly, I'd consider five entrenched players with frequent ups and downs to be the signs of a fairly competitive industry. Indeed, each of the five seems to offer roughly comparable products to at least two of the other four players, suggesting that consumers are getting a pretty good deal out of all this.
- johansch 11y agoIt's a bunch of different industries though. Social: owned by Facebook. Search: owned by Google Advertisement: owned by Google. Mobile platforms: owned by Apple and Google. Actual competition here. No wonder things have been moving quickly. Shopping: owned by Amazon. Cloud computing: owned by Amazon. Google and Microsoft are trying to break in, so there's competition and progress.
- collyw 11y agoFacebook's revenue is through ads though.
- icebraining 11y agoFacebook is itself sustained by advertising, so how can Google own it?
- johansch 11y agoGoogle's revenues are 4x larger than Facebook's. But sure, Facebook are probably getting there some time.
- scholia 11y agoIn the previous generation of competition, the industry structure changed from vertical (IBM, DEC, Wang etc) to horizontal (Microsoft, Intel, Cisco etc). The new generation of competition is between ecosystems. These are both horizontal and vertical.
- walterbell 11y ago
- cconcepts 11y ago"the giants are among the top 10 most valuable American companies of any kind." Depends what you mean by "value". If current price Mr Market is willing to pay = "value" then yes. If value is a measure of long term return based on another set of measures like profitability etc then basing the future dominance of these companies on their current stock price seems a little speculative.
- mcherm 11y agoSo the thesis of the article is that these 5 are permanently entrenched; that none will be run out of business (in the medium term I agree just because of size) and that no new ones will arise (really?). The explanation is that these ones each control a network-effect-driven platform (and that network-effect-driven platforms arose only during a certain time period). They list the network-effect-driven platforms: desktop (MS), web search (Goog), mobile OS (Goog, Application), online advertising (FB, Goog), cloud (Amzn, MS, Goog), shipping (Amzn), and "human relationships" (FB). This thesis is absurd. By that theory, Google is fully dominant and Apple is about to fall out of the club. The idea that no new network-effect platforms can arise is unstated and unsupported. I usually expect better work from the Times.
- gamesbrainiac 11y agoYet more clickbaity article titles with little to no real content.
- jmsdnns 11y agoInteresting they didn't include Netflix. Morgan Stanley talks about the FANG stocks, meaning FB, Apple, Netflix, and Google, and I usually take issue with that for not including Amazon.
- AznHisoka 11y agoI don't consider them tech. The article even says "Netflix hosts their movies on Amazon".
- jmsdnns 11y agoI think you're right. I was thinking in terms of stocks and not raw tech. Thanks.
- mywittyname 11y agoYes, Netflix has pivoted themselves as a content company, a la HBO. Then again, the line for "tech company" is beginning to blur, since every company is so heavily reliant on technology.
- Silhouette 11y agoNetflix is an interesting study in this respect, because they demonstrate both the immense potential if you control a dominant tech platform, and how at the same time relying on platform ownership can become your Achilles heel because you're ultimately just a middle man. With the likes of HBO launching their own services to distribute their own original content, they have relatively little need for Netflix. Netflix, on the other hand, is nothing without good content, and in the face of declining third party content it has little choice but to move into creating its own to remain relevant. And then suddenly it's "just another" content producer, instead of "the" platform.
- runako 11y agoFANG (as indicated by Morgan Stanley) is FB, Amazon, Netflix, and Google: http://blogs.barrons.com/techtraderdaily/2015/12/22/still-a-f-a-n-g-year-in-16-says-morgan-stanley-maybe-qualcomm-apple/ http://blogs.barrons.com/techtraderdaily/2015/12/22/still-a-...
- ianamartin 11y agoSad to see Farhad Manjoo playing the click bait game. That article is so utterly lacking in content that I would expect it to be on buzzfeed. He might as well have said #8 will surprise you.
- forgetsusername 11y ago>Sad to see Farhad Manjoo playing the click bait game. It's an article in a mainstream newspaper for a mainstream audience. >That article is so utterly lacking in content that I would expect it to be on buzzfeed. The purpose is to explain how and why these "tech" companies are expanding into things that most people wouldn't associate with them, and the reason is the idea of the "platform". That's probably not familiar to the layman. By the way, BuzzFeed does decent work.
- clentaminator 11y agoWhen three more consumer technology giants exist (perhaps oriented towards the dreadful Internet of Things), can we start to call them The Hateful Eight?
- teddyh 11y ago“In the mainframe industry’s glory days of the 1960s, it was ‘IBM and the Seven Dwarfs’: Burroughs, Control Data, General Electric, Honeywell, NCR, RCA, and Univac. RCA and GE sold out early, and it was ‘IBM and the Bunch’ (Burroughs, Univac, NCR, Control Data, and Honeywell) for a while.” http://www.catb.org/jargon/html/D/dinosaurs-mating.html http://www.catb.org/jargon/html/D/dinosaurs-mating.html
- beatpanda 11y agoWho's losing? The users are.
- fixermark 11y agoHow?
- teddyh 11y agoMonopolies and oligopolies are always bad for users. Not to mention that many of these companies are in the business of things which directly harms users: Advertisements, Cloud computing, Software-as-a-Service, etc.
- fixermark 11y agoAdvertisements are controversial, but this is the first assertion I've heard that SaaS and Cloud computing directly harm users.
- oldmanjay 11y agoClearly you haven't read the religious tracts from the free software believers.
- belorn 11y agoThe harm comes from users who treat third-party servers as if it was equal safe and private as a server standing inside the company walls. How many lawyers use SaaS or cloud computing and put information trusted by their clients in the hands of third-party (without ever informing their clients). How many hospitals has data flying around, in plain text, about people very sensitive situations that they entrusted to their doctors? How many political parties and government institution has databases being sent to third-party organization because they move their internal servers to the cloud and didn't consider the impact? There are laws, and the laws governing how sensitive data did never get enforced before it became to late. Now we are in the situation that enforcing a strict control would paralyze governments and organizations all over the world, and as a result nothing is being done.
- m_mueller 11y agoI'm doubtful that FB should be on that pedestal. Social is all about the hip new thing du jour and I wonder whether FB can keep up with buying everything new in the long run since their revenue is still not great. Their shady tactics when trying to take over new areas like video show a certain amount of desperation IMO.
- ssharp 11y agoIf you had to cut the list, they'd clearly be first to go, but I still think they have a lock on a lot of people's attention that I don't see loosening any time soon.
- johnchristopher 11y agoFacebook has been around for 10 (or 12, depends how you look at it) years now. That counts for something (but what?). Not bad for the world's most complicated and featureless forum.
- CPLX 11y agoInstagram and Whatsapp are pretty compelling features these days.
- johnchristopher 11y agoThere are hardly Facebook features. There aren't branded as such either. There are separate products.
- julianpye 11y agoFacebook is the most agile of the companies. Two years ago it was a desktop web company, now it is all mobile. With Instagram it arguably made the best tech acquisition of this tech generation - compare that to what Yahoo spent money on. So don't see Facebook as a social app, see them as a powerhouse capable of making big moves and being able to respond to trends better than any other player. Since it has a hard time accommodating new functionality under its Facebook brand, it's perfected the art of managing multiple consumer brands.
- tempodox 11y agoIs it speculation time again? Slow news day?
- amelius 11y agoYes, probably until one of them invents strong AI.
- dhimes 11y agoThere's one issue that can severely damage two of them: Facebook and Google's business value come completely from taking away privacy. Apple, Microsoft, and Amazon also do so of course, but they can offer strong business models that doesn't should the need arise. They won't be as profitable, but they won't die either. At the moment Americans don't care about this issue, because they balance the lack of privacy against their fear of terrorism. But if they start to care things could turn around in a hurry for those two and we would see an interesting scramble.
- cognivore 11y agoI find it curious, because only of of them produces something I use everyday - Microsoft. It's more like the "Ubiquitous One and the Take Or Leave 'Em Four." And even Microsoft doesn't "dominate" my digital life. I think it's about the choices you make. You're choosing to be dominated. Maybe you get some benefits using those companies (Prime looks good sometimes), but you don't have to be involved with any of them. That's not domination.
- pinkunicorn 11y agoI'm surprised, you don't Google everyday? Not even once?
- cognivore 11y agoI was actually discussing this the other day with friends. I use duckduckgo.com for searching, Firefox for a browser 95% of the time, I don't use my Gmail or G+ hardly at all anymore, and the one thing I really like from Google, the Picassa desktop app, I don't use every day, more like every couple of weeks (or longer) when I update my website. It's not a conscious decision (well, except for the searching part - I like the no tracking on DDG) - Google just doesn't offer things I need.
- pinkunicorn 11y agoPretty interesting I must say. Maps? Oh my I'm just entrenched into Google products.
- Noughmad 11y agoOn the other hand, I use many Google's services (starting with search and mail), but not much from the other four. However, we are not really representative of most people. One has to actively search for OS-es other than Windows or OSX, one has to actively for email providers other than Google or MS, and it's downright impossible to get a smartphone without any of them. The large majority of computer and internet users just (correctly) choose the most popular option. The second thing is that you can often choose one of those five, but it's much harder to go without any of them. When you use Bing instead of Google, or AWS insteaf od Azure, or Android instead of iPhone, you're not really escaping their stranglehold. You're just shifting the balance of power between those five.
- oldmanjay 11y agoI am not particularly frightened. I'm not even clear why I should be.
- dannylowney 11y agoInterested to see how this pans out in the next 3 yrs. I see Facebook changing
- serge2k 11y agoAmazon over Microsoft?
- AndrewKemendo 11y agoSo I am wondering if "this time it's different" when it comes to market entrenchment because these 5 companies have so much cash that they buy any potential competitor before they get out of hatchling phase. I mean when you look at the range of capabilities, like the article states, they pretty much have a finger if not a whole hand in what any analyst predicts as future technology: Augmented Reality, Self Driving cars, Radical Life extension, AI, Advanced Logistics etc... It's hard to see a future when they are unseated.
- metaphorm 11y agoserious question, since I'm confused, why is the word "frightful" used here?
- Apocryphon 11y agoGiven how many times the phrase "foreseeable future" was discussed in this comment thread, maybe they should rename them the "Foreseeable Five".
- metaphorm 11y agoseriously. and what is the threshold of "foreseeable"? like 18 months, tops?