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You've forgotten one of the best and, in this situation, most appropriate examples of a company effectively dying without an obvious challenger: AOL. When dial
by jballanc 13y ago
You've forgotten one of the best and, in this situation, most appropriate examples of a company effectively dying without an obvious challenger: AOL.
When dial-up was the only option to get "on-line", AOL was dominant. Those discs (and later CDs) were everywhere. The problem was, even though providing a dial-up connection is what made AOL into the behemoth it had become, I'd argue the real value proposition of AOL in the mid-to-late 90s was the "walled garden" version of the internet that they had created.
So, instead of bolstering their offerings in the "walled garden" arena, they fretted over the death-grip they had on their dial-up subscribers long, long after it became apparent than DSL/Cable had won the battle for your connection. (No seriously, they still have that death-grip...have you tried canceling a free AOL trial account recently?)
AOL "died", as most oversized companies do, by failing to pivot toward an emerging market in favor of holding on to their "sure thing". Look at your other examples: IBM failed to pivot away from mainframes (their sure thing) to PCs (the emerging market). Microsoft has failed to pivot from OS/Office software to Cloud/distributed computing. Apple, eventually, did manage to pivot from graphics and design to mobile devices. Google...well, Google pivots so frequently I'm surprised they don't collectively vomit from dizziness (though, they do still have a worrying dependence on search advertising for "real" revenue).
The reason I think AOL is probably the most apt example for Facebook to consider, though, is that Facebook was the primary beneficiary of AOL's failure to capitalize on the "walled garden" internet. Now, Facebook dominates this realm, but the question is for how long? You're idea that they should pivot towards photo sharing is interesting...but I couldn't say for sure (or, if I could I'm making waaay less money than I should be).
- b43w5 13y agoI agree - AOL didn't mature in tandem with the way users engaged with the internet. I think the same is happening to Facebook. People are fickle so there will come a point where the way people engage with social media changes and Facebook are powerless to stop that. They also don't really have a particularly unique offering. Ok Google doesn't either but it does have the engineering power and infrastructure to put itself so far ahead of the competition that it is able to keep its place at the top of the industry (yes it has many faults but...)...
- abrahamsen 13y agoIt is kind of fun how the failures didn't have to be. IBM did successfully enter and even define the PC market. Microsoft saw the threat of the Internet, and reacted swiftly to own it with Windows 95. Internet Explorer demolished Netscape, with illegal methods, but most people at the time also recognized IE as the better browser. Microsoft also got a strong foothold on mobile with WinCE/PocketPC/Windows Mobile. Google was an early entrance in social with Orkut, dominating some important emerging markets (Brazil, India). In each case the companies seemed to lose interest and refocus on their moneymaker divisions. It might be intrinsic to large companies: If you want to advance, you should work where the money is made. So the best and most ambitious people would go there, leaving the forward looking parts of the company to die of negligence.
- 7952 13y agoWhat is reassuring is that these companies where unable to make anything become completely dominant forever. We tend to obsess over one part of the stack for a few years and forget the necessity of other parts. Another part of the stack will reassert itself and allow someone to challenge dominance. For example, html5 replacing flash is heavily driven by mobile browsers which depended on an evolution in hardware (touch) for them to become prominent. Yet Microsoft pushed silverlight.
- dredmorbius 13y agoEven without becoming perpetually dominant, many of them exercised a huge amount of control over a large area for a long time. IBM from the 1930s through the 1990s, Microsoft from the 1980s through the 2010s, AT&T from the 1910s through the 1980s, etc. There are cases to be made for these reigns being useful: AT&T spawned Unix and (in part) TCP/IP and the Internet, IBM spawned much IC development, Microsoft proliferated cheap and standardized x86 CPUs. But each also quashed competition in the form of both other firms and competing technologies: AT&T, despite the role UNIX came to play in packet-switched networks, explicitly rejected them for its own network recognizing that this would undermine its own dedicated-circuit switching. Microsoft's treatment of competitors is legion, but it's IBM we have to thank for the term "FUD".
- 13y ago
- mparr4 13y agoAgreed. I think the AOL:Facebook comparison makes the most sense. All of those ads prompting you to visit a company's Facebook page are today's version of the "find us at AOL keyword So-and-so" that you used to see all the time in the late 90s.
- tonyhb 13y agoWow, AOL keywords! I forgot those existed. You're right – find us on Facebook is this decades version.
- dredmorbius 13y agoYeah, well, I wasn't going to do a full industry history. AOL is pretty epic, though, particularly counting the spectacular disaster of the AOL - Time-Warner merger. I'd count Yahoo as another dead contestant.
- the_watcher 13y agoThe crazy part about AOL is that it's still got a massively profitable division thanks to people who simply haven't switched off of it.