Will Google, Facebook, Apple, and Microsoft reach their 100th Anniversary, like IBM?

IBM 100 YearsIn 2011 IBM celebrated its 100th Anniversary with a bang. The company was a merger of three companies: the Tabulating Machine Company, the International Time Recording Company, and the Computing Scale Company, and since then it has gone through many changes from high tech product manufacturing to a service-based company. But despite all these ups and downs, company survived and now employs over 450k employees, has a 100bn turnover and operates in over 170 countries!

In hindsight, two reasons stand out for IBM’s success. First, their ability to reinvent themselves time and again, and that includes change in the business model, new products and services, geographical expansion and becoming a more agile firm by cutting resources or selling off their business units, such as selling their hardware business to Lenovo. Second, focusing more on the enterprise market than business to consumer, as the enterprise market is more long lasting and cash rich.

Now the question is, will tech giants from the current age such as Google, Facebook, Apple, and Microsoft exist 100 years after their inception, like IBM?

And like IBM, the answer will lie in their ability to reinvent themselves and rebound at every tipping point they will have in their 100-year voyage. In fact, these giants have already gone through some rough patches and managed to negotiate them so far.

However competition is getting bigger and stiffer day by day, and the reduced price of infrastructure has levelled the playing field between big players and start-ups such as Dropbox and WhatsApp, which have recently disrupted and created their own space in the already established cloud and private messaging industries.

We have looked into some factors these companies are focusing on to survive longer.

Buy Start-ups with a huge user base or serious IPs

The big cash companies are not shying away from buying start-ups and already are on a spending spree. Microsoft bought Yammer, Skype and Nokia; Google bought Next, YouTube and Motorola ( which it then resold); Apple bought Topsy; Facebook bought Instagram, WhatsApp and Opus. However this is a very high-risk policy. Recently Google took a hit when it sold Motorola Mobility at half the buying price.

Keep innovating and launch new products and services

Another proven theory is innovate to keep going i.e. keep launching new products and services to remain ahead of the competition. Google and Apple are really ahead in this game and have huge future product pipelines ranging from wearable technology to renewable energy products to space programs. Microsoft and Facebook are more focused around mobile and cloud friendly technologies.

Expand aggressively into rapidly growing BRICS countries

Expanding business into emerging markets (Far East or BRICS countries) is a very popular option these days, as consumer spending is increasing in these markets and so is a craze for products and services from tech giants. This is therefore a great opportunity for these companies to leverage that market.

 

But there is problem with proven methods:

I am not sure if buyouts, geographical expansions and new products and services are enough to keep big companies going for another century, as product life cycles are shrinking. These days people discard their new phone in months, change cars in year or two, change jobs every three years and homes every five or six years. In this environment people don’t often remain loyal to one company’s products and services. Plus, in order to maintain cash flow sustainability, Google, Apple and Facebook, and to a certain extent Microsoft, have no serious products or services like CRM, ERP, DB servers or Cloud computing with which to break into the enterprise market. Finally, companies like Alibaba and Samsung from the Far East are also making inroads into the Western market and presenting very stiff competition.

Perhaps only the guardian of crowdsourcing might survive

I think, if Google, Apple, Facebook, and Microsoft really want to survive that long, they have to create a worldwide cross platform ecosystem (not like their existing vertical App stores) to crowdsource any future product and service, so nothing slips under their radar. Otherwise they will perish simply because easy access to high speed internet, software infrastructure (e.g. cloud computing), and technical talent abundance far beyond their labs means new product and service creation won’t be limited to these giants.

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Marissa Mayer must play bigger gamble than Summly to revive Yahoo!

Yahoo

Since Marissa Mayer took over Yahoo, shares are on continuous rise and behave gone from the slightly embarrassing price of $14 to a rather respectable $26. And all credit should go to her quick turnaround approach of product consolidation, management makeover, site revamp, acquiring new-generation start-ups and drive to remain top of the interest graph.

Perhaps it is too early to form an opinion, but recent progress hasn’t shown any real intent from Yahoo to indicate that they would really like to make inroads into the very social media and cloud oriented content generation world, as all these new developments are around enhancing their existing products and linking to Facebook or Microsoft, which rely more on content aggregation than crowd generation.

So let’s look more deeply at Yahoo’s current situation, potential issues and what might help them to overcome these problems and bring old glory back!

Yahoo is consolidating products and services, cutting costs and trying to acquire some new generation start-ups

Marissa joined the company after the Jerry Yang boardroom wrestle and then the very untimely and embarrassing CEO (Scott Thomson) exit, but she is trying very hard to bring focus back to company’s core competence and she and senior management indicated  that Yahoo’s objective is to create personalised and interest-focussed mobile content for users, so that display ads, the prime source of revenue, can continue to grow and give her and the company breathing space to decide their future direction.

One undeniable fact that still hugely favours Yahoo that its home page is one of the most visited and where people spend the longest time, especially in the USA.

But this is not enough

Google has been doing it for many years and the rise of the likes of Facebook, Twitter and the now revitalized AOL as display ad networks means that Mayer knows that display advertising is a very competitive field and she needs some real wow factors to remain in the game long term. Therefore, she has already started exploring other avenues to increase shareholder value, ranging from cost cutting via senior management exits and staff redundancies, to discarding some non-profit products, trying to shed some shares from Alibaba, raising stakes in Yahoo Japan , buying start-ups like Summly, Pinterest-style news startup, Snip.it, video chat startup OnTheAir and Stamped; rumours about Zynga and Dailymotion are also circling around.

Overall, Yahoo, with core competence around content generation and leveraging that via Yahoo Mail, mobile and web and vertical search, are determined to enrich their content factory, which may be a quick fix, but looking at current trends of content consumption or distribution from text, images, music , social network and/or video, Yahoo don’t have any products or services in the top two or three options, which means the future is not that rosy until Yahoo/Marrisa Mayor come up with a product line that can stand out from others in this biz!

What can Yahoo do to become a $10bn company?

If Yahoo wants to regain top spot, they know they have to fight with new content generation tools like Facebook, Twitter, blogs like Huffington Post, and new generation vertical search engines like Kayak.com, TripAdvisor etc. Only acquiring content aggregating companies like Summly or some other start-ups might not be the long-term solution; rather they have to look to more cutting edge and matured companies such as:

Yahoo do an AOL and buy Tumblr/Disqus

AOL’s revival is legendary. Tim Armstrong kept to basics i.e. generating content, but this time did something out of the box and bought new generation blogs like Huffington Post, TechCrunch and Engadget, which means they are very much in the social and interactive world and now in the top five most read categories for politics, sports, technology and others.

If Yahoo buy blog hosting sites like Tumblr with over 200 million blogs, or comment generation tool like Disqus, they would have a very cutting edge solution to integrate their display advertising concept!

Yahoo does a Google and aims for an enterprise presence by buying DropBox

Even though Yahoo Mail is still a huge presence, they failed to materialise that in the enterprise arena and I think that, in the same way that Google drive mail and business apps, Yahoo must expand their offering to businesses. Perhaps buying a company like Dropbox, in the same way that Microsoft bought Yammer, could be the way forward?

Yahoo buy a new generation of vertical search engines like TripAdvisor;

Buy Yelp or FourSqare to provide some real-time location-based mobile services – this will give a huge boost to their mobile push;

Buy WhatsApp or another new generation messaging tool.

Like Microsoft with Skype and Google eying up WhatsApp, Yahoo should also jump into the race, as SKYPE, Twitter and WhatsApp have, and change the way we message now – Yahoo must grab this space before it’s too late!

Yahoo must bring search in-house

Coming from Google, no-one knows better than Marissa that search is the trick to make bucks in the online arena, because search is about intent, not just interest, and intent to buy something can drive more money than just mere interest.

Conclusion: Play big with $4.8bn cash – otherwise slow death

Overall, Yahoo is great company founded on aggregating content and creating a one-stop shop portal along with Yahoo Mail and search. However along the road they missed the social, search and mobile boat which reduced them from one of the web giants to a company struggling to survive, and if Yahoo want to compete with Google, Facebook and Twitter now, they might have to take make some drastic changes like buying Tumbler, Dropbox, Zynga, Disqus, or Yelp, who can help them crowd source content and make inroads into the enterprise market. If they don’t take a major step, some smart tech teamed with old-fashioned aggregation and directory structure will only lead to slow death.

In other words Marissa Mayer is right to push for interest graph and mobile-oriented content but rather than banking on small start-ups, she must make a bigger gamble by buying established cutting edge tech companies and restoring the advertising space that used to belong to Yahoo, who had over $7bn turnover in 2008!

Is Google (not Facebook or Twitter or LinkedIn) poised to win the Graph war?

Recently we have had big announcements from Facebook, Google, Twitter and LinkedIn around improving or extending their search technologies! Facebook announced a social graph to leverage social relationship data, and then Twitter introduced human-aided search results to cut the noise and deliver more precise and interest-driven data via search results; The LinkedIn CEO, Jeff Weiner, claims that LinkedIn will be the home of a world economic graph to consolidate the human resources and skills market, and Google has its eyes on a knowledge graph with more holistic data to enrich consumer searches with complete information. So what exactly is this graph war; why are these companies insisting so much on graphs to leverage their platforms; and who will come out as the eventual winner?

We have looked at all these graphs and analysed the pros and cons to reach a verdict on who might be going in the right direction.

Facebook joined the search bandwagon by introducing the Graph Search beta version. No doubt the Graph Search premise is founded on very lucrative logic, which promises to enable the Facebook user to search things within their extended social circle, and as studies suggests that 73% of the time we do, or buy, things based on friends’ references or recommendations, we might end up using Facebook search more often than even accessing the newsfeed or timeline or Google!
In addition, Facebook will, at some point, release this whole functionality to developers via APIs to integrate to their apps and/or websites, which means, like Facebook Connect, the site can now integrate Graph Search to enrich their customers’ journeys with recommendations, reviews and so on i.e. higher conversion!

Pros:
• People can find relevant information based on their interests, activity and location within their social circle e.g. “best pizza restaurants in west London area” and “SkyFall”.
• Businesses can now weave in their ads to search results, similar to Google AdWords i.e. higher conversion.
• Facebook Connect with Graph Search enables websites and apps to integrate customers’ social circle’s sentiments for corresponding products, to help them in decision making.
• Graph Search analytics will enable businesses to have better customer insight, as they would now know exactly what people are looking for through search keywords, locations etc.

Cons:
• Privacy and Data Protection is still a huge concern for Facebook and Graph Search
• Processing 2.5bn likes, 1 bn comments and 3bn pictures upload every day to produce an accurate search graph is not easy.
• Facebook Mobile integration is running behind.
• The data war between Twitter and Facebook is leading to a decoupling, so social data is incomplete.
• Facebook uses Bing as default search engine, which may be a liability rather than an asset.
• Facebook is often used to show off i.e. we don’t share everything we buy on Facebook!

Twitter Interest Graph and Human-Aided Search Results
Initially Twitter started to sell their advertising products based on an interest graph, but it has also recently enhanced its search algorithm by introducing human element (using Amazon Mechanical Turk) to ensure people get the best results when they search live events based on hashtags, keywords, pictures and/or with certain linguistic emotions. Personally, I am the biggest fan of the Twitter platform for finding information, and if they manage to fix their search it could really be a game changer, as the amount of information from various sources they have is unmatchable!

Pros:
• Business can tap into the latest trends to promote their products and services.
• Businesses can use Twitter sentiments analytics to build their products and services. Twitter sentiments are used by the stock market and TV industry.
• Most of Twitter data is consumed on mobile clients, meaning businesses can tap both mobile growth and crowdsourcing!

https://twitter.com/alexhisaka/status/291312770064986112

Cons:
• Despite introducing human intervention, the processing of 1bn 140 chars tweets with free text, emotions, images and videos every two days for accurate search results is still a humongous tasks for Twitter.
• Twitter are reluctant to share profit with the community, which means businesses who are banking on customers to share their services on Twitter, in order to get maximum traction, won’t see much sharing as there is no benefit to the consumer.
• Interest and commerce don’t go hand in hand.

LinkedIn’s vision to produce an economic graph in the next 10 years

LinkedIn’s vision to produce a world economic graph sounds like one of the most realistic and promising approaches. Over the years professionals have already built up their profiles, using the LinkedIn platform for both professional and personal development, and Now LinkedIn is aiming to weave profession, location, and skill sets together to create an economic graph of the business world, which means they can map out human resources and skills supply and demand stats by location, industry, job description etc.

Pros:
• Business development executives are using, and will continue to use, the LinkedIn network for lead generation.
• The recruitment industry is using, and will continue to use, LinkedIn to find best candidates, and vice versa.

Cons:
• Like other crowdsourcing tools, it has data quality issues.
• LinkedIn doesn’t link with Facebook and Twitter data, which would allow a more complete economic graph.
• How will they cover tacit knowledge and skills to complete the economic graph?

Google Knowledge graph (with top search algorithm, G+ , YouTube, Google Place, Android)
Despite all the noise around Facebook, Twitter and LinkedIn graphs, Google has also recently enhanced their search result displays with the introduction of a knowledge graph concept, to give a holistic view to site visitors. For their knowledge graph, Google uses its top quality search algorithm to pull data from various sources including Youtube, Google Images, Wikipedia, Google News, Google Maps and various blog platforms to ensure users have all the relevant information in one place. However, Google still faces severe criticism for its inability to show more recent (i.e. Twitter and Facebook) data in its knowledge graph. To combat this issue, Google is rigorously trying to collect current trending data on G+, which will eventually feed into the knowledge graph. And all kudos to Google, in no time G+ has already become the second most sought-after social networking site!

Pros:
• The knowledge graph with the best search algorithm, YouTube, Google Images, Google Maps, Google News, and G+ data, gives far wider reach to businesses for both promoting their products and understanding their customers.
• Surely behind the scenes Google is feeding Android and DoubleClick experiences into knowledge graph to let businesses and consumers leverage graph features on the mobile platform?

Cons:
• The knowledge graph is missing Facebook, Twitter, Pintrest and Instagram data , which have become part of consumers’ online profiles.
• Businesses perceive G+ to be more or less an SEO tool.

Conclusion

Overall, we know Facebook’s social graph and Twitter’s interest search graph have huge potential to benefit both consumers and businesses, but data privacy, quality of search results, reluctance to link to each other’s data and, let’s get real, how many times we really like to talk about our shopping, apart from when we are knowingly or unknowingly showing off, means all these social networks, despite their claims to breaking the code, have a long way to go before becoming forces to be reckoned with when it comes to understanding consumers.

However, LinkedIn has so far managed to make its niche and is heading in the right direction to become a B2B lead generation and job search engine, by focusing only on professionals and their working relationships!

And despite many critiques and predictions of Google’s demise, it continues to grow year by year at very healthy rates, which demonstrates that when it comes to buying or taking any decision, people still go at Google to find information and Google’s strong grip on the mobile platform via Android and DoubleClick is helping to shape Google’s knowledge graph, to make sure search results now comprise all-round information via Google Maps, Google News, Google Images, Google+ and YouTube, so that consumers can find all they need to make a decision.

All in all, I don’t see any feasible threat to Google in the near future and in fact if they can pull together worldwide content including ecommerce site content, location data, YouTube, Google News, Google Images, Google Maps and Google+ content and process and render this via the knowledge graph in the way they have done for web search, they have a clear winner and are likely to remain on top of the game for a long-long time to come, even in the graph war!

Is the threat of Apple’s demise real?

Lately Apple has taken lots of flak from various areas of life. It all stems from their on-going patent battle with Samsung and apology fiasco on their website, workforce issues in China; then the IOS Map debacle, fluctuating share prices, delays to the new iTunes version, cutting staff hours at Apple stores, Ping (social network) closure, brand depletion, and the final nail into the coffin was the bad PR they got for publicly firing two very high-profile executives. In addition, many experts believe they are running out of ideas (or products) as both iPad and iPhone have already peaked.





To a certain extent, I agree that this $100+ bn dollar cash-rich company is now running toward a cliff-edge, where their blunders could snowball and roll them down into a very deep valley, with no prospect of climbing out again. I think an analogy with Yahoo, Nokia, Blackberry or Intel might offend some diehard Apple fans, but these companies were at the top and vigorously pioneering their respective industries, and whether it was their misjudgement of customer needs or inability to innovate, they all ended up in a very sorry state and are now struggling to survive.

Let’s go back to the original topic – is the threat of Apple’s demise real, or are people just panicking because they have never before seen such bad PR coverage of their beloved company? Or have tablets, laptops, desktops and phones already peaked, leaving little for Apple to milk? We all know Apple is very tight-lipped about its future products i.e. we don’t know what the company has in its pipeline to keep their revenue stream flowing, but looking at their immediate competitors, Google, Microsoft, Amazon and Samsung, it can easily be anticipated that Apple’s near-future product development focus would be around phones, tablets and maybe TV.

So how can Apple possibly keep its supremacy in the tablet, TV, and phone market, when both Google and Microsoft, along with Samsung, who after playing catch-up for a while now seems to be looking confident and in control of its product range, are making good commercial progress? An obvious answer would be innovation: coming up with a completely new product range that can catch consumers’ imaginations; however, is it conceivable that Apple still has the necessary extraordinary talent, content (such as exclusive music , movies or TV programs), leadership, showmanship (don’t forget the charismatic Steve Jobs) or technology edge to carry on innovating the way it did before.

I know all the above analysis makes one think that the peril of Apple slowing down is real, but we should not forget that this cash-rich company with a $550bn market cap is still very agile, with an engineering focus, a loyal customer base and a very stable top management. They are very capable of turning the company around with a new product range as fast as, or maybe faster and better than, their competitors.

Apple still dictate their publicity terms, with no official Facebook, Google+ , Twitter or Pinterest Channel. In Tim Cook and Sir Jonathan Ive, they have one of the most trusted and talented leadership teams. iPhone and iPad are still the fastest selling products in the world! The Apple App economy has created over 466k jobs;



And don’t forget, Apple has yet to fully leverage their popularity (or cult following) in the biggest consumer markets (China and India = Chindia) where another platforms like Google android and Samsung failed to make mark specially among non price sensitive consumers!


And, as they have done with tablet and phone, if they can break into TV App market, where most of the content is consumed, Apple will remain the king.

Also, if Apple can come up with product diversification in the same way as some of their competitors (e.g. Google, who are venturing into driverless cars and social media integrated glasses; Jeff Bezos (Amazon), who is investing in a private space travel program; Microsoft, who are now introducing music on their XBox games console) then who knows. Apple may already have a surprise in store?

Last but not the least, another unthinkable yet very possible  thought comes into mind, what about, if Apple starts selling iPad at £99, iPhone £49 and iPod at £29? I think we will have riots on streets to grab remaining stock at any part of the world and Apple market share for all gadgets will sky rocket at supersonic speed!

Overall, still there are many factors such as Chindia market share, Apple TV, Price war,Tim Cook, Sir Jonathon Ive  and/or most likely another gadget disruption-those can help Apple to keep their lead over competitors!