News Topic: cnBeta Perspective Observation\The online edition of Forbes in the United States published an article today by Eric Jackson, stating that due to the deep-rooted differences between new and old companies in the internet sector, when new models emerge, old companies cannot adapt to new trends at all. This can be supported not only theoretically, but also historically. Therefore, Google and Facebook are very likely to completely disappear within the next 5 to 8 years. The full text of the article is as follows:
Two Schools of Thought
In our view, Google and Facebook are both giants in the online world, and they both seem poised to endure indefinitely. However, with technology developing rapidly today, there is every reason to believe that these two companies will completely disappear within 5 to 8 years. This disappearance does not refer to bankruptcy, but rather a MySpace-style disappearance. This viewpoint is not only theoretically supported, but history can also serve as evidence.
When I was doing my doctorate 15 years ago, I was classmates with Don Hambrick. He is a scholar best known for studying the impact of management and boards on organizational strategy and performance. The core idea of this school is that executives and directors have a significant impact on the fate of an organization. In addition, their backgrounds (including education and career paths) also greatly influence their worldview, competitive perspective, and choices.
There is also a school called population ecology or organizational ecology, whose view is exactly the opposite: managers do not have much impact at all. This viewpoint originates from sociologists who began studying organizations as early as the 1970s. This school believes that, compared to CEOs and the choices they make, the fate of an organization is more closely linked to the overall 'industry effect.' They study the birth and death rates of organizational populations, as well as the impact of age, competition, and surrounding environmental resources. Most scholars of organizational ecology come from the University of California, Berkeley.
As a graduate student, I did not have much time to study this ecological way of thinking. I believed that the personal abilities of executives were sufficient to overcome external challenges. We always focus on high-performing CEOs as case studies, but in the eyes of sociologists, this is equivalent to excessively praising the intelligence of lottery winners.Three Generations Living Under One Roof
As I grew older, I witnessed various advancements in technology and the mobile industry, which led me to irresistibly study this type of ecological perspective. I gradually realized that the timing of a company's birth increasingly affects its long-term prospects. Thinking about the differences between the post-40s, post-60s, and even post-80s generations, it's not hard to understand: each generation has a different worldview, which ultimately influences a variety of behaviors.
In the technology industry, there are also three generations of companies:
- Web 1.0 (companies founded from 1994 to 2001, including Netscape, Yahoo, AOL, Google, Amazon, and eBay);
- Web 2.0 or the social generation (companies founded from 2002 to 2009, including Facebook, LinkedIn, and Groupon);
- The mobile generation (companies founded after 2010, including Instagram).
Whenever a new generation of technology companies emerges, the previous generation of companies seems unable to adapt to the latest changes. Web 1.0 companies excelled at aggregating data and displaying it via a portal model. Google performed better than AltaVista, Excite, Lycos, and all other search engines. Amazon's e-commerce site provided a one-stop experience.
By the time Web 2.0 rose, the allure of social connections greatly increased. MySpace focused on music, Facebook targeted colleges, and LinkedIn valued white-collar workers. Digg, Reddit, and StumbleUpon showcased users' originality while increasing the overall value of the community.
However, Web 1.0 seemed forever unable to grasp the essence of social networking and therefore struggled to fully leverage users' contextual information. Even if everything was clearly displayed, the old companies still could not adapt to new trends. Why did Amazon struggle in the social realm? Why did Google make so little progress? To address these problems, they spared no expense. Yet even so, the model that had initially brought them success became a stumbling block for new thinking.
Social companies born after 2010 have a completely different worldview. These companies regard mobile phones as the primary platform for their applications (sometimes even the exclusive platform), with Instagram being a typical example. They never even considered launching websites. In their view, mobile applications will almost completely replace websites in the future.
Web 3.0 will never be born because the Web is dead.
Theoretical Support
Web 1.0 and Web 2.0 companies still seem to have not found ways to adapt to this new trend. Facebook is the king of social media and will go public in a few weeks, with a market value likely to exceed $140 billion. However, it is still losing money in the mobile sector, and compared to the desktop experience, its iPhone and iPad apps appear too "shabby." Its main goal remains to profit from the website, while the path to generating revenue in the mobile market is still unclear.
Web 1.0 companies once tried to adapt to social networks but did not succeed. Google, which launched last year in this area, has already become a "ghost town." It seems that for Facebook to integrate into new trends, it will not be easy either.
Organizational ecologists have proposed the concept of "liability of obsolescence": over time, the product strategies on which organizations rely for survival will increasingly struggle to fit their environment. This is likely to become an effective theory for interpreting the contemporary world.
Are Google, Amazon, and Yahoo outdated? They are still growing, with large user bases and outstanding managers.
But whenever a new trend emerges (first social, now mobile, and there will be others in the future), older companies become increasingly marginalized and closer to decline. Moreover, the development of the tech industry seems to be accelerating. Last week, Apple CEO Tim Cook made an interesting statement during a conference call:
"By the end of last quarter, it had been just two years since the first generation iPad shipped, and cumulative sales had already reached 67 million units. Mac took 24 years to achieve this, iPod five years, and the iPhone a little over three years. But we were extremely satisfied with the performance of these products at the time. So I believe the iPad is a profoundly significant product."
Past Cases
Compared with 2000, Yahoo is almost an empty shell. Once users find new ways to access information on mobile, Google's desktop search business may also no longer be as it once was. Is Amazon also doomed? There seems to be no sign of that for now; even when moving into the mobile world, people still shop, but new mobile platforms may bring some opportunities that even Amazon cannot anticipate.
The development of mobile trends may also make it difficult for Facebook. As observer Hamish?Hamish McKenzie said: "I suspect Facebook will split its features into separate apps or HTML5 websites to adapt to the development of the mobile trend: one for messaging, one for viewing the News Feed, one for sharing photos, and perhaps one specifically for storing the address book. But differentiating the core product is likely to damage its vitality."
Looking back at history, it's not hard to see that Facebook's relation to mobile is just like Google's relation to social. Can acquiring Instagram change this situation? I don't think so. It shows that Facebook is anxious about emerging companies in the mobile industry, fearing being replaced. However, does merely adding a mobile app on a Web 2.0 platform change the essence? I highly doubt it.
Does this classification also apply to Apple?
Apple's essence is a hardware company, so it is difficult to categorize it this way. The former Ping social application had typical Web 1.0 characteristics. However, it successfully created a thriving app ecosystem through the combination of hardware and software. In a sense, as long as the iOS platform succeeds, the rise or fall of Web 1.0, Web 2.0, and mobile companies has nothing to do with it. Perhaps this is why many non-mobile companies want to emulate Apple. Google entered the hardware field by acquiring Motorola Mobility, and there are rumors that Facebook and Baidu will launch their own mobile operating systems.
Future Trends
Ultimately, the next 5 to 8 years will be incredibly turbulent. Google and Facebook are very likely to become hollow shells or even disappear entirely.
They will definitely spare no effort to adapt to the rise of the mobile industry, but history shows that such attempts are in vain. I often hear about the excellent data of Google Android. Eric Schmidt also once claimed: with value-added services, Android users could one day bring Google a profit of $10 per user per month. However, what precedent is there for Web 1.0 succeeding in the social field? I believe social companies will ultimately face the same fate in the mobile field.
Windows users have already stopped upgrading, Siri can easily replace search, and Google's 76% market share and Facebook's 900 million users are just illusions, ready to disappear at any time.
Could it be that someone thinks the pace of innovation will slow down in the next five years? That startups will decrease?Will the concept of 'spending less and doing more' come to an end? The more likely trend is that entirely new ways of obtaining information will emerge, and novel mobile advertising models will also appear.
The future Googles and the future Facebooks may not yet exist, but by then, today's Web 1.0 and Web 2.0 companies may have completely faded from our sight. Wealth will be created by companies that dare to innovate. To have the future, one must create the future. This is not unattainable, after all, monopolies in the online world are no longer as difficult to break as in traditional industries.
Sina Technology
*Content of this post comes from: cnBeat*
