Mark Twain famously quipped, “The reports of my death have been greatly exaggerated.”
And in this vein,Eric Jackson for Forbes.com writes, “Here’s Why Google and Facebook Might Completely Disappear in the Next 5 Years.”
Jackson’s article is more than compelling – its nearly dead-on accurate with regards to how technologies evolve faster than companies. So, its difficult for companies that have devoted their resources heading down one path to get up, back track and head down a new path. This is especially difficult in the face of competitors who get a fresh start down a new branch.
Think of a tree. Start with the trunk. That’s the start of technology… And as companies create products based upon this technology they head down a branch, say “ecommerce”. However, as they are heading down that branch, a new one sprouts – “mobile commerce”. The problem is, that branch is very different and has its own barriers to entry and competitive forces. Companies on one branch don’t necessarily have the know-how to hop branches and change courses.
Jackson’s article discusses this by breaking down technology into three phases and grouping the big tech companies into those three phases to articulate his point. It’s very compelling.
However, I do believe that many of these newer companies have the cash to acquire technology through M&A so that they can more easily hop branches. Also, I believe some of them have management that will endeavor as best they can to pivot their giant organizations and adapt to change. But this doesn’t always work, as Jackson points out, like in the case of the once almighty MySpace.