We’re in the middle of a battle between a ‘powered by’ approach to social media (where third party apps extend and expand the user experience independently) and an acquisitions and mergers approach (where platforms buy other social media businesses and fold them into their own or kill them off as potential threats). And ‘powered by’ isn’t faring quite so well any more.
Who are the major players and how are they faring?
We might yet see a hybrid of these two ideologies but with social media reaching maturity some things are getting a little Darwinian. Google has never been afraid to take its own products out back and shoot them (remember Google Wave?). Now Facebook and Twitter are showing the ruthlessness to buy start-up products and either extract the best features and ideas to develop their own suite of products or remove them before they become a threat.
Yahoo! in particular has form in this area, although it’s less pulling the trigger than death by neglect. Marissa Mayer wants to shed this enduring metaphor from Yahoo! and has been at pains to say that the company will not wreck Tumblr following its $1.1bn acquisition.
Lessons from history
As empire building goes, there comes a point where you have to stop and consolidate. Alexander the Great couldn’t stop invading new territory and the constant effort finally killed him. By contrast the Romans acquired so many civilisations they had to grant senatorships to more chieftains than social cohesion could support and the empire fragmented and collapsed.
So, if you’re going to follow an example from history, be a Viking. The Vikings weren’t just invaders and pillagers. They were settlers, traders and converts. Take a trip to the Swedish Museum of National Antiquities in Stockholm and you’ll see Viking trade routes all the way to Baghdad. That mobility and ability to adapt to change without losing who you are makes for a fierce combination right the way up to William the Conqueror. Who, by the way, was descended from Vikings.
The last keiretsu
A prevalent theme in Japanese business in the late 20th century has been the dominance of keiretsu. The conglomeration of interlocking businesses, operating as alliances, to insulate against stock market fluctuations and takeovers. This form of effective monopoly was profoundly affected by the 1990’s recession in Japan but has found admirers beyond the land of the rising sun.
Virgin Group, Microsoft and Chrysler are all businesses which have been described as keiretsu. However, in corporate America, the relationship is more like a loose network of alliances than the almost mandatory and legally regulated co-operation in the Japanese model.
For me the increasing trend of social media businesses to ally themselves, through integration, with financial services and media companies suggests that the keiretsu approach lives on. Perhaps apeing the technology consortiums that bid in Nortel’s patent auction is a symptom of growing up in the shadow of the internet age.
The major players of social media won’t hide their light under a bushel. Expect the kind of ambition which builds giant verticals, like lighthouses, to illuminate the social landscape for years to come.
The Supersite paradox
I’ve heard people say that Facebook “is the internet” for many people nowadays. Or that Facebook is essentially an internet browser. But I don’t necessarily agree with that ‘supersite’ philosophy. Particularly given Facebook’s necessary focus on mobile. I think there’s still room for a proliferation of third party tools, products and services once the dust has settled from this spike in Silicon Valley consolidation.
The reason for my optimism is the increased commitment and focus to open standards and open data and the emergence of wearable devices and other augmented reality products. You wouldn’t expect someone wearing Google Glass or an iWatch to frequent a destination like a web page or a platform profile, would you? But they will certainly be receiving feeds, updates and messages and posting to their social profiles like a baddun!