SIIA IIS 2012 - Clash of the Titans: The Collision between Apple, Amazon, Facebook and Google and its Impact on the Information Industry

Moderator:
James Kollegger, Chairman & Chief Executive Officer, Genesys Partners, Inc.
Panelists:
Ken Auletta, Author of "Googled: The End of the World as We Know it", The New Yorker
Pat Kenealy, Former CEO, IDG, General Partner, IDG Ventures
Scott Kurnit, Founder, Chairman, CEO, AdKeeper
Adam Lashinsky, Author of Inside Apple , Senior Editor, Fortune

As Jim Kolleger framed it, there is a war out there for content, but Adam Lashinsky notes that it's more like a picture of who's in bed with whom, as these titans work with one another to conquer one another. A few years ago, for example, Google was nicely integrated with Apple products, not it's a grudging integration at best. Apple doesn't "get" social media, and yet Apple now integrates Twitter tightly with the iPhone, showing that they will use what they need to use to compete. Apple, he sees is a hardware business model, Google is a software model, and that Google is in fact losing control of Android. Ken Auletta notes that Jeff Bezos still owns a large stake in Google in all likelihood, and the Google leaders' hero was initially Steve Jobs.

Yet Google saw that they had to put feelings aside and protect the future of the company. He sees it like 19th century nation states at war, but not like a WWII. Pat Kenealy notes that you can go as far back as Edison's early efforts to own the distribution channels and Sarnoff owned radio stations to help sell radios. Cable companies never became television set companies, though, so there's sometimes early vertical integration that gives away to new models. Lashinsky notes that Apple's extensive relationships in the entertainment industry, yet none of the large companies in the mix for controlling the future are major media companies.

Kenealy points out that when the government steps in, things are reaching more maturity in trends, so the current regulation push may be pointing towards a new phase. Scott Kumit sees that it's pretty easy to make movies, but to be a distribution platform is harder and leads to the real clashes for control. Thinking of the GE approach, trying to be a dominator or to exit a market, their exit from media ownership is a telling factor in who is really going to dominate the future. Auletta notes that Google is in fact getting into the content business, and that Facebook's "Don't be Evil, Google" promotion is pointing towards their increasing domination.

Facebook, on the other hand, is its own universe. Auletta sees itself as a planet and Google as the universe, which may be true to a point, but As Kumit points out that it's not really possible to try to get its hand around all of the Web. Lasinsky related that Apple is making the same mistake when they wouldn't license the Mac operating system, yet the ability of developers to write apps easily for their App Store (and for their new publishing venture also) bodes well for them. He wants an analysis of profits for Android versus Apple - but of course that's not factoring in the fact that there's no platform investment to speak of for Android, whilst the monetise with ads. Kumit sees that the value of a closed system like Apple has changed people's thinking, and that better closed systems may be trumping Android.
In all of this, the fundamental nature of what is "the establishment" has changed, with a new wave of companies ruled mostly by their founders are reflecting the values of aggressive founders, Kenealy notes, with a much rougher jostling amongst young companies that got big quickly. From that perspective, this may be a battle of the new stars carving up the cows and the dogs of media (my words, not theirs). Laskinsy focused on an article that highlighted productive narcissists in business, not unlike the Steve Jobs profile, with charisma, vision and not caring what people think of them. They are likely to bet the company on key ideas, something that more traditional companies with "hired guns" are less likely to do.

Auletta notes that Google's founders aren't too concerned about the stock price in part because of how the ownership is structured, giving them more flexibility. This is also reflected in their business models and the way that they operate, with less authoritarianism in Google's operations, he sees. Interestingly, Lasinsky sees Apple as the most vulnerable, in part because they are a hit-driven business, but the hits are likely to diminish. iPod sales are going down 30 percent, in part because the iPhone is doing well, but will they have enough of a future pipeline that can afford that creative cannibalisation is in question.

A great discussion by some very intelligent people, but here's the thing; think about where global growth is located. Who's in those markets - and who's positioned to benefit from it. Eventually, the Amazon model just sucks the life out of existing markets from commoditized goods without creating a significant amount of new value, though its cloud services are a listening post that helps them to do more. Apple's chasing a shrinking pool of affluent, "first world" consumers with a smattering of trend-setters elsewhere. Facebook ultimately is a play without a real platform - it can't provide enough functionality and content to compensate for the whole Web, whilst losing more market share to others as a new generation of social media users consider alternatives.

The one left standing? Google. Not in an unchallenged way, to be sure, but they're the least invested in existing content monetisation models, has avoided the gadget trap that Apple is caught in, is aggressive in leveraging the value of social media in diverse ways, and is fueling the ability of emerging markets and small businesses to grow, much in the same way that companies Like Toyota entered U.S. markets with what appeared to established players as a niche, eccentric business model.

It will be an interesting few years, and none of these companies are going to disappear soon, so it will be a very dynamic period to be sure. But looking at the broader landscape of how global economies, there's only one company that's positioning themselves truly effectively for the seven billion people who are beginning to join +Content Nation - Google. It is a counterintuitive approach compared to the others' and not guaranteed to succeed in time frames that may satisfy pundits, but as the world's global markets begin to try to reach for a standard for personal, business and media publishing, it's going to remain the Web as a whole - which places Google on top of the titans decisively in five years' time. You heard it here. Thanks Jim, for a great panel.
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