💥 A Boom with a View💥 is a column about startups and the technology industry, written by Erin Griffith. Find them all here: coins2day.com/boom.
Many investors would rather buy Puerto Rican bonds than try to take on a tech titan in its prime. Amazon (AMZN) owns e-commerce. Google (GOOG) is synonymous with search. Facebook (FB) dominates social media. Tech is a winner-take-all game, and as the Internet economy matures, building a winner from scratch looks less promising by the day. Even new categories like on-demand transportation and lodging quickly declare victors. Uber, founded in 2009, is worth $62.5 billion. Airbnb, just a year older, is valued at $22.5 billion.
This ultra-Darwinian environment is bad news for aspiring also-rans, but it hurts you and me, the lowly users of tech products, the most. We’re stuck with whichever services a handful of powerful conglomerates give us. The top 10 apps of 2015 are owned by just three companies, according to Nielsen: Facebook, Apple (AAPL), and Alphabet, Google’s parent company. Throw in Amazon for good measure, and it’s difficult to imagine using the Internet without the “big four.”
But nothing is simple in the interconnected world of technology, and we consumers want to use services how we choose. We expect to be able to conduct a Google search on an Apple iPhone, for example, or watch a YouTube video within Facebook.
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That means tech’s big guns must play nice with one another, even as they compete in increasing ways. Call them frenemies. The dynamic helps explain why Amazon is trying to crush Netflix (NFLX) with its streaming-video service as it sells the company cloud storage for that service. It also explains why I can’t watch Transparent, a show produced for Amazon Prime Video, using my Apple TV—and why I can’t buy an Apple TV on Amazon.com.
The turf wars between social media companies have been especially malicious. In 2012, Facebook-owned Instagram stopped allowing its photos to show up inside the Twitter app. Twitter pulled a similar move the year prior, excluding its content from Google’s search results after the two companies failed to strike a deal. (Access has since been restored.) Today, Facebook doesn’t explicitly attribute the news items it curates from Twitter, preferring instead to use the vague “social media” as the source.
The reasons behind these moves are often as petty as you might expect. One executive offended another. One company believed a frenemy had copied its work. One frenemy actually did copy another’s work.
And, yes, whining about things like share buttons and platform integrations seems just as trivial. But there are few alternatives to the services offered by the big four. Tech’s giants have trained us to expect whatever we want, whenever (and wherever) we want it. But in a winner-take-all world full of tech frenemies, the consumer often winds up with little choice at all.
A version of this article appears in the April 1, 2016 issue of Coins2Day with the headline “The Line Between Love and Hate.”