Internet and the art of world domination

Over the last 15 years, the most dominant Internet company has been the one that has managed to act as the leading entry point to information on the web. As information has grown exponentially, entry points haven’t kept pace, and have eventually been disrupted by newer ways to organize information. And thus new contenders to the top spot have arisen:

Pre-1995: The web is a potpourri of gopher, ftp and then http sites, with no easy way to search through or organize them. The average user’s entry point was the address of the site that the user wanted to visit.

1995 – 2000: There are now way too many websites for every user to remember. Yahoo, with its directory approach organizes the websites neatly by category, becomes the primary entry point for Internet users, and thus becomes the dominant Internet company. As of late nineties, it’s unclear what or who will unseat this powerhouse.

2001 – 2006: By now, the Internet has way too much information to be organized and accessed using directories and portals. Google, with its keyword search approach, and ability to index billions of pages, becomes the de-facto entry point to the web. As of early 2000’s, Google appears set for world domination, and it’s not clear what or who could match Google’s strength.

2007 – Present: There are so many information sources and forms of media that keyword search by itself is inadequate for information discovery. Users want to visit information sources that are relevant to *them*. They want to consume information that they didn’t even know existed – how could keyword search do that? In comes facebook, along with other social networks, which provide ways to not only stay connected with your social circle, but also a more personalized way to discover and consume news, photos, videos and other media that have proliferated over the past few years.  It appears that Facebook will dominate the world and Zuckerberg shall be king.

2013 and beyond: ??

History tells us that change is, indeed, the only constant at the top of the Internet world. Although facebook’s and twitter’s reign at the throne appears uncontested as of 2010, please rest assured that forces of innovation, disruption and exponential growth are hard at work, and the 5-6 year cycle of Internet domination should only get shorter over time.

A couple of years back, I wrote about prevailing themes and trends in consumer Internet. Those themes are as true today, and trends of long tail content, convergence, mobility, social media and user-generated content have only accentuated with time. The result continues to be increasing information overload. The next generation Internet companies would be the ones that can address this.

My conjecture is that the next dominant Internet company would come with an angle of intelligent personalization and context-aware services, and would build upon the current generation social networks. What’s your take?

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Review of current consumer themes in Internet, media and mobile

New ideas and startups don’t necesarily succeed by trying to drastically change consumer behavior. Instead, they succeed more often by identifying shifts that are happening in consumer behavior and needs, and then leveraging then capitalizing upon them with slick execution.

A framework that can help identify, assess and classify potential opportunities is to look for dominant consumer themes that are taking shape across a broad spectrum of products and industries. These themes represent major shifts in consumer behavior, and can  help identify new products and services that consumers are ready to adopt now, or will be in a few years.

Here’s a shot at listing some major current themes in consumer behavior evolution, which are applicable to the Internet, media and mobile sector:

  • Hyperdifferentiation and Personalization: We are in an era where consumers are asking for products that are more and more differentiated, and at the same time more personalized to their tastes.
  • Convergence: As the complexity of types of media and access mechanisms increases, the human need for simplicity keeps creating opportunities for various types of convergence – convergence of access device (e.g. TV content on mobile phone), convergence of media types (e.g. blurring boundary between TV content and online videos), convergence of desktop software and web services (e.g. SaaS).
  • Acceptability of new communication mechanisms: In the beginning, there were phone calls, email and personal web pages. Then came SMS, social network pages, blogs, personal videos, twitter, video twitter… whats next?
  • Consumers also want to be Producers: User-generated content (blogs, videos, music etc) represents a major shift in consumer behavior from the early Internet model, where most consumers were happy being just consumers. Even though the percentage of consumers who contribute content may still be low (less than 20% of YouTube users ever contribute a video), the key theme is that consumers are now ready and eager to consume content created by other non-professional users.
  • Community: The advent and popularity of the Internet took away a little bit from real-world social interactions, as an entire generation grew up spending enormous amounts of their leisure time in front of screens. However, humans are social animals, and the human need for social interactions and affiliation has given rise to an entirely generation of online tools that relicate real-world social behavior – ranging from social network platforms to people search tools to match-making sites.
Then there are some evergreen themes, that have always been around, but which keep acquiring a different flavor with each generation of new technology. These themes include:
  • Information Organization: As the amount of information that is available continues to grow exponentially, opportunities for new mechanisms to organize that information keep on arising. Version 0 was Yahoo-type directories. Version 1 was google-type horizontal search. The current frontiers seeing a lot of action are vertical search (e.g. Indeed for jobs, Kayak for travel), social discovery tools (e.g. StumbleUpon, Digg etc), recommender systems (like the ones used by Amazon for instance). One area where we could see more action in this domain the near future is more comprehensive Personal Information Management.
  • Ease of Use or Lower Cost: Anything that helps me simplify what I already do, or lowers the costs of what I do in some way is always attractive.

These, of course, are all very broad themes. But they can provide us a good framework to look for opportunities. We can cross-index these themes with the major macro trends and structural changes that I laid out in a previous post, to have a matrix that we can classify currently evolving opportunities into.

In a few posts, I’ll start delving into each theme, with the end goal of identifying upcoming players that are well positioned for harnessing those themes.

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