What do Amazon, Microsoft, Disney, McDonalds, Apple, Walmart, Google, the military; Aliens and China have in common? At one stage or another each of the aforementioned have been touted as being capable of world domination. And in this modern Internet age where businesses can turn into multinational unregulated beasts it is perhaps time we look at online businesses and how much power they can potentially wield.
I have written before on the power that data and big data holds for retailers – however what we are starting to see is that online businesses who are not content with just being prevalent in their industry are seeking new ways and delivering new services that can ensure they add to their ability to collect data but also increase global presence.
For centuries people have piled resources into finding the Holy Grail – and it makes sense – the offer of eternal life being the reward for those who discover it. The Holy Grail has been used as a metaphor for numerous sporting teams chasing the premiership, often accompanied with the Hunters and Collectors song. So what is the Holy Grail for the online industry?
If we think about a Venn Diagram – and yes this is the first time I have used one since year 10 math – the three circles would be eCommerce, Social and Search with the middle section where all three inter loop being the Holy Grail – for the first business who can produce a product the covers all three of those spheres will have in their hands the Holy Grail – and with it the potential to make a multinational, untouchable, supreme control company. The ability to combine search data, into shopping data and with social data could pretty much ensure that such a company would know us better than the people that we live with – scary really.
The recent weeks we have seen Facebook – who clearly own the Social circle – have a potential foray into search with their Graph Search initiative – it is unlikely that this product will be a real threat to Google – however it is an advancement in to the Search Circle that may be a precursor to something else. Facebook has also attempted to enter the eCommerce circle through what has been coined ‘fCommerce’ with limited success. By early 2012 most retailers had opened a Facebook store and had closed.
The Search circle of the Venn diagram is dominated by Google – they have had foray into social circle through their G+ social platform – they have had move into the eCommerce circle with Google Shopping and even Google Wallet. Of key to any success of Google moving into other circles is their AdWords service, this service drives much of their income and is also of key importance to the numerous businesses that utilize it.
eBay and Amazon take their place in the eCommerce circle of the Venn Diagram and largely have not entered to much into the other domains. When eBay purchased Skype in 2005 – many industry insiders felt they would integrate the sales platform with the communication platform and have sellers and buyers interacting as if they were in store – it never happened; and perhaps this experience has limited eBay’s expansion desires. Although eBay has strengthened their eCommerce solutions with purchases of Magento, RedLaser, Bill Me Later and GSI Commerce. Amazon too has strengthened their eCommerce capability rather than expand to other circles – offerings such as AmazonLocal, Amazon prime and even their computing services such as Amazon Glacier shows that both the two key players in global eCommerce have little interest in expanding into the other circles. This doesn’t mean that they do not recognize the importance of the other circles as both eBay and Amazon utilize Facebook and Google offerings to drive traffic to their sites; but perhaps highlights the competition with eCommerce is so tough that expansion outside takes too much focus away from the core business -potentially risking deceased market share.
It appears that outside of the eCommerce circle others are making inroads into other domains. This Venn Diagram of the online world doesn’t take into consideration that Google have made purchases of businesses and patents to strength ties of engagement – their android platform for mobile phones soon becomes a major piece of the eCommerce puzzle as mobile commerce increases.
The biggest limiting factor for each circle or sphere of the online world is why are these offerings being used in the first place – are we likely to start to buy from Facebook, are we likely to start conversations with friends on eBay? Evidence suggests ‘no’ to both those questions – however we do appear comfortable using Google Shopping – these results are now based on the advertiser paying rather than what was most relevant. Google holds the ace in the pack in the race to the holy Grail as it is so trusted and can easily promote their own services amongst search results – without the end user even being aware of the relationship.
Amazon too have do something similar – they often look at the sales history of certain products they don’t sell – watch closely and then start competing against the original seller – usually undercutting their competitor whilst also occupying the all important ‘buy box’ on the item page. This is something eBay have vowed to never do – compete against their customers – yet Amazon and Google are very comfortable doing so.
Previously I wrote about Facebook and that the reasons we visit it can hold back the platforms advancement into other sectors such as eCommerce. What Facebook and other social sites have is the data – The Best Data. Retailers and search engines would love to know more about us – and it is this data (plus revenue from FarmVille sheep sales) that is probably keeping the share price of Facebook from plummeting further – the value of data is well known by business and governments and is the reason why governments in the past have been worried about organizations – particularly finance companies having too much power and influence.
Technology and Internet based companies are perhaps of most concern for governments in terms of having too much power. Our reliance on Google as a search starting point is at 95% of market share; this continually tops up their advertising coffers, allowing further expansion into new products and take overs further touching aspects of our lives – Android, Google Shopping, Maps, Gmail and potentially Google Wallet are all evidence of this. Google appear most likely to reach the Holy Grail first – having their circle of influence involved in Social as well as eCommerce well before the other dominant players will have infiltrated the tricky and heavily dominated Search circle. Google may not be able to dominate the other circles like they have Search – but they will certainly be influential and could steal market share from smaller operations – potentially creating a duopoly or triopoly in Social and eCommerce, whilst maintaining their monopoly in Search.
Breaking down a Monopoly is hard to do and usually requires government agencies and departments to regulate and police; given the multinational ever expanding nature of companies like Google, Facebook, eBay and Amazon – Governments may need to keep a close eye on these organizations spheres of influence; as we know how important media and daily usage of organizations can impact our lives and influence or thinking.