Google, Apple Lead Internet Big Five
John Battelle offered this great chart above summarizing by strengths and weaknesses in the areas where Apple, Microsoft, Google, Facebook and Amazon compete. He calls these the Internet Big Five.
"For me, these product lines, taken together, are the basis of what we might call 'the operating system of our lives,' Battelle wrote.
Indeed. It's hard to argue with that. Using these companies, we search, socialize, shop, game and do just about anything we want to do online. These companies are our malls of the digital world.
I wince a little that Microsoft is included in something related to the "Internet," where Bing isn't burning up the search charts and where Hotmail isn't exactly innovative anymore.
If you go by market cap, you can't ignore Microsoft, but the only thing that qualifies here as an online success story for Microsoft is the Xbox 360, which is the premier gaming platform in the world.
The fact that Microsoft has integrated Bing, dozens of entertainment options and voice controls for Xbox 360 makes the company impossible to ignore as a digital pioneer. It's carving out a new path in the living room. Microsoft has done an amazing job here, which is why it must be included.
Battelle explains his own grading systems, which I won't rehash. But I would point out that Apple is only "weak" in social. Amazing to think how easily it could solve that by buying a social network.
Twitter would help. If Facebook weren't going public, I'd say Apple with all of its cash should buy that social network.
Imagine those companies together? Apple and Facebook together would polarize the Big 5. It would be Apple versus Google, Microsoft and Amazon. And Apple could win! But Zuckerberg would never sell, so that's that.
Amazon has no need to do productivity software. It's late in the game for that. But I do think it will launch an Android-based Kindle phone, perhaps for $99. It would make sense, given the $199 Kindle Fire success.
I disagree that Amazon is weak in search and social. The company's own product and recommendation search engine is great and social, thanks to its connection to Facebook:
If you're an up-and-coming player with some interesting technology or a corporate development rep from one of these Big 5, you should mark Battelle's word that:
"In fact, if you really squint, you may well see some patterns in future M&A (the subject of my next prediction post, in fact)."
Indeed, the companies that are weak, or "developing," in some of these areas would do well to start buying. Most are already doing so.
Facebook always makes acquires, and Microsoft occasionally buys something big, like Skype. 2012 could be a very interesting year for M&A if these companies try to fill out the areas of their portfolios where they are wanting.
Regardless, this chart is super useful, and makes a good teaser for Battelle's next book, "What Hath We Wrought." I'm going to buy it; it hits so close to home for my coverage of Google and its rivals, which I write about constantly here.