Google, Facebook Feast on Startup Guppies Who Seek Payday

By Clint Boulton  |  Posted 2010-11-24 Print this article Print

Royal Pingdom Nov. 19 published an interesting post about how our resident Web giants are sucking the soul out of the startup industry.

Don't like the hyperbole? Try Pingdom's phraseology:

The problem is, no matter how brilliant your software or service may be, there's always a cloud on the horizon. There are elephants out there, the likes of Google, Microsoft, Apple, and now also Facebook, and those elephants can come crashing into your glass house at any time. All they need to do is release a similar product.

Pingdom goes on to list Microsoft IE vs. Netscape, Google Maps vs. Mapquest. Apple vs. podcasters, etc.

I know there are a ton of startups out there that are trolling the Web to build an audience or get acquired by the bigger fish.

Google acquired plenty of these in 2010 but it also built technology in-house that duplicates other services in the market. Googlebot.png is certainly one of the latter. Google launched its link shortener and I stopped using

Then RockMelt launched and erased the need for either shortener with its own integrated Facebook and Twitter link blaster, which I love.

Google also launched SideWiki, a sidebar memo tool that pretty much renders Reframe It moot, as well as its own domain name system, dictionary, GPS and several other Web services that would seem to cannibalize others in the market.

Facebook is doing the same, though to a lesser degree than Google. What are Facebook Places and Facebook Deals if not blatant bids to hone in on Foursquare, Gowalla and the turf of other check-in services trying to offer local discounts?

Facebook, like Google, is also acquiring tiny startups. These companies either couldn't hack it competing with the big dogs online or are so bleeding-edge, there isn't even a real call or market for them.

Parakey for desktop/Web sync but mostly for Joe Hewitt's programming talent.. Hot Potato to beef up events. Divvyshot, whose creators went on to retool Facebook Photos. Sharegrove enabled private collaboration.

Most recently, Zenbe engineers were "acquhired" to create Facebook Messages.

Unless you're a VC or just a hound with a nose for high-tech startup news, you probably haven't heard of those companies.

Facebook bought them and subsequently shut them down to insert the technology or the talent into its expanding lineup.

Pingdom has some advice:

If you're about to launch a new product, you may well want to take a very close look at what the big companies might be working on right now and where they are likely to be headed. Heading on a collision course with Google, or Apple, or Microsoft (or Facebook for that matter) might not be the best thing for your startup.

Actually, from the way some of these startups fiendishly seek publicity, I'm pretty sure most are created because they see a gap in Google or Facebook and try to fill it in the hope of getting acquired.

They would never admit to it, but I believe 90 percent of Web startups are formed with the intent to make a quick payday and get out to do the next thing.

That's why I rarely cover them anymore. What's the fun in building a body of work around a company that is gullet-fodder for the big whales? |

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