Tech Crunch is reporting that Revver is in trouble and willing to sell itself cheaply, having accumulated almost $1 million in debt. Microsoft is launching a hostile bid for Yahoo. This smells a lot like the late 1980’s merger and acquisition market, now moved over into the high tech arena.
There’s a great book I read (well, listened to) last year called Blown to Bits. It talks about how the digital economy is fundamentally stripping out profit from long-standing companies, ranging from local printers and travel agencies (the first to go) to Encyclopedias and newspapers, to other businesses. By doing things faster, more efficiently, and often cheaper, the web can have a huge economic effect on traditional things like newspaper ads. If you have a garage sale, the local newspaper may still be your best best- but why not try it on craig’s list as well, for free? If you have left over stuff, you can sell it on ebay. And if you are just unloading a couple of big items, like a couch or golfclubs, the price of the ad can outstrip your asking price, making ebay or craig’s list a much better alternative altogether.
Another point Blown to Bits makes is that many companies may enter a digital marketplace, but one will come to dominate, a few more may do reasonably well, and the others will eat the crumbs- in essence, another version of the long tail. Think of Amazon.com becoming a sales portal for books and more; Ebay as a portal for the secondary (and sometimes primary) market for just about anything; Google for search; and it goes on and on. While the quality of the old Encyclopedia Brittanica was scholarly and well researched, people now want information faster than ever before. What used to cost thousands of dollars for a set can now be found on a CD ROM for about $20. And the jobs of all the sales people as well as researchers have largely evaporated in favor of the frequently quirky and not totally reliable Wikipedia, and Google itself.
End user issues help determine who will win- who has the interface that is easiest to navigate and adopt? Who gives you what you want, and what you need? Who gives you features that rethink how something like email is delivered?
Macs are starting to gain marketshare, and the ipod is winning the mp3 player market because the end user is delighted more often than not. Things work. Customer service is good. You don’t have to read a 400 page manual to work something, and online help is easy to get as well. The interface is lovely, and it’s easier than ever to find and even back up your stuff. Apple surprises and delights users because the stuff looks fresh and new; it has features without feature creep; and it keeps end users in mind always.
R evver may be losing the battle in part because blip.tv and other services are better looking and easier to use. Subtle likes and dislikes drive the market, and when more novices are entering the arena, end user impression will make all the difference.
It’s also why I am not all that concerned about Microsoft trying to purchase Yahoo. I have a yahoo account, but I rarely use it- my google account is my home on the web. Yahoo works, but it is visually cluttered and not as intuitive as Google. Now that said, I love Flickr, a Yahoo service, because it is everything Yahoo itself is not- clean, easy to use, social and seamless.
Google wins in my book for many reasons. Email is threaded and easily searchable; Google docs work well for online collaboration, and even my igoogle home page is customizable and changeable as my whims dictate. I never knew I needed any of these features before I had them, but I use all of them, and they’re simply wonderful- helping me keep my digital life somewhat organized and under control. Google knew before I did, how threaded email would help me- something my comcast email still can’t do.
If you want to get some perspective on how the digital age will continue to carve profit out of traditional companies, read Blown to Bits. In the alternative, listen to Douglas Adams’s series on BBC Radio 4 called Hitchhiker’s Guide to the Future. While some of this may seem a bit dated since it was produced in 2001, shortly before Douglas passed away, but for the most part, it is talking about a future we are living today, and growing into shortly. Entertaining and insightful, you don’t want to miss this.