Maybe Prince is right.He told a UK newspaper over the weekend that “the Internet [is] completely over,”
“The Internet [is] like MTV. At one time MTV was hip and suddenly it became outdated.”
Remember when the Internet was all about the new, new thing? New companies, new technologies, new revenue models?
Suddenly, the Internet is full of (relatively) old companies trying to become the new renewed thing.
AOL, Yahoo, MySpace, and even giant Microsoft are going through turnarounds and transitions.
Few companies pull off transitions, fewer manage to turn things around after they start failing.
Can these tech giants pull it off?
Legacy: Cash cow Windows, and later, cash cow Office.
Challenge: It used to be people navigated their computing lives with Windows software. Now their computer lives are on the Internet, which is best organised by Google on the desktop and controlled by Apple on the mobile. Office faces disruption from free online alternatives.
Plan: Build a kick-butt mobile OS, buy its way into search, and act like nothing ever happened.
Chances for success: Transitions are almost impossible, but Microsoft’s massive cash pile and revenues give it a chance.
Legacy: People use to pay AOL $25 a month to get onto the Internet.
Challenge: People now pay their cable company $40 a month to get onto the Internet.
Plan: AOL, which saw the decline of its ISP business coming, bought a bunch of blogs from Jason Calacanis a couple years ago. Those blogs, along with a bunch more, a local news blog network, and a freelancer platform, are now the future of AOL, which sees itself as a multi-branded media company.
Chances for success: Very low. Advertisers are fleeing, not joining AOL. AOL should probably follow Earthlink’s example: cut down to the ISP and throw off a fat dividend for shareholders for as long as it can. That’s value.
Legacy: Muddled. In the late 1990s, Yahoo built great Web products. Its email product was best in class. After the millennium, it became a company with media properties and search revenues. It tried some e-commerce and social networking later. It’s always been a portal – the place people go when they first open their browsers.
Challenge: Google left Yahoo in the dust on search. People don’t lean on portals as much as they used to, preferring niche Web sites, social networks, or to just start searching instead.
Plan: To be a more relevant portal. Yahoo wants to combine third-party content, social networks, games, and video with original content (local news, video, and national stuff) onto Yahoo.com. To create that original content its building out a media business, hiring journalists and acquiring platform-for-freelancers, Associated Content.
Chances for success: Moderate. Yahoo should be able to transition into a successful media company. But will shareholders tolerate media company margins and media company growth?
Legacy: Back in 2004, social network MySpace built a huge user base spamming email boxes into submission. It fuelled YouTube’s popularity and created an army of micro-celebrities such as Tila Tequila. It made money first by selling hit-the-monkey and win-a-free-ipod banner ads, and then by helping launch movies on Fridays.
Challenge: Facebook presented a designed, less trashy alternative and people flocked over.
Plan: MySpace wants to focus on younger users and the micro-celebrities.
Chances for success: Nil. Put a fork in it.
Legacy: In the 1990’s and early 2000’s, eBay was the easiest way for very small retailers to sell their goods online.
Challenge: Amazon made it easier for retailers to list themselves in its store. Google made it easier for customers to find a retailers Web site. Craigslist is free. eBay’s auction model stayed complicated.
Plan: eBay keeps monkeying with the fees it charges buyers and sellers, trying to become a place where bigger retailers sell more goods at bulk discounts. Hasn’t worked.
Chances for success: Low. Would you look for cheap TV on eBay, Amazon, or Walmart.com?