These titans- Alphabet (Google’s parent company), Amazon, Apple, Facebook, and Microsoft looks unstoppable. These are the five most valuable firms which are listed on the stock exchange. According to the Economist, they collectively earned $25 bn in net profit in the first quarter of 2017. The Giants deal in data, the oil of the digital era.
In the US, Amazon captures 50% of online transactions. Google and Facebook almost garner all the online advertisement spending.
Today few of us want to live without Google’s search engine, or Facebook’s news feed or Amazon’s delivery. The most intriguing part is that they are not overcharging customers but mostly offering services at little or zero cost, but by handing over more personal data such as age, sex and income. The data gives enormous power to these companies. The personal data sharing is a cause of concern to many.
Smartphone and Internet help these companies to get data about its consumers ubiquitously. Artificial Intelligence (AI) combined with machine learning helps these companies to predict their customer’s behavior. These companies need abundant data. By collecting more data, these firms have more scope to improve their products.
Today, a clever combination of data, AI, and machine learning helps Tesla to have more net worth than GM.
Cleaver and Intriguing Strategies
These companies always look out for new wells of information, so that they can go on getting continuous data to mine and go on building cleaver predictive analysis for customers.
While looking out for new wells, these companies applied cleaver strategies to get more customers in their stable and their data, which further allows them to do more clever business. Where can one find a better example than the acquisition of Whats-app at $22 bn by Facebook in 2014? This take over has an underlying smart move of eliminating potential rivals and provide a barrier to the new entrant.
A similar strategy might be applied by Microsoft while acquiring LinkedIn in 2016.
However, some of the strategies are still not clear to me, namely Waze by Alphabet. It is in the mapping and navigation business, and Google already has Good Map in it’s stable.
Company to Watch
Even though these giants go on hogging the limelight, there are some who deserves attention and one of these companies if Price-line, a world’s largest online travel company. This company has done an impressive comeback after suffering a near-death situation at the dot-com bust. Today in its stable various online sites for booking hotels, cars, flights, and restaurants mapping across the globe and includes Booking.com, Kayak, Agonda, and OpenTable.
I sometimes wonder that if this company would have been in the Silicon Valley then instead of New York, then it would have been revered by geeks and technology investors.
This company has shrewd deal-making allow to aggregate its Dutch acquisition hotel inventory with another UK’s acquisition. Today it has the world’s most massive supply of hotel accommodation. In addition to the hotel accommodation, it supports “alternative accommodation” like rentals of apartments, villas and home like other beckons like Airbnb, HomeAway. Though the company is not at the cutting edge of the technology cleaver use of it.
The valuation and lifespan of the company increase when it’s products have features like ubiquitous, continuous data logging, data mining, and analyzing. (Reference: the figures referred to in the article are from The Economist).