But the big web platforms aren’t like that.
In many instances, they are quasi-monopolies. They are so big and powerful that they hardly need to worry about competition.
After all, who can match Google for search? Who can beat Amazon for online shopping? Who does more to keep you connected with family and friends than Facebook? Who helps you clean out the junk in your garage better than eBay?
But even the most dominant players can falter. There was a point in living memory when Sears controlled 30% of all retail spending in the US. I’m not exaggerating: three out of every ten dollars were spent at Sears.
Sears once operated 3,500 stores. Today only 22 are left. Many of my readers have never seen the inside of a Sears store.
This happened because Sears was so big that it didn’t need to worry about competitors.
That sounds impossible. How can you fail by being too powerful? But this has happened in many instances, even on the web. There was a day when Yahoo was the leader in search. There was a day when MySpace was the dominant social network. There was a day when Tumblr was the place to share photos.
There was a day when the two companies controlling your access to the Internet were called Netscape and America Online.
Not anymore.
This has happened before and will happen again. The bigger they are, the harder they fall.
Facebook (or Meta, as it now prefers to be called) is the most intriguing story of them all. So let’s look at it as a case study in how web platforms collapse. Because what’s happening at Meta is a textbook example of how the mighty are laid low.
Why Is Facebook Collapsing?
The situation at Facebook is now uglier than MC Hammer’s wardrobe closet. Meta is the worst performing stock in the S&P 500 this year. In other words, there were 499 other companies in the composite that did better—and this was a tough year all around in financial markets.
Mark Zuckerberg has personally lost more than $100 billion. In fact, he lost $11 billion in a single day. Has that ever happened before in human history? Almost exactly 12 months earlier, I’d written an article entitled “Meta Is for Losers”—but even I never envisioned losses on this scale,
Of course, there are many losers in this story—including the 11,000 workers who got fired a few days ago.
What’s going on?
You probably think that this is the result of Zuckerberg’s fool’s bet on the Multiverse. That’s what everybody is saying. But as we shall see, the Metaverse is just a symptom not a cause.
I can actually explain the problem in one sentence:
Instead of serving users, the dominant company decides it’s better to control them. (...)
"Of course, you could try phoning Facebook customer service for help.
That’s a joke, in case you didn’t realize it. One of the defining marks of the dominant web platforms—the true Sign of the Beast—is that there is never a phone number to call."
by Ted Gioia, The Honest Broker | Read more:
Image: Magazine covers touting the successes of AOL, Digg, and Netscape; Bloomberg[ed. See also: Instagram Is Over (The Atlantic). Also, A Visitor’s Guide to Dante’s Nine Circles of Hell (Penguin Random House).]
