Tuesday, February 15, 2011

Just the two of us.

Hard to tell if it's the economics, population, geography or we just like two of everything but Australia has a long history of duopolies. From Coles and Woolies, DJs and Myers, BHP and Rio through to historical sparring partners TAA and Ansett, we have seen the growth of two giants in many fields of commerce. Maybe we just don't want too many choices?

Globally it is not uncommon and Coke and Pepsi come to mind as well as Boeing and Airbus. What those duopolies have always been good at, is acquiring competition, either for growth purposes or just to keep something away from the other. Right now we are seeing two giants of the net in Google and Facebook square off in competition for Twitter as each try to grab market share in consumer awareness. It won't be the last time they come face to face with wallets in hand as the net becomes the next battleground for such companies looking for market share and customer loyalty, even if that loyalty has to be bought.

Google has tried to break into the social side of the business before with little success. Past social acquisitions have included Aardvark, Zingku, Angstro and Dodgeball with none of them gaining Google any ground on Facebook. They know the power that social search and constant consumer contact can have for their product and with Facebook hits already surpassing Google it would seem they have to take a serious stance and Twitter at $10 billion is serious. Facebook continues to have the upper hand from a social economics view point and twitter would seem to fit their profile but do they have the wallet to fork out $10 billion? Google has the cash to buy small countries but does Twitter want to be gobbled up and used for other agendas or worse, become the next Aardvark?

Twitter as interesting as it is, is only the tip of the iceberg for these two as acquisitions develop on the web that will create interest or competition for either party. The issue with a lot of the acquisitions so far, is they have potential for growth but rely on past reasons to keep their customers that may not fit with the acquisitor. People like to choose where they interact and often they look for the niche players because they fit with their thinking and not everyone wants to belong to giant conglomerates. Right now someone is building a version of Twitter on a small sexy scale that will be the next great thing.

Where does that leave the next owner of Twitter if it's clients look elsewhere because all of a sudden Twitter is just part of a portfolio and that doesn't appeal to the quickly changing loyalty of the net? Like all acquisitions the trick is to keep your new clients happy and engaged, especially on the net as companies like Twitter don't make anything, so all they have is engagement. Rio may have made a bad deal when buying Alcan all those years ago but they had a commodity which they eventually sold on because people understood the nature of mining and aluminium cans.

Is that how Google and Facebook see me, as a commodity?

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