The four giants of the Internet age – Google, Apple, Facebook, and Amazon – are extraordinary creatures. Never before has the world seen firms grow so fast or spread their tentacles so widely …. The digital revolution these giants have helped foment has brought huge benefits to consumers and businesses, and promoted free speech and the spread of democracy along the way.” – The Economist, December 2012
Amazon: Web Services
Nowadays people no longer consider Amazon as merely an online bookseller, which was how it initially began its business in 1995. The company turned in a $5 million profit in 2011 and its global revenue reached about $57 million as 2013 began.
Web Services and credit card payment contributed to about 4% of Amazon’s net revenue. Though this is a small fraction of the revenue comparing to books together with digital media that generated 37% and general merchandise that contributed 59%, Web Services is revolutionary to the traditional online-retailing. What is Amazon’s Web Services? For example, companies like Dropbox, Reddit and the New York Times could purchase flexible information-technology infrastructure services from Amazon and pay for what was used.
Besides Web Services, Amazon’s marketing and advertising for its suppliers had played a key role in Amazon’s business model. In 2011 Amazon initiated an advertising network that tag a visitor with tracking cookie that remind them in another network or website of things that they browsed but failed to buy.
Launched in 1998, Google at that time only offered search function so that it earned zero revenue. In 2000, Google started to sell text advertising to advertisers who want to reach people who were searching particular keywords.
In the following years, Google made a few acquisitions and developed new products that helped the company expand sources of revenue. In 2003 it introduced Gmail, in which enabled advertisers to place ad matching particular e-mail messages. In 2006, Google bought YouTube for $1.65 billion. The website profits by earning payments from advertisers while providing free services to both video uploaders and video watchers. Now YouTube is positioned as a competitor to cable-television.
However, not all Google’s new developments were successful. Google was facing great challenges from its competitors such as Amazon and Facebook. For example, in 2011 it launched a social network called Google+. With the intention of competing with Facebook, Google+ had only 20% unique monthly users that Facebook had.
Apple: Battle with Amazon and Google
Apple’s success is no doubt legendary. The sleek and smart design of its products fascinated people and had won the brand numerous loyal supporters. Apple was found in 1976 and had become the most valuable U.S. public company of all time in 2013.
However, the brand is ambitious and has always been seeking new opportunities. Apple had been competing with Amazon’s Kindle platform with a combination of iTunes and iPad. Even the Kindle was made for books, the iPad was trying to replace it as a solution to a broader range of digital content. Apple’s siri was also in the battle with Google’s search function.
Facebook: Dominating Time
One key advantage that Facebook has over Google and is that people tend to spend longer time on it. The average Facebook visitor spent 6 hours and 41 minutes on the site per month, whereas users of Google only spent 1 hour and 54 minutes per month. The online population today is mostly social-media population.
Advertising consists of the majority of Facebook’s revenue. When a person likes a brand on Facebook, the brand can buy the right to advertise on the page of this person’s friend to drive traffic.
The market of digital advertising will be highly fluid in the future due to the strong competition among the four giants: Amazon, Google, Apple and Facebook. Even though advertisers will be facing the dilemma of picking the best company to collaborate with to maximize the effectiveness of their ads, I believe that the competition will encourage the four giants to evolve into stronger companies. Advertisers and consumers will benefit from their competition and receive high-quality services.
One important skill that the four giants require will be branding. When a consumer can read a book on either Amazon’s Kindle or Apple’s iPod, it becomes crucial which brand the consumer favors over the other. Customer service is a key part of branding since people tend to be loyal to brand whom they received great customer service from.