The fall of Snapchat: “The internet war is over and Facebook is the big winner”
Shares of Snap Inc. fell 17% this month, and it became clear that the myth of the emerging and warrior company that dislodges the pedestal to the technology giant was just that … a myth.
Of course Snap, the company behind Snapchat, still impresses. In just five years it reached an audience of 173 million users, mostly young, who communicate in innovative and fun ways.
But the future of Snap as an independent company seems uncertain and speculated that it will be “swallowed” by Google or another internet giant.
Snapchat faces a very difficult battle. The extraordinary resources that Facebook has already allowed to acquire Instagram and WhatsApp, and if you can not buy a competitor, simply copy it.
There is a growing feeling in the sector that the big winners of the last decade, Google, Amazon, Facebook and Apple, or “Gafa” as the four companies are known by their acronyms, will dominate the world of internet without any opposition.
In the past some analysts have warned that Facebook, which is barely 13 years old, could be under threat. And this is a vision that the company itself has fostered whenever one speaks of limiting its powers.
The argument was that like Bebo, MySpace and Friends Reunited, Facebook could also become obsolete if users opted for new platforms.
But the truth is that the social network war ended. And Facebook is the undisputed winner.
Some smaller players in the industry like LinkedIn, Twitter and yes, also Snapchat, will have significant audiences in the future but will battle to make money.
However, apart from China, the social network whose value is estimated at about US $ 500 billion will remain the main way to communicate in the future.
And the other members of the “Gafa” tetrarchy also seem secure in their domination.
Google gained the battle of the search engines in desktop computers a long time ago and is an equally formidable force in the mobile devices.
As for Amazon, he is the undisputed champion in online shopping and logistics and is a leader in cloud computing.
And while Apple has a relatively smaller share of the smartphone market, it has kept most of the gains in this sector for the past 7 years.
Trends in technology indicate that these four giants will reach even more immeasurable levels of wealth.
Advertising is increasingly targeting the mobile market, and Google and Facebook already get the most revenue from mobile ads.
Artificial intelligence, the key technology
But it is another sector in which the technology giants will further strengthen their leadership: artificial intelligence.
They recently told me that a skilled artificial intelligence worker graduated from one of the top universities in the United States can expect an annual salary of close to US $ 500,000 in his first job.
And they are not the emerging companies, the startups, those who pay those wages, are the big ones like Facebook and Amazon.
Of course, there are many brilliant researchers in artificial intelligence outside the USA, but most of them work for US companies.
Two Artificial Intelligence startups, DeepMind and Swiftkey were bought by Google and Microsoft respectively.
Lack of competition
Should we be concerned about the growing dominance of the four giants?
It is not surprising that the companies in question insist that a new company can arise that puts them at risk.
So far, the monopoly control agencies in the United States have not gotten too involved. They tend to be more concerned if consumers pay too much for lack of competition.
But since the giants of social networks and search services offer excellent services at no cost, US regulators do not seem to fret.
Concern in Europe
In Europe, however, the agencies that regulate competition are more skeptical, and question that almost monopolistic companies benefit consumers in the long run.
That is why the European Union (EU) took decisions against Microsoft and Google, when these companies have not had similar problems in the United States.
EU regulators insist that all their actions are based on the law and not on political grounds.
But there is no doubt that some European politicians are concerned that a few companies based on the west coast of the United States have so much power over our lives.
For now, however, despite the politician’s uneasiness about fake news and extremist content on Facebook, the company has hardly been touched.
2 billion of users
Last year we saw that Facebook played a key role in the US presidential election.
The audience of the social network has already reached 2 billion and has just announced a new video platform to compete with Youtube and Netflix.
“Much of the bottom-line philosophy of technology leaders is to decentralize power”. Steve Hilton, a former British government strategist and now Silicon Valley guru, said in a New York Times interview.
Mark Zuckerberg may well tell us that Facebook – where Hilton’s wife is an executive – is fundamentally a way to bring power back to the communities.
But more and more it seems that the wealth, influence and control of the key technology of our time, artificial intelligence, is centralized in a few directions: Menlo Park, Mountain View, Cupertino and Seattle.