Faceoff of the Three Musketeers: Google, Apple, and Facebook
After the Altair 8800 in 1975 ushered in the digital era because of its microprocessor, a lot of things have not only changed but they’ve been changing faster. The growth of companies like Facebook, founded in 2004, in just eight years has over 845 million active users. Having launched its IPO in 2004, Google’s search engine is the most used web site in the world. Then you have Apple who has over $27 billion in free cash sitting on the side in case it wants to buy anything.
What’s at stake is how fast these three companies can position themselves in a rapidly developing social network market. There’s no question Facebook has the potential to become a great company, but with its staggering stock price hitting an all time low today at $21.71, they have a long way to go. And as a harbinger of trouble, the company had 2.14 billion outstanding shares last week and today they only have 1.88 billion shares outstanding. Someone is buying that stock and it is because they’re scared.
Still, you cannot ignore the gargantuan threat Facebook offers in internet traffic. Google responded today by buying Wildfire Interactive—a social media marketing software company—in the ballpark of $250 million. This acquisition comes on the heels of its purchase of Sparrow, an email application, in hopes it can build the same success it had on the iOS. A significant reason for Google’s success is its execution speed: the time it takes after it buys a company to assimilate and apply it in its own business model.
How will Apple react to Google? They bought AuthenTec, a network security company, a little over two weeks ago for $356 million. So you can expect the next iPhone to have the latest in integrated security. Apple, though, is slower to act than its rival, Google, which is clearly demonstrated by its track record. Since its IPO in 1980, the company has only made $1.62 billion in acquisitions compared to Google’s $21.4 billion. One company Apple might have its eyes on is Twitter. The social network recently passed the 500 million user plateau mark although this number is somewhat skewed. That is, only 27% of those 500 million accounts are active users. Still, Twitter would be the perfect platform for Apple to compete with Facebook and Google+. The private company would cost Apple approximately $10 billion.
If you want to have a better idea of how fast the digital era is accelerating things around you, then take a look at print media verses digital. There are those out there who fervently believe that printed books will never go out of style. It wasn’t too long ago when the New York Times made major efforts to increase their online presence as a result of a fading print subscriber base. The Financial Times, the historic British newspaper, now has more digital subscribers than it does in print. That generation of young folks who haven’t ever read a physical book, but have read plenty of e-books, is already here. Hold on to your print because in the very near future they might be collector items.