The Shrinking Web
With the world currently facing an economic downturn, many are waiting for a second Web bubble to burst. What will come of the huge amount invested in social networks and what will the future landscape of the Web look like?
Google and Amazon reign supreme
A new report from Jeffrey Lindsay, analyst at wealth management firm, Bernstein, predicts that both Google and Amazon.com will continue in their respective strong positions. According to the 310-page report title "U.S. Internet: The End of the Beginning," Yahoo! and eBay will either struggle or change significantly in order to cope in the changing market.
The report highlights that the key reason for the predicted success of Google and Amazon is how both companies have strayed very little from their original business models and key competencies.
"We expect two players to continue to perform strongly, Google and Amazon. Both Google and Amazon.com are still racking up annual growth rates in the 30 to 40 per cent range, with only a relatively modest slowdown in sight," wrote Lindsay in the report.
Changing Web equals challenging times
However, Lindsay also foresees both companies facing huge challenges in the future. If Google is to continue in its position as the search engine of choice it will have to cope with the emergence of mobile handsets as a key platform for Web access. Amazon will also need to address the issue of the intended increase in state taxes.
Regarding Yahoo!, Lindsay predicts that a purchase by Microsoft is inevitable, while InterActiveCorp (IAC) will continue with plans to break the company later this year. eBay could also find itself under the spotlight of a potential takeover which could also see both Skype and PayPal spun out as individual businesses.
Changing Web equals unpredictability
While not dismissing the report outright, Xavier Adam, managing director of AMC Network, believes that the report should not be read as gospel as the Web is such an unpredictable environment.
"Analysts are always looking for the black and white. We do not live in a linear world where x necessarily always equals y. Just because a certain organisation is on to a good thing now, does not mean it will definitely continue in the ascent in the future," said Adam.
"Similarly, a company can get it wrong and come back, or, reinvent itself. Yahoo! for example was a major player and continues to be so, it only takes them to get one, or, two technologies right and they will be back in the game again. While Microsoft has struggled to hit an ASP model, do not consider Bill Gates over. They may do something radical like divide up their company, to be more agile and attract the brains that can think in the new dimension," he continued.