Who will fuel the next wave of the growth of the Digital Media? Or more specifically- the Internet?

In an earlier post, I wondered if the new phase would still be fuelled by the Internet biggies. I also wondered if many small players are hugely susceptible to the might of the big guys. After all, the Internet biggies have been known to ‘eat up’ or acquire smaller promising companies.

Specially if you are a small player getting into their turf- they either acquire you, or (attempt to) kill you.

In this post, I turn the things a bit around. And argue in favor of these smaller companies.

To start with- there are signs that many big internet firms are precariously going the route of being “just another internet company”.

Or maybe these guys restart their growth story- with tremendous resources at their disposal. Only god knows!

Whatever it is, these are formidable forces. They fueled the growth of the Internet in the late 90s and 2000s- and grew exponentially in the range of product they owned- most of the times by the virtue of inorganic expansions.

You know them- the Googles, the Yahoos, the Amazons, the MSNs and the ebays.

The big question to be asked then is – are they able to play the same role in today’s ‘World Wide Web’ ecosystem as they have played over the last decade or so? With new players, new paradigms, escalating costs and cascading economies, what mantle are they going to wear?

Conglomerates by acquisition? Growth fuel-ers? Facilitators? Fence sitters? Or worse…hang on- there isn’t probably a “worse” than being ‘Fence Sitter’ for these guys.

If that scenario becomes a reality- these might be the possible causes:

Breakneck momentum and Survival of the fastest. Because anyone is giving a fight to everyone:
Vibes on the ground (and some in the stock market sentiments- where Apple has a market cap more than Google quite consistently now)- and yet some more in the virtual space- (with FaceBook and Twitter counting on conversation searches, and others like ‘bookmark search’ nibbling into their audience share etc) are indicators that in order to grow, Google and others might have to undergo another wave of serious innovation sooner than later.

It is not new to note that the big web brands have had various failures and limitations inspite of having deeper than deep coffers. Really.

Not only from the nimble small/independent companies that are causing disruption but competition is getting fiercer even within the biggies themselves.

It is a “Goliath against a David and another Goliath” match- where everyone is fighting everybody. Just like everywhere else. But this is the Internet. Battles here are fiercer- and shorter. These are the webDavids and the webGoliaths.

As an example of “Goliath against Goliath”, Apple is reportedly coming up with its own social network ( I can see the fanbois rejoicing)- with the threat of eating into audience attention span from Google properties & Microsoft and Yahoo eventually eating up search ad share.

And for the webDavids- I am surprised that so many nimble local map players have come up with such a variety of cool services, many ironically utilizing Google’s API. Apple’s iTunes is being challenged on its own turf- by small players launching competing apps for the iPhone!

Weak Products and weak marketing

The webDavids are slowly but surely gaining their footholds against the webGoliaths. They have not only been more nimble, with lesser cash burn rates, but in many cases even have also been able to develop great products- exploiting conspicuous gaps. (Twitter apparently had half of their earlier funds still in the bank when they received a fresh round of funding).

Also, for the webGoliaths, there have been surprising failures in the product development or product marketing front.

There are services not picking enough steam for the big players. Like VoIP forays by Google. It caused a bit of hype in the beginning and then died off. What was the unique disruption this service was causing? And why has is failed to retain the level of consumer interest?

And these are just web based business models – there are many forays by Google in print and radio that have proved quite disastrous (or ahead of their times). A case of trying too fast too soon.

Small does not mean- you can eat it

Traditionally, the big guys attempt to subvert smaller rivals by launching their own offerings against the smaller players. After all, big muscle means bigger market share right? Wrong.

PayPal-eBay: Ebay brought their own payment service to the market to kill payPal. It could not. PayPal became so popular, that eBay had to follow the philosophy of “If you can’t beat ‘em- BUY ‘em!”

Youtube-Google: Google had great reach and a repeat visitor base. YouTube was a baby. No match for the reach. Google Videos was launched- as  a me-too service at best at that point. Burnt some cash. And then ‘had to’ buy YouTube. Not bad. The small fish of yesterday- YouTube us the second most popular search engine on the Internet today.

There are many more examples- and I’m not even talking about the new Davids and Goliaths (Facebook trying to acquire Twitter- finally buying small FriendFeed, etc)

The never ending story continues. Grow big fast, subvert, kill.The mantras of survival in the internet ecosystem.

While everyone’s back to furious product development (igoogle social network, Google waves, Bing, conversation search, social shopping, etc) it is truly the survival of the fastest here.

Think about it.

Shalabh

(@shalabhpandey on twitter)