Google Executive Chairman Eric Schmidt points out that the new platform war – which cover web services and, to a lesser extent, mobile devices – is well and truly underway. He believes that this war is being fought by “a gang of four”.
“If you look at the industry as a whole, there are four companies that are exploiting platform strategies very well. One of them is Google; the other three being Apple, Amazon and Facebook.” said Schmidt. “These are global companies with reach and economics that 10 years ago or 20 years ago one company had – typically Microsoft, or before it, IBM.”
“Each is a consumer brand that provides you something that you could not do otherwise. Google organizes the world’s information; Facebook organizes every friend you’ve ever known and even ones you can’t quite remember; Amazon is the world’s largest bookstore and Apple produces beautiful consumer products,” the former Google CEO said.
Interestingly, Microsoft has been left off Schmidt’s list. In discussing Microsoft’s conspicuous absence from this list, Schmidt stated that, “Microsoft is not driving the consumer revolution in the minds of the consumers, but are instead getting their profits from the union of Windows server and the clients, which they do very well at.”
The difference between today’s platform war and the old platform war (that would be, of course, Apple’s Macintosh versus Microsoft’s Windows systems) is that there are many more players who are all growing very quickly, and because they’re all very well-capitalized (particularly after Facebook’s upcoming IPO), there is very little likelihood that one would acquire another.
“It’s unlikely that the number consolidates because of mergers between them. They’re all too big to get through the necessary global regulatory structures,” Schmidt said.
Google would like to have a closer relationship with Facebook, and could use social data to improve search, but Schmidt claimed that it has become clear Facebook prefers working with Microsoft. “We’ve tried very hard to partner with Facebook,” he revealed, adding that Microsoft gives them deal terms Google wouldn’t.
Google once had a close relationship with Apple, but then started competing directly against Apple’s iOS with its own mobile operating system, Android. “It started very much as a partnership, but now with the success of Android it has gotten rough,” he said.