Tech Giants Are Less Powerful Than They Seem

A hallmark of companies cresting into middle age is a preoccupation with regulatory politics

By Holman W. Jenkins, Jr.. Excerpts:

"Google is said to be dominant in a certain kind of “search,” but searching for purchasable items now often begins on Amazon. Meanwhile, much of the online information that most preoccupies Americans is to be found inside Facebook, Twitter and other apps whose data isn’t reachable by Google.

Facebook is surely dominant in the business of algorithmically sifting your friends’ posts to decide which you’ll see, but there remain plenty of other ways for friends to exchange information.
Facebook and Google together are said to be dominant in digital advertising. But digital ads are ads, a $540 billion annual market they hardly dominate.

Amazon is said to be dominant in e-commerce, with a 44% share. But its share of total U.S. retail sales is 4%. Its share of global retail sales is less than 0.5%.

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What’s more, companies dominant today won’t be dominant a decade or two from now. That’s the lesson of history. Today’s leaders will guard existing cash flows and leave it to others to try to catch the next bit of lightning in a bottle. And for good reason: The iPhone, Google’s search box and the Facebook twist on social media were far from certain to be the windfalls they turned out to be."

"Apple is lashed to a single product, the iPhone, whose latest model is hardly leaping off the shelf. Apple’s fabulous margins are increasingly maintained by jacking up prices. The company is moving into a grandiose new headquarters even as it falls far behind in the video-streaming market it once imagined conquering.

Already visible down the road are wearable technologies, augmented and artificial reality, various services that render the limitations of location meaningless. Anybody who thinks he knows which companies will capture these opportunities is fooling himself.

The truth is, today’s digital giants are providers of easily dispensable or replaceable services, so must act constantly to keep users happy or risk being eclipsed."

"The tech giants were all but pushed into being influential voices in the net-neutrality fight, not because they believed in the cause, but because anything that centralizes control in Washington naturally appeals to companies with the biggest lobbying clout. At the same time, their greatest fear is Congress deciding their own platforms should be treated as “public utilities” too."