Since the birth of the Internet network, large companies and multinationals have tried to tame this media with methods that are clearly outside their philosophy. Unpleasant institutional sites, Internet spin-offs integrated into the organisation when they should be entirely autonomous, etc… as many approaches that show that the Internet is still perceived as a fashion effect on which one must simply be positioned.
Don Dodge clearly states the question: Why aren’t the important actual and future services of the Internet created by traditional companies who have the means to?
Indeed, why didn’t Nestlé create or buy Myspace, a vast social network which could have directly or indirectly sustained an important part of its product commercialisation?
Why didn’t NBC create Youtube for a few thousand $ ? Today, Youtube is worth about 1 billion $.
Why didn’t AT&T create Skype, which was sold to eBay for 4 billion $ ?
There are a number of answers to these questions :
The CEO and top management are excellent organisers, they know their customers needs perfectly well through sales reports and marketing teams. They perfectly manage their production tools; they master the costs and stock exchange rates. These competences make them forget that, in the background, the world and the economy are evolving and changing fundamentally. (Read "Direct Economy by Xavier Comtesse").
Perspectives to increase their company’s value by entering the 2.0 economy are difficult to model, especially at an early stage.
The failiures seen with Web 1.0 and its spin-offs are still fresh in people’s memories, WSJ, CPGmarket,etc…
But especially the fear of cannibalising one’s own production by disruptive solutions.
Ignorance of evolutions in the "Internet".
Managers of brick and mortar companies trust traditional media at 99%, such as television, press or radio to promote and capture their client bases. They don’t know Google page rank, Technorati, Digg, Tivo, social networks and persuasion. (read my post on Static marketing vs. Dynamic marketing).
They don’t anticipate that these new communication methods are going to deeply upset their customer acquisition and retention methods, but modify their short term global strategy even more.
Innovation is the entry ticket for traditional companies into the 2.0 economy. Instead of making their existent products better, heads of "Innovation" departments should take into account the new consumers who are agile and creative, and who will create, finish, use, promote and sell the PRODUCT themselves thanks to the transformation of the value-chain.
And to conclude this post, in order to demonstrate the fascinating power of the 2.0 economy:
"Google, the perfect multibillion business model":
- Google is the world's most valuable online advertising agency disguised as a web-search engine and technology company
- On the stock market, the value of the five main public traditional advertising agencies in the world together does not come any close to Google (worth 100 B$)
- They don’t own or buy any media
- They monetize only our content, our emails, and our information free of charge
- Total Power to the end user to make big money
