Magazine article Marketing

Andrew Walmsley on Digital: Change at the Top

Magazine article Marketing

Andrew Walmsley on Digital: Change at the Top

Article excerpt

The companies now most associated with the internet are unlikely to retain their dominant positions.

After 15 years of explosive growth, the web's major players are clear Search, dominated by Google, is the winner in the advertising space. The PC is how we look at the internet, and for 30 years Microsoft has existed in symbiosis with Intel, which makes the chips that power 80% of PCs. Meanwhile, the emerging mobile space is led by Apple, which has made the smartphone category a mass-market phenomenon with its iPhone.

We should be able to put our feet up now the path to the future is plainly laid out before us. Except, of course, it isn't.

All the big guns I have listed here are in imminent danger of losing their primacy. That's more than pounds 500bn in combined market capital that might be headed for the dumpster, as the digital economy continues to disrupt existing models and develop at unbridled pace.

In March, Facebook overtook Google as the most-visited website in the US, growing 185% on the previous year compared with Google's 9%. It will take longer in the UK, but many see the same outcome as inevitable here.

However, it is not just scale that's a threat to Google - how people find stuff online is evolving. A teenager who wants to know which mobile phone to buy is more likely to ask their friends via Facebook than use Google. Social search is a behavioural change that, if it spreads into older demographics, is set to pull the rug out from under algorithmic search, creating a powerful competitor for marketers' attention.

Social networking is driving another change, too. It is fast becoming the killer application for mobile, with Facebook visitors from mobiles staying on the site 30% longer than PC visitors.

Moreover, the rise of the smartphone is increasingly driving internet consumption into the pocket; especially in markets such as China, where fixed-line infrastructure is less developed.

Mobile devices already massively outnumber PCs, and Intel's supremacy is waning. In terms of sales, ARM chips, which power mobile devices, beat Intel chips by a ratio of 10 to one. Intel's design, build and sell model lacks the flexibility of ARM's design-and-license approach, which allows mobile designers to incorporate the chip's technology into other systems.

Alongside this, Intel's co-dependent, Microsoft, is also suffering. Windows Mobile has just 9% of the mobile operating system market, and its relaunch this year is a desperate bid to arrest its continuing decline. …

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