Investors are already placing their bets on who the winners of the new Internet will be: Over the past five years Amazon’s shares, despite their recent fall, have risen 370%. Apple’s are up 438%. Google’s, meanwhile, have merely risen by 17% in all that time. It is still the early days of this long-term trend, but my hunch is that this gap in performance will widen over the coming year — and that Google’s long slow decline has already begun.
What makes Google’s predicament so serious is that it has little to do with technology and everything to do with business models. You can buy or copy technology, but changing a business model is about the hardest thing any company can do. Google’s business model, and nearly all its revenue and profits, depend on the Internet remaining open. When we search, Google pockets billions from advertising. If the old Internet is changing, Google’s original way of doing business loses value.