Eric Schmidt: 'Gang of four' rules tech
Google Executive Chairman Eric Schmidt at the D9 conference explains why Google, Apple, Amazon, and Facebook lead the consumer tech world.
RANCHO PALOS VERDES, Calif.--Google Executive Chairman Eric Schmidt said a "gang of four" rules technology today: Google, Apple, Amazon, and Facebook.
The four companies are "exploiting platform strategies" to create enormous value both for consumers and shareholders, he said here today at the D9 conference.
In addition to offering services that are unavailable otherwise (Amazon, for example: everything you want to buy in one place), each platform, Schmidt says, is a platform that other companies are building additional value on top of. He cites the combined value of these four companies--more than half a trillion dollars, he says--as unprecedented in the history of tech. Also unprecedented is the fact that there are four companies in such powerful and controlling positions.
Schmidt does not expect to see consolidation of these four companies, nor is he convinced these four companies will stay in power for an extended period. It's more likely that one will falter and an upstart fill in for it. Or perhaps a company not in the top four will rise to power. Like Microsoft, perhaps?
No, Schmidt posits that the fifth and sixth companies in his list are perhaps PayPal and Twitter. Microsoft, he says, is an enterprise company, not a driver of consumer products (Xbox notwithstanding).
Furthermore, Schmidt implies that a shakeup among that gang of four could come quickly. "It's axiomatic," he says, noting that the time a company has at the top of the heap on the Internet keeps getting shorter.
Google, he says, tries to keep ahead of the inevitable slow-down in his own company's innovation by building (and buying) completely new products--he says adding display advertising to Google's revenue stream was a completely new business that added billions of dollars of income to the company. The standard tech company curve, he says, is this: two guys start a company, go public, get rich, and the company "asymptotically" becomes boring and middle aged. Product innovation is absolutely required to avoid this.
Music is fundamental to Google's continued growth, Schmidt adds. In this field Google is trying to not just unseat Apple, but challenge the music industry to innovate when it comes to license agreements. Cloud-based consumer music licenses would add value to end-users and by extension to consumers, Schmidt says. "We are attempting to convince the music industry to support cloud-based terms, and just have not been successful at it."