Perhaps. But this logic may really just be smoking the proverbial crack pipe. There's no doubt that search is growing at an incredibly fast rate--and is likely to do so for the foreseeable future.
And somehow, many entrepreneurs like to harken back to's classic work on technology, "The Innovator's Dilemma." Undoubtedly, there's lots of evidence to support the thesis that megasuccessful companies get lax and fail to innovate.
Eventually, upstart companies--which do not have the shackles of legacy systems, technologies and distribution--find ways to unseat the leaders and, in turn, become the leaders.
However, the theory can be quite destructive for upstart companies. If anything, the entrenched legacy systems and technologies can be a prohibitively competitive advantage.
A stark example is LookSmart, a fast-growing search company that will see its business grind to a halt. Microsoft, which accounts for roughly 65 percent of LookSmart's business, has indicated that it will bewith the company by mid-January of next year.
There are a variety of entrenched, highly capitalized tech companies--including Oracle and IBM--that have learned the lessons of disruptive change. If these companies see a strategic technology, they quickly mobilize their resources to capture the profits.
It may take a bit of time, but it will inevitably happen. For instance, Microsoft is investing millions in the development of search technologies and will ultimately be a critical part of its next operating system. Search is too important to be left to other companies.
If anything, Microsoft has a sterling track record of quashing disruptive technologies. The history of tech is strewn with its victims: Novell, Netscape, Spyglass, Stac and so on. (An enterprising author might instead write a new book on how big companies effectively stomp on upstarts.)
If anything, Microsoft has a sterling track record of quashing disruptive technologies.
This is not to imply that selling out is the only solution. Rather, it should be looked at seriously. When mega companies are threatened, the response is often brutal and fatal. Unless the upstart has seemingly invincible barriers to entry, it is rational to believe that selling out is the right course of action.
This is what Overture did. It recognized that, while it had patents, brand and profits, it was dependent on distribution alliances with players like Microsoft. At any moment, the big players could turn the switch. Before waiting for this to happen,.
Take a look at the EDGAR filing for the deal. In it, there are Overture's reasons for the merger. Of course, there are the typical synergies--"complementary nature of the technology and products," "expanding marketing opportunities" and so on.
There is also this: "respond more quickly and effectively to technological change, increased competition and market demands in an industry experiencing rapid innovation and change."
Major companies will continue to fall into the clutches of the innovator's dilemma. Sun Microsystems, for example,. And some upstart companies will use disruptive technology to become market leaders, which is what Amazon.com did with e-commerce. But these appear to be rare examples.
The tech titans have the cash, expertise and drive to get what they want. It's Darwinistic but true. Denying that will not help.