It is true that History repeats itself. The Digital Era we are currently living in is very similar to the period of the Discoveries in the XV-XVIth centuries.
In the beginning of 2000, we reached the “Cape of Storms”, with the “Internet bubble”, and many dot.coms went bankrupt, others resisted and new ones emerged.
In the mean time, many have doubled the “Cape of Good Hope”, but there are also “pirates” in the way and a “Treaty of Tordesillas”, this time not between countries, but between companies: Apple and Google. Still, Amazon, Facebook and Microsoft can cross their way, as happened with us Portuguese and our Spanish neighbors whose ways were crossed by other nations (the Netherlands, England and France, …).
These companies are leading the creation of new markets and new (electronic) trade routes, dominated by distribution platforms of applications and contents. That is why we witness a significant war regarding patenting. These are the new frontiers and tolls that have been created in these new markets and routes.
The excitement and success of the recent IPOs in dot.coms – that started with the social network LinkedIn, then with the Russian search engine Yandex.ru, and with the online radio Pandora – is explained by the fact that they can also be important platforms that can generate added value in these new markets and trade routes.
How much can Google or Microsoft gain from the integration of their applications in LinkedIn, i.e., a market with 100 million professional users and respective companies? It will all be solved with the “rental” or acquisition of LinkedIn… of course. The market price has already been defined, in this case above 8 billion dollars.
What about Pandora? It has accumulated losses amounting to 90 million dollars in 10 years, and captured 90 million registered users in the U.S. alone (each user at the cost of 1 dollar; it was not that expensive anyway, considering the “bonus” of an excellent content distribution platform). Pandora is a radio platform that will broadcast worldwide, and will be listen to on every device, including car radios. What is the world market value of advertising on the radio (with the possibility to have segmentation per geography, device, profile, and, of course, allowing interaction)? How much can Apple, Google or Amazon pay for the tunes sold via Pandora? Also here, we will have a future rental or sale contract…. right now the market value reaches almost 3 billion dollars.
I hope that, as a navigators’ country, the Portuguese see this new Digital Era as a major and interesting opportunity to create value and economic momentum, since we are a creative people that was always navigated with courage and curiosity and thus discovered new markets.
Article published at Cibertransistor.com, Diário de Notícias and Meios & Publicidade – 15/July/2011