Revenues and profits of the big five consumer tech companies still depend heavily on external technologies that are outside of their control.
When evaluating an internet company’s strategic position (the defensibility of its profit moat), you need to consider: 1) how the company generates revenue and profits, 2) the loop in its entirety, not just the layers in which the company has products.
Think of the internet economic loop as a model train track. Positions in front of you can redirect traffic around you. Positions after you can build new tracks that bypass you.
Possible future flash points include:
1. The automation of logistics
2. Web VS App: Apple and Facebook won the App side of the buttle, Google the web one. The mobile web is in decline: this shift could have a significant effect on web publishers who rely on older business models like non-native ads
3. Video: from TV to mobile devices: the question for the next decade is who will win the market for ads that generate purchasing intent (so far the winner is Facebook, followed by Google). Most likely this will depend on who controls the user flow to video advertising
4. Voice: baking search into the OS. This would mean that AI interfaces could become the master routers of the internet economic loop.