(The Big Disrupt) Myspace: What Killed MySpace? (It Wasn't Facebook) by @coldfusion

(The Big Disrupt) Facebook: Why TikTok is the Least of Facebook's Problems

Facebook has many enemies and few friends but has largely been able to escape the fate of companies before them with who inspire more hate than love because of the unassailable position in the digital ad space but of with the impressive and swift rise of short form video app TikTok, it’s the first time in a while that Facebook is  faced with a threat it can’t easily dismiss. 

There are a number of things that make TikTok a formidable competitor in the digital ad space from its large and young audience, it’s rapid growth to its expansive ambition but what really makes TikTok dangerous is its Beijing based parent company, Bytedance. In hindsight, Facebook has been incredibly lucky in its rise to prominence as it has managed steal a march on Myspace as it self-imploded, blow past a popular but poorly run Twitter and outright copy and stunt the growth of a promising but outmatched Snapchat. Along with some of smartest acquisitions in the last decade in WhatsApp and Instagram, the Menlo Park giant along with Google has managed to secure a duopoly over the digital advertising marketplace for the best part of a decade. 

However, in Bytedance both Facebook and Google face a company that arguably poses the most dangerous threat both companies have faced in a while (we can make the same “more luck than skill” argument for Google’s rise to dominance). 

All companies have to deal with competition but looking closely at Facebook, the social media giant looks extremely vulnerable and has for years. Even as Facebook ruthlessly dealt blow after blow to snapchat’s business, it showed a certain weakness of a company that’s seemingly couldn’t compete with snapchat technically and offer original features or appeal to its younger audience and build a more compelling alternative from scratch. Recent years of scandal has had a debilitating effect on the Facebook which has seen it shed top executive talent including the founders of WhatsApp and Instagram who even have made their reservations of the product and the company public. 

Facebook tried its copycat strategy to undermine TikTok with the release of Lasso in late 2018 but twenty months later shuttered the app and has elected to try the same trick rolling out TikTok inspired features on Instagram and plan to roll it out in 50 countries. Only time will tell if this strategy will work but it speaks to Facebook’s inability to affect TikTok rise directly. 

However, as mentioned before, TikTok is the least of Facebook’s problems. Bytedance, unlike past competitors, is well run, backed, popular (with its large and growing user base at least) and extremely ambitious. The company is already ruffling very formidable feathers in its homeland with Bytedance effectively breaking up the Alibaba, Baidu and Tencent (BAT) Triumvirate dominance over the Chinese digital advertising market with its explosive growth. 

Bytedance now has the US in its sights and Facebook already looks like that knows that it faces a foe that isn’t going away. There has been reports of Facebook internally being worried by TikTok’s growth and no wonder as they’re witnessing Bytedance win over key blocs Facebook has ignored or strained over the years and even today. Facebook currently finds itself the subject of a large ad boycott of its own customers that could extend into august and Facebook’s response to it has been complacent to say the least with Founder and CEO Mark Zuckerberg confidently predicting “these advertisers will be back on the platform soon enough”. 

While we think he’s right as the reach and targeting opportunities Facebook offers to its customers is hard to match, it speaks to the deep-rooted problems that has a great business looking extremely vulnerable at the hands of a company that didn’t exist 8 years ago and that despite its success, is a speck of dust in the US digital ad space in comparison. 

Bytedance’s only real weakness is that it's based in the wrong country at the worst possible time. Tensions between China and the US couldn’t be higher and with China squaring up with India, a longtime U.S. ally, over a border dispute, it's no wonder that TikTok has been subject to bans and other threats of expulsion in a number of countries allied with the superpower. Tensions between the US and China isn’t the only reason TikTok faces expulsion in the US and elsewhere as concerns over privacy and inappropriate content amplified by the exposure of its youthful audience to both issues. 

Facebook, however, still struggle with similar issues to this day and a large part of why the ad boycott mentioned earlier exists speaks to the company long term failure to combat issues over privacy and content moderation.      

In any case, whether TikTok/Bytedance are allowed to do business in US or are subject to similar treatment metered out to Huawei, Facebook must address its now potentially deadly aloofness and tone-deaf approach to dealing with controversies and seek to win over key blocs (in Facebook's case,  advertisers, influencers, marketers, developers, publishers, content creators and rightsholders)  or find its business under pressure it's never had to deal with. 

In sum, Facebook must thank its lucky stars TikTok was founded in Beijing and not 4,742 kilometers west of the Chinese capital because if it was, we’d be writing about Facebook inevitable decline.   

(The Big Disrupt) Google: Why Google's future In Europe Is About Get Expensive

With the news of Google being slapped with a record 2.4 billion fine, it caps an end of a saga that really isn't over just yet. Google were found last week to be guilty of abusing their dominant market position in search to promote its Google shopping service over its competitors. 

This really should send shivers down the spine of other tech giants such as Facebook, Apple and Amazon who habitually use their dominant position in one market to bolster a service in other. Indeed, one of the reasons why Google, Facebook, Apple and Amazon are so feared is because they can use their dominance one or more markets along with a large war chest to bury even their most strident competitors into submission. 

The last decade or so has produced one case study after another of US tech companies beating their competitors to a pulp whether its Apple taking over the smartwatch market in a matter of months or Facebook using its dominant position in social media to copy snapchat out of existence as the self-titled camera company currently hovers just above its original IPO price.  

With this in mind, it's little surprise that Walmart, a highly profitable company that represents 14% of the $700 billion grocery market, has 4,692 stores and a world class distribution network took a big hit on Wall Street when Amazon, barely a blip in the marketplace, made headlines for buying Whole Foods, which only has 466 stores and a 1.2% share of the market.  

In any other case, Walmart would have nothing to worry about but since Amazon enjoys a dominant position in more than one marketplace and has one of best loyalty programs ever in Amazon prime, it can quickly hoover up market share offering its other services (for a time at least) free to entice prime subscribers to shop at Whole Foods online or click and collect in store.  

In short, Google, Facebook, Apple and Amazon pose a threat to competition in any market they enter and no one knows this more than the EU. While the 2.4 billion fine isn't exactly going to bring Google to its knees, the EU has been sniffing round Google's mobile open source OS Android accusing the Mountain View based company of forcing manufactures to load its apps over competitors which should concern Google as it may have a better case however, not much has happened since last year.        

In truth, Google and other US based tech giants run the risk breaking EU antitrust law as it focuses on the anti-competitive behaviour of dominant companies that effect the it actual competitors as opposed to the American tradition of protecting consumers from the use of  the dominant firms market power. 

While Google dominance in the search and mobile OS markets has been probed by the Federal Trade Commission in the past, it has largely come out of its battles with the FTC unscathed as the FTC has been unable to prove that Google's dominance negatively impacts consumers given most of Google's products and services are either free or priced competitively in the markets it operates in.  

What this means is that the FTC can't punish Google for using its dominance in one or more markets to bolster a service in another even if that service itself becomes a dominant player so long as it provides net benefits to the end consumer.  

However, antitrust in Europe is a different monster entirely and Google in particular could end up cutting more checks than it bargained for as the EU legal process is nowhere near as litigious as its American counterpart and Google has a lot of powerful enemies, Oracle, Microsoft and Newscorp among them, who are more than willing provide evidence against the company through the EU's complaints driven system. 

In sum, Google may be 2.4 billion pounds lighter but with the EU looking to bring Silicon Valley behemoths like it to heel and its bevy of rivals all too willing to help, fines in the billions could become business as usual.