BEST OF THE WEB: The tech war of 2012 will change everything

Remember 2007? It was a simpler time. The tech bubble had long subsided and while the industry was still attracting a lot of attention, there wasn’t the crazy white-hot attention on how businesses would integrate new things like mobile, or social media – the iPhone didn’t even exist.

At that time, rules and boundaries were formed. Apple dealt with computers, Google was a search engine, Amazon sold books and Facebook was starting the global revolution in social networking. It was all clear and simple.

Unfortunately, all that has changed. Now these four tech giants are constantly battling against each other, moving further and further into enemy territory by creating competing services, and spending plenty of money while doing so.

Apple launched the iPhone, so Google pumped up its Android OS. Facebook has 800 million users, so Google launched its own network. Amazon sold books, so Apple thought it would be a good idea to do the same thing – and Amazon retaliated with the Kindle Fire.

A new piece on Fast Company chronicles this fascinating time in technology history, when some of the biggest companies are trying to be everything to everyone. Consumption of media is the game now, and these four titans are trying hard to become the biggest provider.

“Remember when Google’s goal was to catalog all the world’s information? Guess that task was too tiny. In just a few months at the helm, CEO Larry Page has launched a social network (Google+) to challenge Facebook, and acquired Motorola Mobility for $12.5 billion, in part to compete more ferociously against Apple.”

“Amazon, Apple, Facebook, and Google don’t recognise any borders; they feel no qualms about marching beyond the walls of tech into retailing, advertising, publishing, movies, TV, communications, and even finance.”

This in-depth article takes a hard look at these companies and their actions, and looks at several different ways it could change how users interact with technology, and what they should expect in the future.

One of the more interesting predictions is that given these companies have or plan on amassing huge databases of credit card numbers, the potential for mobile payments is huge – especially with Apple, which the article argues has a significant advantage.

“First, the iTunes database of customers is huge. Second, there’s the iPad, which is fast gaining traction as a next-gen cash register in small businesses around the country.”

“This sets up Apple to own both sides of potentially millions of transactions: Go to your coffee shop, wave your iPhone against the cashier’s iPad, and voilà, you’re done. Multiply that by every hipster in America and you see the scale of Apple’s ambition.”

The tech industry is slowly beginning to compete against each other, but whether consumers will win in the end isn’t clear.

The Dropbox that got away

There are plenty of interesting stories coming out after Steve Jobs’ death, especially around potential deals that were or weren’t realised. One of the most fascinating is the story of Dropbox, and how the iPhone giant nearly snapped up this start-up for a massive nine figures.

Jobs invited Dropbox founders Drew Houston and Arash Ferdowsi to chat about the business.

“Houston cut Jobs’ pitch short. He was determined to build a big company, he said, and wasn’t selling, no matter the status of the bidder (Houston considered Jobs his hero) or the prospects of a nine-digit price (he and Ferdowsi drove to the meeting in a Zipcar Prius).”

“Jobs smiled warmly as he told them he was going after their market. He said we were a feature, not a product,” says Houston.

Next, Jobs announced iCloud, and Dropbox kicked themselves.

Nevertheless, the piece is a great look at one of the fastest growing start-ups around, one with a reported valuation of $US4 billion, and how the company got up and running fairly quickly.

“The idea for Dropbox was born three months later on a bus to New York. He planned to work during the four-hour ride from Boston but forgot his USB memory stick, leaving him with a laptop and no code to mess with.”

“Four months later he flew to San Francisco to pitch his idea to Paul Graham of incubator Y Combinator.”

Dropbox may have missed a chance to cash out with Apple, but it’s definitely turned out for the better.

Amazon changing the publishing game

But while Amazon may be moving more into selling apps, music and films than Apple would like, it’s still a book company at heart. In line with that, the company is now producing a publishing arm that will work with authors directly in order to sell their work on its electronic readers.

It’s scaring the publishing industry. According to this piece in The New York Times, which quotes a number of executives including Dennis Johnson of Melville House, “publishers are terrified and don’t know what to do”.

Already Amazon has bought a few books, one for high six figures, and it’s only the beginning – 122 books are slated for publication this year.

“Amazon has started giving all authors, whether it publishes them or not, direct access to highly coveted Nielsen BookScan sales data, which records how many physical books they are selling in individual markets like Milwaukee or New Orleans.”

“It is introducing the sort of one-on-one communication between authors and their fans that used to happen only on book tours. It made an obscure German historical novel a runaway best seller without a single professional reviewer weighing in.”

The book industry isn’t dying, but it’s definitely changing, and Amazon is leading the way.

The originality of American start-ups

American tech start-ups seem to garner a lot more attention than companies in other countries, and perhaps for good reason – this piece in The Atlantic argues that they actually change the shape of the entire economy.

The article argues that unlike other start-ups, the system of innovation practiced in Silicon Valley is “based on three key principles: technology, talent and tolerance”.

“This system, this social structure of innovation and new firm formation, requires a constant flow of especially talented people – and not just scientists and investors, but entrepreneurs with the vision and skills to follow through, executing and building companies.”

But it also requires experimentation, pointing out that Silicon Valley has plenty in common with the hippie culture of the Bay Area in San Francisco.

“Hippies are what Jobs and Wozniak looked like, with their long hair, ripped jeans, and beards. ‘Doing LSD was one of the two or three most important things I have done in my life,’ Jobs famously told The New York Times’ John Markoff. Try to picture Jobs and Wozniak in one of the leading centers of banking or industry.”

While the start-up culture is beginning to become more global, it is definitely true that without American innovation, the tech industry would not be where it is today.