Web 2.0 Act 2: Integration War

Recent uproar over Kiko's demise and conversations that followed made me laugh, hard. Is Google the new Microsoft? Nasty question. Google has to grow continuously and that growth has to come from somewhere. A better question is: will Google compete unfairly? If one considers integration leverage unfair, my answer is yes.

It won't be so bad for a while though because all the big boys (Google, Yahoo, Microsoft, and AOL) will be competing with each other to offer the best integrated web services which means acquisitions and partnerships for small companies. But pretty soon, the picture will turn darker, making it near impossible for small companies to survive without joining one of the big boy's integrated service network and, to succeed, companies will have to spend millions of dollars to get a prominent link on the big boy's main page.

A network of Web 2.0 companies can't compete with those of the big boys because there is no hub to rally around. If one somehow managed to organize and integrate all the small companies represented at the TechCrunch party, the result would confuse the users and constrain the companies. APIs? I am sure the big boys will use APIs to rally third parties to their side in the war, but the silkroad will eventually be turned into puppet strings.

It's useless to ask whether Google is the new Microsoft. Ask instead how can small companies survive the chaos to come.

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