The Death of Google (and Yahoo and …)

Leo Hindery gave a provocative speech at Convergence 2.0 today on the end of the portals business. Here is a  summary:

Hindery … first took all
content and distribution and broke it down into three columns using a
powerpoint slide: Portals (AOL, eBay, Google, MSN, Yahoo!), Content
Providers (ABC, NBC, Disney, et al.) and Non-Broadcast Distributors
(Cable, RBOCs, Satellite, Wi-Fi etc.) Hindery points to the portals
column and says that the $225 billion market cap represented by those
five companies can be directly linked to lost money in the valuation of
the companies from the other two columns. This imbalance, he says, will
correct itself.

Why? Because he thinks at least two-thirds of the imbalance is based on advertising dollars and non-proprietary content. Content providers will eventually figure that out, and, he argues, the result will be four of the five aforementioned portals will fold.

Ballsy stuff.

Related posts:

  1. Google is the Only Portal
  2. Yahoo: Google? Never Heard of It
  3. Ebay’s Google/Microsoft/Yahoo Dance
  4. How DFJ Missed Google (and Yahoo)
  5. Rumors of Software’s Death, etc.

Comments

  1. fartikus says:

    why does he assume there is an imbalance? the tv networks have been trying to take back usershare from the web properties for years (snap.com, msnbc.com, etc)
    if i were to put my money on the firms to correct the “imbalance” in ad dollars from web portals, i would not be looking into the past, but the future (ads in video games, ads in virtual worlds like secondlife, etc).

  2. Joe says:

    I think it far more likely that the absurd pay-per-click advertising model will collapse. The question is whether the change will be long or short and whether portal operators will have the financial strength to weather the changes.
    In other words, the entire amount of money spent for electronic advertising will decrease, probably quite significantly. I’m quite skeptical, though, that that means the dollars will flow to other industry sectors.
    (I do agree with the above poster that placement ads will probably be the better bet. Users don’t seem to mind and it allows companies to really target their advertising.)

  3. Joe says:

    By the way, for the record, I predict Yahoo! and MSN will survive more or less intact and MSN only because Microsoft has shown such a willingness to flush money down the toilet.

  4. Jason says:

    Now that’s really funny… four of the five big players (google, yahoo, aol, msn, fox) will fold to Disney, NBC, and ABC!
    hahahahahahahahahahahaaha
    hahahahahahahahahahahaaha
    hahahahahahahahahahahaaha
    Right… Disney is going to come from no where and make a better search engine than the big five, and NBC is going to have a better email application than the big five…. and ABC is gonna great the next killer IM client.
    This can’t right… this guy can’t be so dumb as to think that Yahoo/AOL/MSN/Google/etc. businesses are based on content can he?!?! The portal business is driven by three things: email, search, and IM. That’s it people… the other 20-30% of traffic just icing on the cake of core services.

  5. Venkatesh says:

    He is assuming that people are going online for the content these companies generate , which is a false assumption. One goes online for communication(email, IM), searching for content (proprietary or otherwise) which is not available via these content creators, publishing content and for social networking etc.
    None of these are enabled by the media companies. I would have agreed with his assumption if 50% of my search results ended up on content generated by these media companies. The actual figure would be like .5%.
    Internet is more than just “Proprietary Content Economy”.

  6. Bryan says:

    How can he fail to see the value added model of a company like Google?
    Finding something he wants in a matter of milliseconds isn’t worth anything to him?
    Google doesn’t own the content. They just organize it and link to it. Accusing them of theft is analogous to calling the phone directory thieves.
    The development of separate content developers and content organizers is natural when you have such a huge amount of content. Remember that one of the reasons Google has reached meteoric popularity is due to the failure of companies like AOL.

  7. Joe says:

    Please read Google’s financials. The vast, vast majority of their income is from advertising revenue. Google’s success is entirely predicated on the current superiority of its search results as compared to everyone else. If they lose first place or, more likely, the pay-per-click advertising model falls out of favor, Google’s revenues will plummet.

  8. BDG123 says:

    Now there’s a many who knows what he is talking about. Google is one of the most overrated companies in modern history. Might someone tell me how their only source of revenue, click advertising, will play in the world where devices are a million times more powerful and the majority of interaction via the web is by a handhelp, earpiece or some other device which ties us into the net full time? That isn’t decades away either. Most likely within a short period of time, many of these methods of connecting won’t have a display. Google is a search engine. The technology is thirty years old. Now, their algorithms aren’t thirty years old but those who view the future of the net through Google and their current business model know little or nothing about technology. That isn’t an opinion. That is a fact.
    Content will eventually dominate on the net.

  9. Richard says:

    So BDG123, if you’re connected to the net fulltime or via a mobile device you don’t need a search function?

  10. chickun-wing says:

    Is this the same Leo Hindrey that sold off the Global Center division of Global Crossing to Exodus for 6.5 Billion dollars all while lining his pockets with 205 Million screwing his employees on the deal and creating the 4th largest bankruptcy in US History? Hindrey is a cable con-artist, has been, always will be. He’s trying to pull a deal somewhere and he has very crafty/sneaky people working with him.

  11. Dan Ancona says:

    “Content will eventually dominate on the net.”
    Already is. It’s just not Disney etc.’s content that’s going to win, it’s user created stuff.