Future%20of%20internet

Mobile is So Money: The Future of the Internet

Across Silicon Valley, companies like Google and Facebook are waking up and realizing that the future of the Internet is no longer taking place on the desktop or laptop - it is taking place on the tablet and smartphone. As a result, there has been a huge land grab in 2012 to control the future evolution of the mobile Internet. Facebook's recent $1 billion acquisition of Instagram is just the latest sign that the social networking paradigm that we've learned to "like" is nearly over. The jig is up. You can look at nearly every significant tech deal of the past 60 days through this prism - the Instagram acquisition, the Path deal, Microsoft's billion-dollar patent deal with AOL, the Google-Oracle legal dust-up over the Android operating system - as a desperate attempt to monetize those tiny screens in the palm of your hand.

For better or worse, we now live in a world of networks, platforms and operating systems that connect together our digital devices. In the best of all possible worlds, you own the network, you own the platform and you own the operating system: you have yourself a nice little ecosystem. That's easier said than done. In fact, only Apple has really done this well, and that's why the company is the most valuable in the world right now, at nearly $600 billion in market cap. To a lesser extent, companies like Google and Amazon have patched together ecosystems. Not surprisingly, Facebook is concerned - it's got a network, but it doesn't have a popular operating system and it surely doesn't have the wherewithal to start cranking out digital devices.

That's why tech patent portfolios are worth hundreds of millions of dollars these days. It's because they are increasingly central to the future of how all of our digital devices connect to each other. If you don't already own a digital ecosystem, you may have to litigate to create one (or hold on to one). In the case of Samsung and Apple, the patent wars are over the devices themselves. In the case of Google and Oracle, it's over the operating system that runs these devices. Remember how Google plunked down over $12 billion for Motorola Mobility last year? That too, was part of a broader effort to control the future of the mobile Internet. Google handsets that run Android are the competitive answer to Apple iPhones that run iOS.

While Apple talks about the post-PC world, it is not like the company was created specifically for the mobile device. Contrast Apple to Instagram, which lives first and foremost as an app on your phone. It used to be the case that an app was a feature, not a company. That's no longer the case. Now that Facebook has plunked down $1 billion for Instagram, look for other "mobile-first" companies to capture the attention of investors and shareholders. How about Path, which just landed $40 million in VC funding from a bunch of top-tier Valley investors to build a mobile version of Facebook? Or Shazam, which started off life as an app but blossomed this year during the Super Bowl as part of a potential meta-product sitting on top of other products? And there's plenty of other contenders that are mobile-first companies, like Tinychat, which now has 20 million users for smart phones.

As Facebook prepares for its gargantuan IPO this year, there is a bigger picture going on here. Silicon Valley is in search of a new paradigm. For now, mobile is that new paradigm. The need to adapt to a mobile world will only intensify as new devices are created that connect directly to the Internet. The new fad du jour is the wearable computing device, which is meant to be worn on the body. Forrester predicts wearable computers - like Google Glasses - will become a huge, untapped market opportunity within several years. One thing is certain: it's getting late early for Silicon Valley to start mobilizing for the future of the Internet.

 

image: Young Businessman Talking on Mobile Phone While Using Tablet / Shutterstock

comments powered by Disqus
×