If we were to look at the Internet product – technology, distribution, content, services, infrastructure, everything – that has been manufactured in the last couple of decades in a manner similar to inventory accounting, with the 90s being more or less equivalent to the raw materials stage and the past decade a sort of work-in-progress cycle, then we may at last be getting to the finished goods ledger entry, documenting that a product previously incomplete but in-progress has been given polish and touched up and made final.

While these last ten years saw an unprecedented burst of innovation and adoption – as meaningful or trivial as you care to see it – followed in rapid succession by replicas and mass production, imitations, enhancements, spinoffs, offshoots, and variations, we feel that these products have almost without exception been imperfect and unfinished. The new Blackberry Tour device breaks down regularly, the iPhone voice signal is horrible, Twitter is inaccessible on a monthly basis, Facebook’s privacy issues are a mess, most of Google is still in beta, and what is more, we may be approaching an innovation level that is close to saturation.

Of course, technical evolution will occur forever, I don’t suggest otherwise, but it is conceivable that changes in the communication landscape for the foreseeable future are less likely to revolutionize the sector as much as, lacking a better term, perfect it. If the era just ended was one of quantity and alternatives, then perhaps the current one will shift its attention to quality instead. For example, the forthcoming Apple slate device, seen in the context of an iPhone on one hand and a netbook on the other, is not so much a revolutionary product as one that modestly seeks to improve upon certain features of its predecessors and adjacencies. By the same token, an unlocked Google phone is not an innovation in technology as much as a potentially improved consumption approach. And if we drop our cable subscriptions in favor of Apple TV, this also is a behavior shift that has been in the making for some time, reflecting a quality and price calculation rather than some particularly new thing.

If the era behind was thus one of fragmented and frenzied expansion, then the era ahead may be one of consolidation and efficiency. Coming down a few notches from platitudes to more immediate realities, the picture that comes into focus could be roughly as follows:

  • From the perspective of entrepreneurs, such an environment suggests a tipping of the scales in favor of strategic partnership and M&A, with a lessening of the purely financial opportunity.
  • From the perspective of venture capital, this might be a period of harvesting and exiting, more so than new investments.
  • From the perspective of old media, the opportunity may present itself to catch up.
  • From the perspective of new media, the onus to become more mature will increase.
  • From the perspective of sector competition, it could be difficult to displace leaders.

But this remains a very broad summation, even if slightly less platitudinal than the sweeping global generality of the previous post in this series. In the third part, coming up, I may dig more deeply into such things as open and closed systems, remote and local storage, asset value affirmation, social commerce, and everybody’s new favorite, the mobile web.


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