On the Shoulders of Giants: Internet companies succeed by disintermediation, not creation per se

[c1ue]

http://www.businessinsider.com/chart...revenue-2011-3



Now compare Ebay's revenues for the same period:

Ebay revenues 2000 2009.png

Any questions?

[lektrode]

Re: On the Shoulders of Giants: Internet companies succeed by disintermediation, not creation per se

http://www.businessinsider.com/chart...revenue-2011-3

Now compare Ebay's revenues for the same period:

[ATTACH=CONFIG]3942[/ATTACH]

Any questions?

how about http://www.craigslist.org/about/sites ?
would think thats where most of the classified section has gone to.
but 'disintermediation, not creation per se' was precisely my comment re a prev post that was hyping the latest IPO candidates a few weeks ago = dont see how this will help to 'save or create' any jobs whatsoever, merely 'redistributes' the existing market share of the respective lines of biz the newcomers wade into, and _then_ either eliminate jobs with their more streamlined biz model or worse, simply will get away with paying less, because.. well... "we're NEW!" with "unlimited advancement potential" (prolly what they told the suckers, i mean, 'team members' at webvan and pets.com etc)

but maybe i'm just getting more skeptical (and old n kranky ;)

[reggie]

Re: On the Shoulders of Giants: Internet companies succeed by disintermediation, not creation per se

Of course it's about disintermediation of existing social structure. What, exactly, do you think the Internet was established for? And of course those that disintermediate existing structure, and facilitate the best framework for applying laws of Dynamics and Control, will gain the biggest returns.

For those that only give a shit about making money, then learning the science that's driving our societal direction will make one much financially proficient. For example, who would have thought something as simple as Bit.ly would be so powerful, so telling, and so valuable?

[c1ue]

Re: On the Shoulders of Giants: Internet companies succeed by disintermediation, not creation per se

Of course it's about disintermediation of existing social structure. What, exactly, do you think the Internet was established for? And of course those that disintermediate existing structure, and facilitate the best framework for applying laws of Dynamics and Control, will gain the biggest returns.

Uh whatever

For those that only give a shit about making money, then learning the science that's driving our societal direction will make one much financially proficient. For example, who would have thought something as simple as Bit.ly would be so powerful, so telling, and so valuable?

Wrong again. Bit.ly is only a slightly shorter rehash of tinyurl.com

[globaleconomicollaps]

Re: On the Shoulders of Giants: Internet companies succeed by disintermediation, not creation per se

According to Wikipedia, Facebook now has 750 million active users. Those users would previously have communicated via email, by creating their own web sites on tens of thousands of individual shared hosting servers, by using message boards on thousands of popular web sites such as this one and using now defunct decentralized techniques such as IRC and usenet. When I want to buy a new shower curtain do I go to the manufacturers web site ( possibly one in Taiwan or Vietnam) ? No! I go to Amazon or what ever is presented to me first in a Google search ( in this case bed bath and beyond ). What has happened is that a new intermediary has sprung up. Instead of the old store front, A new virtual store front has arisen to challenge the old one. Many times as in this example the old one has successfully promoted their brand on the web. In other instances the old brand has been totally replaced by the new one. In a recent story it was revealed that pricing strategy on amazon frequently relies on one vendor buying the product from another and they selling it on to you. In other words, these vendors have no actual product in stock.

Amazon’s $23,698,655.93 book about flies

Amazon servers as an umbrella ( an intermediary ) that shelters thousands of small online shops. These vendors "piggyback" on the reputation of amazon. Frequently people have no idea that they are not buying from amazon. What is happening is that an additional layer of intermediaries has been created. Have you ever bought anything from Alibaba? No? Me neither. Dealing with a Chinese or Indian on line store seems a bit more intimidating than dealing with the exact same guy on amazon. Why is that? Alibaba was designed to create that disinter-mediation that the web was supposed to be all about.

[c1ue]

Re: On the Shoulders of Giants: Internet companies succeed by disintermediation, not creation per se

Alibaba doesn't sell to individuals; it is B2B. There is no disintermediation whatsoever there as Alibaba was always intended to help Chinese manufacturers flog their wares to customers around the world.

As for buying direct from Chinese or Indians, the Indians don't really do sales of physical products, though they do lots of programming hours type sales.

The Chinese have been selling for decades via Ebay and what not, the only differences today are that the larger outfits ship their products in bulk to the US for resale rather than attempt to ship direct from China.

Sometimes this is via a US reseller, but most of the time even this is no longer true.

For 'long tail' products it is slightly different: the Chinese still provide the bulk underlying product - say a towel - with the US reseller adding the value of customization (print or pyrograph, or even sewing) such as an American flag.

[Chris Coles]

Re: On the Shoulders of Giants: Internet companies succeed by disintermediation, not creation per se

There is another aspect of the likes of Facebook that many seem to have overlooked. No spam. I have an old girlfriend that gave up using the internet some time ago simply because she was so affronted by crude male orientated spam in her email inbox. But with the likes of facebook, no spam. So I should imagine that they have a very strong hold upon their client base.

[jiimbergin]

Re: On the Shoulders of Giants: Internet companies succeed by disintermediation, not creation per se

There is another aspect of the likes of Facebook that many seem to have overlooked. No spam. I have an old girlfriend that gave up using the internet some time ago simply because she was so affronted by crude male orientated spam in her email inbox. But with the likes of facebook, no spam. So I should imagine that they have a very strong hold upon their client base.

Sorry, but there is some spam on Facebook. Not as much, but they even have a way for you to report it.

[c1ue]

Re: On the Shoulders of Giants: Internet companies succeed by disintermediation, not creation per se

There is another aspect of the likes of Facebook that many seem to have overlooked. No spam.

That will change.

Skype already has started showing spam - within weeks after Microsoft's acquisition.

Facebook will show spam as well as soon as revenues (and revenue growth) becomes necessary as a function of being public.

[touchring]

Re: On the Shoulders of Giants: Internet companies succeed by disintermediation, not creation per se

As for buying direct from Chinese or Indians, the Indians don't really do sales of physical products, though they do lots of programming hours type sales.

Sometimes I wonder if big corporations do save from outsourcing programming work to India.

[Chris Coles]

Re: On the Shoulders of Giants: Internet companies succeed by disintermediation, not creation per se

That will change.

Skype already has started showing spam - within weeks after Microsoft's acquisition.

Facebook will show spam as well as soon as revenues (and revenue growth) becomes necessary as a function of being public.

The point I was making relates to the less than overt sexual, (in your face, not very nice to say the least), form of spam. I do take the point regarding the long term implications of an increase of sales spam.

[Chris Coles]

Re: On the Shoulders of Giants: Internet companies succeed by disintermediation, not creation per se

Sometimes I wonder if big corporations do save from outsourcing programming work to India.

It is my view that the West has made a strategic error; in that all our telecom support, sourced out of nation, means that they have full access to every computer here. The next best thing to being able to sit inside our minds, is to sit outside, looking in, to our computers.

[flintlock]

Re: On the Shoulders of Giants: Internet companies succeed by disintermediation, not creation per se

Some of these internet companies are creating better efficiency. Is that not productive? In the case of Amazon.com or Ebay, they at least help make the sellers more productive. There is probably a better use of limited land resources than retail shops. And a more efficient way of making purchases than loading the family into a car and driving around town all day.

[don]

Re: On the Shoulders of Giants: Internet companies succeed by disintermediation, not creation per se

Facebook tidbit:

"The phenomenon started in 2008, when an Australian court allowed -- no, ordered -- a lender who was attempting to foreclose on a home to serve notice on the defaulting borrowers via Facebook, as well as at their Canberra home and a backup physical address. Since then, attorneys in New Zealand, Canada, and, this spring, East Sussex, England, have all authorized mortgage lenders and their attorneys to serve borrowers with foreclosure notices via Facebook, when the borrowers could not otherwise be located."

http://moneyland.time.com/2011/07/11...-via-facebook/

[thriftyandboringinohio]

Re: On the Shoulders of Giants: Internet companies succeed by disintermediation, not creation per se

...When I want to buy a new shower curtain do I go to the manufacturers web site ( possibly one in Taiwan or Vietnam) ? No! I go to Amazon or what ever is presented to me first in a Google search ( in this case bed bath and beyond ). What has happened is that a new intermediary has sprung up. Instead of the old store front, A new virtual store front has arisen to challenge the old one.... In a recent story it was revealed that pricing strategy on amazon frequently relies on one vendor buying the product from another and they selling it on to you. In other words, these vendors have no actual product in stock.
...These vendors "piggyback" on the reputation of amazon. ... Dealing with a Chinese or Indian on line store seems a bit more intimidating than dealing with the exact same guy on amazon. Why is that?...

You describe the traditional role of a trusted merchant. A hundred years ago Sears Roebuck and J.C. Penny earned their mark-ups exactly that way, by choosing the merchandise in their catalog and then standing good for the returns and warranty.

People still value that service, finding the good products from among the crap and junk, and getting them delivered at a fair price.

Personally, I like good intermediaries. I want a few trusted sources rather than an endless universe of unknown peddlers for all my purchases.