Online Biz, where size does matter

I would like to share my view on internet business, and current context are supporting me to describe it hereby quickly. 

Context: Microsoft (MSN) acquiring Skype for sth like 66 $ per user from what we are advised. Go there for more info; well in French, sure the English exists.: http://eco.rue89.com/2011/05/10/microsoft-rachete-skype-a-prix-fort-et-plante-google-203281.

Away from the standard M&A, I would like to tag along this event to discuss about a key an utterly most important parameter for internet only online businesses: critical mass.

To come back on definition, I am considering as critical mass the number of people required within a whole subset of connected people in order to make one thing essential and unavoidable for all. 

Microsoft is a prime example. I have to say on my side, I am using Microsoft tools because I know most can read it, simply as that, the network effect in the long term. and no I am not a Keynes fan, Keynes who kept saying "in the long term, we are all dead" or sth like that, in the long term.


So i don 't go as far as the long long term kind of useless here but the 5 10 years brackets. In the long term, we will be here, and more we will know more about bet we need to nurture, and how we will articulate promises becoming reality

So, compared to traditional business, I am taking traditional as business not only interacting via the online sphere, Amazon being at the critical border. Even for Amazon, what matters really is the critical mass the business needs to have, between fostering customer loyalty, and engaging new customers. 

I would take one example further: Apple is well known as a seller on the online, on the offline grid. Apple is making most of its revenues from a small share of an overall segment of IT user (if you disagree, please ask me for references and details), in brackets “selling premium products and services “ to engaged customers Critical mass and the network effect are part of the deal to optimize this business equation, still not only an online business.

Apple does it because in the real world you can. Any, only,online business is possibly facing the complacency challenge, in such a low switching, perhaps slight higher informal acquisition cost, environment.

What Microsoft buying Skype shows is a remake of the Darwinian formula for the life cycle of a product/services:. Get better, or get lost

Before the end of a cycle, on an untangible world like the internet, you have to find your rebound as good as you can, and hopefully before your product is dead, perhaps even better at the climax of the products/services business.

Below, I do assume, it might make an ass of u, of me, anyway I’ve warned you. I do believe Microsoft MSN so long onto the waves were targeting most entertainment while skype developped and fostered loyalty and its brands even through the business side promoting connection the business way, developing the same services adequately on two spheres, the personal and the professional, while MSN was perhaps mainly targeting personal use.

Now, many articles will go out. Merging and acquiring, when not failing, is about setting up a fruitful strategy and who knows between windows phone, an updated MSN. Most importantly cutting the grass under Google and Facebook feet, it should be a successful try if nurtured and developed the innovative way and not staying complacent as MSN did in the past decade.

Reason why I am not thinking that it is totally silly if, in 3 years time, Facebook might go if not off the grid, secondary to one huge thing. Simple as untangibles in a world of tangibles. Online biz shows it, it is a football market, if a good player, make the most money when you can, because everything is even more unsettling tomorrow.

Well I am not forcefully a google fan, still I do enjoy it a lot, Google orientated part of their business on sharing and contents, sharing documents online, not only pictures, comments, status and so on. And I do believe here Google is more ahead, like Skype was with MSN, because not only focusing on one type of customers (General one type please allow me this generality), but playing on both fields. I would be Zuckerberg, I would buy Linkedin straight and develop an ecosystem within the system and the communities. Or maybe not, it could kill straight both brands. No, P&G, Unilever show it on another segment, you can keep integrity of multibrands while ensuring the most valuable synergies from inside, so definitely a move to go for? to work on the fruitful manure the business segment of community is.

Still, this Skype move is not as bad for Facebook as for Google given the shares of Microsoft in Facebook, which offers great growth perspectives and ties for a well thought plan in the future.

PS: I wrote that quickly and would review that some times in the next few days, still i do believe you can grasp the essence of what i say. As put in the title of this blog, it s a possible view, only one.