Is Facebook Headed For The Same Way As Roman Empire and General Motors
Romans were brave rugged people till the empire became rich . After that they started keeping slaves for doing the dirty work . Finally slaves were inducted into the most sacred core activity or the wing of any empire ie its army to fight its wars . From then on the end of the Roman empire was just a matter of time .
General Motors became too successful and too big for it to be supple and fighting fit .
It, like dinosaurs, could not adjust to changing climatic demand of more reliable and fuel efficient cars . It avoided fighting and winning the technological battle with Japanese car makers in seventees and instead survived first by designing gas guzzler SUVs out of truck chasis .Subsequently it tried making a half baked diesel engine based car which failed miserably . Finally ,like Romans, it went into a buying spree of factories to remain world’s largest car maker . The last was acquisition of Daewoo factory of Korea in 2002 in the hope of getting a good small car design . It got a shot of adrenalin in Chinese deal but finally nothing could save it and old GM filed for bankruptcy in 2009.
Facebook is not able to innovate enough anymore in a field where one survives only by innovation . It has a user base of one billion which is shrinking due to youth changing loyalty . Fifty five employee of WhatsApp can earn 19 billion dollar because they can innovate more than five thousand employees of Facebook . It is the Toyota challenge that Facebook is trying to meet by buying Daewoo. It can stall and delay the doomsday but cannot avoid it . Business models don’t change the fate of technological companies.
Facebook can survive by buying competitors at low price by judging budding success stories at ealy stage but apparently it does not connect with innovators anymore. It instead buys a booming company to retain number one slot of user base just like GM .But it can’t prevent new ideas from coming up . The writing on the wall is clear , ‘ Innovate or Perish ‘
I think Facebook will shine for five years just as GM did by Chinese deal but will suddenly sink without trace after ten years .
