Google's problem is they used Facebook as their guide to upgrading their view of what the Internet is. And that led them away from their strength, and into what I think is a dead-end. Much as Microsoft was led into a dead-end by the web in the 1990s.
The problem with Facebook's approach is more than it has centralized all access to user's data, which they have. They've also centralized the flow of new ideas to the Internet. If you buy the idea that Facebook is the Internet, which is of course the problem for Facebook. Because no matter how big they get, they're still just part of the Internet. All the devices people use to access Facebook can access other parts of the Internet. So if something more exciting comes along, people can get there.
No problem, you say, because Facebook is a very innovative company. But it is a problem, because that's the Facebook of yesterday. The one that occupied a small suite of offices in downtown Palo Alto. That was two iterations of Facebook ago. And they're working on the third iteration. Each is much huger than the previous. And they are all hiring out of the general talent pool of tech.
At best, they can produce a stream of innovation equal to 1.5 previous Facebooks, and that would be a victory. The model for everyone for scaling a company and still producing new products, and new ideas, is of course Apple. But I'd argue that the Apple of the 1980s was far more innovative than the Apple of the last ten years. They took huge unprecedented steps every couple of years. Today's Apple, and there's nothing wrong with this by the way, takes them every five to seven years. And they aren't as big, they're more evolutionary, more refinements of previous stuff. Re-releases. Like Pixar, they ship a new Toy Story every few years.
The value of the Internet is that it represents a common set of protocols and formats that are very widely implemented. Everywhere human beings are you will find HTTP and HTML. Even in space. Even at the poles. Even in the jungle. Or the core of our cities. It is even possible to add new stuff to that. But please study how that happens. Sure some of it comes from the big companies, but lots of it comes from the people. Some of it comes from young people, and some of it comes from people in their 40s, 50s and 60s.
Never mind whether they were true or not, what's important was that with the benefit of hindsight we see that these were not the only stories. Just the ones that reporters pushed. Even though they used Apple products, and if they had studied hsitory of tech cycles, they would have known that Microsoft was in its twilight of dominance, and that languages don't change things the way Sun and Netscape wanted us to think they do.
All along, however, all the way from the beginning of my career as a technologist in the 1970s, to the present, there has been the idea that big companies make innovation. This is the biggest impediment to actual innovation. It means that investment dollars go to the wrong places. That people are driven to become big just to innovate. Which is as silly is waiting to be happy until you're rich. By the time you get there, the sex sucks and the innovation is a memory. Instead you're mired in politics, and turf wars and strategy taxes, and execs lack the intuition they had when they were founders because now they live like almost no one else does. Even Steve Jobs drifted away from his roots as he aged. You have to work at staying in it.
If the past is a predictor, here's what will happen. Facebook will exist for a long time to come. They're huge. They've absorbed a lot of the growth of Silicon Valley. They're the continuation of companies like Sun and Netscape, Apple and H-P. Google is out there too, but they are imho where Microsoft was in the 1990s. They too will be here for a long time because it's very rare for companies as large and diverse as Google to go down quickly. It usually takes a generation or two, and sometimes they figure out how to be in it much longer.