October 1, 2005

Legacy Businesses Beware

While reading Tech Memeorandum I came across an article from Fortune Magazine called: Google, Yahoo, and eBay: Next-Generation Conglomerates? by David Kirkpatrick. You will definitely want to read this article.

Kirkpatrick's analysis of eBay's rationale for aquiring Sykpe is the right one. Essentially, he contends that eBay picked up Skype to match the voice enabling moves of Google, Microsoft, and Yahoo. What's more important is the bigger picture. The bigger picture is that these 4 companies are converging into next generation entities to compete over broadband enabled mega E-Commerce plays.

I disagree with Kirkpatrick on one thing. The probability is low that Google/Microsoft/eBay/Yahoo will transform their payment capabilities/divisions to become banks. Why? Because banking regulations are restrictive and inflexible. But if I were in banking or any other legacy business I would take steps to avoid my customers being poached by any of the 4.

In my experience if you don't partner with next generation conglomerates you will be competing with them to retain and aquire clients...its your choice.

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