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Facebook, Google, Apple are racing to leave their business model behind

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Facebook, Google, Apple are racing to leave their business model behind

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Facebook buys WhatsApp, Google buys Nest and Apple is rumored to be talking with Tesla’s Elon Musk. Why are these tech giants looking outside their business model instead of growing the space they already dominate? Because the speed of disruption today makes every pause to draw a breath a chance for someone else to steal your lunch money. Facebook bought 400 million mobile eyes, Google moved beyond the Internet and into the physical comfort world and Apple…well, why wouldn’t they be the perfect partners to pioneer the Tesla iCar?

Tech giants with deep pockets

Who would have thought just a few years ago that the conglomerates of today would be high-tech companies? It isn’t too surprising when you consider the deep pockets of these three giants and the remarkable diversification opportunities staring them in the face. With Facebook, Google and Apple’s cash, it isn’t necessary for each and every acquisition to be a smashing success. Like the VC money that helps tech grow, today’s Internet giants have become incubators in their own right that can afford to win some, lose some.

Besides, the best hedge against being overtaken is to constantly put greater daylight between yourself and anyone who even thinks about sneaking up. The core business model that made each successful is a cash machine and they can afford to “throw it around” in an effort to develop new models before anyone else can.

And then there’s the investors

Don’t forget, too, that each of the three is a public company and the market demands growth. Apple knows that every product it produces has a lifecyle and Facebook knows that teens aren’t much of a growth opportunity. Apple is also rumored to be looking at medical devices and Google has been on a robotics buying spree. While some marvel at the success of each of these titans, the view from the inside isn’t nearly as optimistic. Investors want a return on their investment and growth is a hungry beast.


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