Comment by ghaff
10 years ago
>Might be peanuts to them but it seems like an opportunity for some in-house streamlining to fully exercise dead properties.
That's the thing. It is peanuts. And it's peanuts that would probably be distracting from their primary focus.
Someone at $LARGE_COMPUTER_COMPANY once basically told me that, for them, if something wasn't going to be a billion dollar business, it wasn't interesting. Sure, something smaller might nominally have a positive ROI, but if you factor in the distraction/opportunity cost/etc., they just couldn't afford to deal with yet another $50 million revenue opportunity.
> ...they just couldn't afford to deal with yet another $50 million revenue opportunity.
I wonder if Facebook was just a "$50 million revenue opportunity" and that's why Google didn't enter the space until it was too late. Maybe if Square and Westwood would have looked at a few more $50 million revenue opportunities they'd still exist.
Actually, Google launched Orkut at about the same time as Facebook launched.
Your basic point is fair enough but companies do need to focus and the larger they are the less they can afford to be distracted by small projects/products that have little hope of breaking out into something substantial. In this respect, they're something like VCs.
Don't know about Facebook in particular, and oh man is Google not cut out to do a good social site. But this kind of thing happens all the time, yeah.
It's explicitly called out in a lot of business books -- as a small business you often have a lot of cover to undercut the incumbent, because they're just not interested in a niche that may be huge from your point of view.