The dark side of competing online

Cutthroat competition is as old as business in the corporate world offline, and the nothing has changed when it comes to competing online. The days when a company like Facebook or Google could rise to popularity and achieve dominance while flying under the radar are gone. Create something that works and it’s only a matter of time before a larger competitor tries to imitate the idea.

Perhaps cyberspace is getting overcrowded and running short of novel ideas. These days an idea hardly gets sufficient time to grow and mature. The moment a company achieves success there’s a long line of competitors that are willing to go to any length to establish a similar platform.

All is fair in love and war, though, even if it’s a cyberwar. The rules are not much different. Actually, in the struggle to survive there are no rules or ethics. Everything is meant to be broken—be it trust, ethics or word of mouth reputation.

A recent example is the case of Twitter withdrawing access to its data API from third-parties so it can expand its own big data analytics services. This has come as a shock to many companies like Datasift whose entire business revolves around the data flowing from Twitter. Legally and technically speaking Twitter has every right to withdraw its own API. It’s another question entirely, though, whether doing so without warning or notice is ethically justified. After all Twitter had been promoting its API very aggressively over the past few years and now it has suddenly taken a u-turn on the issue.

Another case of cutthroat competition is Zynga. The company announced that Mark Pincus, the founder of Zynga, is returning to the role of CEO. The tales of his work culture are horrifying indeed. Even more concerning is the fact that the company has been openly copying successful games of other companies with minor variations. Zynga has market presence and financial muscle over small rivals so this is not good news for other gaming companies.

There’s no doubt that Silicon Valley is a major force to reckon with in this world but possibly the axiom of power corrupts and absolute power corrupts absolutely seems to apply. If scenarios like those mentioned above are to be taken as a glimpse into the future, it is certainly not a very bright one—at least not for smaller startups and rivals competing online.

3 thoughts on “The dark side of competing online”

  1. I’m of two minds about this sort of thing. I tend to default to believing a company has the right to make whatever they want and to include or exclude whatever they decide is right for them. But, of course, that can get out of hand when a company wields too much power in a market. And I think that is where our regulatory focus should be aimed, at the market overall.

    While very logical and attractive arguments based on the concept of freedom can be made in their favor, some practices lead to unhealthy markets. Usually, I think it’s best to do what encourages competition. This is something that seems to be overlooked quite often these days. A competitive market is usually superior to a totally free market. But there again, sometimes regulatory agencies can misjudge what a market needs. So it’s a delicate balance of letting the market drive itself but nudging it away from the cliff when it starts to swerve off the road.

    It’d be interesting to read what you think about the Google services showdown in Europe where some of these issues are coming to a head. Can competition and privacy be protected while not destroying great and convenient services?

    1. “Can competition and privacy be protected while not destroying great and convenient services?”

      Yes. Simply insist that companies charge for these services, thus turning users into customers, and then apply some very stringent privacy policies.

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