Written by News 1st
27 Mar, 2014 | 11:19 am
Facebook and Google are locked in a high-stakes, multi-billion dollar battle to shape the future.
Both companies are spending like crazy on emerging technologies. Their aims: when their current businesses are disrupted — and they will be — they’ll have a fallback plan.
“While Facebook is doing well now, it knows that its core business could degrade just as MySpace’s did,” said Carl Howe, analyst at Yankee Group.
That’s why Facebook (FB, Fortune 500) has poured billions of dollars into a photo sharing network, facial recognition software, a chat app and now virtual reality company Oculus.
Google (GOOG, Fortune 500), in turn, has invested billions in driverless cars, wearable gadgets, military robots and — most recently through its purchase of Nest — connected home devices like smoke detectors and thermostats.
It’s as if Facebook and Google are now combatants in Silicon Valley’s version of a Cold War arms race.
“Facebook and Google are high technology titans engaged in a real world game of ‘Monopoly’ to grab the choicest technology properties in a bid to maintain and extend their dominance with each other as well and various other rivals,” said Laura DiDio principal analyst at consultancy ITIC.
These are long-term bets. For all their attempts to diversify, neither company’s purchases have helped them expand beyond their core business models just yet. Both Google and Facebook generated about 90% of their revenue from advertising last year.
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