EXECUTIVE SUMMARY

The four giants: Amazon (AMZN), Apple (APL), Facebook (FB), and Google (GOOG), were
imperative in shaping the internet into a marketing platform. AMZN leads in online retailing. Apple
leads on the standard of device interface. FB leads in social engagement. Google leads in online
advertising. The four institutions capitalized at $3 trillion combined in internet marketing. However, in
an effort to continue growing each company had to expand its products and services leading to
competition amongst each other.
PROPOSAL
Each company is trying to achieve tech dominance. With our society continuously evolving,
these four giants desire consumer data. Data creates insight and leads to new business opportunities
and monetary increases. The ecosystem is in conflict as the four companies are crowding in each
other’s niched area to generate revenue and increase market share. The digital boom has each
company encroaching in the online advertising, online retailing, mobile e-commerce, and social
engagement. The possibility of a few companies being able to provide all services would create
monopolies and leave no room for competition. According to the case study by acquiring or building
new technology these four companies are aspiring to dominant the design for online marketing.
BACKGROUND
Amazon started the modern era, when it turned a $5 million in profit in 2001. Since it first
launched Prime membership it has seen 100 million members in 2018. With this kind of customer data,
it also released streamed digital products giving consumers access to free and purchased
entertainment. AMZN also offers cloud computing services and AMZN Web Services (AWS), to third
party sellers and large information technology firms allowing AMZN insight into third party sales.
When consumers are shopping on the site but do not make a purchase, they can be a prime candidate
for a retargeted ad since the product they searched is stored with tracking cookies. They continued
their growth by launching smart speakers with digital assistants and bought Whole Foods. AMZN’s
total market value is $961.3 billion. See Exhibit A.
Google started as just a search engine that Yahoo used, but GOOG quickly realized that it could
monetize search traffic. They launched AdSense, which reported a staggering $24.1 billion of
Google's $27.77 billion revenue for Q3 2018. Entire businesses depend on ads as their primary source
of income (Rosenberg, 2019). GOOG continued their content acquisition by purchasing YouTube, to
compete against traditional cable tv. They also acquired DoubleClick and AdMob, both of whom
dominant the world of online ads and mobile devices. Their expansion continued as they launched
music services, payment services, social network, cloud computing services, and smart speakers with
digital assistants. Google’s total market value is at $863.2.3 billion. See Exhibit A.
Apple, while established in the 70’s, rose to prominence starting in 2009. The release of the
iPhone was a game changer not only for APL for but for the world. Their operations grew outside of
computers, tablets, phones, and media players when they started investing more in operating systems
and their digital app store. Next, APL expanded with digital assistants, smart speakers, payment
systems, cloud storage, and by purchasing Beats Audio products for $3 billion. Apple’s total market
value is at $961.3 billion. See Exhibit A.
Facebook started as a way to connect college students, now they lead in social networking. The
user base grew to $2.2 billion and most of their revenue is generated from paid social ads. They have
acquired other social communication tools, Instagram and WhatsApp. FB’s total market value is at
$512 billion. See Exhibit A.
Competition
When these four giants first started, they specialized in their area of expertise and worked well
together. FB needed to promote its app on APL’s iTunes store. APL gets billions of dollars a year from
GOOG for making it the default search engine on iPhones and Mac. GOOG, FB, and APL rely on their
products to be sold on AMZN. With the shift in consumer behavior to digital platforms, each of the
four conglomerates are clashing in an attempt to bump one another out the top spot. Exhibit 2 shows
AMZN and APL as players in the search capability, where Google is dominate. While all 4 are in the
advertising network, GOOG is the clear leader. APL and GOOG compete in the mobile sector with their
iOS and Android operating systems and are both challenging AMZN on digital content. In social
capability, where FB is top dog, GOOG has attempted to grab shares.
While GOOG and FB compete fiercely for online advertising, capturing 70% of ad spending,
AMZN has quickly started increasing their shares in this space (Sterling, 2019). The advantage GOOG
has is being the world’s most popular search engine, with 3.5 billion search queries a day, it offers
advertisers unprecedented users looking for products. With this immense audience, the reach and
data capture from searches is the main advantage. Lastly, Google ads offers a level playing field to all
businesses. They don’t give advantages to the businesses with the highest pay-per-click budgets but
focuses on quality and relevance of ads. However, the weakness is that GOOG’s cost-per-click cost
pricing model can become a substantial expense for businesses. FB also has an unparalleled audience
granularity with more than 1.55 billion users. Since users share their personal information on social
platform, it gives advertisers an opportunity to tailor personalized messaging to a targeted audience.
They are also an inherently visual platform and can offer incredible ROI to businesses and marketers.
The weakness is that this platform is good for B2C products but not B2B. Since neither GOOG nor FB in
a position to exploit one another, these platforms are viewed as complimentary to one another so
marketers and advertisers should use both.
APL, GOOG, and AMZN compete for digital content with their respective stores: iTunes, Google
Play, AMZN App Store. Consumers can use these stores to create music libraries, watch videos, movies,
tv shows, listen to podcasts, read books, all while being able to download a plethora of mobile apps.
Since all three provide the same services the decision is dependent on consumer preference. However,
APL and GOOG have commanded the majority of the market share, 99.7%, due to dominating the
mobile sector. APL’s iOS is second to GOOG’s Android operating system, however APL commands a
higher price. Most of APL’s revenue is due to hardware that can only be used on APL devices, which
not only makes Apple owners more valuable to mobile market but allows APL to exploit their
opponents. In 2017, traditional and digital media spent over $207 billion in revenue, with $46.5 billion
in digital display ads, $40.6 billion in paid search, and $70.2 billion in broadcast television (see Table 1).
Based on these figures it is evident why GOOG, FB, APL, and AMZ ventured into the digital streaming
services. APL is quite new and released APL TV+ in September 2019, while AMZN launched Prime
Video in 2006. GOOG is attempting to lead the market by starting YouTube TV, which reported 1
million subscribers in March 2019 (Levy, 2019). While these 3 are trying to grow, the leader in this
space is Netflix who reaches about 75% of the US streaming service viewers (see Exhibit B). Netflix
established this niche early compared to the rest but continues to differentiate itself by not pushing
advertisements to members.
Society is very dependent on smartphones, so APL introduced Apple Pay while GOOG
introduced Google Wallet. However, most Americans have not made the transition from using
traditional bank credit cards, like Visa and Mastercard, to using mobile devices as a form of payment.
AMZN, GOOG, and APL all compete in the digital assistant space as well. Alexa (AMZN) is dominating
by having 70% of the market share, while Google Home (GOOG) and HomePod (APL) have 25% and
5%, respectively. AMZN is leading in the digital assistant aspect because they were the first to invest
time and resources into this relatively new technology. Another factor that contributes to AMZN’s lead
is the pricing. AMZN and GOOG charge $50 for their low-end models while APL charges $300.
FB and GOOG competed for social networking, with GOOG’s launching its social media
platform called Google+. Google+ was deemed unsuccessful and in 2018 GOOG announced its
discontinuation due security vulnerability. The weakness was that GOOG simply wasn’t genuinely
passionate about social media. Google + was a tool to help generate more profit and their lack of
passion was visible in their product as users and even GOOG admitted that the platform was
“confusing” (Press, 2018). FB, on the other hand, was successful because its strength was controlled
growth. Through controlled growth FB built a robust and reliable technology infrastructure that was
able to handle serving hundreds of millions of users simultaneously. By investing in smart and
experienced engineers FB avoided the technical problems that plagued its competitors (Press, 2018).
This is why FB was able to exploit GOOG, which failed to carve out its own distinctive purpose.
RISKS/ALTERNATIVES
While these four giants sit in their corners of the boxing ring, there are a couple of other
players that could soon start to challenge them. In 2018, Microsoft surpassed APL as the most valuable
publicly traded company in the world, after having been dethroned by APL in 2010. In April 2019,
Microsoft reached the trillion-dollar market cap, becoming the third U.S. public company to be valued
at over $1 trillion after APL and AMZN respectively. They are best known for software products but
have a flagship in the hardware product space with personal computers and gaming consoles.
Microsoft has their own search engine (Bing), social media platform (LinkedIn) and also offers cloud
services (OneDrive) so they can be been seen as a major competitor to the 4 giants in the case
(Muhammad,2019) (See Exhibit C). Microsoft’s main challenge in join these 4 will be their lack of share
in the mobile device sector. AT&T and Time Warner teamed up earlier this year. Time Warner is one of
the largest media and entertainment companies in the world, controlling a number of popular brands
including TNT, TBS, CNN, HBO, Turner Sports, and the Warner Brother line of enterprises (See Exhibit
D). The telecommunications titan will now be able to market Time Warner's massive pool of content to
other cable companies and consumers. It would also aim to collect usage data regarding viewership of
the content, with the ultimate goal being able to construct a digital advertising arm to compete with
major rivals like FB and GOOG (Reiff, 2019). AT&T and Time Warner also has a major head start in the
digital streaming service that the big 4 have been trying to monopolize. Other than facing more
competition, a big hurdle for these 4 companies continuing to dominate is the Federal Trade
Commission. The FTC is reviewing competition in the tech industry, including past mergers, to
investigate whether AMZN, APL, FB, and GOOG have used their size and wealth to suppress
competition and expand their dominance (Rubin,n.d.).
Conclusion
With these four giants growing in so many various sectors, other brands are facing threat on
oligopoly, publishers are having to choose to partner with these fours, traditional retailers are having
to use these four which is cutting into their profits, and government are having a hard time with their
ideology and democracy. Google and Facebook are extremely reliant and have monetized personal
data. Given the importance of the data, governments are starting to contemplate increasing
regulations in the next few years. These giants’ technology is so valuable and their hold on the market
is so big, that if the government intervenes, they might eventually be forced to break up. At some
point regulations could come out to make the data a shared resource that all companies could use and
increasing regulations on how this data is used. They might not go completely out of business but
would not be in the same position as they are today.
Citation

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 EXHIBIT A: Market value (in billions)
*Alphabet is also Google

EXHIBIT B: Netflix’s hold in Digital Streaming

 EXHIBIT C: Microsoft

EXHIBIT D: AT&T Merger