For almost a decade now, I have run a list of technology predictions for the coming year.
This year is different, there is no list, because:
1. Not that much will visibly happen in the web industry, there’s not exactly going to be a plethora of IPO’s, private equity driven M&A, new VC investments, product launch cocktail parties or company expensable conference junkets. Web 2.0 will die with a whimper rather than a bang, and the clever people will have plenty of thinking time to work quietly on the innovation will drive the next cycle. It should be noted, however, that it looks like the legacy of this time around (Youtube, Flickr, Facebook), is not that impressive compared to last time, or even what happened in between (Google, Paypal, Skype). Perhaps Kleiner Perkins were right to pass?
2. The changes we are seeing are macro changes that take years. We will see the acceleration of the shift online for things like commodity eCommerce (i.e. non luxury and based on price), media rental and broker intermediated transactions. By the end of this recession, there will be fewer shopping malls, Blockbusters or Virgin Megastores; travel agents will be near extinct, and there will be far less realtors. Amazon, Google and possibly even Neflix will be much bigger companies and a hybrid of UK style franchised real estate brokerage (Foxtons) and aggregated online real estate sites (Trulia) will largely wipe out information blocking middle-men like the independent realtor.
3. Short term gloom will mask longer term optimism. After periodic mini rallies, there will be another major stock decline for companies such as Google, after a second wave of economic bad news. This will preface a long steady climb for companies that belong in the emerging, remade landscape.
4. There will be a short term focus on shoring up existing industries to create jobs, but whatever America does to prop up industrial production will fail in the long term. Things like low end cars perhaps shouldn’t be made in the US. Conversely the reactionary overshoot of financial services regulation and the death of monetarism will mean that America cannot rely on a Thatcher style services economy. Even if technology and culture (media) will be America’s flagship industries, employment creating stimulus programs will mask this change.
5. US military and economic hegemony will inevitably decline, from its post Cold War singularity, and the events of last year are possibly the inflection point. The future role of America’s near total dominance in something seemingly far less important, such as the Internet, will be different. This is a change whose effects are currently impossible to predict. Note this doesn’t mean that America role as a sole superpower is superceded by China or something that melodramatic, just that the abnormal and unsustainable period of near global, single nation dominance will recede. With it, there will be cultural changes. The world will become slightly less Americanized, and that possibly means the diminishing of an historically abnormal culture dominated by what can best be described as recreational shopping.
6. The short term fluctuations in the fortune of web 2.0 companies are completely irrelevant considering the long term changes to the Internet industry and the short term affects elsewhere. In other words, even for those who work in technology, what is happening in the industry is irrelevant compared to both the effect that the collapse of the US banking system could have on our lives in the short term and the effect of secular technological trends.
7. America is in a similar place to Britain at the end of the Edwardian era. Frankly there is a lot more to worry about than a 40% decline in display ad revenue. Om Malik, one of the the most likeable and wise people in the industry put things in perspective best.