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Why Facebook, Apple And Google Will Fall Like The Roman Empire

John Naughton at The Guardian has made this observation: Despite their overwhelming dominance, Facebook and Apple will eventually fall. “History should teach us that for today’s technology industry titans, the only way is down.” That goes for Google too. And Amazon. It’s inevitable.

Naughton’s argument — familiar to historians and Guns ‘n’ Roses fans alike — is that nothing lasts forever. He realised aptly that truism applied to today’s tech giants after re-reading Paul Kennedy’s The Rise and Fall of the Great Powers, which chronicles the history of Rome, Imperial Spain and Britain.

All of them reached world domination and the then-unthinkable eventually happened: they fell. They started to crumble and eventually faded into history, losing more and more political and cultural relevance as time passed by. The farther the falling, the more irrelevant they are. Ask Spain, Rome or the UK. Each fell because they tried to control it all. They tried to impose their ways, close their walls and command commerce, and thought their way, their culture was the only answer to everything. In that confidence, and with absolute power, they thought nobody else could compete with them. And they failed.

But why look at ancient history? Might as well ask companies like Ford, Microsoft or Kodak, all of whom once dominated the market they had created and set trends for decades to come. But ultimately they faded into irrelevance.

Some of them went bankrupt, like Kodak. Some, like Ford or Microsoft, became just another face in the crowd, still big but no longer setting the agenda, no longer dominating 90 per cent of everything. Some were superseded with new markets that made their markets obsolete, thus killing their power — like the fall of the PC in favour of phones and tablets. Some just lost relevance, like Kodak’s chemical business replaced by the ascendance of digital photography.

When these companies were dominant, it was inconceivable that they would ever not be. Apple, Amazon, Google, and Facebook won’t be any different. They will not fall at the same time, but they all will. From his article:

Although the eclipsing of Apple and Facebook is inevitable, the timing and causes of their eventual declines will differ. Apple’s current strength is that it actually makes things that people are desperate to buy and on which the company makes huge margins. The inexorable logic of the hardware business is that those margins will decline as the competition increases, so Apple will become less profitable over the longer term. What will determine its future is whether it can come up with new, market-creating products such as the iPod, iPhone and iPad.

Facebook, on the other hand, makes nothing. It just provides an online service that, for the moment, people seem to value. But in order to make money out of those users and satisfy the denizens of Wall Street, it has to become ever more intrusive and manipulative. It’s condemned, in other words, to intrusive overstretch. Which is why, in the end, it will become a footnote in the history of the internet. Just like Microsoft, in fact. Sic transit gloria.

It’s not that Apple will disappear. With over $US100 billion in the bank and the ability to churn out desirable products with great margins, they will continue to be a successful, profitable company for a long, long time. Most probably, it will become a Sony. Relevant, but not dominant. Amazon, despite its razor-thin profit margins, is likely here to stay in some capacity. Google may turn into yet another Microsoft.

As for Facebook… like Naughton says, Facebook may become completely irrelevant and disappear, because it doesn’t make anything irreplaceable. As it continues to push the limits of privacy to satisfy the demands of advertisers and shareholders, its users will seek higher ground.

Facebook may be the first one to fall. But all of today’s tech giants will follow its path into dull obsolescence, just like every empire before them. At least we can look forward to whatever takes their place.


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