In the Champions League of internet superpowers the stakes are very high indeed. Alphabet, the parent company of Google, just announced financials that took its overall value close to parity with Apple, for several years now the world’s largest company by market capitalisation. (Alphabet was even briefly ahead.) But Amazon and Facebook also have enjoyed soaring fortunes while Microsoft is renascent – who will be the ultimate winner?
This being technology, folks have invented an acronym, GAFA, for Google (17 years old), Amazon (21), Facebook (12) and Apple (39). The first three are almost startups and the last is the greatest comeback story ever told. All of them have remarkable franchises that create vistas of wealth creation from ad-related search to online retail, IT platforms, social interaction, entertainment and devices.
Can there be an ultimate winner in the field? Forecasting is made more difficult by the fact that all these companies are on terrific runs. That has swollen their market caps even in what have been icy waters for many tech companies. A glance at market caps suggests how crowded the scene is: as I write this, Apple is valued at $535bn followed by Alphabet ($517bn), Facebook ($328bn) and Amazon ($271bn). Microsoft, with its lock on personal computing, has a market cap bang in the middle of the GAFA camp - from which it has been so rudely excluded - at $433bn.
All of these companies seem in rude health and all have the treasure chests to spend on acquisitions and on R&D so the next wave of success might well come from the ‘moonshots’: the expensive projects, currently heavily loss making, to create new opportunities from driverless cars, to home automation, augmented/virtual reality and beyond, incorporating ideas that won’t yet even have entered the heads of many industry observers.
We English call the boss ‘the gaffer’. All these companies have great chances to succeed for many years yet but who will be the top GAFA? Or, given the relative youth of many aspirants, will the technology leader come from elsewhere entirely?
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