Connecting buyers and sellers: beyond Google, Facebook, Groupon, etc. (part 1)

November 14, 2010
John Koetsier
news

Note: this post is part of a series … Part one | Part two | Part three

There are three ways to make money:

  1. make stuff
  2. provide services
  3. connect buyers and sellers

Apple is a maker. Microsoft is a maker (in spite of some attempts to move to subscription services). Samsung is a maker. But just about everyone else that is a big name on the web today is a connector. Google, Facebook, Yelp, Groupon, and any other ad-supported website, blog, application … they’re all connectors.

A precious few provide services, like 37signals, the WSJ, and so on, but in technology, most are makers or connectors.

The connectors connect in different ways. Google connects through search as well as discovery based on context in cloud-based apps … the intentional graph. Facebook connects based on context also, but growingly via increasingly detailed and predictive information about you and your friends … the social graph. Twitter is the interest graph. Yelp is a town hall or community centre, Groupon is the buying club.

The value of a connector is dependent primarily on two things:

  1. how … connected … the connector is to both buyer and seller
  2. how close in time and space the connector is to the actual point of purchase

That’s why Google, with intent to purchase a key basis of a segment of search activity, and Facebook, with its intimate knowledge of buyers, are incredibly valuable companies. That’s also why deal companies like Groupon have come from nowhere to potentially $3 billion valuations in nothing flat. And it’s a major factor in why the local/social/mobile solution space is white-hot right now.

So that’s today … and, partly, tomorrow. But as Gretzky said … you gotta go where the puck is headed, not where it’s been. So where’s the puck going the day after?

I think we can take as a given that …

  • Location awareness is only going to grow
  • Social connectivity is not going to decrease
  • Mobile devices are going to get smarter/better/faster

What does that mean for the connectors of the future? There’s a bunch of things to think about …

                           

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