Innovations Rise And Fall: 8 Instances Of Major Takeovers

Finding success in the tech industry is a mix of a variety of factors: entering the right market at the right time, pioneering a new change, establishing dominance and further expanding the potential and possibilities in the field. For those who have already reached the top, they are not guaranteed long-term success, especially when leading in a cut-throat industry.

We will be looking at major innovations that have made an impact in our daily lives — so much so, they can be considered "household names" — and also at how each predecessor loses out to the successor in the quest for dominance in their respective fields.

The following 8 comparisons will depict the circumstances that surround the fall of the predecessor and the rise of the successor. The factors and reasons for each differ, and for some of the cases, the tables could still turn at the last minute. Nonetheless, this gives us a look into the complexities of decision-making, which in many cases, can make or break your business.

Windows vs Macintosh

Windows vs. Macintosh is the classic example of a successor triumphing over its predecessor. Back in 1979, after being inspired by a demonstration from Xerox PARC on Graphical User Interface (GUI), Steve Jobs took the idea and created Macintosh Operating System (Mac OS) with Steve Wozniak. The result was an indisputable commerical and technological success.

Having witnessed the commercial success of Macintosh, Bill Gates from Microsoft further developed his own GUI for the Microsoft Disk Operating System (MS-DOS), and released it as Windows in 1985. Although it had no success until version 3.0, which saw better design and features, Windows offered something that Mac OS didn’t: openness.

Windows could be licensed to hardware developers as the primary OS for their computers, but Mac OS was only available as a bundle with its designated hardware.

os market share (Image Source: Statista)

As it could be installed on any computer, Windows appealed to people of various income classes, dominating the OS landscape in the PC market, and eventually took over 90% of the market share today.

Google vs Yahoo!

In 2009, former Yahoo! CEO Carol Bartz declared that Yahoo! was never a "search" company. Until 2003, the core of Yahoo! Search was a huge directory with a searchable index of pages. Needless to say, the search engine was not nearly as accurate as Google’s self-automated crawler bot, armed with PageRank algorithm focusing on link relevance, and authority above all.

Although Yahoo! had done its best later with tech acquisitions, it was just too little, too late. It simply failed to realize the change early enough. This could be credited to the company’s conventional business strategy with emphasis on advertisers. Yahoo! didn’t change, but the world did. Users were fast becoming the source of profit in the age of Web 2.0.

Yahoo!’s anti-innovation management culture has also indirectly pushed talented individuals to head toward its rival company, thereby leading to a failure to innovate and create better products. The chain of consequences resulting from poor business decisions offers an explanation as to why Yahoo! was overtaken by Google. As of July 2013, Google has 67% of market share compared to Yahoo!’s 11.3%.

Facebook vs MySpace

MySpace was once the king of social networking sites in US, which saw its peak in 2006 when it surpassed Google in terms of site visits. It generated $800 million in 2008 and contributed to the success of mobile game company, Zynga. Basically, it was all smooth sailing until Facebook came into the picture.

facebook map (Image Source: Mark Zuckerberg)

It was perhaps just a matter of time before the inevitable happened for MySpace. After all, it was merely a clone of another social networking site called Friendster. To make matters worse, in recent years MySpace has been focusing intensely on generating profit to the extent that they had lost sight of what’s truly important for a social networking service: helping users connect with each other better.

Eventually, the site slowed down, and became cluttered with nasty display ads and blinking GIFs, effectively forcing users to look for a better alternative which turned out to be Facebook. MySpace had declined to acquire Facebook for (a mere) $75 million in 2005.

Three years later, in 2008, Facebook had matched MySpace in terms of unique global site visitors every month. Since then, Facebook has gone from strength to strength with 1.15 billion active users as of July 2013.

YouTube vs Vimeo

Vimeo was founded in 2004, a year when video sharing was still in its infancy. Although Vimeo founders foresaw its potential, they were more concerned with the legal trouble they could get entangled in: copyrighted material. Vimeo was launched with strict rules to prevent users from uploading any potentially copyrighted material. Largedly viewed as a side project by its founders, it was also not allocated much cash flow for storage and bandwidth.

YouTube, on the other hand, is a totally different story. It was well funded by venture capital, and had much lower legal thresholds for video uploaders. Its influence was strengthened later when it was acquired by Google. Eventually, YouTube overtook Vimeo and became the no.1 vide-sharing site you frequent today.

However, unlike the other cases we’ve discussed so far, Vimeo’s decision to protect its core businesses was a step in the right direction. On the other side of the fence, Youtube, even after being acquired by Google, is still trying to find a way to profit without relying on external investment. So, perhaps getting to the top is not always as good as it seems.

Chrome vs Internet Explorer

Browser wars have always been one of the fiercest tech battles of our time. Internet Explorer once reigned supreme with a whopping 95.97% of market share back in 2002 — because it was pre-integrated into Windows. Despite having overtaken Netscape Navigator as the dominant web browser, it was full of security bugs and worst of all, it stopped improving beyond IE6.

Mozilla Firefox and Opera came into the market but none did much damage until Google Chrome came along. Within 5 years, Chrome has overtaken Internet Explorer in both performance and web standards support, while IE is having a hard time in shifting its user base to its latest versions (thanks to its monopolistic bundle strategy).

browser usage market share (Image Source: Royal Pingdom)

As of September 2013, Chrome has 46.02% of usage share compared to 20.71% for Internet Explorer in the web browser market. Internet Explorer’s dethronement carries a valuable lesson: releasing a flawed product just to outpace your competitors will doom you for years.

HTML5 vs Flash

In April 2010, a public letter from Steve Jobs explaining the ban of Flash on iOS platform was published. This ignited a heated battle between HTML5 and Flash, a war so intense that Flash was later hailed as a prime feature for non-iOS smartphones.

What’s so wrong with Adobe Flash, the technology that has been powering all interactive websites since the dawn of the Internet? For Steve Jobs, it was security, performance and reliability issues, and incompatibility with mobile devices. Also, Adobe failed to improve Flash fast enough. Upgrades kept getting delayed. Whenever a security bug was discovered, developers could do nothing but wait for the next release.

All these pitfalls made developers jump ship and crown HTML5 as the leader of the next era of web interactivity. After 1.5 years, Adobe announced that they would halt the development of Flash player for mobile, literally marking the end of the Flash era on the smartphone platform.

Android vs iOS(?)

Android vs. iOS is pretty much the same story as Windows vs. Macintosh, except that it’s still ongoing right now. iOS owned the entire touchphone market, until Android OS (acquired by Google), came into the market, trying to establish itself as a direct competitor. Available on both affordable and more recently premium phones, it steadily improved its features from Android 1.5 Cupcake to Android 4.4 Kit Kat.

Now, Android dominates the smartphone market with 79.3% of market share compared to 13.2% for iOS. In terms of smartphone unit shipments, Android leads with 187.4 million units to 31.2 million units for iOS.

In the tablet market, Android also has the lead with 62.6% of market share compared to 32.5% for iOS. Android has also exceeded Apple in app download numbers with a lead of 10%, and soon it will overtake iOS in terms of app developer’s revenue as well.

mobile os revenue share Developer Economics)

It looks like a comprehensive victory for Android, but Apple’s CEO Tim Cook mentioned that market share didn’t matter if "users dump [Android devices] in the drawer" and use the iPhone for everything instead. Yet Apple did release the iPhone 5c, a "budget" version of the iPhone (Apple has a different version of budget, apparently), so maybe they are feeling "a little bit" threatened by Android’s rise. Let’s put a pin on this one and revisit it a year from now.

E-Publishing vs P-Publishing

For many years, print publishing was the definition of publishing, but if you have heard of or used an e-book, you are part of the revolution that is changing the face of publishing as we know it. E-publishing allows publishers to cut down on printing and distribution costs, and their books are available for order, 24/7.

Social media became the online version of "word of mouth" and book recommendation sites e.g. Goodreads flourished during recent periods. In spite of these benefits, publishers are still ironing out the creases when it comes to author royalties, discoverability of new titles and piracy problems with copyrighted material.

Nonetheless, the publishing industry is going through an overhaul as evidenced by the disrupted businesses of magazines and newspapers. Yet print publishing, or more precisely, books will always have the support of its hardcore fans. Although many print publishers were initially hesitant in joining the switch in medium, most have come to embrace it as an additional outlet, rather than a full-on replacement.