The technologies and platforms people use every day are interoperable and based on open standards. And people expect and demand systems that allow seamless flow and transfer of information and content.
For this issue we look at the concentration of power of companies in important sectors of the Internet, we focus on acquisition and IPO statistics in the tech industry (globally and/or US-specific), and we evaluate how different products handle data portability.
Limited by the scope of this issue we selected 6 relevant market segments/ products relating to the Internet: E-Commerce; Social Networks; Content Management Systems; Search Engines (Desktop & Mobile); Digital Display Ads; and Browsers (Desktop & Mobile). A further selection of the most relevant companies/products in these fields was made based on their marketshare.
Looking at the market share of various sectors on the Internet (publishing, social networks, search, and more), we can see that many of them have clear market leaders.
In some cases, such as social networks, this can make switching to a competitor very difficult for social reasons (e.g. getting friends to join an alternative platform is hard)
Data portability differs greatly per sector. For example, switching browsers is very easy, switching content management systems is also possible with some effort, but switching social networks is being made very hard.
All State of the Web data sources
Datasets and notes:
Market Share Sources:
Social media: Statista, Experian, (US, 2016)
Content Management Systems: W3techs (sites running on these systems) (Global, 2016)
Search: Search Engine Land (2015, US)
Digital display ads: Emarketer (Desktop & Mobile, US, 2016)
Browsers: Statcounter (Global, 2016)
Data portability sources:
The support pages of all products mentioned
Acquisitions v IPOs sources:
Volume of US IPOs by sector
US IPO Timeline
When the dot-com bubble burst, around the turn of the century, at least one thing changed decisively in the tech industry: the taste for IPOs has soured. Between the 1980s and the peak in 1999, an average of 116 annual IPOs were performed. Between 2000 and last year there were 36 tech IPOs per year on average -- barely a quarter of the average before the burst. While the 2007 financial crisis brought with it another strong dip, the number of tech and Internet IPOs has been slowly recovering, but they fall far behind the number of IPOs by non-tech companies.
Global Tech and Internet IPOs
The most recent view on global IPOs shows a similar trend: relatively low numbers but an unsure uptick in the last few years. Global Internet IPOs rose from 26 deals in 2011 to 40 deals in 2015, a 54% increase.
Volume of global IPOs
Proceeds of global IPOs (in US$bn)
When we look at the proceeds (the cash raised) from the Internet IPOs in the last 5 years, we see a steeper increase. A low year with less than US$5 billion in Internet IPO proceeds, 2013 was followed up with a seven-fold increase the next year, when over US$33 billion was collected.
Market shares of different sectors
Most 'sectors' on the internet (social networks, digital ads, content management systems) show a clear market leader. This can be problematic if people can't easily transfer their data between these products, or if social pressure pushes them to the market leader.
These numbers are in visits, so a lot of people probably visit more than one of these social networks, but the dominance of Youtube and Facebook is clear.
Market share of Display Ads (Desktop & Mobile)
We can see Google and Facebook making up 30% of the display ads business in the US. This field sees quite a lot of competition: the top 7 companies only make up 55% of the whole market.
Of all websites with a CMS, almost 6 out of 10 runs on Wordpress. Joomla comes in a distant second. The CMS market is dominated by Wordpress, with a lot of smaller other players.
Market share of Search Engines (Desktop)
As a primary search engine for people in the US, Google has a market share dominance in the US by the largest margin of all sectors we've looked into.
Market share of Search Engines (Mobile)
On mobile Google is even a clearer winner. Google is the default search engine on all Android and iOS devices, which might be an explanation for this.
As we can see, Chrome takes a strong lead in browser usage, with over half of all users worldwide using either Chrome on the desktop or on their smartphone.
Mobile browser show another picture: Chrome only takes a small lead here, with Safari and UC browser coming right behind it.
For some of the sectors of the last section, data portability can ensure that people can move freely between the products. Think about the ability to transfer your bookmarks and settings between browsers, or the ability to change blogs without loosing too much posts.
Since e-retailing and display ad products don't benefit from data portability, we didn't include these sectors in this section.
Almost all browser makers ensure that people can move their bookmarks freely between browsers of competitors. Except for Microsoft IE, they also all offer a 'sync' option, which lets you sync your history and settings (but only between instances of the same kind of browser).
Mobile Browsers: Sync only
Mobile browsers don't offer native export and import of bookmarks like their desktop counterparts. They do however all support syncing of settings (and sometimes open tabs) between the mobile and desktop version of the browser.
CMSes: switching is possible
Almost all big CMS systems offer a way to export and import blogposts, so switching is always possible. However, it's not always possible to migrate the URL structure, and usually a lot of manual adjustments need to be made. There's a lot of room for improvement, but the basics are there.
Market share of Search Engines (Desktop)
Search: Only Google provides downloadable user behaviour
Data portability between search engines is not offered anywhere yet. Google is the only one who lets users export their search history, but offers no kind of import for search history.
Data portability features are the same on Mobile and Desktop
Market share of Search Engines (Mobile)
More data is being made available, but no real portability yet
Facebook, Youtube and Twitter all let users download their posted content and some user behaviour (like favourites or likes). This is more than users could do a few years ago, but without the ability to also import this data, or to reliably crosspost between social networks without restrictions, there is no real data portability yet.
Acquisitions in the US Tech industry
With quarter by quarter data, collected by PriceWaterhouseCooper (PWC), we can have a look at recent trends in the US tech industry's appetite for acquisitions. In short, there is a big and increasing appetite for acquisitions in the tech industry as a whole: the number of deals each quarter has been steadily rising since early 2013, almost doubling in the past 3 years. The value of all of these deals per quarter is equally showing sharp increases. Most big value acquisitions tend to get closed in the last quarter of the year so just comparing the 4th quarters of the past 3 years shows the most relevant trend: from $US50 billion in the 2013 last quarter to $US75 billion the next two years last quarters.
Volume of closed US acquisition deals
Value of closed US acquisition deals
There are sharp differences within the various tech sectors however. For instance, while the hardware sector had a big peak late 2013 but a steady decline in acquisition value since, the IT services and Semiconductor sectors both saw highly valuable acquisition deals in late 2015.
Closed deals per sector
Zooming in on these sectors shows the following annual trends:
1) the Hardware sector's decline is mostly expressed in the value of deals, not so much in the number of deals each year.
2) The IT services and Semiconductor sectors both show similar trends in the value of acquisitions deals (both saw the money involved in closed deals quadruple between 2013 and 2015). For the Semiconductor sector however this huge bump in money involved originated from the same number of deals as usual; in the IT services sector, the increase in the volume of deals actually closely resembles the increase in the value of deals
3) Both the Internet and the Software sector had a very active year in 2014, with acquisitions numbering 77 and 90 respectively, and the associated value of these deals hovering around US$45 and US$50 billion respectively. 2015 has been a slower year, in particular for the Internet sector, where both the number and the value of new acquisitions more than halved relative to the year before.
Hardware sector declining
IT services & Semiconductor sectors show big increase
Internet & Software sector up and down
Hardware sector: volume of closed deals
IT services & Semiconductor sector: volume of closed deals
Internet & Software sector: volume of closed deals
Volume of acquisitions by a selection of tech giants
Zooming in: Internet Giants' Acquisitions
Taking a longer view back, for a selection of some the biggest tech companies, shows a similar taste for and rise in acquiring other companies in the past decade. The timeline since 2000 shows a clear crescent up until 2007, with particularly Google, Microsoft and Yahoo splurging on acquiring new companies. After a financial crisis dip in 2008, when only a handful of new acquisitions was made by any of the tech giants, new deals ballooned again. The most recent trend, between 2014 and 2016, however shows another drop, at least in the number of new deals.
An important caveat in the data on these individual companies' acquisitions that it only shows the number of deals, not the value associated with these deals. While Microsoft 'only' acquired 8 companies in 2016 (as opposed to 20 the year before) one of those 2016 acquisitions was of Linkedin and with a value of over US$26 billion it was one of the biggest acquisitions in history.