kidmercury

Google's acquired a bunch of companies in its relatively brief history, although three relatively recent acquisitions are worth focusing on: YouTube, DoubleClick, and FeedBurner.

Those three acquisitions, especially the relatively recent acquisitions of DoubleClick and FeedBurner, suggest we may have seen consolidation amongst the infrastructure players online.

This is worth noting because the consolidation phase suggests the infastructure industry is in a mature phase. This would suggest that the infrastructure players are set to be disrupted and commoditized.

There are two ways I see this playing out:

One way would be a new market disruption. This is something like some type of a new infrastructure technology that significantly reduces the cost of data transmission (i.e. bandwidth), the primary cost associated with infrastructure businesses. I'm not a server/networking person so I have no idea if this technology even exists or how it would work. But as an example of a parallel new market disruption, think of how mp3 players acted as a new market disruption for portable CD players; they essentially created a whole new ecosystem that commoditized the old one.

The other way is a low end disruption. This is where companies find a way to capture the revenue associated with the mature industry, but do so using assets other than what participants in the mature industry are using. In this particular instance, it means that companies will find a way to capture online advertising revenue (the revenue associated with the online infrastructure players) without investing in infrastructure assets.

The low end disruption is what I think we'll see. If you know of any companies well positioned for a low end disruptive strategy or are planning a low end disruptive strategy, feel free to note them in the comments below (in case anyone tried to comment before but was unable to, I fixed the technology problem that was causing that).