Today Microsoft launched Soapbox, a service that is positioned to compete with YouTube according to a recent article. Despite there being no indication of differentiation, it seems likely that any "me-too" service launched by a large portal is destined for moderate success. Portals drive traffic to destinations and as time passes more and more people seem to use these services.
Taking a step back, this doesn't seem so uncommon. it seems that aside from Google (although Google will likely move in this direction), the common strategy that is being leveraged amongst the large Internet portals is the conservative 'me-too' approach. These companies continuously copy each other and new innovators (unless they acquire them). As the cost of developing technologies continue to decline and more time passes are we going to have four nearly identical Internet domains? Will differentiation fall by the way side? Will Microsoft be the only incumbent with a unique adjacent business?
Furthermore as these companies offer increasingly sticky services (such as photo management), it would seem that customer lock-in will become more intense. If it weren't for the increasingly integrated browser, these companies could be headed for a stalemate.
Maybe there is a management consultant out there who could align incentives within these organizations such that they encourage those with new ideas to stay in house and breathe new blood into the R&D efforts.
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