2012 was a year in which a bigger picture formed inside my thinking. Ecommerce is my day job and I think we are in a great period for commerce. Let us be clear about one thing, retail and ecommerce is no longer 2 channels. It is one massive opportunity for businesses and entrepreneurs to assist customers buying items whether it be online or in-store.

Mobile commerce in its current format is not the endgame in my mind. We are only scratching the surface on what mobile devices can do. Augmented reality, location and a variety of other things will play a role in commerce in the coming years.

Regular readers will be aware of my thinking regarding the big five. It is not the animals found in the game park but rather the big five technology businesses. I have written about it in the past when I looked at the Amazon effect but these companies drive the technology used by us on a daily basis.

A large part of my thinking was started by Farhad Manjoo when he wrote about the 4 horse man in Fast Company in 2011.  One can summarize his article in a sentence –  “Apple, Facebook, Google, and Amazon battle for the future of the innovation economy.”

In a NPR interview Manjoo summarizes the business models used by the Google and Amazon whom has direct lines with ecommerce. Facebook and Microsoft at the moment have ecommerce as a supplimentary service but it is not a core part of their revenue generation mechanisms.

On Amazon’s business model

“They’re trying to create a device that sells as well as the iPad and can prove to be a very popular rival to the iPad. But the thing they have done that is very smart is that they’ve made their device less powerful on purpose. So the Kindle Fire is smaller than the iPad and cheaper, and it is very intimately tied to Amazon’s Web store. They don’t want to make money from the device. They’re selling it, from what we know, for no profit at all. But they want you to buy a lot of stuff from their store.”

On Google’s business model

“Beyond search, it has an email service. Google has various online stores — a bookstore, a new music service. The big thing recently, it has created this very successful mobile operating system called Android, which has become a big competitor to the iPhone. And then it’s doing some very far-out things. Right by my house, I see Google self-driving cars driving around. And so they’re working on things that might be ready in the far future and also things that are going to be ready next year — the breadth of their innovation is pretty amazing.”

The battle is far from done as I see these businesses being disrupted by developing world behemoths whom control the industries in which the fab 4 play in.

Staff.com have a great infographic in which the big 5 is looked at in terms of revenue,profit and market cap.

Market cap, revenue and profit

Source: Staff.com