Diversify and conquer

Amazonian elephant coming up from behind.

There were three global technology elephants left standing at the close of the Consumer Electronics Show in January – Samsung, Google and Apple. Microsoft was last seen rumbling toward the elephant’s graveyard and the two likeliest candidates to replace it, Amazon and Facebook, were still shy of the necessary bulk.

Recent days have shown why Samsung and Google will rule the herd for a long time to come.

Google has so many market-default services that it’s accounting for 25% of daily Internet traffic, with 60% of the world’s devices touching it every day. Samsung has the same kind of diversification across sectors it either dominates or ranks within the top tier of competitors.

Although Samsung has nearly a third of the global smart phone market and just reported a quarterly operating profit of $8.5 billion, there was something of a panic last week because it’s looking like it is close to exhausting the immediate growth potential of this planet’s 7 billion or so potential customers.

Samsung’s response was to talk about chip and screen making as new growth areas, allowing it to continue its march to higher profits while it tries to figure out a reason to get everybody in the world to trade in their current Samsung Galaxy for a new one. It’s a company that uses dominating heft in one technology sector to gain market share across all business lines. In contrast, Microsoft’s warring fiefdoms keep it from building strength upon strength. The post-Jobs Apple looked like it might be going in that direction, too, but Tim Cook seems to have headed it off for now.

Facebook staged a stock price come back last week as it demonstrated a new command of the mobile advertising market. But it’s still a one platform pony. With global leadership in online retailing and a front-of-the-pack position in core Internet services, Amazon is best positioned to occupy the empty fourth elephant’s slot. It has enough weight, it just has to learn how to throw it around.