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strategy+business: Corporate Strategies and News Articles on Global Business, Management, Competition and Marketing
/ Winter 2011 / Issue 65 (originally published by Booz & Company)

Data Points: Winners in the New Digital Economy


The balance of power in the digital economy has shifted. When Web 2.0 emerged after the dot-com bubble burst, service and content providers captured the lion’s share of profits. But between 2002 and 2010, according to a recent Booz & Company study, the digital players farthest from consumers — including telecom and publishing companies — lost profit share to those that are closest. Internet software and services companies that broadly aggregate and disseminate digital content, for example, lost money in 2002, but in 2010 took 4 percent of total profits (much of this attributable to Google); device producers claimed 11 percent in 2010 (up from 5 percent in 2002), thanks largely to Apple’s record growth. Companies across the digital value chain, the study concludes, will need to develop the right capabilities to bring them closer to the consumer.

 

 

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Data Points: Winners in the New Digital Economy