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Comment by hugh3 | Hacker News Reader

The ten largest companies in the world are, as of last quarter, Exxon-Mobil, PetroChina, Apple, BHP Billiton, Microsoft, Industrial and Commercial Bank of China, Petrobras, China Construction Bank, Royal Dutch Shell and Nestle.

Of these, Exxon, BHP, Shell and Petrobras have one trick between 'em: dig shit out of the ground and sell it. The banks pretty much have one trick too. Only Nestle, Microsoft and Apple have much diversity in their products.

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> Of these, Exxon, BHP, Shell and Petrobras have one trick between 'em: dig shit out of the ground and sell it.

I hardly think this is the same.

It is very expensive to 'dig shit out of the ground' and you will only make money if you manage to dig in the right place. Many a mining company have gone into the business of digging only to go broke shortly after, because the managed to dig in the wrong place.

Sure these companies make massive profits by digging, but they also spend a vast amount of money consolidating these profits by exploring for the next place to dig.

Their trick is not so much the digging, but their ability to keep finding other places to dig and their ability to then get the stuff out of the ground at profit.

That's the rub. Google's trick was created by a bunch of CS grad students at Stanford, and annihilated Yahoo! (who had a very similar trick) in less than a decade. One of Google's biggest competitors was started by an undergrad in his doom room at Harvard.

The barrier to entry on the web is incredibly low in comparison to other industries. There are thousands of other people ready to eat your lunch, and it only takes one to bring everything toppling down.

I think Google's previous attempts at monetization, like the swiss cheese Google box for your intranet, Google Apps, etc. were decently good ideas. Google now seems hell-bent on open-source, in the hope of drawing more eyeballs onto the one trick. As awesome as the self-driving cars are, I'd worry about trying to find some cash flow on something a bit closer to home.

This certainly seems to indicate that great product diversity is not necessary for strong financial performance in the short to mid term. I think the question here is more one of longetivity - how long will this "one trick" remain relevant, and retain a large enough market to keep increasing the profits?

All those oil companies would run into a lot of trouble if, say, the oil ran out. On the other hand, Microsoft could keep generating substantial revenue even if people stopped buying the XBox for example. Their other (major) products such as Windows and Office provide enough diversity to keep them relevant, despite the loss of one or two major markets.

Actually I think the bigger problem with what I said is that the huge one-trick companies I mentioned (all in mining/oil) are insensitive to competition. The market can easily support a large number of mining/oil companies, all plugging away steadily on their own bits of dirt.

Google, on the other hand, is the dominant search engine mostly because it's the best, and if anyone ever develops one that's significantly better then Google can have its lunch eaten quite quickly.

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