Is This the Fifth Pillar of the Modern Internet?

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In an interview with Bloomberg this week, Google (NASDAQ: GOOGL  ) Chairman Eric Schmidt presented the "four pillars" of technology. Google, Facebook (NASDAQ: FB  ) , (NASDAQ: AMZN  ) , and Apple (NASDAQ: AAPL  ) have all created public platforms that consumers and third-party businesses can use to communicate, share media, and process information.

No surprises in that list: Apple's technology ecosystem is the lifeblood of the world's biggest and richest company, Amazon's online services even power the infrastructure of Amazon's direct rivals, Big G has its advertising and infrastructure fingers into every online pie, and I dare you to find a popular site that doesn't let you log in via your Facebook account. Microsoft (NASDAQ: MSFT  ) is conspicuous by its absence, but then Mr. Softy isn't exactly controlling the world of modern computing anymore.

Then Schmidt took the next step by announcing up-and-comers that might join this exclusive list soon. That's where he may have shared a secret or two.

Tell me more!
Of Schmidt's two potential "fifth pillars," the first one is another obvious pick. Twitter runs on interaction and public use, and some would argue that it already rivals Facebook in terms of ninja-like communication skills.

But then Schmidt offered up Netflix (NASDAQ: NFLX  ) as another alternative. That's a shocker.

Yes, Netflix is a leader in digital video services. CEO Reed Hastings sits on the board of directors at Facebook and would presumably have an idea or two about social sharing.

But the company has a mere 30 million subscribers today -- a drop in the billion-user Facebook bucket and untold legions of Google accounts. The company used to have some in-house social features but stepped back from that effort a couple of years ago. Netflix integrates with Facebook where it can and hopes to change American privacy regulations to enable a similar hookup domestically. But that's leaning on thew Facebook platform, not creating a set of social Netflix features.

Insider info?
But Schmidt might know something we don't. As Google's chairman, he probably spends a fair amount of time talking to fellow board member and audit committee leader Ann Mather -- who also sits on the Netflix board. Maybe I'm jumping to conclusions here, but Schmidt might just have stumbled across the social future of Netflix in these discussions and then slipped a hint of this into the Bloomberg interview.

So my mind is racing with possibilities right now. What if Netflix opened up a video sharing portal to rival Google's own YouTube? The company could add group chats to video streams to replicate the experience of parties around the big screen -- but across states or even continents these days. Or maybe he was just talking about the way Netflix shares its infrastructure advances as open-source software packages, allowing others to benefit from its research.

The last option might be the least exciting one from a consumer standpoint, but it's both the most likely angle and a very interesting tidbit for Web developers and technology upstarts everywhere. I could see Netflix growing into a platform for next-generation technologies -- a sort of godfather or even (someday way down the line) a venture capital hub like Google Ventures. That's one way to stay relevant once you've saturated your natural markets.

That last step would obviously have to wait until Netflix has stopped growing globally and started accumulating wealth instead. Hey, everybody needs an exit strategy for that faraway day when the current model meets its logistical limits.

The precipitous drop in Netflix shares since the summer of 2011 has caused many shareholders to lose hope. While the company's first-mover status is often viewed as a competitive advantage, the opportunities in streaming media have brought some new, deep-pocketed rivals looking for their piece of a growing pie. Can Netflix fend off this burgeoning competition, and will its international growth aspirations really pay off? These are must-know issues for investors, which is why we've released a brand-new premium report on Netflix. Inside, you'll learn about the key opportunities and risks facing the company, as well as reasons to buy or sell the stock. We're also offering a full year of updates as key news hits, so make sure to click here and claim a copy today.

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  • Report this Comment On December 16, 2012, at 12:33 PM, techy46 wrote:

    Mr. Softy isn't exactly controlling the world of modern computing anymore.

    By modern computing, you mean in your face advertising and free multi-media junk and porn content? That's like calling a Chevy Volt a modern modern autmobile. Modern computing be be when my home network can connect all my content and devices to my place of employment. I'll bet Microsoft and Nokia get their before Apple and Google plus Samsung.

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