Content is King. But Platforms are Gods.

"Content is King" was a common expression during the first dot-com boom. Two of the most notorious M&A deals of that era (Time Warner + AOL, $160 billion; and Excite + @Home, $6 billion) were driven by the idea that bolting content onto infrastructure would provide the road to riches. Both those deals ended up as financial disasters.

What a different world it is today. Content is still key, but but the money isn't in creating content – the money is in building platforms that accelerate content distribution and consumption.

Consider the market capitalization of these content creation companies:

  • New York Times Corporation: $1.9B
  • CBS: $27.9B
  • Thompson Reuters: $29.8B

Now let's look at three companies that don't create content, but provide platforms for distributing content:

  • Facebook: $201.2B
  • Google: $390.3B
  • Twitter: $33.8B

We could also toss Apple in here – you could easily argue that what they have done is created the most successful consumer content consumption platform in history. Market cap? Approaching $600B. Again, they don't create content, but they certainly facilitate the distribution of it. 

So the money, apparently, is in monetizing other people's content. Think about The Onion, the small satire/humor newspaper. They write a hilarious article with a funny headline. If 10,000 people share it on Facebook (the aveage person on Facebook today has 350 "friends") then Facebook potentially gets to sell advertising on 3,500,000 pageviews associated with that post – even though they had nothing to do with actually writing the funny article. Facebook's platform is about monetizing other people's content. 

So content is still king. But platforms are gods.