Google, Facebook and Amazon: The New Media Companies

Internet access, click to enlarge.

If you have watched markets long enough, you have seen cycles of vertical integration and decomposition occurring in companies competing in changing markets. Today this is happening once again. As AT&T and Verizon are snapping up content creation companies, Google and Facebook are busy developing their own information networks. Wired explains to readers how the media landscape is changing fast.

TELECOMMUNICATIONS COMPANIES ARE becoming media companies. That explains AT&T’s agreement to buy Time Warner for $85.4 billion. But something else explains it, too.

Media companies are becoming telecoms.

Internet firms like Google and Facebook and Amazon and Netflix are the new media companies. They deliver enormous amounts of video online, posing a direct threat to old-school television and movie companies. But they also are becoming telecoms, threatening the likes of AT&T and Verizon.

The proposed AT&T/Time Warner deal combines two powerhouses. AT&T is the nation’s largest pay TV provider, the second-largest wireless provider, and the third-largest home Internet provider.

Time Warner owns a dizzying array of media properties, including HBO, CNN, Warner Brothers, DC Comics, TBS, TNT, the Cartoon Network and broadcast rights to many live sporting events. But it does not own Time Warner Cable, a separate entity that the cable company Charter Communications bought earlier this year.