Cover story
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SHARE PRICE OF BAIDU OVER 5YRS
300
250
200
150
100
50
Jun15
Jun16
Jun17
Jun18
Jun19
Source: Google Finance
controlled a quarter of the online
advertising market in China. And that
is all wealth creation that would have
appeared within Baidu if it had been
able to take some of those capitalallocation
decisions.”
The good news is that being
disrupted isn’t necessarily the end
for Baidu, or any of the FAANGs. As
Coombs points out, Microsoft seemed
to have entered a period of long-term
decline in the early 2000s, only to
turn itself around.
“It had a quasi-monopoly, then
Apple came along and you suddenly
had a big competitor. Some of those
old tech names like Dell, HP and
Oracle withered a bit,” he says.
“Microsoft was the exception. It
completely changed its business
model from being dominated by
one operating system and getting
complacent and not moving fast
enough.
“If anything, it copied Apple in
terms of developing ecosystems
in Microsoft Teams, Microsoft
Dynamics, the gaming business and
the cloud.”
He adds: “If you look at successful
tech companies now, they build
a waterfront, an ecosystem and a
subscription-based model that keeps
you as a customer.
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