My friend Steve Rogers, the greatest pitcher in Expos/Nats history  (158 wins of which 37 were shutouts and a lifetime 3.17 ERA), once warned me that the most serious arm injuries he ever experienced were the ones he incurred patting himself on the back.  But after my post of several weeks ago on the nature of competition in the broadband market, I’m going to have to accept the risk of injury is part of the game and get out there and pitch.

Back on May 12, I said:

We used to think of competition as being like a sprint – Coke and Pepsi, Oreo and Hydrox racing to a finish line. But Microsoft, Google, Apple, Comcast, Motorola, Facebook, Amazon, Clearwire, Verizon and the like (but, unfortunately, not T-Mobile) are not on a track – they’re in a cage match, in which alliances and partnerships continually form and reform with the goal of being the last contestant standing – the entity that “brings the entire broadband experience together” for the consumer.

Well, as if he wanted to agree with me as emphatically as possible, Eric Schmidt, the CEO of Google and perhaps the toughest guy in the cage – the biggest, meanest father-raper sitting on the bench — gave this interview last week.

And in it, in response to a question about “a new platform war emerging.”  Schmidt says something important:

If you look at the industry as a whole, there are four companies emerging that are exploiting “platform strategies” very well…Google…Apple, Amazon, and Facebook.

Or, as the article reporting the interview calls them, the “Gang of Four.”  What defines a platform strategy?  A couple of things, to listen to Schmidt describe it.  One is a consumer orientation, a second is ubiquity (global presence), and a third is excellence in one aspect of the Internet experience – whether Google search, Apple gadgetry, Amazon retailing, or Facebook social connectivity.  And the crowning piece of the definition is that the product becomes a platform for other value services – that Facebook becomes an e-mail service, and Google’s new “+1” feature becomes Facebook, and Apple’s Kindle becomes a stalking horse for an alternative to Apple phones, and Apple phones become a platform for an entire new apps industry in which the others take part, and so on down the line.

In fact, when Schmidt was asked who the “next” member of this Gang was (why shouldn’t the Gang Of Four have five members?  Consider the Big Ten) and whether it was Microsoft – remember Microsoft? – Schmidt said, no, Microsoft was an “enterprise” company.  Which means what?  That they sell to  businesses?  Well, yes, but my copy of Office, my Xbox (Ok, that’s literary license – I don’t have an Xbox), and perhaps my phone one day speak to the contrary.  No, the explanation must be that Microsoft isn’t involved in the competition in which the Gang of Four is involved – the struggle to be the consumer’s gateway to the broadband Internet, to organize and intermediate the consumer’s broadband experience.

In fact, Schmidt specifically casts out Microsoft and says that the next members of the Gang would be PayPal and Twitter.

OK, PayPal, I can see that – if Apple is gadgets and Amazon is the bazaar and Google is search and Facebook is digital Main Street, then PayPal is currency.  I did a piece on NPR about thirteen years ago – I’d link to it but many of my greatest radio moments seem to have been erased by NPR, probably because I was too conservative — to the effect that American Express ought to get on the stick and buy EBay and PayPal before it’s too late.  Jeez, I nailed that one on the head!  Can you imagine where they’d be if they’d done that, seamlessly migrating people from their cards to PayPal, integrating the two, making EBay a PayPal/AMEX playground?

But I digress.  PayPal, sure, they could become the digital currency of the next epoch, although Schmidt is probably being strategic in mentioning them.   But Twitter?  Something that Aston Kutcher uses to share his pensees, or the medium of choice for meandering Congressmen who post underdressed pictures of themselves?  They’re a prospective champion of the cage match?  Can you imagine being Microsoft, the Standard Oil of the desktop computer, and being told by Eric Schmidt – a guy from Novell, for Chrissakes – that you’re really not relevant to where the digital world is going, that you can stand aside and let Twitter get past the competitive rope line and onto the Club dance floor while you and your antiquated rear end sit out in the cold?  Whatever happened to respect? I’m Microsoft!  I used to be somebody!  I was the subject of an antitrust investigation before your co-chairmen had their first beer!

Sorry, old timer.  Personally, I think Microsoft might yet get somewhere in the phone business.  But their company, essentially, makes computers work, and making computers work seems a good deal less important today than getting them connected to the broadband network, and when the “Cloud” arrives, computers will look like the Princess Phone of the new millennium – lovely to look at, but not all that interesting when you get right down to it.  Twitter, on the other hand, may today just be a way to find out if the Korean taco truck will be in my neighborhood at lunch time, but it may yet be the platform –   Schmidt’s word  — that people use to buy and listen and chat, and mail and search – or more generally, “find out” – and therefore be the winner of the cage match for who gets to intermediate the entire broadband experience.

Intermeditation!  In fact, Schmidt all but says that’s what it’s all about, albeit in another context.  He remarks at one point in the interview that music is fundamental to Google’s growth and …well, wait, let’s stop right there.  Music is fundamental to Google’s growth?  What the hell is that? Music has never had anything to do with Google’s growth.  In fact, I’ll bet Larry and Sergey are terrible dancers.  Ah, but music is important to Apple’s growth, and therefore it’s a must for Google, because that’s the nature of the cage match.

But back to disintermediation.  As Schmidt says, You have this disintermediation possibility, of people by-passing studios and going directly to digital rights.

Or, as he meant to say, We’ll make the studios dance to our tune, just as we will the signal providers, and the device manufacturers, and the rest of them.  Because we’re here to intermediate every aspect of the broadband experience.

And I don’t mean that pejoratively – that’s what platform competition – the cage match — is all about.  It’s about becoming the frame in which the consumer/user places the rest of the broadband experience.  And that’s the real competition in the broadband market.  Signal carriers created these new competitors by virtue of the fast and affordable networks they created, and now they have to keep up with them.  Content producers thought they would meet their customer on the network, but now find that a new class of platform megafirms are the entryway to the consumer’s frame of reference.

That’s the real nature of competition in the broadband world today – a cage match among firms that offer connectivity, devices, applications, content, and more.  Each tries to intermediate the others, each tries to capture the lion’s share of the value of the integrated broadband proposition.  Schmidt gets it, and the rest of us need to as well.