Kevin Werbach has noticed that the successful Internet companies are the ones that do one thing and do it well rather than trying to be all things to all people. Needless to say, this has long been a formula for success in non-Internet businesses as well. Here’s his conclusion:
The Googles of the world, who found valuable niches and stuck to their knitting, are thriving. Yahoo! and Inktomi find themselves the equivalent of a 1970s conglomerate: The whole is worth less than the parts. It doesn’t take a search engine to figure that out.
You might also note that this holds true across the IT industry. There are some notable exceptions, but most companies succeed by virtue of mastering one specialty. Even a mammoth like Microsoft makes the lion’s share of its money selling desktop operating systems and productivity applications. All of those side businesses are money losers.