Staying on Top

The view from the top of the high-tech business world may be nice, but companies just need to look at the history of the industry to know it's not safe up there.

Market leaders must keep a close eye on their myriad competitors and copycats while also avoiding internal missteps. And top executives must not let the inflated egos that come with early successes get in the way of changing direction when necessary.

The Internet and fledgling Web 2.0 markets are a case in point. Some early leaders, like MySpace Inc. and Yahoo Inc., rapidly lost early share to newcomers. And now others, like Twitter Inc. and Facebook Inc., are working hard to avoid that fate. Even very successful companies like Google Inc. acknowledge that it's a struggle to maintain strong leads in their markets.

A few technology companies have thrived over the long term -- IBM, Microsoft, Hewlett-Packard and Oracle come to mind -- but most of them have had to bounce back from hard times at one point or another.

A company might be basking in the limelight one day, only to find itself confronting an insurmountable challenge the next and then facing a descent into obsolescence. It took years, but that was the fate of onetime highfliers like Digital Equipment Corp. and Sun Microsystems Inc.

Based on that history, Web 2.0 companies like Google, Facebook and Twitter, which have scratched and clawed their way to the top of their markets -- in mind share, if not financially -- will have to work harder to stay there.

Each of those three companies has momentum, buzz and millions of users. People don't talk about searching online for a new restaurant; they "Google" it. When Oprah Winfrey or NASA astronaut Mike Massimino wants to get the word out about something, they use Twitter. And when people -- whether they aren't old enough to vote or are members of AARP -- want to find out about a friend's big vacation or see the latest pictures of a niece, they go to Facebook.

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