There’s an arms race going on about who develops the best video recommendation algorithm (for short videos). Whoever wins this algorithm race will likely rule the social media space for the next few years until metaverse or something else disrupts it. We don’t have a definitive answer yet, Meta and Google are the obvious leading contenders since they have the capex capability required to win this race. Developing a video recommendation algorithm requires combing through a massive amount of data which requires enormous computational power and storage in the Cloud; only a few companies have it right now. One can’t develop this Cloud infrastructure overnight and hence the likely winners are Meta or Google apart from the current front-runner TikTok. Food for thought, one of the largest video platforms, Netflix, isn’t even competing in this space; they are busy spending on expensive video content. We are worried it will relegate Netflix to just another movie studio with a massive organic content library but nothing to show on the technology front. It raises the question, is Netflix even a tech company anymore or just a movie studio? The answer to this is very important since the market valuation multiples are very different for a tech. video platform vs. a movie studio. Share your thoughts in the comments section….
