Why Google and Facebook won’t suffer the same fate as AOL

[Commentary] With Verizon finally putting an end to the misery of AOL’s decade and a half long decline, some are wondering whether today’s juggernauts -- Facebook and Google -- will face the same fate. The answer is unequivocal: No. To understand why, it’s helpful to look at why AOL went from being the No. 1 Internet provider in the country to a has-been outpaced by companies such as Facebook and Google. AOL failed because it focused on quarterly results and had a big cash cow in the dial-up business. Those should be good things, right? After all, that’s what Wall Street wants. Yes and no. Day traders benefit from these two things because they result in volatility. Buy-and-hold investors shouldn’t care about monthly and quarterly earnings. AOL also lacked lock in. Or, more accurately, it blew the lock in it had. Remember AIM? How big is instant messaging now? Big enough that Facebook paid $19 billion to acquire it. That’s more than four times the $4.4 billion Verizon is paying for AOL. That shows that Facebook is a long-term thinker.

Google is similar in its long-term thinking. Although some investors criticize the money invested in initiatives such as self-driving cars, Google Fiber, Google Shopping, Google presses on. Google Maps was similarly mocked. Now it is a key advantage over Apple. Some questioned Google’s investment in Android. No one is questioning that now. It’s extremely hard to get over the long-term thinking and lock in that Facebook and Google have. That’s why they’re 100-year companies.

[Rakesh Agrawal is the CEO of redesign | mobile, a marketplace for connecting consumers who need questions answered to service professionals]