Classroom Companion: Business

1.2 · Definitions

---

6
1
dise using the Internet. We are experiencing a transition from the industrial econ-
omy to the digital economy—from physical products to digital goods and services.
The world’s six largest corporations by market capitalization as of the first 
quarter of 2021 (in descending order) are Apple, Microsoft, Amazon, Alphabet 
(Google), Facebook, and Tencent (Wikipedia, 
2021
). All of these companies pro-
duce digital goods and services and are major businesses in the digital economy. As 
of March 30, 2021, their combined market capitalization totals more than $8300 
billion. 
.
Figure 
1.3
illustrates the market cap of the top ten companies in the 
world.
These companies hold immense power in today’s business world due to their 
size, span of operations, and international impact. They can be characterized as 
digital conglomerates as their business operations have expanded far beyond their 
original business idea (Tapscot et al., 
2006
). Google, for example, started out as a 
company delivering search engine services for Internet users. Today, Google offers, 
in addition to its search engine, e-mail (Gmail), instant messaging, learning plat-
form (G Suit for Education), voice-over-IP (Google Hangouts), text editing 
(Google Docs), cloud storage (Google Drive), and several other platforms. Google 
has expanded its business operations into many sectors of the digital economy by 
acquiring competing companies and by horizontal and vertical integration.
The main asset of these companies is the network of consumers of the digital 
goods and services they offer. These users give rise to network effects (see 
7
Chap. 
9
) that generate huge value to these companies. Maybe the most striking fact is that 
these companies have only needed 20 years to gain their current market domi-
nance. In 2008, the top five companies according to market capitalization included 
PetroChina, ExxonMobil, General Electric, China Mobile, and Industrial and 
Commercial Bank of China (ICBC). Of these companies, only China Mobile can 
be said to fully operate in the digital economy by offering Internet and mobile 
. Fig. 1.3 Top ten corporations worldwide according to market cap. (Authors’ own figure)