What do you think of GAFA and GAFAM? GAFA is an acronym for four American IT companies, Google, Apple, Facebook, and Amazon, and is used to describe a group of companies that lead the global IT market. More recently, GAFAM is often referred to as GAFAM, including Microsoft.
- 1 What is GAFA/GAFAM
- 2 What services does GAFA(M) provide?
What is GAFA/GAFAM
GAFA(M) have changed the world and created a “new normal”.
What GAFA(M) have in common is that it has a successful platform business. They are also making good use of the big data obtained through this business for their own services and marketing. They control the infrastructure of the digital world, so that money flows to GAFA(M) simply by our living in the digital world. This is why GAFA(M) are said to be the most powerful company.
For GAFA(M), even the COVID-19 Crisis is a tailwind
GAFAM generated a total of $33.9 billion in profits in Q2 (April-June). As business activities stagnate due to COVID-19, business activities and daily life are accelerating online. From online meetings and cloud storage use to social networking, searching, shopping, and watching videos, the services we touch every day are rapidly moving online. So under COVID-19, it is no longer possible to avoid GAFA(M) on or offline.
Criticism of the large and powerful influence of GAFA(M)
As GAFA(M)’s influence has grown to encompass all areas of politics, justice, and national defense, the perception of users who had previously only enjoyed its convenience is changing. In the United States, there is growing alarm over GAFA(M)’s oligopoly and invasion of privacy.
What services does GAFA(M) provide?
I’m sure you have all used GAFA(M)’s services, but let’s review some of their features and business.
The company offers a wide range of services, from the world’s largest search engine, Gmail, Google maps, Chrome browser, and YouTube for individuals, to the Android operating system for smartphones and Google Analytics for website operators. Recently, the cloud business Google Cloud Platform has also grown significantly. The advertising business includes search-linked advertising (listings), display advertising such as banner ads, and video advertising.
Its strength is the integrated development of hardware such as the iPhone, iPad, and Mac Book and the operating systems that run on them. Recently, we have also focused on the content business (subscription services) such as Apple TV+ for video distribution and Apple Arcade for game distribution. They also consistently pursue the protection of user privacy, which has been a major differentiator for them.
By operating several social networking services, including Facebook and Instagram, the company has about half of the world’s population of users. It generates revenue mainly by displaying advertisements that match users’ interests. Although it has a strong presence as a communication platform, the company’s leak of personal information has made people warier about privacy violations. The company is also involved in other VR businesses, including the acquisition of Oculus, and is also looking for future earnings drivers.
Amazon operates the world’s largest online store and has recently expanded its business to include Amazon Music, Amazon Prime, AWS cloud service, and financial services. It also focuses on its own devices such as Kindle, Fire tablets, Fire TV, Echo, etc. It has the widest business market and largest sales of any GAFA(M) company.
The development of the Windows operating system for PCs has set the standard for PCs in today’s business world. Recently, our cloud business and web conferencing tools have made remarkable strides, resulting in sales that exceeded market expectations.
GAFA(M) has an overwhelming presence in the stock market, dominating the corporate market capitalization rankings. There is no doubt that GAFA(M) will continue to have a major impact on the global economy in the future, and it is very important to keep abreast of their trends when considering our own business.