Abstract
We propose a view of conglomerates that is at odds with what was seen in the implementation of highly unrelated diversification strategies pursued in the 1960s. Many of their differences emanated from development of the Internet’s enhanced computing power which facilitated greater controls as well as significant scalability. First, instead of organizing as passive holding companies, diverse activities within Internet-enabled conglomerates were coordinated via a technology bundle that included customer data, logistical details, common algorithms, and other software resources that were facilitated by advanced computing capabilities, such as artificial intelligence, as well as by enhanced communications capabilities. Second, Internet-enabled conglomerates leveraged their accumulated customer data by embracing a “demand-side” strategy perspective—which meant that businesses considered to be unrelated from the “supply side,” in fact, often shared customers. Leverage of customer data (and infrastructure investments) drove further demand-side diversification to provide differentiated, complementary products to a core of common customers across business units. Third, Internet- enabled conglomerates maintained a tight ecosystem of relationships that were frequently vertically related (or reciprocal) in nature to enjoy synergies that were consistent with their customer centrality focus. Finally, early losses from their novel and disruptive activity chains were subsidized by providers of capital seeking speculative gains of uncertain duration. In the post-COVID era, when demand declined, turnarounds and restructurings were their fate. (The new conglomerates were most like the speculative conglomerates venerated in the 1960s in this last trait, as firms’ organizational structures were inherently malleable as industries evolved.)