Which Social Media Marketing Agencies Will Thrive In 5 Years?

From WIRED Magazine’s controversial article, “The Web is Dead, Long Live the Internet” came this set of factoids:

The story of industrial revolutions, after all, is a story of battles over control. A technology is invented, it spreads, a thousand flowers bloom, and then someone finds a way to own it, locking out others. It happens every time.

Take railroads. Uniform and open gauge standards helped the industry boom and created an explosion of competitors — in 1920, there were 186 major railroads in the US. But eventually the strongest of them rolled up the others, and today there are just seven — a regulated oligopoly.

Or telephones. The invention of the switchboard was another open standard that allowed networks to interconnect. After telephone patents held by AT&T’s parent company expired in 1894, more than 6,000 independent phone companies sprouted up. But by 1939, AT&T controlled nearly all of the US’s long-distance lines and some four-fifths of its telephones.

Or electricity. In the early 1900s, after the standardization to alternating current distribution, hundreds of small electric utilities were consolidated into huge holding companies. By the late 1920s, the 16 largest of those commanded more than 75 percent of the electricity generated in the US.

Indeed, there has hardly ever been a fortune created without a monopoly of some sort, or at least an oligopoly. This is the natural path of industrialization: invention, propagation, adoption, control.

We vaguely knew all of this from High School History, but too easily forget: at some level we are simply living through just-another business cycle.

It’s almost sad. I’m fond of saying that Social Media represents the most fundamental change in human communications since the Gutenberg Printing Press — and I still feel that way — but the cynical businessperson in me also recognizes that where Opportunity exists, opportunists will rush headlong.

We already know that companies like Apple and Google and Facebook are dominating their niches. But when it comes to Social Media Marketing providers — whether in the fields of monitoring, PR, advertising, customer response, etc. — we are still very early in the process of figuring out the long-term winners & losers. As Jay Baer recently noted:

Agencies realize how hot social media is, and they are scrambling to add social media expertise (real or imagined) to their services mix. In fact, a search for “social media agencies” on Google yields more than 41 MILLION matching Web pages. Sifting through that pile to separate the experts from the pretenders is a near impossibility.

What’s your take? Which Social Media Marketing vendors and agencies will be thriving 5 years from now? Who will be gone from the scene? If you care to make any predictions, share them with me in the comments!

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