How PayPal, Netflix, X, Facebook and YouTube lost their way

There was a time when the biggest technology companies knew exactly what they were.

Twitter was where the world talked. Facebook was where friends connected. YouTube was where anyone could broadcast themselves. Netflix was where you watched great television without adverts, schedules or interruptions. PayPal was the easiest way to pay online.

Each company had a clear identity. A simple purpose. They solved one problem exceptionally well.

Today, most of them are trying to become something else and, in doing so, have lost their way.

Earlier this week I wrote about PayPal's remarkable strategic journey. Here was a company that revolutionised online payments by making sending money over the internet effortless. Then it tried to become the operating system for commerce. Wallets. Shopping. Lending. Cryptocurrency. Rewards. Buy Now Pay Later. Merchant services. Consumer finance. Advertising.

The strategy wasn't wrong, but somewhere along the way the original clarity disappeared. The platform became a portfolio.

PayPal isn't alone. I also recently wrote about the decline of Twitter after Elon Musk's transformation of the platform into X.

Netflix appears to be having its own identity crisis.

I used to love Netflix when it produced original series like House of Cards and The Queen's Gambit. Today I often spend longer searching than watching. Instead of distinctive originals, I increasingly find endless licensed content, foreign imports with dubbing and subtitles, and programmes that blur into one another.

The reason is straightforward. Netflix is no longer competing against television. It's competing for attention.

When YouTube, Apple TV+, Disney+, TikTok and gaming platforms occupy hours of our day, producing one brilliant series every few months isn't enough. Investors increasingly care about engagement rather than subscriptions. The question is no longer, "How many people subscribe?" but "How long can we keep them here?"

That changes everything.

Facebook has gone through an even more dramatic transformation.

Originally it was a network of friends and family. Your news feed really was news from people you knew.

Today, much of that feed consists of recommended content from people you've never heard of, generated by algorithms optimised for engagement rather than relationships. Increasingly, those recommendations include AI-generated images, fake stories and what has become known as "AI slop". It often takes only a few seconds before low-quality or fabricated content begins filling the feed.

YouTube faces a similar challenge.

The platform remains extraordinary, but finding genuine expertise increasingly means navigating oceans of AI-generated summaries, reaction videos, clickbait thumbnails and synthetic content designed more for algorithms than audiences.

The irony is hard to ignore.

Platforms built to connect humans are increasingly being optimised for machines.

Algorithms create content. Algorithms recommend content. Algorithms optimise advertising. Humans are becoming an implementation detail.

This isn't because these companies are badly managed. Quite the opposite. They're responding rationally to the economics of digital platforms.

Public companies optimise what investors measure. Investors measure engagement. Engagement rewards more content. AI produces more content.

The result is an internet overflowing with material but increasingly short of meaning.

The same pattern appears almost everywhere.

Twitter became X and expanded into payments, video, AI and the everything app. Netflix is exploring live television and podcasts. Spotify has become a podcast platform as much as a music service. Amazon makes films. Apple produces television.

Every platform is converging towards the same destination: becoming the place where you spend all your time but, when everyone tries to become everything, everyone starts looking the same.

Ironically, this is why the next generation of social media seems to be moving in precisely the opposite direction.

Instead of giant universal platforms, we're seeing communities fragment into smaller, more purposeful spaces. Private group chats. Discord servers. Substack communities. Bluesky conversations. Creator memberships. Professional networks. Interest-based communities.

Sprout Social's latest research highlights this shift. Audiences increasingly value authentic interaction over polished corporate messaging. Serialised content keeps people returning because it builds relationships rather than chasing viral moments. AI is becoming mainstream, but the brands succeeding are those that combine AI with genuine human connection rather than replacing it.

That feels like a much healthier direction.

People don't want infinite content. They want relevant content. They don't want endless recommendations. They want authentic recommendations. They don't want millions of followers. They want communities where they feel recognised.

This reflects a broader pattern we've seen repeatedly in technology.

The first generation creates abundance. The second generation learns how to filter abundance. The third generation creates trust.

Payments followed exactly this path.

The internet made information abundant. Search engines filtered information. Now AI agents increasingly determine which information we trust.

Social media is following the same trajectory.

The first era connected everyone. The second era optimised engagement. The third era will optimise trust and authenticity.

That's why I don't believe the future belongs to platforms with the biggest feeds. It belongs to platforms with the strongest communities. Perhaps that's the lesson all of these companies are rediscovering.

Netflix doesn't really need live television; Facebook doesn't need more AI-generated posts; YouTube doesn't need another billion videos; PayPal doesn't need another product.

What they all need is the same thing they had at the beginning.

A clear reason to exist.

 

Postscript

If you think this sounds familiar, remember MySpace. Friendster. AOL. Yahoo! Technology changes. User behaviour changes. Markets change. What doesn't change is that the companies that endure are the ones that stay relentlessly focused on solving a real problem for real people. The moment they start optimising for everything, they often end up standing for nothing.