This past week I was able to talk a partner of an oil and gas VC that specializes in small scale (less than 10M) projects. One of the things I asked her was if the 'small-fry' oil and gas industry was being smothered by the giants of Exxon, BP, and Shell much as some people claim is being done by Microsoft, Google, and Yahoo. She replied that the big three are only able to pursue and develop the projects which show a high margin due to their high operating costs thereby allowing small ventures to flourish in projects that aren't 'profitable enough'.

Certainly this argument has also been made for the internet market too, but the oil and gas market is heavily capital dependent with large 'retooling' costs whereas the internet industry is driven largely by a smart labor force (ie: a more agile industry). So is it a possibility that small time internet ventures are more vulnerable to attack than the equivalent oil and gas company (and other industries for that matter)?