If only it would be that simple... For one, Europe lacks the institution of venture capital which can be a key differentiator between a success and a total Elop, err I mean flop. You can have an incredibly good idea, you can even find crème de la crème developers to execute it and willing to work for peanuts, but you need a sizable amount of money to burn before it could even have a prospect to become self-sustaining one day, let alone profitable. Due to all kinds of laws and general socialistic nature of most European countries it's quite expensive to own capital and throw it around on start-ups for the vague promise some of them will bring 1000%+ returns - at least far more expensive than it is in the USofA which makes European VCs, and by extension start-up companies far less competitive than their USofA counterparts.

The only `real success` (tho still questionable if profitable, but Microsoft seems to think so) of such garage companies coming from Europe, that I know of, is Skype, which - lo and behold - also had to jump over the Atlantic pond and secure money from USofA VCs like DFJ and others - and were it not for the P2P foundation of it, which by default requires far lesser amount of money and resources to establish the initial network, it would've probably flopped before anyone of us even heard about it. And in the end, now it is a USofA company.

Mind you, I don't blame the USofA for that, I'm just saying that the things aren't as rosy as you paint them to be, and while the stories of 'two college dropouts forming a company in their mom's basement and becoming billionaires over night' are nice and soothing, they are less real than the fairy tales featuring a prince on a white horse showing up from nowhere and solving all the life's problems. You need money to make money, and in that regard Europe is no competition for the USofA. And while you can find VCs in Europe, and even get American VCs to invest in your start-up, those opportunities are far lesser, and far more sparse, not to mention far more expensive, than you can get if you were in the US. Many European companies (mine amongst others) open a USofA branch (which becomes a virtual HQ) for that reason, and then should their business become a success they are not considered European companies, mainly due to the large stake of the business owned by American VCs.

In the past several years, tho, what with the recession and global economic crisis, it's been increasingly difficult to start a successful start-up company anyway, so it's a moot point to even discuss why there isn't an European Facebook/Twitter/Youtube/etc.



Software / business methods patents are the / of all evil in the modern industry, especially the IT industry. They are a legalized monopoly mostly owned by huge companies and patent hedges, used to bully the competition and ensure your acclaimed top spot. While they might have made some sense in the distant past when inventions were scarce and it benefited all for those inventions to come in the open ASAP as the production was limited, these days they just make no sense. Not to mention that back then at least you couldn't patent an idea or an algorithm, which you can do now.

Imagine if music could be patented back in the XVIII/XIX century - you'd have something like this: http://www.youtube.com/watch?v=slVseKxhjjU . It's pretty much the same these days when it comes to software.