Increasing Overlap of Tech Giants

Question: When you’ve joined the $100+ billion market cap club, what do you do next? Answer: You start invading the other members’ territories (e.g., Amazon is now chasing the digital advertising business that Facebook and Google make billions of dollars from) AND you hire a bunch of pricey lawyers to defend you against antitrust suits.

This club is pretty exclusive today, with American members including mainly Alphabet/Google, Amazon, Apple, Facebook, IBM, Intel, Microsoft, and Netflix. They are so big that to grow significantly they have to look for other big markets (like cloud computing or self-driving cars or Hollywood-type movies) to enter, and most of those big markets are already occupied by other club members or non-member already-large specialists. What are the bloopers here? A classical one would be monopoly/oligopoly pricing and/or restraint of trade. But perhaps more important might be the opportunities lost by a failure to allocate capital to creating useful NEW-AND-DIFFERENT products and services.

Demand for H-1B Visas Continues to Rise in 2018

Continued massive growth by the giant high-tech companies in Silicon Valley brings with it commensurate demand for trained software engineers (as well as housing shortages and high prices, traffic jams, and other problems). The U.S. doesn’t produce enough STEM (Science, Technology, Engineering and Math) trained people, so the tech companies are forced to cast a wider net by hiring foreigners, using the mechanism of H-1B visas. Many of these H-1B hires are from India, and of those many are provided by well-compensated outsourcing firms such as Infosys, Tech Mahindra, and WiPro.

The situation in 2018 is similar to the one in 2017, with the important difference that now President Trump is now involved. He does things in strange and wonderful ways, and the America First plank in his election platform may bode ill to the H-1B visa program. Plus, he is at odds with the leaders of the giant high-tech companies. So anything can happen.

While the H-1B visa program may enable well-educated (especially in technology) individuals to enter the U.S. and earn considerably more than they could in their native countries, some of them are dissatisfied with the layers of bureaucracy that prevent them from advancing. However, there are two outstanding exceptions to this (both natives of India), namely Microsoft CEO Satya Nadella (who joined Microsoft in 1992 and became its CEO in 2014) and Google Inc. CEO Sundar Pichai (who joined Google in 2004 and became its CEO in 2015 when its now-parent Alphabet Inc. was created).

Technology Can Help or Hurt – Part 4: Social Media Giants’ Missteps Alter History, Spur Regulation

Mark Twain’s 1897 quote had it right: “Truth is stranger than fiction, but it is because Fiction is obliged to stick to possibilities; Truth isn’t.” One possible Truth in the current fracas involving Russians, Trump’s campaign team for the 2016 presidential election, and social network companies including Facebook, Google, and Twitter is that this is an early example of wars that are fought by hackers and the Internet rather than soldiers and guns. Numerous semi-fiction books could be written or movies created about this craziness. One possible plot is that the Russians knew how unusual (AKA weird) Donald Trump is, and preferred him to Hillary Clinton as president because they could exploit that unusualness (AKA weirdness). A bunch of congresspeople are calling for regulation of these giant Internet-based companies. So are the media, who are far more regulated than Facebook, Google, and Twitter. These are crazy times, and the Russians and other enemy nations must be enjoying all the gyrations that the US is going through.

Technology Can Help or Hurt – Part 3: Large-Scale Deaths or History-Altering Events Enabled by Technology

Even more dangerous to individuals, America, and the whole world, are the loopholes in the processes at internet giants like Facebook and Google. Technology is evolving faster than it can be controlled by either man or machine. And since these companies make most of their money by selling ads, exciting events—whether or not correctly reported on—boost their revenues and profits.

The technology of rapid-fire firearms that are available to crazed murderers like Craig Paddock who murdered dozens and injured hundreds in Las Vegas on October 1, is the most serious recent example. That technology was not kept in check by proper rules (and their enforcement) regarding what firearms can be sold to whom. On the information side Facebook and Google allowed two known rightwing “hate news” sites to post incorrect information unfettered, for minutes in the case of Facebook and for hours in the case of Google. All the information gaps here can can ultimately be traced to errors by humans, either failures in the basic design and implementation of the laws/rules or in the software, or in the review by people. Unfortunately, the genie is out of the bottle, and is misusing its powers.

Beyond such “fake news”, which can be distributed widely and quickly, the very content of the ads can be hurtful. Facebook and Google (including YouTube) apparently accepted a considerable number of ads from Russia supporting Donald Trump during the 2016 campaign. Since those ads were paid for, which is how those companies make money, they were motivated to accept them. Apparently only in retrospect did they investigate, after which they reported on what happened, but Facebook, at least, didn’t tell the whole story.

Like the old saw “Everyone talks about the weather but no one does anything about it” (including President Trump, who refuses to recognize global warming), there doesn’t yet seem to be any consequences for these tech giants. But change may be in the offing from places like Stanford University, which has launched a new Global Digital Policy Incubator, with a speech by Hillary Clinton. We can only hope that we can get the genie back into the bottle, by getting these tech giants under control … if that is possible.

Technology Can Help or Hurt – Part 1: Apple Watch Compromises America’s Pastime

Years ago (well before the Internet or Apple watches) we read a story about a black native of Africa asking why a white explorer kept looking at his watch, and being told that it must be his God. Fast forward to the electronic age, when billions of people have electronic gadgets like cellphones that they treat with similar reverence, because they give those people helpful capabilities that they never had in the past. But that same technology can also be hurtful. If you replace “Lord” by “Technology” (which billions of people today seem to be doing), the phrase “The Lord giveth and the Lord taketh away” sums up the benefits and dis-benefits pretty well. A couple of recent examples of the latter shows why.

Likely none of the engineers who designed the Apple Watch foresaw that it could be used for mischief like stealing the catcher’s signals to the pitcher as to which sort of pitch to throw next. Apparently the Boston Red Sox figured out how they could very quickly take a video of the New York Yankees’ catcher using an Apple Watch and very quickly communicate with hand signals to the Red Sox batter the type of next pitch, boosting his likelihood of getting a solid hit. Probably most of those Apple engineers couldn’t even name any of the possible types of pitches.

We’ve Done Our Passwords All Wrong

Passwords are one of our favorite villains. We have long advocated the use of hardware dongles. And Apple, among others, have created various technologies that scan fingers or faces. Most recently, shipments of their iPhone X are being delayed because of problems with critical components (cutely named Romeo and Juliet). There is even a novel by Scott Allan Morrison, “Terms of Use”, in which the hero invents a way to scan an eyeball.

But the conventional wisdom, originally spelled out by NIST (the National Institute of Standards and Technology) to make them complicated (and thus virtually impossible to remember) has been replaced by NIST itself. Now, long but simple phrases that are meaningful to the user are advised, because they are easy to remember but hard for hackers to break.

Unfortunate but Unsurprising Suboptimization in Silicon Valley

Don’t Google and Amazon Read Businessweek? At least Google has the excuse that they were born and grew up in Silicon Valley and have always lived here. So it may be instinctive for them to keep on wanting to out-Silicon-Valley Silicon Valley. As for Amazon, Jeff Bezos’ historically bare bones operating philosophy has apparently changed if he now wants to pay big bucks for the facilities and staff in Silicon Valley.

Even worse, no other than the CEO of Silicon Valley Leadership Group who was just given accolades by the San Jose Mercury News may be one of the villains. Although Carl Guardino wants to “exorcise the twin demons of housing shortages and traffic jams” he appears to be focusing only on the traffic jams part. (This, in turn, may be due to the fact that he commutes to work by bike 17 miles each way, from tony Monte Sereno to the airport. He may actually get to work faster that way than by car, but Google Maps shows one hour and twenty minutes, though there are fortunately two alternatives that are trails. The third is via an expressway, which is not cyclist-friendly.) He apparently expects somebody else to deal with the housing shortage, a poignant example of suboptimization. (Interestingly, the definer of suboptimization is a San Joe State professor, who no doubt has lots of local examples to cite.) Apparently HE thinks that having fast transportation allows people to live farther away, where housing is affordable. WE think that the proposed “Google transit village” (that puts 20,000 Google employees in offices adjacent to Diridon Station) will be a nightmare because it puts too many eggs in one basket. And if you want to know what Silicon Valley residents REALLY think, have a look at the Comments accompanying the article about Carl Guardino.

Another consideration is that past experience regarding the preferences of high-tech company employees is that managers have families and prefer to live toward the San Jose end so they can have grass to play on, whereas single guys writing code prefer to live in San Francisco so they can party. Where will the party scene shift to? Will hungover software engineers want to commute from San Francisco to Diridon Station on BART? And can their bosses afford to live in closer proximity to Diridon Station? Houses in nearby Sunnyvale are selling for nearly $800,000 over their asking prices.

What about Amazon? While those with vested interests—politicians, city planners, tax assessors, etc.—are positive, knowledgeable local residents (and newspaper columnists) are not. Maybe Amazon’s own planners and cost accountants will horrify Jeff Bezos so much that he will choose some other city on the Businessweek pictogram who will appreciate him more and charge him less. Or maybe he will get creative with a twist like the giant factory towns in China, which have dormitories and apartments and stores, and propose to build giant apartment buildings to overcome the housing and traffic challenges.

Mammas, Don’t Let Your Babies Grow Up To Be Web Entrepreneurs

Mamas, don’t let your babies grow up to be web geeks,
Don’t let ’em write Java or HTML.
Let ’em be doctors and lawyers and such.
Mamas, don’t let your babies grow up to be web geeks,
‘Cuz they’ll work all night long and they’ll never get rich.
While Google makes all the cash.
(With apologies to Ed Bruce and Willie Nelson)

Most web entrepreneurs need OTHER day jobs. Millions of them make little or no money, despite delivering informative and/or entertaining content. And they may well spend more on SEO than they make. An expensive hobby …

Can Women Write Code As Well as Men?

Anyone working in Silicon Valley (or reading local newspapers) cannot fail to be personally affected by issues of workplace diversity (at least vicariously). (Actually, anyone reading the Wall Street Journal these days could not avoid seeing the variety of prose on this topic from its chorus of reporters and columnists.) And during the last couple of weeks s/he could scarcely avoid hearing about the 10-page memo written by Google’s James Damore, his subsequent firing, and the furor both locally and nationally. There is a saying in Japanese that “the nail that sticks up is the one that gets pounded down”, and we are sure that he feels very pounded down these days. And his subsequent article published in the Wall Street Journal (in a nice touch the accompanying picture shows him wearing a T-shirt that says “Goolag”) has doubtlessly made Google management feel pounded down, too. (This appears to add insult to the injury already facing Google because the U.S. Department of Labor is already claiming that Google systematically pays women less than men.)

It is no secret that the tech industry in general employs a majority of white or Asian (mainly Indian) men, particularly in technical and leadership roles, which means that Google is no better or worse than other giant tech companies. But when one digs a bit deeper, it turns out that Damore’s belief that women are less capable at writing code than men is incorrect because Indian women CAN code too.

The Wall Street Journal’s Andy Kessler points out that there is limited proof that Google’s mandatory “Unconscious Bias” training has any merit, because of the fallibility of the numerous studies that have supported its inclusion.

Actually, it is meaningless to give OVERALL statistics about percents of male/female or race without also putting them in the context of compensation or managerial level or similar measure, as we have tried to do with the illustration above.

Will Bitcoin Replace Dollars and PayPal?

Bitcoin was generated in its early days by geeks running souped-up microcomputers for billions of cycles, consuming a lot of electricity and communications bandwidth to produce no useful result. (Does “It is the tale of an idiot, full of sound and fury signifying nothing” seem a propos?) This is counter to the evolution of physical coins (and their paper surrogates and later trusted electronic financial institution balances) that were a convenient (easily transported) substitution for useful physical objects that had previously been bartered (e.g., cords of firewood or herds of sheep). Given its origin, it seems strange that it was not originally denominated in terms of compute cycles and actually used that way. Anyway, enough people believe in it that it it has practical value.

Many of those same geeky people are doing things like setting up proxy servers, and the sources of those proxy servers prefer to be paid in Bitcoin. So they are essentially following a path similar to PayPal, whose users did not want to use credit cards, and earlier when people used credit cards when they didn’t want to carry coins and paper money.