The famous quote from Lord Acton—“Absolute power corrupts absolutely”—is a good guide to compiling a list of the companies that are likely to need policing. The list is pretty short—Amazon, Facebook, Google (including YouTube), Twitter, and Uber (perhaps). And the effect on humankind (especially children) is pretty severe. Amazon is now so large and powerful that it is in danger of being prosecuted under the antitrust laws.
Fortunately, a handful of Silicon Valley notables have become activist vigilantes. And they are aiming at kids to use their smartphones for healthy purposes rather than wasting time on useless social apps.
Every major new technology brings with it not only fascinating new capabilities, and in the case of electronic technologies also some potentially-dangerous new challenges. So many auto accidents have been caused because drivers were distracted by their gadgets that it has been proposed that those drivers be punished as if they were driving under the influence of alcohol (or other substances). And it isn’t only driving. Focusing on the small screen while walking not only puts one in harm’s way but in cities like Montclair, CA crossing a street while distracted can result in a sizable fine.
We have twice before posted strong pleas for the giant tech companies—especially Alphabet/Google/YouTube, Apple, and Facebook—to stop expanding their Silicon Valley facilities rather than creating/expanding sizable operations in other cities. They’re mostly software companies, which could be located anyplace with high-speed data transmission capabilities!!! Are these companies afflicted by cases of hubris?
We wonder why all those cities who were campaigning for the Amazon HQ2 aren’t similarly campaigning for expansions of other tech giants.
We also wonder why Silicon Valley communities have not been able to either (1) extract enough money from these companies to compensate the many victims (long commutes, wasted time in traffic jams, inability to find housing, homelessness, etc., or (2) tax the companies so much that it makes it uneconomic to expand there.
Though YouTube was a great technological achievement by its original developers, more recently YouTube management has made a lot of video creators bitterly angry by their actions that started deliberately de-monetizing YouTubers since June, 2017. But not angry enough to shoot three YouTube employees at their San Bruno, CA headquarters and commit suicide on April 3, as Nasim Najafi Aghdam did. For many of these video producers, their anger was due to the pressure from advertisers who deplored YouTube’s running their ads preceding objectionable video content.
Unfortunately for a lot of people (including us at Technology Bloopers), in mid-2017, YouTube changed their monetization rules and instead of immediate monetization, they required that all YouTube channels had to exceed 10,000 views before they could make any money from advertisements that played in conjunction with their video creations. And in early 2018 YouTube upped their monetization ante by requiring each channel to have had 4,000 hours of watcher time during the preceding 12 months plus 1,000 subscribers. While there is no law against YouTube’s actions, many of these actions were a shock to the video creators—who had invested a lot of effort to produce entertaining or informative content and who highly valued—in monetary or artistic terms—a way to present them and some, like the YouTube shooter, relied on the income they received from monetizing their videos on YouTube..
The shooter felt that she had been especially victimized, not only by the numerical requirements that easily overwhelm small, independent video producers, but also by her perception of YouTube’s censoring of some of her content, and took revenge with a pistol. And the current vogue for shooting up a group perceived to be the reason for an individual’s economic or moral discomfort very likely gave her both a method and additional motivation.
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.
Will Apple topple from its perch as the world’s most valuable company? The stock market didn’t reflect Apple’s declining smartphone sales far enough ahead, which led to a drop in share price when year-over-year Q1 iPhone sales declined nearly 15%. And while the overall market grew about 4%, leader Samsung stayed flat, and a handful of Chinese companies rose ominously. Apple’s reliance on the iPhone for growth has become a weakness.
But there is another important consequence. If you look at total market capitalization (total shares times share price), Apple is declining rapidly and Amazon is rising rapidly. For the last 3 calendar quarters, the top 5 companies in the world have included only Apple, Alphabet, Microsoft, Amazon, Berkshire Hathaway, and Exxon Mobil, and the top 3 were only Apple, Alphabet, and Microsoft. But Apple’s market cap(italization) in 1Q2015 was more than double ANY other company, while in 1Q2016 there were 7 other companies with market caps over half of Apple’s. But In 1Q2015 Amazon was not in the top 10. It was #10 in 3Q2015, and #4 in 1Q2016 (getting profitable helped a lot). And Amazon is not dependent on one product line.