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).

One Less Big Tech Company to Pile Into Already-Overcrowded Silicon Valley

The good news today is that Amazon will NOT locate its second headquarters (with up to 50,000 people) in the Bay area. So San Jose mayor Sam Liccardo will get his wish. This is a welcome change from past practices by Silicon Valley cities, when city councils have welcomed large, tax-paying companies despite the downsides of their new presence.

Every day Silicon Valley denizens read about high-and-rising house prices and apartment rental rates, traffic jams and ever-longer commutes, and other phenomena caused by the irrational decision-makers at the likes of Adobe, Amazon, Facebook, and Google … AND local city council members with dollar signs in their eyes. We have lobbied for regionalization to spread the employees and economic benefits more evenly across the country, for thoughtful consideration of ALL aspects of the situation (including housing and traffic flow), for thoughtful consideration of ALL aspects of the situation (including housing and traffic flow), and to grow their Silicon Valley operations at sensible rates.

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.

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.

Silicon Valley Continues to Be #1 Technology Hub; Why Not Boulder, CO or Ithaca, NY?

Despite our repeated reminders that the multiple woes—especially housing prices, traffic gridlock, and long commutes—of tech companies’ building large staffs in the San Francisco/San Jose area, nearly all of these mainly-software organizations continue to ignore the logic of setting up new operations in other cities in the U.S. And these other cities would love to have them locate their operations in their respective cities. This phenomenon, coupled with the September 13 opening of the vaunted Cornell Tech in New York City, is so noticeable that Bloomberg Businessweek went to considerable effort to prepare a pictogram for its September 11 issue that includes about 300 metro areas (but they do not appear to be the 300 most populous cities in the U.S.) is so detailed that they couldn’t include it in their online version and an article apparently so basic that they couldn’t include it in their print version. On the horizontal (“good stuff”)axis it combined nine positive ways: rates of college education, science and engineering majors, top universities, headquarters of big tech companies, venture capital investment, share of jobs in computer-systems design and related services, broadband subscription rates, independent coffee shops (huh??),and commutes by bike/public transportation/on foot. On the vertical (“bad stuff”) axis it combined three negative ways: high home prices, lots of income inequality, and long drive times. It weighted these 12 ways equally (what else could they do?) and plotted a scattergram with city names as labels. In the upper lefthand corner (high on both good stuff and bad stuff) is the San Francisco/San Jose area (Silicon Valley), which is in the biggest “quadrant” (the quadrants are quite unequal in area) called “Both the good and the bad of Silicon Valley”. The upper righthand quadrant is “Unequal and expensive, but not techie”, the lower lefthand quadrant is “Tech without the downsides”, and the lower righthand quadrant is “ Least like the Bay Area”. The authors highlighted Boston (not surprisingly, due to its many good universities and Route 128 tech companies), Boulder, Co (high percent of households with broadband access), and Ithaca, NY (low housing cost). Ithaca??!! Well, it’s home of Cornell University which, together with partner Israel’s Technion, created Cornell Tech, and it’s the most techie of the Ivy League. (It’s also our home town, with nice summers, but awful winters … especially compared with Silicon Valley.)

Crowdsourcing Companies Likely Can’t Boost YouTube Views. Can Proxy Servers?

The old adage “If it seems to be too good to be true, it probably is”. That is, it’s NOT true. Crowdsourcing companies promise a lot more than they can deliver. Our previous post proved to be way too optimistic when we tried to get a couple of those companies to actually deliver those views. What we found was that some proxy servers MIGHT do so.

However, it seems that proxy servers are as much of a bag of snakes as crowdsourcing entities. We noted during our experiments with crowdsourcing companies that some of them proposed to use proxy servers, or actually did so, but they apparently did not succeed in adding more than a handful of views. That apparently was because YouTube is too clever, and they disqualified most of the views for a variety of reasons. For example, if the crowdsource operative used a proxy server located in a country other than his/her own (which they could tell if the visiting IP was from one country in one time zone but the time of the computer to which the IP was attached was set to a different time zone), YouTube disqualified those views.

The other challenge is that most proxy server folks want to be paid in Bitcoin. While you can use dollars or credit cards or gift cards at sites like Paxful, they can be pretty expensive.

The bottom line is that many owners of YouTube channels may find it too expensive and time-consuming to boost their view counts via crowdsourcing or proxy servers.

YouTube’s New 10K Views Minimum: Triumph of Quantity Over Quality, Bonanza for Crowdsourcing Companies

YouTube makes money by putting advertisements on video channels, but advertisers are increasingly restive because some of those channels show terrorists attacks or racist rants. Ironically, the terrorists and racists could have earned money via YouTube’s AdSense program. Additionally, some YouTube channels have been stealing others’ content (and associated AdSense payments). Unfortunately, this new rule disenfranchises the millions of YouTube video creators who have not yet reached 10,000 views of their channels. According to Internet data firm Pex, 88 percent of all YouTube channels have fewer than 10,000 views.

YouTube’s new policy should create a bonanza for the numerous organizations who provide low-cost labor for doing a wide range of tasks on the Web that are more suited for humans than software, because many of sub-10K view channel owners can flock to them to boost their view counts. The most famous of these is Amazon’s Mechanical Turk. When we first heard of what appeared to be slave labor, we were affronted, but when we found that people as ethical as Stanford University researchers used Mechanical Turk we were somewhat mollified. And we quickly learned that it would only cost about one cent to have one of these low-paid “slaves” watch a video for the 30 seconds that is needed to create a “view”, so it would only cost about $100.00 to rack up 10K views. This means that essentially ANY channel owner—including terrorists, racists, and plagiarists–could exceed YouTube’s 10K requirement.

Social Media, Especially Facebook, Unfortunately Hijacks Users of the Web … But “Better Web” May Reverse That

Facebook and a handful of other social media are so entrenched that few people think about life before them. But the Web was conceived 15 years before Facebooks’s founding in 2004. Facebook put a pretty face on the Web, and billions of people have flocked to it. And Google Search, YouTube, and a handful of other giants –fueled by tons of advertising revenues—exercise a lot of control over what people can see and do, so much so that there is growing sentiment about breaking up these monopolistic organizations. And delivering fake news or vicious propaganda from the likes of ISIS (ironically ISIS can even get PAID by YouTube while it disseminates its messages of hatred) adds further pressure for this breakup.

It will take more time, but help may be on the way from the original creator of the Web, Tim Berners-Lee. He is working towards a “Better Web” where users’ control their own (private) data. One group that should benefit from greater control of their data is musicians. The title of Jonathan Taplin’s new book, “Move Fast and Break Things”, may even have caused Facebook to foresightedly replace their eponymous former motto with “Move Fast With Stable Infra(structure)”.

Sports More Important Than Technology Business in Silicon Valley Newspaper

The Mercury News’ demoting its business coverage to the back pages of the Sports Section was a populist victory even before Trump’s election. Or does this situation simply derive from the biblical truism “no prophet is accepted in his hometown”? In any case, the rest of the world—including major newspapers—seems more entranced with the goings-on in San Jose and surrounding cities. The New York Times and Wall Street Journal have permanent staff in Silicon Valley who seem to turn out significantly more column-inches of reporting and opinion about technological accomplishments in this geography than do the valiant-but-outnumbered technology staffers at the Mercury News.

This demotion came a few months after the April 2016 renaming of the San Jose Mercury News to to reflect its merger with the San Mateo Times. But the spirit of San Jose, which some years ago was dubbed “the USA’s largest truck stop”, lives on in the focus of its printed media. (Apparently a number of other cities in the U.S. claim that theirs is the largest, and a number of locations have subtitled themselves “Silicon XXXX”, like “Silicon Prairie” which can refer to Dallas-Fort Worth or the Chicago area or a multi-state area of the upper Midwest.) We are a bit baffled because the advertisements in the Mercury News don’t seem to be for products and services that the typical sports fan would buy.