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Will Apple, Google, Facebook, and Amazon Be Forever Dominant?
President Donald Trump, Satya Nadella of Microsoft, and Jeff Bezos of Amazon.
I’m skeptical that Washington will break up Big Tech like it did Standard Oil or AT&T. Likewise, New York Times tech columnist Farhad Manjoo also doubts such action is on the near horizon, or really governmental action of any kind. One difference is that Manjoo — who refers to Amazon, Apple, Facebook, Google, and Microsoft as the “Frightful Five” — seems far closer than I am to being convinced strong action is necessary. From his lede: “The tech giants are too big. They’re getting bigger. We can stop them. But in all likelihood, we won’t.”
Like I said, I’m not there yet. But one thing that could nudge me a bit closer is the certainty that the megaplatforms were dampening US innovation. And that’s just the argument being made, anecdotally at least, by Erin Griffith in Wired.
And, in its own backyard, many in Silicon Valley believe Facebook’s aggressive competitive strategy is stifling innovation. Since 2012, Facebook has repeatedly copied or acquired social-media apps that gain traction. There’s the Instagram deal, and more astonishingly, its $22 billion acquisition of WhatsApp. Facebook attempted to acquire Snap for $3 billion, was turned down, and made at least 10 attempts to copy its most distinctive features. Last week the company acquired tbh, an anonymous app for teens that has bubbled up in recent months. … Facebook isn’t the only Silicon Valley company that competes aggressively against upstarts. Amazon started a price war with Diapers.com, then bought the weakened rival. When Google Maps competitor Waze became popular, the company bought it. But the speed at which Facebook identifies its targets, the amount of money it is willing to pay, and the shamelessness of its copycat products goes beyond its peers.
Indeed, one point that Griffith makes that I also have is that today’s founders have learned the lessons of disruption. They’ve read Clayton Christensen and Andy Grove. They won’t be lulled into complacency. They won’t let some upstart startup steal their lunch, starting with the side order and eventually moving to the main entree. To that point, it’s worth reading the latest blog post by Andreessen Horowitz tech analyst Ben Evans. After documenting just how big Big Tech really is — even compared to dominant players of the past such as Wintel and IBM — Evans expresses his doubts about their forever dominance:
Published in Economics, TechnologyOn the other hand, both in tech and the broader economy, large, dominant companies don’t last. You lose the market or the market becomes irrelevant. Nokia had close to half of the mobile handset market a decade ago and lost it all; IBM still has the mainframe market but no-one cares. Few people can predict where the change will come from, but it does come. [Google, Apple, Facebook, Amazon] are very visibly conscious of that – Google experiments with everything, Apple is working on cars and mixed reality, and Facebook bought not just Instagram and WhatsApp but Oculus.
But then, Microsoft was working on smartphones and mobile devices 20 years ago, and now it’s killed Windows Mobile, acknowledged that the PC is going the way of the mainframe and, like IBM, has to make its way in a market shaped by other companies. There probably won’t be a technology that has 10x greater scale than smartphones, as mobile was 10x bigger than PCs and PCs were bigger than mainframes, simply because 5bn people will have smartphones and that’s all the (adult) people. There will be something, though, and though ’something will change, but we don’t know what’ is an unfalsifiable point, so is ‘nothing will change’, and I know which side of that argument I find more likely.
All, except Woolworth a model of future retail, and AT&T a government created monopoly,,made stuff with rising marginal costs eventually making their appearance.
The socialist intellectual has always the same answer to the question “who shall plan–the consumer or the state?”
His motivation is always the same: he wishes to substitute the “right” preferences for those of consumers (and thus, of the entrepreneurs, laborers, capitalists, and managers, who in an unhampered market are the slaves of the consumers), which are “wrong”. It is clear to him that only his preferences could be right, and in a well-run society these must be given preference, by any means necessary.
Scarce production resources shouldn’t go to Google, as they would if people were free to invest their money as they see fit. That would be the “wrong” preference. Consumers shouldn’t buy Apple phones. That would be the “wrong” preference. The socialist knows what would be best for the little people. What is the best use of their money is not what they would do with it, if unhampered by violence and threats. It is what the intellectual knows would be best for them.
The inevitable course of history, when economic illiberalism gets is way, is this. All but one of the intellectuals discover that the government is not using violence or the threat of violence to force (a) capitalists to invest in, (b) producers to produce, or (c) consumers to consume what he THOUGHT it would. They choose some OTHER socialist’s vision of how the commoners should live their lives.
I hope if Mr. Pethokoukis and the Ricochet interventionist community who make their pleadings for their own superior judgement get their way, and government interventionists get even more power to tell ordinary human beings what they should not do with the fruits of their labors, that his (or their?) choices happen to be the ones that win the day against those of all the other self-righteous determiners of correct human values.