By Rolfe Winkler
Over the past decade, five big technology companies morphed into
five great technology empires.
The stock market values this group -- Apple Inc., Microsoft
Corp., Amazon.com Inc., Google parent Alphabet Inc., and Facebook
Inc. -- at more than $4 trillion, while the six surviving men
behind four of those companies are together worth nearly $450
billion, according to Forbes. Both valuations have quintupled since
"Avatar" was in theaters.
Such an accumulation of wealth is unparalleled perhaps since
Standard Oil. And the impact these companies have had on society
may be just as revolutionary.
It starts with the billions of smartphones packed in pockets
world-wide. We have outsourced so much of our daily lives to these
mini-supercomputers, equipped with GPS chips, fast 4G connections
and powerful cameras, they have become appendages, a third
hemisphere of the brain.
Social media, internet search and online shopping were old news
as the aughts rolled into the teens, but the mobile revolution was
just starting, making our hand-held devices increasingly powerful.
Witness the birth of the "gig economy," whose wildly popular
services, from ride- and home-sharing to food and grocery delivery,
barely existed 10 years ago but now employ millions.
As the five tech superstars blazed, they changed practically
everything they touched. They vacuumed up data, hired so many top
engineers and bought out so many rivals, the breadth of their
powers not only kept expanding but reshaped and redefined the
technology universe.
Take artificial intelligence. Theories underlying AI date back
decades, but machine learning for commercial use became possible
only with the amassing of huge data sets used to train computers to
think on their own -- assets controlled largely by the big tech
companies -- and the parallel development of faster semiconductors.
Facebook and Google both have computers that can recognize people
and objects in images with help from their gargantuan photo and
video libraries. Now image search and auto-tagging, in turn, are
useful.
Amazon's Alexa assistant, meanwhile, gets smarter with each
voice query. And by the time the next decade ends, Google may have
revolutionized the car and truck industries with its
state-of-the-art autonomous-driving technology running on even
faster 5G networks.
As successful as the tech giants have been, however, such
concentration of power, both in computing and in the marketplace,
has also come at a cost. As the decade ends, our dependency on
these platforms is feeding a backlash over privacy, screen
addiction, software algorithms that mislead users, the spread of
misinformation and online mobs that pollute political discourse,
and more. Critics want to see the tech giants broken apart by
antitrust authorities, or at least regulated more tightly.
The turning point for public perception of tech companies came
in 2016, in the wake of Britain's Brexit referendum and the U.S.
presidential election, says Margaret O'Mara, professor of history
at the University of Washington. Russia interfered in the U.S.
election by posting propaganda on social media, U.S. authorities
determined, and is accused of playing a similar role in the Brexit
referendum as well.
"There was an expectation that these companies had control of
their creations," says Prof. O'Mara. "Now it's more like
Frankenstein's monster." Facebook, Google's YouTube and Amazon have
allowed unfettered growth on their platforms for so long, they are
difficult to police.
Americans' feelings toward tech companies took a noticeable turn
in recent years. A Pew Research Center survey from July showed that
U.S. adults rank tech companies second, behind churches and
religious organizations, for having a positive impact on the
country. But the percentage who felt that way this year was only
50%, down from 71% in 2015; the percentage who felt tech companies
had a negative impact, meanwhile, grew to 33% from 17%.
Among the biggest concerns, Facebook has been used to spread
misinformation and conspiracy theories, promote genocide, and
live-stream a New Zealand mass shooting.
YouTube faces many of the same criticisms. It built algorithms
designed to maximize "watch time" that also helped crackpot
conspiracy theorists build massive audiences. In late 2016 and
early 2017, its No. 1 content creator, Felix "PewDiePie" Kjellberg,
repeatedly posted Nazi imagery and anti-Jewish material to his more
than 50 million followers at the time. He was celebrated by the
leading neo-Nazi website. Mr. Kjellberg said at the time the
material amounted to "jokes."
Huge contract workforces hired by the companies have struggled
to keep pace with the volume of violent, pornographic and other
prohibited content that is uploaded every minute.
At the same time, the companies have come under fire for their
very power to determine what we see and don't see.
"These people shouldn't be deciding speech codes for the world,"
says Zeynep Tufekci, a University of North Carolina professor who
studies technology's impact on society. She describes them as "de
facto sovereign entities" given their massive scale, and points out
how, at Facebook and Alphabet, the decisions fall ultimately to
their founders. Facebook's Mark Zuckerberg rules his empire via
supervoting stock, as do Larry Page and Sergey Brin at Alphabet,
although the latter two recently gave up their executive
positions.
As Facebook has grown, it has also faced questions about how it
handles user information. It was slapped with a $5 billion fine
this year by U.S. regulators, for allegedly violating a 2012
consent decree in which it promised not to misrepresent how it
shared user data with third parties. Repeated questions about
violations of user privacy have fed distrust of Facebook, yet
haven't had a significant impact on its business, judging from its
stock price, which sits near record highs.
Amazon's advantage lies in the immense logistics network it has
built, which makes it possible to deliver so many products across
the U.S. in two days or less. More than 100 million Americans now
pay for Prime memberships, more than half of households, according
to an estimate by Consumer Intelligence Research Partners. That's
up by a factor of 50 since a 2009 Piper Jaffray estimate put Prime
memberships at two million.
Also over the past decade-plus, Amazon turned the computing
infrastructure that supports its own operations into a juggernaut
new business, Amazon Web Services, powering other companies'
systems in its cloud. AWS is on pace for $35 billion in revenue
this year, up 20 times since 2012, the first year Amazon reported
the entity's stand-alone results. It also carries the fattest
profit margin among Amazon's businesses.
Microsoft and Google are trying to catch up in providing their
own cloud services. The three companies have such vast computing
infrastructure, it's hard for others to compete, another example of
how scale spins the flywheel powering the companies' momentum.
Amazon, too, is being criticized for allowing bad actors on its
platform. It has been unable or unwilling to effectively police
third-party sellers, some of whom sell dangerous or toxic products,
many coming from China. And in its race to deliver packages
quickly, it has been criticized for pushing third-party logistics
partners to operate at unsafe speeds. In both cases the company has
deflected responsibility, saying it is shielded from liability.
And therein lies one big threat to big tech next decade. To
date, the giants have grown mostly unfettered because a powerful if
little-known law lets them avoid responsibility for what is posted
on their platforms, from hate speech to third-party sales of
dangerous products. If the "techlash" ever pushes politicians to
rewrite that rule, it could change the internet as we know it.
Mr. Winkler is a Wall Street Journal reporter in the San
Francisco bureau. Email: rolfe.winkler@wsj.com.
(END) Dow Jones Newswires
December 17, 2019 20:14 ET (01:14 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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