Tech's Ruling Class Casts a Big Shadow (theverge.com)

Veteran technology columnist Walt Mossberg believes that Google, Apple, Microsoft, Amazon, and Facebook, or Gang of Five -- as he likes to call them, are casting a big shadow over how today's startups foster, a phenomenon he believes will continue to happen over the years to come. From his column for The Verge: What we have now in consumer tech, in 2017, is an oligopoly, at least superficially similar to the old industrial-era American corporate groups that once dominated key industries. I think that their enduring and growing power casts a shadow over the Silicon Valley legend that there are lots of great new consumer tech innovations being incubated right now in garages or dorm rooms somewhere that will be taken all the way to becoming great companies, the way each of the Gang of Five was. What I fear is more likely to happen to any such startup is that, if they're good, they get acquired by a member of the Gang, or that their idea is turned into a feature for one of the Gang's products. And, even if that never happens and a startup thrives, too often it can only thrive by being successful on a platform controlled by one or more Gang members, with the big guy maybe taking a cut. For instance, Snap, the parent company of Snapchat, which went public last week, famously spurned a $3 billion takeover offer from Gang member Facebook in 2013. But it depends for its very operation on the cloud services of Google and on the mobile app platforms of Apple and Google. And plenty of other companies which either presented threats or opportunities to the Gang have been snapped up by them. Each of the five companies actively scoops up numerous smaller companies every year, in many cases just for their talent and / or patents. In fact, I'd be amazed if there weren't plenty of startups whose main goal is to be purchased by the Gang.

Comments

"veteran" columnist?

[xxxJonBoyxxx]

This newb sounds like a babe wet behind the ears.

>> "I'd be amazed if there weren't plenty of startups whose main goal is to be purchased by the Gang."

Welcome to the industry, er, Walt.

Re:Why isn't Moz://a included?

[DontBeAMoran]

(Score: +5, Funny)

Mossberg should know better.

[SvnLyrBrto]

Seriously, he's been around long enough to know that every single one of his "gang of five" got where they are by starting up out of nowhere, blindsiding a dominator of a key industry, and knocking the fromer king of the hill off his perch. Apple and Microsoft have even been blindsided themselves, knocked down before (Apple almost to bankruptcy), and shifted gears to become dominant again.

If Mossberg's notions were correct, none of the five would exist now in the first place. They'd all just be sub-divisions of IBM.

Re:Mossberg should know better.

[swb]

I think the so-called Gang of Five learned the lesson from IBM experience. Keep a massive pile of cash on hand and simply bribe into submission with stupid amounts of cash any innovator who will potentially disrupt your business model if you can't use or suppress their technology.

Another reason why tech companies with massive piles of cash should have it taxed away. They're not "investing in innovation", they're suppressing innovation by buying the innovators off and maintaining their hegemony. Without massive piles of cash hanging around, they would have to actually *innovate* -- improve their products or come up with new ones. Now they can simply buy off competition and not bother investing in their hegemonic products.

They've turned innovation into something of a lottery -- it encourages not ideas that are good, but ideas that big companies will want or *need* to buy.

Of course, some competition sneaks through, like Snapchat, but probably not because someone at Facebook or Google didn't try. The founders gambled that whatever stupid amount of money they were offered was less than what they could make in an IPO, and they were right. But there's probably not enough long-term business model there, which limited how high the big players were willing to go in paying them off.

Re:Mossberg should know better.

[grumpy_old_grandpa]

In the end, it's about the money. Of these five companies, only Facebook is not in the top five of companies with the largest market cap; they're all top 15 though, with a combined market cap of some 2 trillion USD. Much of it is in liquid cash. That's a lot of money and power sitting around to buy up, sue away, push out smaller competitors. Not even IBM controlled that amount of money and power in their heyday.

Moz No Longer a Leader for Good Reason

[Kunedog]

What about Moz://a? Why wasn't it included?

Because they are all but bought by Google already. Why else do you think they would fire Eich, adopt DRM, ape Chrome, and plan to kill off the browser extenstion system that gave users unprecedented control over their own browsing experience (through adblocking and script-blocking and a million other essential features).

Re:Moz No Longer a Leader for Good Reason

[roca]

Since that article you cited, Mozilla dropped their big Google deal and switched to Yahoo instead. Regardless of the merits of that, "bought by Google" is just wrong.

Isn't this an episode of The Simpons?

[taustin]

Compu Global Hyper Meganet

Re:They rely on Google because they want to and ca

[SvnLyrBrto]

You seem to have forgotten the time when MySpace was the 800 pound social network gorilla that Facebook is now. Then the fickle winds of what's cool changed direction and it went from being the dominating player to a whithered husk in about a year. The only real advantage that Facebook offered was blocking the stupid CSS tricks people used to "pimp their MySpace". And that would have been trivial for MySpace to offer themselves. Otherwise, Facebook's entire position is based on being where the cool people hang out. And that can change in an instant and for no apparent reason.

Veteran technology columnist?

[jgotts]

I've been a programmer for 30 years and I've seen tech companies come and go. Google and Facebook and to a lesser degree, Amazon, run their companies on Linux. These are Internet-only companies. There was no Linux 30 years ago, and there was no Internet as it exists today. Linux was created 26 years ago. The general public joined the Internet around 22 years ago. There was no Google, Facebook, or Amazon 30 years ago, and none of these companies would have made any sense 30 years ago.

30 years ago, Commodore was the dominant player in the computer market. Microsoft was seen as small potatoes compared to IBM. Apple existed and the Apple II was fairly popular but the Mac was a machine regular people couldn't afford to purchase so you saw them mainly at schools, where they were discounted.

In 30 years, the present day landscape will be radically different. Maybe all of those companies will exist in some form but I see Facebook as the most likely to not make it, as people's tastes in online computer bulletin board systems are fickle. Facebook is today's Internet BBS. Some companies will exist in different forms. There will certainly be new dominant players.

If your window into the tech world is only 10 or 15 years then you need to do a little bit more research. It's not like I'm an old man. I'm only 41. The tech world did not come into being in the year 2000.