Companies like Apple, Amazon, and Google have become the IBM’s of their generation. Powerhouses of innovation that are rapidly integrating into stock market mega performers, highlighting the possibilities of the meteoric rise of the modern corporation. Companies like Facebook, Twitter, and Snapchat benefited from the same technologies, but is it fair to group all these companies together? Perhaps and maybe decades from now these companies will be as ubiquitous as Ford or Standard Oil were in their time. Maybe though, just maybe, we’re living through a tech bubble.
On the other hand, what if the tech industry is over saturated with venture capital and rehashed ideas that don’t actually impact people’s day to day lives enough to justify their stock or stature. This is something that has a lot of people worried the tech industry might be a bubble poised to pop much like its late 90’s dotcom bubble predecessor. Which could fundamentally change the way people view the potential of internet corporations.
A quick look at the vast amount of money in the tech industry, where it has gone, and what services it has created, paints a conflicting picture of companies that on one hand provide life changing services and technology and others that are simply startups running on steam created by burning through billions in venture capital. One set of companies seems poised to create the future and another seems likely to burn out nearly as quickly as they rose to prominence.
Apple was part of the tech revolution early and enthusiastically and to an extent enabled the success of everything that was to come. Despite an up and down history, they successfully re-branded, effectively created the smart phone, and doing so solidified themselves a tech giant. Which brought their stock price something stuck around the dollar range to what of the hottest investments on the market, sitting at $143 a share.
Amazon began as an online book retailer and quickly used the power of the internet to become an entrenched monopoly with octopus like tentacles in like every possible industry. From the original online book store, to web hosting, to eCommerce, and including retail, Amazon is everywhere. Which let it skyrocket from a somewhat modest performer on the stock market into a staple of tech portfolios.
Google was revolutionary in the sense that it performed a function that has become integral to most people’s relationship with the internet. There was a time before search enginges, not one that I remember or want to, because Google fundamentally upended the trajectory of the internet and made it digestible in a whole new way. Which enabled Google to spread into basically every internet business avenue in a big way. Which has brought it a tremendous amount of growth and long term financial success.
While they certainly have their differences, these companies have proved themselves sustainable and effective in the long term. Other tech companies, like Facebook, Twitter, and Snapchat have shown they can get an audience, but can they turn that into something more? Can these companies utilize the infrastructure the internet provided in an attempt to make themselves a part of their users lives? Considering the services they provide and what they cost to maintain it’s not at all clear they will have the same staying power and if they don’t there could be consequences.
What happens if people find out they don’t need to update their Snapchat story or check their twitter anymore? They do have instagram and Facebook, right? What happens when companies like Uber or B&B aren’t as revolutionary long term as the claimed to be when they came to prominence? What happens when the benefits of big data don’t drive the type of prosperity they were originally thought to inevitably enable? Many of these companies are acting like that can never happen, which is a huge problem.
Companies like Facebook, Amazon, and Google are the high value giants they are today because of the tangible impact they brought their users. They turned their capital into goods and services millions of people utilize. Snapchat is one of the most successful tech startups in recent memory and has so far used its clout to build a massive audience, but it’s not clear is that enough to maintain its status as a publicly traded company, especially in the long term. It’s not at all clear that companies like Twitter can maintain the value that connecting billions of people has brought, especially in a world where connecting people is increasingly easy.
There are a lot of tech companies that offer the promise of disruption, but so far have only yielded another avenue for people to connect. While that’s nice and definitely worth something, it’s probably wrong to equate it with the same kind of clout that tech companies who survived the first tech bubble have. Companies like Google, Amazon, and Apple carved a niche and found a way to provide goods and services that are fundamental to living in the internet age.
Maybe Twitter and Snapchat are also fundamental services people would rather not live without, but in my opinion it’s a lot more likely they’re just opportunists taking advantage of the internet by connecting their customers in a novel way. Which is only going to decrease in value as more and more people figure out their own ways to bring people together. It might not matter long term, but it might also be the end of many companies some felt were the next generation of tech giants.