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During the early months of the pandemic in the United States, businesses were closed or in turmoil. Millions of people close their wallets when they close. I wrote on On Tech at the time that it’s not clear that America’s biggest tech companies will continue to thrive as they have in the past decade or so.
Big Tech bosses also seem annoyed. After all, the five U.S. tech giants hadn’t gotten as hot in the Great Depression nearly 15 years earlier. Maybe around this time they will also have to endure.
Hahahahaha. Yeah … They’re fine. Really, really good.
In the last year, the five tech superpowers – Amazon, Apple, Google, Microsoft and Facebook – totaled more than $ 1.2 trillion in revenue, as I wrote for The Times on Thursday. It was a strange and wonderful year for Big Tech. I can’t believe it, but some companies are growing faster and bring more profit than previous years.
The pandemic has made tech giants and their bosses incredibly rich. (Even richer than ever before.) Apple has so much cash that it costs an extra $ 90 billion to buy its own stock, roughly the same as Kenya’s gross domestic product. Out of the 10 richest people in the world, 8 have been successful from tech companies. The head of Amazon alone, Jeff Bezos, was worth a half and a half more than Goldman Sachs.
I’ve seen a lot of huge financial numbers, including from these five tech giants. But I promise you that Big Tech’s numbers are so wild now that I’m running out of curse-free words to explain them.
How did this happen? I will give you two explanations. First, the pandemic created a special economy that benefits some people and industry, even in the tech sector, even as it beats others. In the past five crisis years, people and businesses have had an even greater demand for what the tech giants are selling.
That seems obvious now, but it wasn’t necessarily a year ago. The American preference for home shopping has become a necessity for some safety. Families bought iPads and Macs when work and school went virtual. Any business that still has money to spend on marketing has spent that money on Google, Facebook or Amazon. Companies may have made cuts in other areas, but they’ve certainly bought software from Microsoft and Amazon.
Second, tech giants have used the pandemic as a moment to become stronger. In some cases, that means cutting costs in less important places, like travel, entertainment and marketing. Google says it saves more than $ 1 billion a year on those kinds of expenses.
On the other hand, the tech giants have spent big on areas extending their advantage. Amazon spent $ 50 billion last year on big ticket purchases like warehouse and cloud hub. This is more than double the amount Exxon Mobil spends on extracting oil and gas from the ground each year. Again, bananas.
As economies in the United States and some other parts of the world reactivate by 2021, the tech giants are lean, mean, and willing to make even more money. The question I ask now: Are America’s technology powers invincible? And are they winning at the expense of others?
The first is unanswered, but it definitely feels that way. And I ask a second question for Thomas Philippon, a professor of finance at New York University, who studies the growing power of dominant companies.
Philippon told me that the pandemic and the digital adaptation it forces have helped smaller businesses. For example, restaurants must quickly adapt to selling web orders and shipping, and many of those investments will benefit them in the long run.
But he also believes that the pandemic may have widened the gap between the big and wealthy companies, including the tech giants and all the others. “It certainly feels like a recession that’s going well for companies that are already doing well,” he said.
Before we go …
However, Big Tech’s success is awkward: The European Union accuses Apple of violating the law by using its iPhone app store controls to stifle competition, my colleague Adam Satariano wrote. It is one of about four billion antitrust lawsuits or investigations involving tech superpowers.
Is this an office or an “office”? Google, the company that has set trends for office work and employee perks, is now trying to reimagine the post-pandemic workplace. Dai Wakabayashi and Cayce Clifford detail Google’s plans, including robots that inflate glass walls temporarily and camping-themed outdoor workspaces.
Read this for complete comfort: Invented by the folks on TikTok, the term “cheugy” is a new and not quite straightforward shorthand for things that are somewhat general, overbearing, or outdated. Instagram’s once dominant aesthetic was the pinnacle of cheugy. Lasagna also seems cheugy? Just read Taylor Lorenz’s explanation of all this.
Prancer has found a house! The Chihuahua that a pet volunteer has described as a “rage machine” and “container for a wounded Victorian child” now lives with a Connecticut woman, Ariel Davis.
The pictures of Prancer enjoying the flowers almost made him seem like he was hugging each other tightly. And of course, Prancer has his own Instagram account.
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