29 October 2022

EXPLANATORY JOURNALISM: Peter Kafka reports on the collision of media and technology

". . .We’ve been watching this play out for most of the year as tech stocks dropped, but it came into focus this week when Alphabet, Meta, and Amazon all saw their shares get hammered and the sector collectively lost $400 billion in value.

All of the tech guys have different reasons to worry investors, but I’d argue that all of them have the same underlying problem: They’re mature companies that are no longer going to impress Wall Street with crazy growth from their core businesses, and none of them look like they have any new giant businesses coming down the pike. Alphabet, for instance, just posted revenue growth of 6 percent — its weakest quarter in a decade. . ."

The Big Tech boom is over and Wall Street knows it

Meta and the rest aren’t going away, but now they’re big boring companies. Maybe that’s not a terrible thing.

By Peter Kafka Oct 29, 2022, 7:30am EDT

Not gonna talk about Elon Musk and Twitter in this one.

Okay, just a little: Elon and Twitter are front-page news today, but it’s not the most important story in the tech business.*

The story that really matters for tech and business is this one: The giant consumer companies that have powered the tech business for years aren’t going away but their rocket-ship days look like they’re coming to a close. And Wall Street investors who’ve wanted that ride are getting off, which means those companies and their employees need to learn to live with less. . .I don’t tend to do optimism, but we can definitely spin this as a glass half-full if we want: Yes, Facebook, which hired more than 19,000 people in the last year — a 28 percent increase — now says it’s going to keep its headcount flat for at least the next 15 months. That’s via a combination of very limited hiring, not replacing employees who leave on their own, and pushing others out the door.

But in theory, all of those would-be Facebook employees who aren’t getting hired there can end up ... somewhere else more interesting. One of the animating ideas beyond the Web3 craze of the last couple years was that the big tech companies had become so big and powerful that it was impossible to make anything new without their permission. Now they’re still big and powerful, but maybe not as appealing to the kind of person who wants to make a new thing. That’s not a bad idea.

* It’s an interesting story and also maybe amusing and maybe scary and I’d recommend starting with Nilay Patel if you want a bracing read about what’s next.

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