Big Tech Needs to Throw Out the Old Business Playbook
(Bloomberg) -- I’m writing from the sepulchral murk that’s enveloped the Bay area over the last week from the wildfires in Northern California. As the air purifier hums, I’m trying to remember how much there is to be thankful for on this Thanksgiving week. There’s family, friends and colleagues, peace and prosperity, and at our fingertips, a host of nearly magical internet services that allow us to access practically the entire store of human knowledge, connect to two billion people around the world and buy just about anything we desire with a single click.
That’s Google, Facebook and Amazon, of course, three companies that in the last few weeks have each been caught in remarkable hailstorms of criticism. Google was protested by its own employees after revelations that it paid $90 million to Android creator Andy Rubin, who left the company under a cloud of credible accusations of sexual misconduct. Amazon.com Inc. announced Alexandria, Virginia, and Queens, New York, as the dual locations for its second headquarters, only to be denounced widely by newspaper editorials and politicians for unduly extracting more than $2 billion in financial concessions from local governments without following through on the original promise of 50,000 jobs in one city.
And Facebook Inc., of course, was pummeled on all sides after a New York Times report charging that top executives slow-walked the company’s response to Russian interference and hired an opposition research firm to undermine political opponents and deflect blame onto rivals.
The cumulative effect of each controversy has staggered Silicon Valley, and to some, amplified the sense that these are apocalyptic times in tech. But it has also underscored just how thoroughly our tech giants are living in the past, in a time when they could ruthlessly scrape for each advantage while shaping their own favorable narratives. Back then, extracting incentives from governments, handing out bonuses to executives accused of misconduct and hiring opposition research firms may have seemed like perfectly fine business tactics. Now they are the stuff of weeklong news cycles and worldwide employee protests.
Executives at these companies have miscalculated and should be held accountable. It’s also true that the challenges at these companies go beyond their leaders, who have operated with a set of values largely embraced by their customers. But things are changing. Amazon, Facebook and Google are now defined by their own success. Each is firmly embedded in our society, impacting the outcome of democratic elections, the mental health of users and the condition of local economies where they operate. Few companies in history have had this kind of impact, and as the old saying goes (attributed to the late, great Stan Lee—and Voltaire), “With great power comes great responsibility.”
The tech companies have been operating from a traditional business playbook. It’s time to chuck that dusty manual out the window and forgo things like development incentives, golden parachutes and PR firms that dabble in the dark art of political manipulation. The tools that worked so grandly before are now backfiring. Our tech giants risk further repercussions if they keep scrabbling to get bigger and elude government scrutiny. They already have enough to be thankful for.
And here’s what you need to know in global technology news
There’s a shakeup at Google Cloud. Diane Green is stepping down, though she remains on the Alphabet Inc. board. She’ll be succeeded by former Oracle Corp. executive Thomas Kurian.
An icon in India was ousted. Binny Bansal co-founded e-commerce pioneer Flipkart and helped sell it to Walmart for billions. Now he’s leaving under a fog of controversy.
Nintendo wants to switch on growth. After a year of lackluster game sales for its Switch console, Nintendo is betting on a new Pokémon game.
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