Eight Charts That Tell Technology's Story for 2017
(Bloomberg Gadfly) -- Here is Gadfly's (bitcoin-free) ranking of the eight biggest themes in technology for 2017, and what to expect in the year ahead. In reverse order:
8) Everyone Pivots to Video:
It's not just Netflix and YouTube anymore. Facebook, Amazon, Apple, Snapchat and Twitter are among the technology companies betting that web videos are the future of the internet and entertainment, and they are spending billions or changing their business models to make it come true. These companies are transforming what it means to watch TV or movies. Will this continue to change information and entertainment as we know it, or will web video be a Waterloo for these tech companies and those who rely on their big checks?
7) Snapchat Hits Turbulence:
Snapchat created a novel way for people to document their lives and pulled off the year's biggest IPO despite having an immature and wildly unprofitable business. But investors lost faith after parent company Snap Inc. whiffed on its first three earnings reports as a public company, overestimated interest in its Spectacles camera-plus-glasses and surprisingly revamped its app. Snapchat's struggles might be temporary, but the experience shows how difficult it is for new companies to break through in a significant way as superpowers rule technology.
6) Locals' Leg Up:
Facebook Inc. and Google parent company Alphabet Inc. span the globe, but it hasn't been easy for most American tech companies to gain a significant foothold everywhere in the world. Uber and Airbnb are having trouble. Amazon and China's tech superpowers have had only pockets of success outside their home markets. Regional tech companies are gaining ground by tailoring products for local needs, including on-demand ride company 99 in Brazil, delivery and ride-hailing company Go-Jek in Indonesia and digital payments company Paytm in India. That means companies whose business models were predicated on global growth might need to rethink.
5) SoftBank's Cash Bazooka:
SoftBank Group Corp.'s nearly $100 billion technology investment fund has made the industry greedy, skeptical and jealous. Other tech investors express doubts (privately) that SoftBank can generate good profits from a huge fund with an incoherent strategy, but they also hope SoftBank becomes an exit route for the unsustainable number of richly valued startups. In 2018, watch whether SoftBank becomes an alternative to tech IPOs or a go-to potential acquirer.
4) Uber's Year of Hell:
This year was peak scandal for Uber, with controversies over its workplace culture, criminal investigations and the belated disclosure of a serious cyberattack. Spiraling crises cost CEO Travis Kalanick his job. Uber Technologies Inc.'s new CEO has promised to repair the company's reputation, but he has other problems: Uber is finding it tough to take over the world, losses remain stunningly high, and a pending stock purchase -- led by SoftBank, of course -- make clear Uber is worth less than investors thought a couple of years ago.
3) Who's Afraid of Amazon? Everyone:
Amazon.com Inc.'s acquisition of Whole Foods sent earthquakes throughout food-related companies and proved no industry is out of Amazon's reach. And yet, Amazon didn't seem invulnerable. The Whole Foods deal showed Amazon couldn't crack groceries on its own. The company shuffled leadership and the programming strategy in web video entertainment. Google and others are rallying an anti-Amazon alliance. Critics, including Donald Trump, questioned whether Amazon was too big and powerful. If Amazon wants to plunge into highly regulated industries such as pharmaceuticals, expect more scrutiny.
2) #MeToo in Technology:
The industry was ensnared in the horrible revelations about sexual misconduct and discrimination. Combined with several years of data that show most tech employees are white or Asian men, the disclosures have eroded technology's myth that those with the best ideas and work ethic succeed. The industry also faced accusations, most prominently from a former Google employee, that tech companies are silencing people who disagree with the typical socially liberal ethos in Silicon Valley. Expect more revelations and friction in 2018.
1) Technology's Reckoning:
This year, Google, Facebook and other technology superpowers were more dominant than ever, but they also faced unrelenting attention for how their digital hangouts spread misinformation, sow discrimination or terrorism, make us unhappy and promote violent acts or harmful products. The perfect visual encapsulation of technology in 2017 was the enlarged images of social media posts shown in Congress of socially divisive Russian propaganda that spread online to many millions of Americans.
More people began to wrestle with the dark side of technology. Companies and their executives started to acknowledge their products have downsides, but it's not easy to fix them without squashing free speech or hurting their users. The pressure isn't likely to dissipate in 2018.
Big tech companies dominate the rankings of the world's most valuable public companies, which puts a target on their backs. Anxiety about tech companies is mostly confined to pockets among regulators, politicians and the media, but America's tech superpowers have to worry anti-tech feelings will spread to the masses and force tighter regulations or make people use their products less.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
Shira Ovide is a Bloomberg Gadfly columnist covering technology. She previously was a reporter for the Wall Street Journal.
To contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.net.
©2017 Bloomberg L.P.