Homepage / Technology / How 2017 became a turning point for tech giants
Amazon says this Prime Day was its biggest shopping event ever Kudlow says President Trump is 'so dissatisfied' with China trade talks that he is keeping the pressure on As stocks regain their footing, an ominous warning looms Goldman Sachs downgrades Clorox to sell, says valuation is 'unsustainably high' How Satya Nadella has spurred a tripling of Microsoft's stock price in just over four years Kudlow says economic growth could top 4% for 'a quarter or two,' more tax cuts could be coming The one chart that explains Netflix’s stunning comeback US housing starts plunge 12% in June to a nine-month low Aerospace titans Boeing and Airbus top $110 billion in orders at Farnborough Target uses Prime Day to its advantage, logging its 'biggest online shopping day' so far this year Billionaire Marc Lasry sees bitcoin reaching up to $40,000 as it becomes more mainstream and easier to trade These are the 10 US airports where you're most likely to be hacked Amazon shares slightly higher as investors await Prime Day results Wreck of Russian warship found, believed to hold gold worth $130 billion A bullish ‘phenomenon’ in bond market is weeks away from fading, top credit strategist says Stocks making the biggest moves premarket: MS, GOOGL, TXN, UAL, NFLX & more Twitter shares up 50% since late April means most upside priced in, analyst says in downgrade EU fines Google $5 billion over Android antitrust abuse Mortgage applications fall 2.5% as buyers struggle to find affordable homes America may not have the tools to counter the next financial crisis, warn Bernanke, Geithner and Paulson Investors are getting spooked as the risk of a no-deal Brexit rises EU expected to fine Google $5 billion over Android antitrust abuse Ex-FBI chief James Comey urges Americans to vote for Democrats in midterm elections Elon Musk apologizes to British cave diver following baseless 'pedo guy' claim Disney, Comcast and Fox: All you need to know about one of the biggest media battles ever Xiaomi shares notch new high after Hong Kong, mainland China stock exchanges reach agreement The trade war is complicating China's efforts to fix its economy European markets set for a strong open amid earnings; Google in focus Hedge fund billionaire Einhorn places sixth in major poker tournament The biggest spender of political ads on Facebook? President Trump Asian stocks poised to gain after Fed's Powell gives upbeat comments; dollar firmer Stocks are setting up to break to new highs Not all FAANG stocks are created equal EU ruling may be too little, too late to stop Google's mobile dominance Cramer explains how Netflix's stock managed to taper its drop after disappointing on earnings Airbnb condemns New York City's 'bellhop politics,' threatens legal retaliation Amazon sellers say they were unfairly suspended right before Prime Day, and now have two bad choices Investor explains why 'duller' tech stocks can have better returns than 'high-flying' tech names Elon Musk is 'thin-skinned and short-tempered,' says tech VC Texas Instruments CEO Brian Crutcher resigns for violating code of conduct Google Cloud Platform fixes issues that took down Spotify, Snapchat and other popular sites Uber exec: We want to become the 'one stop' transportation app 'What a dumb hearing,' says Democrat as Congress grills tech companies on conservative bias Amazon shares rebound, report says Prime Day sales jumped 89 percent in first 12 hours of the event How to put your medical history on your iPhone in less than 5 minutes Investment chief: Watch these two big events in 2018 Even with Netflix slowing, the market rally is likely not over Cramer: Netflix subscriber weakness debunks the 'sky's the limit' theory on the stock Netflix is looking at watch time as a new area of growth, but the competition is stiff Why Nobel laureate Richard Thaler follows Warren Buffett's advice to avoid bitcoin Rolls-Royce is developing tiny 'cockroach' robots to crawl in and fix airplane engines After Netflix plunge, Wall Street analysts forecast just tame returns ahead for the once high-flying FANG group Roku shares rise after analyst raises streaming video company's price target due to customer growth China is investing 9 times more into Europe than into North America, report reveals Amazon says US Prime Day sales 'so far bigger than ever' as glitch is resolved Netflix is on pace for its worst day in two years US lumber producers see huge opportunity, rush to expand San Francisco to consider tax on companies to help homeless Homebuilder sentiment, still high, stalls as tariffs, labor and land drive up costs Powell backs more rate hikes as economy growing 'considerably stronger' Netflix history is filled with big stock declines – like today – followed by bigger rebounds Intel shares get downgraded by Evercore ISI due to rising competition from Nvidia, AMD Petco aims to reinvent the pet store with something you can't buy online Genetic testing is coming of age, but for consumers it's buyer beware Tech 'FAANG' was the most-crowded trade in the world heading into the Netflix implosion, survey shows Netflix weak subscriber growth may indicate a 'maturity wall' that could whack the stock even more: Analyst This chart may be predicting the bull market's demise Wall Street says Netflix's stock plunge is a ‘compelling’ buying opportunity because the streaming giant ‘never misses twice’ Tesla sinks after Musk tweets, again Boeing announces new division devoted to flying taxis Stocks making the biggest move premarket: NFLX, UNH, GS, AMZN, WMT & more Deutsche Bank downgrades Netflix, but says big subscriber miss is not 'thesis changing' IBM is experimenting with a cryptocurrency that’s pegged to the US dollar North Korea and Zimbabwe: A friendship explained Virgin Galactic spinoff Orbit to launch rockets from the UK with space deal Artificial intelligence will create more jobs than it destroys? That’s what PwC says ‘Treasonous’ Trump and ‘Putin’s poodle:' Scathing headlines follow the Trump-Putin summit China’s fintech companies offer ‘enormous’ opportunity, investment manager says Trump's performance at summit with Putin was 'unprecedented,' experts say Walmart and Microsoft link up on cloud technology as they both battle Amazon European stocks seen mixed amid earnings; Fed’s Powell to address Congress How I knew I should quit my day job and run my start-up full-time: Viral website founder China's stocks have been trounced, but the trade war may ultimately be good news for those shares Billionaire tech investor Peter Thiel bets on crypto start-up Block.one Asian shares subdued open after mixed close on Wall Street; energy stocks under pressure Amazon cloud hits snags after Amazon Prime Day downtime Netflix isn't doomed by one quarter unless people start questioning the long-term investor thesis Tech stocks set to sink on Tuesday after rough evening for ‘FANG’ Netflix plummets after missing big on subscriber growth This wristband lets humans control machines with their minds The U.S. has a rocky history convincing Russia to extradite computer criminals Amazon suffers glitches at the start of Prime Day Jeff Bezos is now the richest man in modern history 'The United States has been foolish': Read Trump and Putin's full exchange Goldman Sachs recommends these 5 highly profitable companies — including Nvidia — to combat rising inflation Goldman Sachs releases 'tactical' stock picks for this earnings season Three red flags for Netflix ahead of its earnings report The bond market may be raising recession fears, but don't expect one anytime soon Cramer: Banks are 'making fortunes' but are still as hated as they were during the financial crisis Putin told Trump at summit: Russia never meddled in US election

Technology

How 2017 became a turning point for tech giants

This was a terrible year for the tech industry.

That’s an odd thing to say at a time of record growth and profits. In 2017, large American tech companies have kept hauling in more money, more users, and — to a degree that might seem dystopian — they continued to expand their foothold in our lives. This was a year in which Amazon created a way for its delivery drivers to let themselves into your house, and Apple created a phone you can unlock with your face.

Yet underneath this apparent success was a momentous shift in how the tech business deals with the world. Five or 10 years from now, we will come to regard 2017 as a turning point.

Why? Because this year, for the first time, tech giants began to grudgingly accept that they have some responsibility to the offline world. The scope of that responsibility, though, is another matter entirely.

Let me explain how this is all playing out.

“Platforms” are the shiniest prizes in the tech business. The reason the five most valuable American tech companies — Amazon, Apple, Facebook, Alphabet and Microsoft — are also the five most valuable American companies of any kind is that they own these fundamental building blocks of the digital economy, whether they are operating systems, app stores, social networks, cloud servers, or shipping and logistics infrastructure.

Think of these platforms as the roads, railroads and waterways of the information economy — an essentially inescapable part of life for any business or regular person who doesn’t live in a secluded cabin in the woods.

For years, despite their growing power, tech platforms rarely garnered much scrutiny, and they were often loathe to accept how much their systems affected the real world. Indeed, the online ethos has been that platforms aren’t really responsible for how people use them. It might as well be the slogan of Silicon Valley: We just make the tech, how people use it is another story.

In 2017, that changed. At first grudgingly and then with apparent enthusiasm, platform companies like Facebook began accepting some responsibility for how they are affecting the real world. They did not go as far as some critics would have liked — but in many significant ways they offered a shift in tone and tactics that suggested they were rethinking their positions.

You could argue that they had no choice. In the past year, social networks and search engines have been blamed for undermining the news media, fostering echo chambers, and spreading misinformation, hate, misogyny and other general social unpleasantness (YouTube, for example, removed lots of videos of kids gets getting pretend-tortured by their parents). There was also, of course, the unfolding saga of the companies’ role in Russia’s propaganda efforts, which resulted in them being hauled before lawmakers.

And then there were the larger questions about who makes the platforms and who benefits from them. The tech industry is overwhelmingly run by men, and it is a place of little racial and class diversity. A whistle-blowing blog post by Susan Fowler, an engineer who detailed a culture of harassment and misogyny at the ride-hailing company Uber, sparked a women’s movement in tech that was then subsumed by the global #MeToo movement.

Many tech titans were obviously unprepared for the serious questions that began coming their way a year ago. When the Facebook chief executive Mark Zuckerberg was asked about his site’s role in the 2016 election just days after Donald J. Trump’s victory, he responded with a line from tech’s old playbook: It was a “pretty crazy idea,” he said, that misinformation on Facebook had “influenced the election in any way.”

Now that tone is gone. Mr. Zuckerberg has apologized for his glibness. And during Facebook’s last earnings report to investors, he put the company’s social mission at the top of his agenda. “Protecting our community is more important than maximizing our profits,” he said.

Several other tech execs have expressed similar commitments to a deeper mission. Timothy D. Cook, Apple’s chief executive, told my colleague Andrew Ross Sorkin that Apple has a “moral responsibility” to attempt to heal the nation’s social and economic fissures.

More from The New York Times:

Google, Looking to Tiptoe Back into China, Announces A.I. Center
Net Neutrality Protests Move Online, Yet Big Tech Is Quiet
I Was Wrong About Bitcoin. Here’s Why.

Sure, all this could just be marketing. But I’m inclined to believe the shift represents a new way of navigating the world, for a few reasons.

First, employees are demanding a new way. The highly paid workers of Silicon Valley were lured on the promise of changing the world, and in the past year many became demoralized about their companies’ apparent impact. In some cases they’re pushing their bosses to change.

Second, for the first time in years, there’s real pressure from lawmakers. That has resulted in some real-world retreats. For instance, tech giants last month stopped fighting a bill in Congress that would allow victims of sex trafficking to sue websites that supported the sex trade. In another time, this would have been a gimme for tech companies — they aren’t responsible for how people use their services, remember?

Not this time.

If the big shift of 2017 is that tech companies now accept some responsibility for how their platforms impact the world, the big mystery of 2018 and beyond is what, exactly, that responsibility will look like.

Mr. Zuckerberg said he was willing to risk the company’s profitability to improve its community. Facebook has been testing new ideas for making its News Feed less divisive and less prone to misinformation, and for promoting what the company calls “meaningful” social connections. Facebook is also testing systems that it said would more stringently police advertising, in the hope of preventing foreign actors from using its ad network to influence an election.

And in response to criticism from former Facebook employees that its tech might be addictive, the company said this week that it has conducted extensive research on the subject and was “using it to inform our product development.”

But what if these early efforts don’t mitigate the problems? What if Facebook finds that offering people a less polarized News Feed dramatically reduces engagement on its site, affecting its bottom line? Or what if the changes disproportionately affect one political ideology over another — would Facebook stick with a kind of responsibility that risks calling into question its impartiality?

I don’t mean to offer a barrage of hypotheticals just for the fun of it. My point is that these issues would probably be pretty hard to solve.

“Just as the packaged food industry did in the 1950s, Facebook and Google have lured users with convenience, while feeding them a diet certain to cause lasting harm,” Roger McNamee, the musician and venture capitalist, told me. “The problem cannot be addressed by hiring; it can only be fixed by changing the algorithms in ways that will materially reduce profitability.”

Or consider the question of diversity. I asked Ellen Pao — the former Reddit chief executive who unsuccessfully sued the venture capital firm Kleiner Perkins Caufield & Byers for gender discrimination — what she made of the industry’s efforts to address the issue this year.

“I would give tech a C grade,” Ms. Pao, who is now the chief diversity and inclusion officer at the Kapor Center for Social Impact, wrote in an email. “Leaders are doing the bare minimum to address problems and are far from doing all that is necessary to solve the problem.”

She said she hoped for a far more vigorous effort that ushered in a complete overhaul of the culture of tech companies, and that held leaders accountable.

“It means firing all the people involved in the failures, from the C.E.O. to the H.R. leaders to the board members in some cases,” she wrote.

Ms. Pao’s and Mr. McNamee’s comments underline the real problem for the industry. Once you accept that you’re on the hook for fixing problems caused by the thing you built, people will start to expect that you really will fix them — even if the solutions are expensive or otherwise conflict with your business interests.

So, yeah, 2017 was a terrible year for the tech industry. If the fixing does not actually happen, 2018 might well be worse.

Email: farhad.manjoo@nytimes.com; Twitter: @fmanjoo.

Source: Tech CNBC
How 2017 became a turning point for tech giants

Comments are closed.