After more than a decade of arrogance, as a rule, all American tech giants have been laying eggs for the past two years. They have become very large. There are those who would say too big. This has led regulators in the US, Europe – and by analogy in China with Alibaba (BABA), Tencent (TCEHY) and others – to examine their activities and try to find ways to limit their power.
Because when Apple (AAPL) has a market value of $ 2 trillion, Amazon (AMZN) a value of $ 1.66 trillion and Google (GOOG) a value of $ 1.4 trillion, it means they are more powerful and have greater resources than most countries in the world. We know them as the FAANG shares, which are the acronyms that consist of Facebook (FB), Apple, Amazon, Netflix (NFLX) and Google (GOOG) – although it is already possible to include Tesla (TSLA) as well. Or T-FAANG if you will.
The problems of Facebook and Zuckerberg are piling up
Of all of them, Mark Zuckerberg’s Facebook seems to be in the biggest trouble – some would say fundamentally. That is, substantive and basic. Why? First of all, because its cold business is under attack – there are some, and they are quite a few, who will say quite rightly. It’s not just that. The amount of fronts faced by the world’s largest social network, which also includes Instagram and WhatsApp, is very large.
On the one hand, Zuckerberg is fighting a very well-publicized war against Tim Cook’s Apple, after the latter changed the tracking options it gives to Facebook and transferred the power to users. Facebook, whose business model is built on micro-targeting – that is, massive and systematic tracking of users – to match them with appropriate advertisements, rightly saw this as a blow under the belt. From there comes FB’s big money and Apple users are a significant part of these users and they can, literally, block FB’s access to their information. Terrible right?
Another reason? FB is also under attack in the U.S., due to its role in attacking the Capitol building last month, when various White Power organizations and several other Messianic organizations banded together, among other things, and planned their plots. Of former President Donald Trump.
In Australia they went out to the defense of the press and the giants were shaking
But the last and most relevant reason comes from Australia. Where a new law comes to correct an injustice, caused mainly to news publishers and especially on Google and Facebook platforms; Which are the strongest companies in the field of online advertising worldwide and also in Australia. How strong? In Australia alone Google controls 95% of the online search market in a market of over 25 million people.
This is a blatant injustice, which threatens to bring the free press to its knees. Publishers not only do not receive money for content they produce professionally and with a huge investment of resources, the content is provided for every push at no cost, when worse, publishers are forced to pay FB money in exchange for advertising and self-promotion. Absurd at its best.
If the tech giants thought their power would succeed in changing the evil of the decree then they were wrong. Google had already threatened to shut down the Internet to Australia, but backed away and instead began to align with the new policy. Just today it was reported that it had signed a second agreement in the country, this time with Rupert Murdoch’s Newscorp. The deal, which was signed for 3 years, joins a series of deals signed by Google with global giants, including Bloomberg, the New York Times and more, to the new news platform that Google is establishing – Google Showcases. Apparently Google understood that violent action would not benefit the company. On the contrary, it is a double-edged sword.
So while Google has already more or less figured out where the wind is blowing, Facebook’s recent reaction in Australia, in which the social network has blocked the ability to share news as well as political content, is likely to lead to quite a few repercussions. Or in the Australian lexicon, it will come back to them like a boomerang.
Why? Because leaving the news content for a moment, the blocking of Australian politicians to social networks without real justification, will bring the politicians to the path of revenge. And not just in Australia. This can lead to very significant pressure on Facebook and its revenue streams.
The global press is not just following the affair and also governments are following, especially to see the reaction of Google and Facebook. The reactions of the two companies mainly indicate that Zuckerberg was under pressure and that, perhaps, the enormous amounts of urine he had accumulated went to his head. The implications Facebook will have in the coming months and years in the most profitable markets in which it is based – that is, the US and Europe, with India also likely to be next in line.
Because Zuckerberg may be very, very strong, but contrary to popular belief in the American economy since the 2008 economic crisis – there is no such thing as too much to fall for. Mark Zuckerberg may soon discover this in his flesh.