You might think this is a no-brainer, but in today’s market, people are consistently incapable of distinguishing between the two. At a certain point, let’s say in the early 2000s some companies operating on the internet came up with the single greatest market innovation in decades. No, it wasn’t new technology, it was a new idea.
If you could invest in and build a service, give it away for “free”, then you could create a dedicated viewer base, which would be your actual product. This was the point where factory farming met internet services. Cows get fed, watered, in some places they even get massages. The whole point of doing that, feeding, watering, massaging – is to fatten them up to be consumed.
It was a masterful idea, it was brilliant, and genius. Today you have companies like Google $GOOGL, Facebook $FB, Twitter $TWTR, and even companies like Apple $AAPL, which masquerade as tech companies, but are really just advertising agencies. Instead of targeting advertisement of their product to a wider consumer audience, these companies turn consumers into the consumed, and have a B2B model of selling their consumer livestock to the highest bidder.
Think about it. What has $GOOGL ever really done or invented? The simple answer is: nothing. Nothing that google did was particularly innovative. Networking a bunch of computers together for distributed computing was already a thing people had done. I was there when $GOOGL won the search engine wars. The idea google sold to users was not that their search was particularly the best, but that they didn’t allow companies to pay for placement in search rankings. We all see how today, they’ve reversed that position (though they kindly delineate between paid placement etc.)
I don’t consider this a problem in and of itself. I’m not anti-advertising. I simply find it ironic that 15 years ago, what all of us thought was the shining gold star deserving point for Google has essentially been turned on its head: once it won the search wars, it essentially did what every Eyeore said it would do.
What has Google ever done? The raison d’etre of Google is search, and it’s algorithm is one of the biggest frauds in history. Google is still, and was always, a mechanical turk. Google’s page rank is a bunch of jargony sophistication on the idea of outsourcing search results to users. Throughout Google’s search history, those who’ve understood this have made a lot of money in SEO. There was a time when you could artificially spike Google’s search results by simply creating lots of dummy websites with back links to your site. Eventually Google caught on, without the slightest bit of embarassment for having been exposed as frauds, and began tweaking their “algorithm”. You remember, the age of the Posting Board? Almost every search on Google ended up having hundreds of different threads from online forums. Because Google decided to “fix” their mechanical turk and over rely on “live discussions” between real humans (the mechanical turk). Remember the time when a link on slashdot could litterally tank your website?
Eventually they fixed that, but most of what Google and its “algorithm” actually does is account for the various methods of cheating and fooling its mechanical turk.
When Youtube wanted to censor objectionable (to them) material, what did they do? They invented some high powered AI that pretty much didn’t work. So they outsourced it to the ADL and SPLC (Youtube’s Mechanical Turk).
I have no problem with Ad Agencies, I think they are awesome, I think Google is a great company, for an advertising agency. But I could care less what Google or anyone at Google thinks about tech. When Erich Schmidt gives a keynote or some kind of tech convention address, all I do is wonder, when is someone going to point out that the Emperor is Naked?
This doesn’t mean that Google doesn’t offer tech things, like Tensor Flow, Kubernetes or Google Maps. Some of those things even have a bit of a cool geek factor. But Google does not create or innovate at the level of its capitalization. Google innovates because it throws truckloads of money at MIT grads for 2-3 years to see if they come up with anything that will grow their product: the audience. You. Me.
Remember Google Pay/Wallet? Yeah, neither do I.
Google couldn’t compete against Paypal because Google can’t innovate. If they could have found some new and innovative way to merge online payments with advertising, maybe it would have succeeded. The reason google payments failed was because it offered nothing above or better than anyone else in the space. Except: Because Google.
Google trades on reputation and image alone, and it cultivates that image in the same way a Pick Up Artist cultivates his image to seduce women. Its all a shew. A multi-billion dollar shew.
Twitter is another such story. It was a fast to market app that capitalized on the Web 2.0 and Rails hype. It had nothing to do with tech innovation (it was basically SMS for a webpage), it was just able to get enough acceleration to build a marketable customer base. Forward thinking investors chose these “tech companies” based on their future earnings when they began to sell to their audience. Social Networks are cash crops for B2B sales of Advertising. What these Masters of the Universe, these men of science, learning, and technology, have done is turn the entire internet into a billboard laden dopamine super highway. It’s not merely that they haven’t contributed in any meaningful way to tech, it’s that they’ve actually and actively polluted the internet. They are the digital equivalent of Big Tobacco and Big Oil and Big Pharma rolled into one. It makes me laugh my ass off, considering the prevalence of self-congratulating leftist socialist backslapping that goes on within and without these so-called “tech-companies.”
Fight the power man. LMFAO.
It’s the greatest con in recent memory, perpetrated on the liberal elite of this country. Masters of the Universe my ass.
Just to repeat, I am not against these companies. Personally, the idea of whoring leftist yuppies in skinny jeans gives me a massive chub. In fact, the more I think about it, the more I love these companies. It makes me want to get a screen printer and sell Che Guevara t-shirts at $25 a pop and Fidel Castro Tea Cozies for $15. Gotta get in on that Democratic Socialism Dollar.
So, what does make a tech company?
The same thing that makes a Sci-Fi novel. Star Trek is Sci-Fi because it is predicated on technology. Specifically Warp Capability. Several shows even are built upon the idea of the distinction between Warp Capable and Not Warp Capable societies. Star Wars gets a pass because of Hyper Drive, as well as the Planetary Shield over Endor, or the Death Star (giant planet sized “laser”).
Google is not a tech company because its business model, i.e. the way it makes money as a business, has nothing to do with technology and everything to do with advertising and services. For this same reason, Apple Inc. $AAPL skates under the wire, so technically it is a tech company, but only in the broadest definition of the word.
Netflix is a tech company, actually a really good one. Their core business is their application to deliver streaming content. I think they’ve also innovated in this space, both technologically, but also cinematographically.
Strangely enough, Amazon $AMZN has become a tech company. It is way more of a tech company than Google ever was. AWS is ubiquitous and, quite frankly, game changing. DropBox Inc $DBX is a tech company. Twitter is not. Facebook is not.
A tech company is a company who delivers investor value because of technological innovation, in deployment, scaling and features. If it fails to innovate or it fails to deliver on promised technology, it fails as a company. That’s why people prefer to invest in companies like Google and Twitter, because their success of failure is a direct product of their ability to massage cows. Massaging the Cows is a quantifiable and well understood investor concept. Happy, smiling cows that post selfie are a metric you can talk about. If you have 400 Million cows and 75% of them are posting selfies at the trough, you know you’re doing well.