If you’re a cynic about corporate power and (lack of) responsibility — as I am — then Facebook is the gift that keeps on giving. Consider this from the NYT this morning:
For years, Facebook gave some of the world’s largest technology companies more intrusive access to users’ personal data than it has disclosed, effectively exempting those business partners from its usual privacy rules, according to internal records and interviews.
The special arrangements are detailed in hundreds of pages of Facebook documents obtained by The New York Times. The records, generated in 2017 by the company’s internal system for tracking partnerships, provide the most complete picture yet of the social network’s data-sharing practices. They also underscore how personal data has become the most prized commodity of the digital age, traded on a vast scale by some of the most powerful companies in Silicon Valley and beyond.
The deals described in the documents benefited more than 150 companies — most of them tech businesses, including online retailers and entertainment sites, but also automakers and media organizations, and include Amazon, Microsoft and Yahoo. Their applications, according to the documents, sought the data of hundreds of millions of people a month, the records show. The deals, the oldest of which date to 2010, were all active in 2017. Some were still in effect this year.
Is there such a condition as scandal fatigue? If there is, then I’m beginning to suffer from it.
The €2.4B fine on Google handed down by the European Commission stemmed originally from complaints by shopping-comparison sites that changes in Google Shopping that the company introduced in 2008 had amounted to an abuse of its dominance in search. But 2008 was a long time ago in this racket, and shopping-comparison sites have become relatively small beer because Internet users researching possible purchases don’t start with a search engine any more. (Many of them start with Amazon, for example.)
This is deployed (by the Internet giants) as an argument for the futility of trying to regulate behaviour by dominant firms: the legal process of investigation takes so long that the eventual ruling is so out of date as to be meaningless.
This is a convenient argument, but the conclusion isn’t that we shouldn’t regulate these monsters. Nevertheless it is interesting to see how the product search scene has changed over time, as this chart shows.
The obvious solution to the time-lag problem is — as the Financial Times reported on January 3 — for regulators to have “powers to impose so-called “interim measures” that would order companies to stop suspected anti-competitive behaviour before a formal finding of wrongdoing had been reached.” At the moment the European Commission does have powers to impose such measures, but only if it can prove that a company is causing “irrevocable harm” — a pretty high threshold. The solution: lower the threshold.
This morning’s Observer column:
There is something irresistibly comical about the spectacle of two CEOs announcing a friendly takeover. The two chaps (for they are still generally chaps) stand side by side, grinning into the cameras. The proud new owner explains what a great outfit his latest acquisition is, how pleased he is with the deal, extols the “synergies” that will magically materialise once the marriage is consummated and expresses his undying admiration for the poor schmuck who is now his latest subordinate.
The schmuck, for his part, declares his undying admiration for his new boss and his deep respect for the gigantic organisation into whose maw he is about to disappear. He, too, is “incredibly excited” by the new horizons that are now open to him and his colleagues. The marriage is a very good deal for both organisations – a win-win outcome no less. The fact that he omits to mention how much he has personally made from the deal is tactfully overlooked by his admiring media audience.
Last week’s announcement of Microsoft’s acquisition of LinkedIn followed this script to the letter…
This morning’s Observer column:
One of my favourite cartoons shows a team of scientists in a Nasa control room clustered around a big screen. Their spacecraft has just landed on a very distant planet and has begun transmitting data back to base. A guy in overalls is saying to his assembled colleagues: “Now all we have to do is figure out how to install Windows 95.”
Ah yes, Windows 95… I remember it well. It signified the moment when Microsoft finally managed to implement the user interface invented by Xerox in the early 70s. It was launched with the biggest hype-storm that the computer industry – or indeed any other industry – had ever seen. Microsoft paid the Rolling Stones an unconscionable amount of money (we never found out how much) to use Start Me Up as the musical backdrop for the launch. The first internet boom, triggered by the web and the Netscape browser, was just beginning to roll and Windows 95 was the first Microsoft operating system to have a TCP/IP stack (needed to connect to the internet) baked in.
Back then, the PC was the sun in the computing universe around which everything else revolved. And Microsoft controlled well over 90% of the PC software market. So Windows 95 really was a big deal.
Last week, 20 years on, Microsoft launched Windows 10 with the kind of faded hoopla that accompanies 60s discos…
And then, of course, there is the fact that Microsoft is one of the very few large corporations that is still doing serious, high-quality, long-term research.
“Google held its annual developer event, IO, which is a platform for lots of announcements. For me, the overall theme was that Google is a cloud and machine learning company, not a hardware or OS company, and the further we got from devices and the more into the cloud and into big data analysis the happier the presenters were. Beyond that, Google’s self-confident ambition to be the platform for everything is apparent – this is very obviously the new Microsoft.”
Benedict Evans 31 May 2015.
This morning’s Observer column:
Let’s spool back a bit – to 1993. By then, the internet was roughly 10 years old, but for its first decade had been largely unknown to anyone other than geeks and computer science researchers. Two years earlier, Tim Berners-Lee had created and released the world wide web onto the internet, but initially no one noticed. Then in the spring of 1993, Marc Andreessen and Eric Bina released Mosaic – the first graphical browser – and suddenly the “real world” realised what the internet was for, and clamoured to get aboard.
But here’s the strange thing: Microsoft – by then the overwhelmingly dominant force in the computing world – failed to notice the internet. One of Bill Gates’s biographers, James Wallace, claimed that Microsoft didn’t even have an internet server until early in 1993, and that the only reason the company set one up was because Steve Ballmer, Gates’s second-in-command, had discovered on a sales trip that most of his big corporate customers were complaining that Windows didn’t have a “TCP/IP stack” – ie, a way of connecting to the internet. Ballmer had never heard of TCP/IP. “I don’t know what it is,” he shouted at subordinates on his return to Seattle. “I don’t want to know what it is. But my customers are screaming about it. Make the pain go away.”
But even when Microsoft engineers built a TCP/IP stack into Windows, the pain continued…
This morning’s Observer column:
Bill Gates once said that the only technology company that reminded him of Microsoft in its early days was… Google. Thanks to one of those delicious ironies in which capitalism excels, guess which company Google now reminds people of? Answer: Microsoft in its current dotage. Gates’s creation was once even more dominant in the industry than Google is now. It had three core products – the Windows operating system, Office and Windows Server – which were licences to print money. Microsoft had huge revenues that just rolled in every quarter, just as Google’s advertising revenues do today, and on the back of them built a huge 128,000 employee company. But, cushioned by its money-pump, it failed to innovate and, in particular, failed to address the decline of the desktop PC and the rise of mobile computing.
Despite Google’s self-image of an ultra-agile, young company, in fact it’s become a 55,000-employee monster, which is what is leading some people to see parallels with Microsoft…
This morning’s Observer column.
It was a clear, windless night. All around was a wonderful panorama crowned by the glorious dome of St Paul’s in the distance. Then I started to look at the tall, glass-walled office blocks in my immediate vicinity. Although it was after 10pm, the lights were on in every building, enabling me to see into hundreds of offices. These offices varied in size and decor, but they all had one thing in common. Somewhere in every one of them was a desk on – or under – which stood a PC.
What then came to mind was the memory of a tousle-haired young entrepreneur named Bill Gates, who once articulated a vision of “a computer on every desk, each one running Microsoft software”. What I was looking at that December night was the realisation of that vision. Every one of the machines I could see was running Microsoft software: a software monoculture, if you like.
Microsoft’s dominance was a testimony to the power of network effects and of technological lock-in. It led to a world in which nobody ever got fired for buying Microsoft products and no software innovation gained traction unless it was designed to run under Windows.
For a time, Microsoft was the winner that took all. It would be churlish to pretend that this was all bad news, because the de facto standardisation that Microsoft brought to personal computer technology enabled the vast expansion of the PC industry and accelerated the adoption of computers in offices and homes.
But accompanying these substantial benefits there were some significant downsides…
From today’s New York Times
For years, Microsoft has let its customers in Europe, including businesses and organizations, keep their online data close to them. The company operates big data centers in Amsterdam and Dublin for that very purpose.
It now looks as if the company will deepen its commitment to letting those customers decide where their information is stored, at least partly because of concern about spying by the National Security Agency.
In an interview with The Financial Times, Brad Smith, Microsoft’s general counsel, said the company’s customers should be able to “make an informed choice of where their data resides.”
“Technology today requires that people have a high degree of trust in the services they are using ,” he told the paper. “ The events of the last year undermine some of that trust,” he said. “That is one of the reasons new steps are needed to address it.”
Interesting. In some ways, Microsoft is closer to the business community than are Google & Co. They may also be sensitive to the fact that some big European companies (e.g. Siemens) are offering European-based cloud services.
From one of the last interviews Jobs gave:
I have my own theory about why decline happens at companies like IBM or Microsoft. The company does a great job, innovates and becomes a monopoly or close to it in some field, and then the quality of the product becomes less important. The company starts valuing the great salesmen, because they’re the ones who can move the needle on revenues, not the product engineers and designers. So the salespeople end up running the company. John Akers at IBM was a smart, eloquent, fantastic salesperson, but he didn’t know anything about product. The same thing happened at Xerox. When the sales guys run the company, the product guys don’t matter so much, and a lot of them just turn off. It happened at Apple when Sculley came in, which was my fault, and it happened when Ballmer took over at Microsoft. Apple was lucky and it rebounded, but I don’t think anything will change at Microsoft as long as Ballmer is running it.