Tech companies get a disproportionate amount of press. Why?
There’s the obvious. Year after year we see twentysomethings become multi-millionaires. We love their products. We’re chronically attached to our smartphones. Our lives are on our laptops. Every new technology that comes out we lap up. Communicating with Skype, WhatsApp, and Snapchat. Fitbits for exercise, Ubers to get around. Social media gives everybody the option to tailor their media consumption and to broadcast whatever from their own channel.
But that’s just scratching the surface. If we look at the top 10 most valuable companies on the Fortune 500 list we see Apple, Alphabet — Googles parent company, and Microsoft in the top 3 spots. What’s interesting is that tech companies are much much younger than the other fortune 500 mainstays. Exxon Mobile is number four. Exxon and Mobile came from Standard Oil which started 146 years ago. Berkshire Hathaway at the number six spot is 177. Compare this to Google, 17 years old and Facebook, 12.
These businesses are reaching astronomical valuations far faster than any others in the history of business! It took Warren Buffet 49 years to get to a $300 billion market cap. Mark Zuckerberg did it in 12!!
But besides the stupid amounts of money that the tech companies are making, there’s also the value they produce. What they make is supremely useful. This is why they attract these huge amounts of revenue.
Let’s take the example of Google, whose mission it is to organize the world's information. Since they improved search tremendously, more people started using the service. Where the eyeballs go is where the ad revenue goes. Because Google search is so useful, it makes the company draw in huge amounts of revenue in a short time. For advertisers, Google ads were many times more useful than the previous forms of advertising like print and tv.
Over a billion people use Google for everything they want to find. Health info, business intelligence, news, music, entertainment, pictures are all at our fingertips. Because of Google search we’ve moved from having to look through books at a library that closes to having the collective knowledge of humanity all of the time. This is a big shift in how we interact with knowledge. Among other things, it frees up mental bandwidth by eliminating the need for memorization. Because of this, knowledge is more like a readily available extra limb for the mind. Prosthetic knowledge not limited access knowledge. Search, though bad for long-form literacy has had a big positive impact on the amount of information that people can access. Basically, we’re smarter for it. And Google is much larger than their old school advertising counterparts because of this.
Communication is a fundamental human need. We developed language to exchange increasingly complex ideas and create advanced social structures. This gave us a competitive edge over the other animals. With writing, ideas became recordable and sharable over distance and time.
Later the printing press was invented, literacy spread and our minds expanded again. New concepts were introduced into the noosphere. Around the 1800s the speed of technological invention sped up. The camera, telephone, radio, and tv came at a rapid cadence. With the creation of the internet, the information age advanced in a big way. Another acceleration of communications technologies flourished. Websites, mobile media and social media came to the fore.
Each new invention changed our understanding of the world. Cameras reduced the need for long descriptions, the telephone shrunk our concept of distance. Radio and TV changed social norms and advertising took off as mass consumption continued to roar across the planet.
The internet evolved into the web 2.0 and the information flow changed from a unidirectional — producer to consumer — to multidirectional and another massive shift in mass communications happened. It’s changing how we interact with each other, how we do business, and how we perceive and construct our ideas of self, community, country and the world. Now I can reach out to anybody on Twitter. And I mean anybody. I can earn a living from my laptop. And this makes me a different kind of a human being than I would’ve been without it.
Information is consumed differently. Articles and videos are taking over literary culture. We expect things faster. If a page takes 5 seconds to load, we get annoyed. As the mediums for communications changed so did the quality of the message and the thoughts of the messenger. Because the tool on which media is created changes what’s expressed.
This is how tech companies are leading us to the next information age. But we’re not there yet. We’re transitioning from the energy/industrial age into the next information age. The primary driver of planet earths social-political landscape is still the acquisition, production, and distribution of energy. Coal, oil, nuclear, biomass, hydroelectric and renewable sources are the basis of our economies, governments and societies. We moved from the iron age to the industrial/energy age, when the availability of energy exploded. The information age is here but it hasn’t matured yet. When it does, and the high purity materials needed for making processors get significantly cheaper we will enter the second stage of the information age.
The software that’s eating the world is on devices that are on every corner of the planet. It’s global and it’s accelerating. Today about half of our waking hours are spent looking at screens, mainly on mobile devices. An increasing amount of our attention is absorbed by technology. The organizations that are behind the devices and software that we’re on are going to gain more influence as we spend even more time with displays. Data is taking over oil as our most useful commodity. The second part of the information age is coming. Fast. Tech companies will replace the energy and financial institutions as the bedrock of the global economy. And when this happens it’ll be a completely different world. We’re in the middle of a massive transition. And it’s an extremely exciting time to be alive!