As marketers, we very much take platforms like Facebook and Google as a given. These two platforms have become inextricably intertwined with our marketing strategies to the same extent as they are with our personal lives. In fact, who could even imagine a world without Google or Facebook?
Well, it turns out that one of the most influential persons in the financial world recently has, and claims to have evidence to back his views.
In what many would qualify as a very emphatic position, billionaire and philanthropist George Soros recently made quite a bold statement directed at Facebook and Google. At the World Economic Forum in Davos, Switzerland, Soros stated without circumspection that Facebook and Google are both eminently doomed as companies.
In the same line of thought, Soros gave praise to the recent European legislative initiatives aimed at restricting Google and Facebook’s data collection on users.
“Facebook and Google have grown into ever more powerful monopolies, they have become obstacles to innovation, and they have caused a variety of problems of which we are only now beginning to become aware,” said Soros at the Forum.
The above statement correlates strongly with the increasing scrutiny surrounding the two tech giants. The mounting controversy about the possible effect of fake news on democratic election campaigns haven’t helped.
Facebook even addressed the issue in a blog post dated January 22, 2018. In an almost repentant tone, Katie Harbath, Global Politics and Government Outreach Director, admitted that social media can, at times, be harmful to democracy.
This blog post was conveniently published around the same time as the release of the new algorithm of Facebook aimed at restricting fake news. The update is meant to reduce overall news showing in the user’s newsfeed, as well as a more rigorous penalization of clickbait tactics.
But will this be enough? Can self-regulation suffice when it comes to making sure technology and data superpowers like Google and Facebook are kept “in-check”? Not so, according to Soros, who advocated that the U.S. take the approach of E.U. Competition Commissioner Margrethe Vestager, who is called by many the “nemesis” of American tech giants.
Some of the actions implemented by the E.U. include antitrust lawsuits against Google over alleged violations in its data usage within its mobile operating system, as well as the upcoming rigid privacy protection law aimed at restricting personal data collection.
In the U.S., such laws are not on the verge of being implemented. Nonetheless, the economic blueprint introduced by Democrats last summer, called the “Better Deal”, intended to push for more accountability on the part of tech and data monopolies, namely Google and Facebook.
When we juxtapose these political trends with the data wars that could ignite the end of net neutrality, one is forced to ponder the Soros prediction more seriously.
In essence, the data wars behind net neutrality imply a tug of wag between GAFA (Google, Amazon, Facebook, Apple) and telecommunications companies. The ultimate prize is control over the internet user’s data access.
With an end to net neutrality, the balance tips in favor of telecoms in their ability to restrict the speed and volume of what goes into GAFA’s data pipelines, namely internet connections. If this trend perdures, along with political pressure from world governments, there could be a crippling effect on the economic power of the world’s current tech and data lords.
Perhaps in preparation for harder times ahead, Google has been working for the last couple of years on its own data infrastructure and internet access route, through Google Fiber. However, as Mr. Page came to realize in 2016, the challenge of creating something like a fiber optic network is of course the tremendous cost. But in light of a repealed net neutrality, the question becomes, can Mr. Page or Mr. Zuckerberg afford not to invest in an infrastructure that could secure their precious data pipelines?
At this point, with so many pieces still in motion, it remains difficult, albeit unwise, to take any clear stand on the doomsday predictions of George Soros. Moreover, GAFA is known to have more than one trick up its sleeve. These companies continually invest in highly disruptive technologies that could allow them to thrive in new business territories and environments.
Contrary to Soros’ statement about Google and Facebook hampering innovation, technologies like ultrasound device matching or AI capable of reading human thoughts are signs that innovation is at an alltime high under GAFA.
The irony, and the danger, is that in spite of the millions invested in R&D, the income stream of these tech giants is still very linear. At the moment, 87% of Google (Alphabet) revenue is from advertising and similar proportions apply to Facebook. Considering how both Amazon and Verizon are rapidly expanding in the digital advertising space, this too could weigh-in on Soros’ prediction.
As marketers, given the central place of these two giants in most customer journeys leading to our products and services, we should certainly keep track of how this prediction will turn out.
