Dis­rup­tive

The Vam­pires of Sil­i­con Val­ley

Newsweek International - - CONTENTS - KEVIN MANEY @kmaney

ALL OF THE SUD­DEN OUR TECH gi­ants find them­selves in a PR pickle: They are post­ing record earn­ings and seem un­stop­pable in busi­ness, but they des­per­ately need to con­vince the pub­lic they’re not scarier than a pack of ve­loci­rap­tors on meth.

Even peo­ple you’d ex­pect to be all rah-rah about Al­pha­bet, Ama­zon, Ap­ple, Face­book and Mi­crosoft—five of the most valu­able com­pa­nies on Earth—are turn­ing cold. Roger Mc­namee, a big early in­vestor in Face­book, re­cently told Te­chon­omy: “Face­book has the largest mar­gins of any com­pany of sim­i­lar size in the Amer­i­can econ­omy. They’re func­tion­ing like a drug com­pany without do­ing clin­i­cal tri­als.” Adds Se­na­tor Mark Warner of Vir­ginia, the top Demo­crat on the Se­nate In­tel­li­gence Com­mit­tee, “They’ve grown so quickly—i’m not sure they’ve fully re­al­ized the im­pli­ca­tions of all their power.” Warner is the guy drag­ging ex­ec­u­tives from Face­book, Google and Twit­ter to D.C. to an­swer for the way Rus­sia used their plat­forms dur­ing the pres­i­den­tial elec­tion.

What can the tech gi­ants do to im­prove their im­age? Ro Khanna, the Demo­cratic rep­re­sen­ta­tive from Sil­i­con Val­ley, of­fers a sug­ges­tion in a re­cently pub­lished op-ed in The

Wash­ing­ton Post. Khanna notes that the tech gi­ants have the re­sources and in­no­va­tion to do some se­ri­ous so­ci­etal good—if only they would worry less about quar­terly re­sults and best­ing each other. “More than stock prices or prod­uct launches, Sil­i­con Val­ley’s le­gacy will be de­fined by whether tech lead­ers step up to con­trib­ute to the larger Amer­i­can ex­per­i­ment,” Khanna writes.

Al­pha­bet re­cently showed a ten­ta­tive ex­am­ple of how th­ese com­pa­nies might win us over. Its re­search lab X (for­merly Google X) has been work­ing on some­thing called Project Loon as a way to bring in­ter­net ser­vice—and also Google prod­ucts—to re­mote places like the Mon­go­lian steppes. Loon bal­loons, loaded with com­mu­ni­ca­tions equip­ment, are de­signed to rise 65,000 feet over an in­ter­net-starved land and act as float­ing cell tow­ers for de­vices be­low.

After Hur­ri­cane Maria dev­as­tated Puerto Rico, Al­pha­bet started talk­ing to the is­land’s of­fi­cials about us­ing Loon for emer­gency con­nec­tiv­ity. Great idea—though not beau­ti­fully ex­e­cuted. It took a month for a Loon balloon to get over the is­land, and a month is like 10,000 years in smart­phone down­time. On Oc­to­ber 20, Loon was in place and pow­ered up, but the bal­loons might not stay where they’re needed. “This is the first time we have used our new ma­chine-learn­ing-pow­ered al­go­rithms to keep bal­loons clus­tered over Puerto Rico, so we’re still learn­ing how best to do this,” X re­ported in a blog post. Which means that if you’re on Slack in San Juan, you might lose the sig­nal if the wind picks up.

Al­pha­bet clearly has cool stuff that could help the world in ways gov­ern­ments can’t. If it were to, say, leap into ev­ery dis­as­ter to help with its Loons

or other in­ven­tions, we’d start cut­ting Al­pha­bet a few breaks on things like pri­vacy and elec­tion-swing­ing.

Ama­zon has a bril­liant op­por­tu­nity to do some­thing that has stumped gov­ern­ment: pump new life into an old city like Detroit or St. Louis. Ear­lier this year, Ama­zon re­quested bids for the com­pany’s new sec­ond head­quar­ters—which will bring with it 50,000 high-pay­ing jobs. More than 200 cities put in bids for Ama­zon HQ2 be­fore the dead­line in Oc­to­ber. Ama­zon will make a de­ci­sion in 2018. The na­tion re­ally needs the com­pany to make a so­cial-good choice by in­ject­ing it­self into a re­gion starv­ing for jobs. Ama­zon’s im­pact could be like when the Clin­ton Foun­da­tion moved into New York City’s Har­lem in 2001, giv­ing a hard push to a fly­wheel of re­newal.

The de­ci­sion, though, could wind up with Ama­zon look­ing even more vi­ciously com­pet­i­tive. Most an­a­lysts be­lieve it will make an en­tirely self-in­ter­ested choice by go­ing with an al­ready vi­brant, ta­lent-rich city like Den­ver or Bos­ton. And Ama­zon threat­ens to suck rev­enue out of even the down­trod­den cities bid­ding for HQ2. The com­pany made it clear it wanted over-the-top in­cen­tives, and bid­ders obliged. Newark, New Jersey, of­fered $7 bil­lion in tax breaks. Mary­land and Philadel­phia also of­fered breaks in the bil­lions. Stonecrest, Ge­or­gia, said it would go so far as to change the town name to Ama­zon. This is a com­pany with a mar­ket cap of $464 bil­lion. It brought in nearly $44 bil­lion in rev­enue this past quar­ter. It needs tax breaks and in­cen­tives about as much as you’d need to steal a quar­ter from your grand­mother.

The other tech gi­ants are mostly dig­ging them­selves deeper into their PR pits of de­spair. Face­book built a plat­form that Rus­sians or white su­prem­a­cists can use to wield enor­mous in­flu­ence on so­ci­ety. We need Face­book to boldly step up and own that, and then show us it’s do­ing ev­ery­thing it can to be open and re­spon­si­ble about its power. About the only thing that unites Repub­li­cans and Democrats right now is the push to force com­pa­nies like Face­book to dis­close who paid for po­lit­i­cal ads on Face­book, and Mark Zucker­berg’s com­pany is fight­ing it, spend­ing $2.85 mil­lion in the third quar­ter lob­by­ing against new reg­u­la­tions, up 41 per­cent com­pared with the same time last year. Why the big push? Be­cause such laws could make Face­book turn away ad­ver­tis­ing, slightly dent­ing those enor­mous mar­gins in­vestor Mc­namee re­ferred to. So much for so­cial good.

Mi­crosoft and Ap­ple don’t look much bet­ter. Mi­crosoft in Oc­to­ber re­leased a Cor­po­rate So­cial Re­spon­si­bil­ity Re­port not­ing that the com­pany tries to use sus­tain­able en­ergy and makes its soft­ware ac­ces­si­ble to peo­ple with dis­abil­i­ties. But there’s not much in it that is go­ing to cap­ture the pub­lic’s imag­i­na­tion. At the same time, CEO Satya Nadella made $20 mil­lion in cash and stock the past year, in large part be­cause he drove what he calls a “growth mind­set” through the com­pany’s cul­ture. He didn’t get paid $20 mil­lion to im­prove so­ci­ety. How about Ap­ple? iphone X: $999. ’Nuff said.

Khanna wants the tech gi­ants to see this mo­ment as an op­por­tu­nity—“a chance to re­spond to the chal­lenges fac­ing our coun­try,” he wrote. “The hope is that they will an­swer the na­tion’s call to ad­vance the com­mon good, from ex­pand­ing job op­por­tu­nity to com­mu­ni­ties across the coun­try to en­sur­ing that on­line plat­forms do not con­trib­ute to po­lar­iza­tion or mis­in­for­ma­tion.”

Khanna might be a lit­tle san­guine. In his new book, The Four, se­rial en­tre­pre­neur and New York Univer­sity pro­fes­sor Scott Gal­loway talks about Ama­zon, Ap­ple, Face­book and Google. Near the end, he writes, “What’s the endgame for this, the great­est con­cen­tra­tion of hu­man and fi­nan­cial cap­i­tal ever as­sem­bled? What is their mis­sion? Cure can­cer? Elim­i­nate poverty? Ex­plore the uni­verse?”

Gal­loway con­cludes, “No, their goal, to sell an­other fuck­ing Nis­san.”

Ama­zon needs tax breaks and in­cen­tives about as much as you’d need to steal a quar­ter from your grand­mother.

SO­CIAL BAD? At left, Google’s Project Loon in Puerto Rico. As tech gi­ants face pres­sure from Wash­ing­ton, Rep­re­sen­ta­tive Khanna, bot­tom, wants them to ex­pand job op­por­tu­ni­ties, among other things.

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