The Economy Is Reeling. The Tech Giants Spy Opportunity.

The Economy Is Reeling. The Tech Giants Spy Opportunity.

Technology NEWS / By


SAN FRANCISCO — Even as Facebook grappled this month with an internal revolt and a cascade of criticism over its refusal to take action on President Trump’s inflammatory posts, the social network was actively making other bets behind the scenes.

Late one Tuesday, as attention was focused on how Facebook might handle Mr. Trump, the Silicon Valley company said in a brief blog post that it had invested in Gojek, a “super app” in Southeast Asia. The deal, which gave Facebook a bigger foothold in the rapidly growing region, followed a $5.7 billion investment it recently pumped into Reliance Jio, a telecom giant in India.

The moves were part of a spending spree by the social network, which also shelled out $400 million last month to buy an animated GIF company and which is spending millions of dollars to build a nearly 23,000-mile undersea fiber-optic cable encircling Africa. On Thursday, Facebook confirmed that it was also developing a venture capital fund to invest in promising start-ups.

Other technology giants are engaging in similar behavior. Apple has bought at least four companies this year and released a new iPhone. Microsoft has purchased three cloud computing businesses. Amazon is in talks to acquire an autonomous vehicle start-up, has leased more airplanes for delivery and has hired an additional 175,000 people since March. Google has unveiled new messaging and video features.

Even with the global economy reeling from a pandemic-induced recession and dozens of businesses filing for bankruptcy, tech’s largest companies — still wildly profitable and flush with billions of dollars from years of corporate dominance — are deliberately laying the groundwork for a future where they will be bigger and more powerful than ever.

Amazon, Apple, Facebook, Google and Microsoft are aggressively placing new bets as the coronavirus pandemic has made them near-essential services, with people turning to them to shop online, entertain themselves and stay in touch with loved ones. The skyrocketing use has given the companies new fuel to invest as other industries retrench.

The expansion is unfolding as lawmakers and regulators in Washington and Europe are sounding the alarm over the tech giants’ concentration of power and how that may have hurt competitors and led to other issues, such as spreading disinformation. This week, European Union officials were preparing antitrust charges against Amazon for using its e-commerce dominance to box out smaller rivals, while Britain began an inquiry into Facebook’s purchase of the GIF company.

Some of the tech behemoths have made little secret of their intention to forge ahead in a recession that has put more than 44 million Americans out of work and that officials warn will be protracted.

“I’ve always believed that in times of economic downturn, the right thing to do is keep investing in building the future,” Mark Zuckerberg, Facebook’s chief executive, said in an investor call last month. “When the world changes quickly, people have new needs, and that means there are more new things to build.”

In doubling down on growth in a time of economic pain, the largest tech companies are continuing a pattern. In previous recessions, those that invested while the economy was at its most vulnerable often emerged stronger. In the 1990s, IBM used a recession to reorient itself from a hardware company into a software and services company. Google and Facebook both rose out of the dot-com bust about 20 years ago.

Apple, whose iPhones now dominate computing, doubled its research and development budget for two years during the downturn in the early 2000s. That led the company, which nearly went bankrupt in the late 1990s, to create its iPod music player and iTunes music store — and eventually the iPhone, the App Store and an unbridled growth streak, said Jenny Chatman, a professor at the Haas School of Business at the University of California, Berkeley.

Ranjan Roy, a tech commentator for The Margins, an internet industry blog, said it was clear the tech behemoths were unafraid to get more aggressive now and that the power they were accruing should give people pause.

“Without any pushback from regulators, big tech companies would almost unquestionably come out of the pandemic more powerful,” he said. “So many additional parts of our daily lives are becoming dependent on their products, or they could just buy or copy the services they don’t yet deliver.”

Still, the companies are taking risks by spending in an uncertain period, said John Paul Rollert, a professor at the University of Chicago Booth School of Business.

“To double and even triple down when the casino is on fire is a remarkable move, because they may not even be able to cash in their chips later on,” he said.

Amazon, Apple, Facebook, Google and Microsoft, which declined to or did not respond to requests for comment, have plenty of cash. Combined, they are sitting atop about $557 billion, enabling them to maintain a pace of acquisitions and investments similar to last year’s, when the economy was humming, according to a tally of financial disclosures. They have been among the top corporate spenders on research and development for most of the last decade, according to PwC, the big accounting firm.

The companies have ramped up their activity since March, when shelter-in-place orders began. As Amazon, Facebook and others adapted to their employees working from home, they experienced a spike in use. Messaging and other teleconferencing software soared in popularity.

That created opportunities. Microsoft, for one, started promoting its Teams videoconferencing service, which allows people to talk and collaborate online. Microsoft also snapped up three cloud computing companies in the last few months — Affirmed Networks, Metaswitch Networks and Softomotive — to offer more technology to businesses.

READ ALSO  iPhone 11 rumors: What to expect from Apple's September event

Google, too, updated products that people can use to work from home. In April, it said that its video chat service, Google Meet, would be easily available inside people’s Gmail windows and free to anyone with a Google account. It also said it would start making listings in its shopping search results mostly free, instead of having merchants pay for all their products to appear in the results, to bolster e-commerce searches.

Amazon was initially overwhelmed with a surge of online orders and safety concerns over its warehouse workers. In response, the company added more than 175,000 jobs to keep up with demand.

Amazon has since invested further. While aviation all but ground to a halt in the pandemic, the company said this month that it was adding 12 Boeing 767s to its fleet of more than 70 delivery planes. It also discussed buying Zoox, an autonomous vehicle start-up valued at $2.7 billion, according to a person with knowledge of the talks. The discussions were earlier reported by The Wall Street Journal.

Apple, with $193 billion in cash and debt, went on its own buying spree. This year, it bought DarkSky, a popular weather smartphone app; NextVR, a virtual reality company; Voysis, a digital assistant and speech recognition software company; and Xnor.ai, an artificial intelligence start-up.

The company will soon hold a developer conference virtually and is managing a surge in activity on FaceTime and iMessage as people use those services to communicate in quarantine.

  • Updated June 12, 2020

    • What’s the risk of catching coronavirus from a surface?

      Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.

    • Does asymptomatic transmission of Covid-19 happen?

      So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.

    • How does blood type influence coronavirus?

      A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.

    • How many people have lost their jobs due to coronavirus in the U.S.?

      The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.

    • Will protests set off a second viral wave of coronavirus?

      Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission.

    • How do we start exercising again without hurting ourselves after months of lockdown?

      Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home.

    • My state is reopening. Is it safe to go out?

      States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people.

    • What are the symptoms of coronavirus?

      Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.

    • How can I protect myself while flying?

      If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)

    • Should I wear a mask?

      The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.

    • What should I do if I feel sick?

      If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.

READ ALSO  Uber tries to reassure customers that it takes safety seriously, following NYTimes book excerpt – TechCrunch

Facebook’s activity has been the most pronounced. When the coronavirus swept through the United States in March, the social network was inundated with people flocking to its apps to use voice and video chat services. Mr. Zuckerberg said Facebook was “just trying to keep the lights on.”

But the company soon capitalized on the momentum. Mr. Zuckerberg accelerated the building of some products, introducing Messenger Rooms, a group video chat service, in April.

That same month, Facebook said it was taking a $5.7 billion stake in India’s Reliance Jio. It was the company’s largest investment in an outside company, giving it more access to one of the world’s fastest-growing digital markets.

“We are committed to connecting more people in India together with Jio,” Facebook said of the deal, noting that Jio had brought more than 388 million people online in less than four years.

Last month, Facebook bought the GIF company Giphy for an estimated $400 million. Giphy is to be integrated with Instagram, the photo-sharing app owned by Facebook. And last week, the social network invested millions in Gojek. Based in Jakarta, Indonesia, Gojek makes an app for digital payments, transportation and other services that is used by more than 170 million people in Southeast Asia.

Facebook is now working on the new venture fund, which will help it spot new popular apps. The fund was reported earlier by Axios.

In driving the activity, Mr. Zuckerberg may be taking a cue from a Facebook board member, the venture capitalist Marc Andreessen. In April, Mr. Andreessen wrote a blog post titled “It’s Time To Build” and said, “We need to demand more of our political leaders, of our CEOs, our entrepreneurs, our investors.”

Less than two weeks later, Mr. Zuckerberg said on the investor call that he was doing exactly that: building.

He said he felt “a responsibility and duty to invest” and added, “We’re in a fortunate position to be able to do this.”

Daisuke Wakabayashi contributed reporting from Oakland, Calif.; Karen Weise from Seattle; and Erin Griffith from San Francisco.



Source link

?
WP Twitter Auto Publish Powered By : XYZScripts.com