{"id":7866,"date":"2017-05-12T13:17:47","date_gmt":"2017-05-12T17:17:47","guid":{"rendered":"https:\/\/www.roughtype.com\/?p=7866"},"modified":"2017-05-16T13:20:18","modified_gmt":"2017-05-16T17:20:18","slug":"the-digital-industrial-complex","status":"publish","type":"post","link":"https:\/\/www.roughtype.com\/?p=7866","title":{"rendered":"The digital-industrial complex"},"content":{"rendered":"

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Exactly fifty years after the hippies\u00a0gathered in San Francisco, another summer of love seems set to blossom. This time it’s not the flower children who are holding hands and sharing beds. It’s the titans of Big Internet<\/a>.<\/p>\n

Just this week, at its Build conference, Microsoft\u00a0gave a hug<\/a>\u00a0to former adversaries Apple and Alphabet. “Windows PCs heart iOS and Android devices” was one of the big\u00a0themes of\u00a0the event\u00a0\u2014 yes, the heart symbol was on display \u2014\u00a0and Microsoft announced that Apple’s iTunes app is\u00a0coming to\u00a0the\u00a0Windows Store. Microsoft also formed a partnership<\/a> with Facebook to incorporate an ad-tracking tool into Excel. Meanwhile, Apple and\u00a0Amazon were engaged in their own public display of affection. They let word leak out<\/a> that Amazon’s Prime Video app would soon be available on Apple TV. The once fierce rivals appear to have “reached a truce,” reported<\/a> Recode.<\/p>\n

Thanks to their technical and marketing prowess, combined with\u00a0the winner-take-all dynamics of the internet, Alphabet, Amazon, Apple, Facebook, and Microsoft have emerged as the dominant companies of the consumer net\u00a0(Farhad Manjoo dubs<\/a>\u00a0them the “frightful five”), with a combined market cap of a zillion dollars, give or take. Each now operates something of a perpetual-motion money-printing\u00a0machine powered by the dollars and data that flow in such massive quantities through the net. The\u00a0companies\u00a0still face threats, of course, but, even as they sow disruption in other industries, their own market positions now look pretty stable and secure. They’re the winners.<\/p>\n

While the boundaryless nature of online business means that each of the five companies competes with each of the others on many fronts, there is also now a symbiosis among them \u2014 and that symbiosis is getting stronger. Each of the five makes its profits\u00a0in different ways, with Apple focusing on\u00a0hardware, Google on web ads, Facebook on social-media ads, Amazon on retailing, and Microsoft on software sales and subscriptions. Their businesses overlap, but they are also\u00a0complementary.\u00a0And, as is often true with complementary products and services, gains\u00a0by one company often help rather than hurt the businesses of the others. Each of the five is focused on expanding consumers’ dependency on the net, and as the net\u00a0pie expands so does each of the five slices. At this point, being friends rather than enemies makes sense.<\/p>\n

When it comes to business, in other words, the net is a centralizing force, not a decentralizing one as once assumed. The frightful five together\u00a0form a digital-industrial complex, a nascent oligopoly\u00a0set to skim the lion’s share of the profits from the consumer web for the foreseeable future. Five big pieces, loosely joined.<\/p>\n

On Monday, the venture capitalist Jeremy Philips wrote a column<\/a> intended as a rejoinder to Manjoo’s warnings about the power of the titans. Philips\u00a0argued against the idea that, as he put it, “the five leading tech behemoths have turned into dangerous monopolies that stifle innovation and harm consumers.” Their businesses, he wrote, are “all converging \u2014 therefore competing \u2014 with one another.” His timing was unfortunate, as immediately after the column appeared we got the news of the new partnerships among the companies.<\/p>\n

Philips’s\u00a0argument would have sounded\u00a0compelling just a few years ago. Back then, the five’s positions were not as well-established as they are now, and their relationships were defined by their skirmishes. That’s no longer the case. Yes, the businesses of the five have converged, but it’s now becoming clear that their interests have\u00a0converged as well. For Big Internet, this is\u00a0the dawning of the Age of Aquarius.<\/p>\n

Image: Actors portraying hippies in “Hair.”<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Exactly fifty years after the hippies\u00a0gathered in San Francisco, another summer of love seems set to blossom. This time it’s not the flower children who are holding hands and sharing beds. It’s the titans of Big Internet. Just this week, at its Build conference, Microsoft\u00a0gave a hug\u00a0to former adversaries Apple and Alphabet. “Windows PCs heart […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":true,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[],"class_list":["post-7866","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/posts\/7866","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7866"}],"version-history":[{"count":10,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/posts\/7866\/revisions"}],"predecessor-version":[{"id":7896,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=\/wp\/v2\/posts\/7866\/revisions\/7896"}],"wp:attachment":[{"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7866"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7866"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.roughtype.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7866"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}