There have been times in years past that Amazon, Alphabet (read: Google), and Microsoft have had rough patches. Amazon has suffered quarters-long profit droughts. Alphabet has given its investors agita over profligate spending on non-core products. Microsoft’s growth—if not its profit engine—stalled for years, causing its stock to idle too.
The middle months of 2017 have not been one of those times for any of these companies.
Each, for their own reasons, reported anywhere from solid to spectacular earnings results Thursday. Amazon didn’t make any more money than it did the year before, but its growth resembles a startup more than the grownup it is. Alphabet’s ad machine is humming. Microsoft, a cloud computing convert, has completed the most impressive tech turnaround since Lou Gerstner taught an elephant to dance.
That these giants are charging simultaneously—throw in Twitter and Intel too—is no coincidence. Their success is the digital transformation explained. Where the action once was in high-trafficked shopping malls, print and TV advertising, and client-server software, businesses that deliver digitally rule the roost today.
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This is the point in any account of Big Tech’s success where journalists insert the “to be sure” paragraph, as in, to be sure, this garish performance will draw the attention of regulators, legislators, and other haters that could ruin the fun. The New York Times and The Wall Street Journal both turned in laudable examples of the art form.
Those concerns only matter, of course, when they matter. For now, they don’t. It is party time. And what a party it is.
The cinema business is thinking about experimenting with dynamic pricing, as Bloomberg reported this week. Dynamic pricing—charging more when goods and services are in high demand and short supply and less when the opposite is true—isn’t new. Gasoline retailers, hoteliers, and airlines have been deploying the technique for years. Uber did it too—to great success but also with dollops of controversy largely attributed to its own stubbornness and insensitivity.
According to Bloomberg, Regal Cinemas will charge more for hits and less for flops, an intriguing concept given that the real money is in egregiously overpriced popcorn and soda, not movies.
Long live capitalism. And see you at the movies.
Big capital gains. As Adam noted, it was one of the busiest days ever for people who follow big tech company earnings.
If you want a few more interesting tidbits below the headlines, Microsoft said its annual run rate for its Azure cloud unit exceeded $20 billion for the first time. Google said pre-orders for its new Pixel 2 phones were double the number from last year and that YouTube watching on old-fashioned TV sets jumped 70% to 100 million hours a day. CFO Ruth Porat also disclosed massive cuts in spending on Google Fiber. With the Whole Foods chain now in hand, Amazon broke out sales in physical locations for the first time: $1.3 billion, or 5% of total sales. Intel surprised everyone with flat revenue in its PC chips unit. Stocks of all four companies rose in premarket trading on Friday. Microsoft was up 6%, Google parent Alphabet 4%, Amazon 8%, and Intel 3%.
Pre-panic mode. Fresh off its attack on the grocery business, Amazon appears closer than ever to shaking up the prescription drug market next. The e-commerce giant has obtained wholesale pharmacy licenses in at least 12 states, including Louisiana, New Jersey, and Michigan, the St Louis Post-Dispatch reported on the basis of public records searches. The fallout is already here, as CVS’s bid for Aetna is said to be motivated in part by the looming specter of Amazon’s entry.
Munch all you want, we’ll make more. With pre-orders for the iPhone X starting at midnight Pacific Time on Friday, Apple quickly ran out of phones for immediate delivery on November 3. Delays were out to six weeks on Friday morning, though according to some reports, wireless carrier Sprint still had units available for next week for Sprint customers.
Horse, meet barn door. After Russia used social networks to meddle in the 2016 election, Twitter said it would ban advertisements from any accounts owned by Russian news outlets Russia Today and Sputnik. The bans are part of Twitter’s “ongoing commitment to help protect the integrity of the user experience,” the company said.
Wrist slap. HR services startup Zenefits and co-founder Parker Conrad will pay almost $1 million, but won’t have to make an admission of guilt to settle charges they misled investors. Federal regulators said the company’s failure to disclose it was not in compliance with state insurance laws constituted “false and misleading statements and omissions.”
Momentum play. The tech IPO train is still steaming forward. Cloud security startup Zscaler has made a confidential filing to go public, TechCrunch reported. The leak comes just as cybersecurity firm ForeScout Technologies priced its IPO at $22. It starts trading on Friday under the symbol “FSCT.”
Conspiracy theories. The National Archives released almost 3,000 documents connected to the assassination of President Kennedy and put them all online. Spoiler alert: the Russians were just as surprised as everyone else by Lee Harvey Oswald’s shooting of the president.
IN CASE YOU MISSED IT
Amazon CEO Jeff Bezos May Be the World’s Richest Man — Again By Lucinda Shen
Facebook Just Upgraded Its Slack Competitor Chat App By Jonathan Vanian
Why AMD’s New Laptop Chip Might Be Its Best Performer Yet By Aaron Pressman
Super Mario Odyssey Leads a Rush of Big Video Games This Week By Chris Morris
FOOD FOR THOUGHT
We are, unfortunately, beset by news of the continuing problems of discrimination, bias, and harassment in the workplace. One related problem feeding the culture of abuse is the lack of diversity, particularly in leadership roles, at many companies. Consultants Jack Zenger and Joseph Folkman have studied the problem and put a lot of the blame at the top: leaders who aren’t good self-critics of their own biases.
In fact, their surveys found that leaders who were found to be lowest rated at valuing diversity were more likely to think they were doing a great job at inclusiveness:
The implications of this data are: leaders are not good judges of their own effectiveness on valuing diversity; and those leaders who are poorest fail to see the problem, while those who are the best don’t realize their skill and capability. This phenomenon is not limited to inclusiveness — the Dunning-Kruger effect, for example, explains that unskilled people are particularly prone to thinking they are more skilled than they are. Conversely, our research has found that many of the most skilled leaders are too humble and modest in assessing their strengths. Nonetheless, we find this result particularly disturbing when we see it in the context of inclusivity. While a person’s effectiveness with any skill always needs to be based on the evaluations of others, rather than self-perception, it seems especially true in this case. Inclusivity is particularly in the eye of the beholder. You might intend to be inclusive, and even think you are inclusive, but your impact on others might be very different.
FOR YOUR WEEKEND READING PLEASURE
A few interesting longer reads I came across that are suitable for your weekend reading pleasure.
Love in the Time of Robots
In a secluded room at IRL, a collection of androids is stored and maintained: his hardest workers. Arranged in this space today, with its blackout curtains, thin corporate carpeting, and shelves cluttered with cables and monitors and an array of wigs, is a pair of his replicas of grown women. They are models of the Geminoid F series. The name is a play off geminus (Latin for “twin”), a reminder that their human counterparts exist somewhere in the world.
Three MacBook Mistakes: Will Apple Correct Course?
Apple’s not a company that backtracks easily. It’s got a lot of pride and a reputation for moving forward. And yet every so often the company makes a decision that it thinks is right and is ultimately proven to be completely wrong. In 2008, Apple removed FireWire from the MacBook, only to put it back in 2009. In 2009 the iPod Shuffle went buttonless, only to revert to its previous buttony design in 2010. The third-generation iPod, with its row of touch-sensitive controls, was a similar design cul-de-sac. And the most recent example is the Mac Pro, which Apple introduced to fanfare, but ultimately admitted was a mistake.
The Scientists Persuading Terrorists to Spill Their Secrets
The interviewer wanted him to provide an account of his plan, and to reveal with whom, if anyone, he has been conspiring. But the detainee – we will call him Diola – refused to divulge any information. Instead, he expounded grandiloquently on the evils of the British state for 42 minutes, with little interruption. When the interviewer attempted questions, Diola responded with scornful, finger-jabbing accusations of ignorance, naivety and moral weakness: “You don’t know how corrupt your own government is – and if you don’t care, then a curse upon you.”
When the Revolution Came for Amy Cuddy
Cuddy became famous in her field for a 2010 study about the effects of “power poses.” The study found that subjects who were directed to stand or sit in certain positions — legs astride, or feet up on a desk — reported stronger “feelings of power” after posing than they did before. Even more compelling than that, to many of her peers, was that the research measured actual physiological change as a result of the poses: The subjects’ testosterone levels went up, and their cortisol levels, which are associated with stress, went down.
BEFORE YOU GO
They’re saying it looks like a Pokemon monster, but Sinosauropteryx was a real dinosaur with feathers and the “bandit mask” shading of a raccoon or badger, researchers studying its 120-million-year-old fossils say. Somebody tell Wes Anderson. Maybe the sequel to Fantastic Mr. Fox can feature dinosaurs, too?