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The real feat of Microsoft’s $2 trillion milestone

June 23, 2021, 8:02 PM UTC

Remember back in the late ’80s and ’90s when Microsoft was king of the world? Back when Windows was the window to personal computing? Back in the days when billionaire cofounder Bill Gates got rich bringing on the digital revolution (and bullying other businesses into submission), just before his successor, Steve Ballmer, dropped the ball by missing out on phones?

After a brief hiatus, Microsoft has reclaimed its former glory. The market cap of Microsoft crossed $2 trillion for the first time on Tuesday, thanks in large part to its cloud computing efforts. The company brought in $143 billion in revenue last year, about half from renting access to its Azure computer servers and Office 365 software, among other cloud services. To the folks in Redmond, Wash., the era of shrink-wrapped boxes of CD-ROMs is but a distant memory.

The pivot paid off. Microsoft has just joined Apple, its erstwhile arch-nemesis and the world’s only other similarly valued public company, in the ultra exclusive two-million-million club. They are the only corporations in America ever to achieve this feat. (Poor Saudi Aramco, the state oil company of Saudi Arabia, briefly held membership, but has since fallen to $1.9 trillion in market value.)

Despite being the subject of a major antitrust fight a few decades ago, Microsoft has mostly skated by the latest wave of regulatory broadsides leveled at Big Tech. Some critics have taken notice. Rep. Jim Jordan, a Republican from Ohio, recently took aim at Microsoft, arguing that it should face the same reckoning as Facebook. In a letter addressed to Brad Smith, Microsoft’s president, Jordan alleged that Microsoft is “out to get conservatives,” citing instances of censorship across LinkedIn, the Bing search engine, and in Microsoft Word.

Whatever your view of Jordan’s allegations, there are reasons for Microsoft’s seemingly uncanny ability to fly under the radar. The company learned from its last antitrust battle to be less egregious about its Windows PC dominance. (It also faces more competition across the world of computing devices, in general.) Since Microsoft’s primary focus is on business software—in comparison to Google, Amazon, and the rest—its abuses are less apparent. And politicians win more points by barking at companies that are more regularly in constituents’ faces.

Microsoft is the rare Goliath that does not tend to dominate its main markets. Windows is still a power center—the company is planning an event to unveil its latest generation, Windows 11, tomorrow. But its other lines of business place second: Amazon Web Services eclipses Microsoft Azure. Facebook tops LinkedIn. Sony PlayStation beats Xbox. Google Chrome outshines Bing. Zoom bests Teams. If Microsoft were a country, its athletes would reign as Olympic silver medalists.

The days of a Microsoft monarchy are over. But serial duopoly? Well, that strategy is treating the company and its shareholders quite fine.

Robert Hackett

@rhhackett

robert.hackett@fortune.com

NEWSWORTHY

Getting in FaceTime. Apple CEO Tim Cook gave House Speaker Nancy Pelosi a ring to tell her Congress's handful of Big Tech-bashing antitrust bills were rushed and will broadly hurt businesses and innovation, the New York Times reports. Apple is also making the case in a report out today that its stranglehold over its app store—a centerpiece of antitrust proceedings—is essential to users' security and privacy. Tech giants like Google and Amazon have been bringing out their lobbying guns to argue against the proposed legislation, which the House Judiciary Committee is set to vote on today.

In this cryptogether. After China's crypto crackdown, Bitcoin's price plummeted below $30,000—provoking some hyperventilation and schadenfreude. Now the price is back up near $34,000 as the crypto-faithful buy the dip. The market's uncertainty has had ramifications for its top businesses. Bitmain, China's biggest Bitcoin mining rig manufacturer, is halting sales to deal with the turmoil. Coinbase's stock is experiencing volatility. Things aren't looking great for Tesla, a big Bitcoin holder, either; it's going to have to report a big Q2 loss.

Destiny's Rothschild. Masayoshi Son, the larger-than-life founder of Japan's Softbank, says he wants to be viewed as a 21st century Rothschild, the prominent European family that made its name in banking centuries ago. Whereas Mayer Amschel Rothschild funded machinery ventures at the onset of the Industrial Revolution in the early 19th century, Son is backing A.I. businesses in the Information Revolution of the present. Toward that end, Softbank's Latin America fund just plunked down $28 million on Atom Finance, a retail investing app, at a $150 million valuation.

Hitting the road (show). Transportation tech remains hot. Embark, a self-driving truck startup, revealed its plans to go public via a SPAC, or special purpose acquisition company, in a $5.2 billion deal. The debut follows recent stock offerings by rival trucker-less trucking companies PlusAI and TuSimple. Meanwhile, Quanergy Systems, a maker of lidar devices, a laser-based technology that helps vehicles "see," is also planning to go public in a $1.4 billion SPAC deal.

E-commerce cometh. Facebook is working on a "visual search" tool to make shopping easier on Instagram. Meanwhile, Twitter is testing ticketed events and "super follows," features that let people pay for exclusive content. 

FOOD FOR THOUGHT

Marc Andreessen, the Netscape cofounder turned venture capital disrupter, has some advice for twenty-somethings: "Don’t follow your passion. Seriously." Andreessen spoke to economics-opiner Noah Smith for Noahpinion, the Bloomberg columnist's Substack newsletter. Andreessen said people's passions are "likely more dumb and useless than anything else," and instead people should pursue them as a "hobby, not your work. Do it in your spare time."

Andreessen wasn't all chiding. He also had some uplifting words to share.

It can sometimes feel that all the exciting things have already happened, that the frontier is closed, that we’re at the end of technological history and there’s nothing left to do but maintain what already exists. This is just a failure of imagination. In fact, the opposite is true. We’re surrounded by rotting incumbents that will all need to be replaced by new technologies. Let’s get on it.

IN CASE YOU MISSED IT

The batteries that will power our green recovery by Michael Insulan and Benedikt Sobotka

What is the ‘death cross’ and what does it mean for Bitcoin? by Jessica Mathews

Keeping tabs on climate promises: 2050 is closer than it appears by Geoff Colvin

How Salesforce wants to make its supply chain more sustainable by Tovin Lapan

Forget disinformation. It’s Hollywood and Madison Avenue where deepfakes are about to wreak havoc by Jeremy Kahn

Sir Richard Branson enters the billionaire space race by Nicole Goodkind

The battle forming in the European fintech scene by Lucinda Shen

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BEFORE YOU GO

Meet Computer Man. No, really. Computer Man Lim is a 22-year-old Filipino whose parents named him in honor of the Y2K bug, which some people thought would fry machines at the turn of the millennium. For all his budding Internet stardom, Computer Man still can't join Facebook using his birth name. 

"They won’t accept it. They tell me to sign up as a company or organization," Lim told Vice. "I’ve been trying for years."

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