Pixel Envy

Written by Nick Heer.

The World’s Biggest Startups Are Growing Up

In business terms, if not in behaviour. Alistair Barr, for the Wall Street Journal:

With revenue growth ebbing, profit margins shrinking and shares flat, Google is curbing hiring and seeking ways to run its sprawling empire more efficiently, according to recruiters, venture capitalists and others familiar with the matter.

[…]

For many years, Google teams assumed they could add staff each year. Now, Google executives are selecting which groups can hire, based on the company’s strategic priorities. Since late last year, many Google teams have had to submit plans describing how additional employees will produce specific business objectives, such as increased revenue or more users.

For example, Google last year capped hiring at the struggling Google+ social-media division, while the Nest connected-home unit was given more leeway to grow, according to people familiar with the changes.

Graham Lee quoting John Gruber (via Michael Tsai):

At just 20 percent of unit sales, Apple isn’t even close to a monopoly. At 92 percent profit share, they have a market dominance that rivals any actual monopoly the tech industry has ever seen. We don’t even have a term for this situation, it’s so unusual.

[…]

The thing it’s important to remember about monopolies or monopsonies is that they are not inherently bad: badness happens when an entity uses its dominant position in a market to set prices or other terms that are not considered fair, and that’s a pretty woolly situation. When the one buyer in your market decides that your contribution is “amateur hour” (sucks to be a hobbyist, I guess), or that your content is “over the line”, and doesn’t want to buy your product, you have no other vendors to sell it to: is that fair?

These companies aren’t little any more. They’re huge, and have the kind of influence over our lives that their market cap implies. Sometimes, though, we forget that. Whether that’s because they both project an image of friendly youthfulness or because the law is having a hard time keeping up with rapidly-changing technology, I’m not sure. It sure is interesting to watch this era take shape.