An Unstable Moment for Technology

We are in a strange time for technology. Can you feel? The powerful forces of unstoppable change and technological wealth are advancing rapidly, but something else is at stake: doubt.

Some of the giants of the digital age, including Netflix and Facebook, are simultaneously ubiquitous, devastating digital supernovas and blackened stars headed for existential growth challenges.

The war in Ukraine, governments’ efforts to rein in rising consumer prices, and the unstable economic and social effects of the pandemic, Stop in some digital advertising and technology purchases. Money professionals who bet on the promises of young tech companies they lose some of their faith.

Half a dozen tech giants – Apple, Microsoft, Google, Amazon, Facebook and Netflix – have collectively lost $1.3 trillion in market value this year, a sign of concern from investors. (Facebook’s stock price, which rose on Thursday, was only a slight retracement from the epic crash of 2022.)

The past decade has been an almost nonstop party for technology as we digitize our lives. And although there were periodic technical panics before, including In short, as the coronavirus began to spread in early 2020, predicting the fate of tech and industry’s leading companies has been harder than it has been in years.

Careless optimism came out and realism came in. This is very non-technical.

Maybe this tense period is just a recession and the near future will look like the years since 2010, when the importance of technology increased and technology companies produced. crazy dollar and tech investors rolled in wealth. Or maybe we’re on the verge of something else – not a collapse, but perhaps a sadder stage for technology.

At the moment, much is still rosy at Techland. We need technology in our personal and professional lives, and many manufacturers of these technologies are still unimaginably wealthy. Backers of Facebook’s parent company Meta were relieved when the company, which lost users at the end of 2021, reported more people on Wednesday. got a habit using Facebook or the company’s Messenger app again. Facebook shares rose 15 percent on Thursday.

But many tech leaders struggle to replicate past successes. Netflix in the first quarter of this year lost subscribers for the first time in ten years. Facebook predicted that compared to 2021, its quarterly revenue could drop soon. It’s not shocking in part because last year was weird for Facebook, but a tech company’s revenue doesn’t have to shrink.

We’ll get more data later today from Amazon and Apple, who will report their earnings for the first three months of 2022. Young tech companies including stock trading app Robinhood there is this week announced layoffs as their investors I want them to squat.

Also, a more nuanced reassessment belief that the pandemic will turbocharge technology. Lots of retail back to physical stores From the online shopping spree of 2020. Not everyone wants to Zoom all the time or Riding peloton bikes in the dining rooms. In 2020, businesses that buy home working technology with panic may not need it anymore for a while.

Twitter is emblematic of this period of unstable ground. Maybe Elon Musk, who agreed to buy the company $44 billion this week Twitter potential that always seems unattainable. Or maybe he’ll bring the company to the ground.

And if there is a US recession, as some economic observers do, thinks, all bets are off. The last time there was a prolonged global recession – brief about the pandemic The US’s downturn in early 2020 – technology was a sniper compared to today. Many tech companies that have enjoyed success have never gone through lean times anymore.

In a recent conversation with a veteran tech investor, who asked not to be named so he could speak more freely, he outlined what the dark tech phase might look like, especially for companies that sell technology to businesses.

For the past decade, businesses have been pouring money into purchasing technology, mostly with few financial constraints. But he imagined that if a recession did happen, managers would scrutinize budgets and cut down on unnecessary technology. This investor warned that if that happens, tech companies that assume they will continue to grow rapidly for a long time will be in for a rude awakening.

We are not there yet. But the fact that investors dream of worst-case scenarios underscores a mood swing. The boom times in technology were largely based on tangible facts – more people went online, more businesses were desperate to get ahead of their competitors, and investors found few places other than tech to make good money.

But another foundation was the belief that the tech sector would continue to see uninterrupted expansion. Once that feeling subsides a bit, it’s not always easy to get it back.

Before you go …

• It’s hard to love Elon Musk, but at the same time helped improve the human conditionWritten by Farhad Manjoo for The New York Times Opinion episode. “For one, I’m excited to see what you’ve come up with,” said Farhad, the next owner of Twitter.

• More on social media: New European regulations can improve social media sites without hindering freedom of expression. and the USA can do the same, Writes Frances Haugen, former Facebook product manager, who documents her insights into the harm caused by Facebook.

  And my colleague Brian X. Chen Not impressed with his experience at Truth SocialSocial media app powered by former President Donald J. Trump.

• Competitive writing: this is somethingand the hobby has found new life in online communities.

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Extraordinary multitasking today: This man caught a baseball without pushing the baby she was feeding.

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