Why Big Tech Companies Are Finding Themselves In Trouble Lately
What’s something that all these big tech companies have in common right now?
Despite their tight grip on global markets and our attention spans, what’s always felt like an unwavering influence over politics, culture, and the next big trend is starting to shake.
So much so that streaming giant Netflix is considering advertisements, and Twitter has been bought by the richest man in the world and internet pest Elon Musk for the equivalent of $61 billion Australian dollars.
Why The Plummet?
Well, the news that Twitter is up for sale is actually not all that surprising.
According to Shira Ovide from The New York Times, Twitter has never fulfilled its full potential. And that’s because even though the blue bird is iconic, Twitter isn’t actually widely used.
Despite having around 217 million active daily users and being the breeding ground for celebrities, world leaders, and journalists to share their best and controversial thoughts, Twitter is much smaller than rival platforms like Facebook and TikTok.
It’s had small user growth over it’s 16-year life span and unlike Facebook, which has 1.79 billion daily users, Twitter doesn’t have enough users to attract bigger advertising ventures.
This means Twitter is not a hugely financially successful business.
Even though Facebook, or as it’s now known as Meta, still has a mammoth amount of users, earlier this year it had its first ever drop in daily user numbers. Experts point to its major rebrand — that was a huge expense for the company — Apple privacy rules and competitor TikTok for the market loss.
Similarly, Netflix lost subscribers for the first time in 10 years in 2022.
The company blames competitors, economic disturbances, the war in Ukraine, lockdowns mostly being over, and people sharing their Netflix accounts with other households for the drop.
What’s interesting about Netflix though is that it ditched Silicon Valley to basically join a Hollywood association in 2019. The streaming platform has since leant into being its own movie making company, which naturally costs more money.
Its future now hangs in the balance of potential advertising and crackdowns on shared accounts.
How Dire Is It Really For These Big Tech Companies?
It’s important to remember that the big six tech firms all profited greatly from the pandemic, so t’s not like they are going bankrupt anytime soon.
But regulators around the world are becoming stricter on social media platforms, issuing bigger fines for non-compliance and forcing companies to take responsibility.
Spreading misinformation and hate online has made platforms like Twitter or Facebook lose their credibility among not only users but advertisers and even the next generation of users.
For Twitter, the impact of Musk owning the platform is significant. Musk wants more free speech, to relax its content restrictions, and to shift away from its advertising-based approach and bring in subscriptions — all of which has been met with unease.
Musk has his own record of controversy on the platform, especially after financial regulators accused him of misleading Tesla investors with his tweets that he eventually resolved with a $40 billion dollar settlement.
Twitter users are responding in the best way possible with tongue-in-cheek tweets.
<blockquote class=”twitter-tweet”><p lang=”en” dir=”ltr”>free speech is when the richest person on the planet buys the place where you talk. I am very smart</p>— Bobby Wagner (@bwags) <a href=”https://twitter.com/bwags/status/1518642878670594050?ref_src=twsrc%5Etfw”>April 25, 2022</a></blockquote> <script async src=”https://platform.twitter.com/widgets.js” charset=”utf-8″></script>