Hello. It’s my first day back covering technology for The Atlantic. It also marks roughly 10 years that I’ve been covering science and technology, so I’ve been thinking back to my early days at Wired in the pre-crash days of 2007.
The internet was then, as it is now, something we gave a kind of agency to, a half-recognition that its movements and effects were beyond the control of any individual person or company. In 2007, the web people were triumphant. Sure, the dot-com boom had busted, but empires were being built out of the remnant swivel chairs and fiber optic cables and unemployed developers. Web 2.0 was not just a temporal description, but an ethos. The web would be open. A myriad of services would be built, communicating through APIs, to provide the overall internet experience.
The web itself, en toto, was the platform, as Tim O’Reilly, the intellectual center of the movement, put it in 2005. Individual companies building individual applications could not hope to beat the web platform, or so the thinking went. “Any Web 2.0 vendor that seeks to lock in its application gains by controlling the platform will, by definition, no longer be playing to the strengths of the platform,” O’Reilly wrote.
O’Reilly had just watched Microsoft vanquish its rivals in office productivity software (Word, Excel, etc.) as well as Netscape: “But a single monolithic approach, controlled by a single vendor, is no longer a solution, it’s a problem.”
And for a while, this was true. There were a variety of internet services running on an open web, connected to each other through APIs. For example, Twitter ran as a service for which many companies created clients and extensions within the company’s ecosystem. Twitter delivered tweets you could read not just on twitter.com but on Tweetdeck or Twitterific or Echofon or Tweetbot, sites made by independent companies which could build new things into their interfaces. There were URL shortening start-ups (remember those?) like TinyURL and bit.ly, and TwitPic for pictures. And then there were the companies drinking at the firehose of Twitter’s data, which could provide the raw material for a new website (FavStar) or service (DataSift). Twitter, in the experience of it, was a cloud of start-ups.
But then in June of 2007, the iPhone came out. Thirteen months later, Apple’s App Store debuted. Suddenly, the most expedient and enjoyable way to do something was often tapping an individual icon on a screen. As smartphones took off, the amount of time that people spent on the truly open web began to dwindle.
O’Reilly’s lengthy description of the principles of Web 2.0 has become more fascinating through time. It seems to be describing a slightly parallel universe. “Hyperlinking is the foundation of the web,” O’Reilly wrote. “As users add new content, and new sites, it is bound into the structure of the web by other users discovering the content and linking to it. Much as synapses form in the brain, with associations becoming stronger through repetition or intensity, the web of connections grows organically as an output of the collective activity of all web users.”
Nowadays, (hyper)linking is an afterthought because most of the action occurs within platforms like Facebook, Twitter, Instagram, Snapchat, and messaging apps, which all have carved space out of the open web. And the idea of “harnessing collective intelligence” simply feels much more interesting and productive than it does now. The great cathedrals of that time, nearly impossible projects like Wikipedia that worked and worked well, have all stagnated. And the portrait of humanity that most people see filtering through the mechanics of Facebook or Twitter does not exactly inspire confidence in our social co-productions.
Outside of the open-source server hardware and software worlds, we see centralization. And with that centralization, five giant platforms have emerged as the five most valuable companies in the world: Apple, Google, Microsoft, Amazon, Facebook.
In mid-May of 2007, these five companies were worth $577 billion. Now, they represent $2.9 trillion worth of market value! Not so far off from the combined market cap ($2.85) of the top 10 largest companies in the second quarter of 2007: Exxon Mobil, GE, Microsoft, Royal Dutch Shell, AT&T, Citigroup, Gazprom, BP, Toyota, and Bank of America.
And it’s not because the tech companies are being assigned astronomical price-to-earnings ratios as in the dot-com bust. Apple, for example, has a PE ratio (17.89) roughly equal to Walmart’s (17.34). Microsoft’s (30.06) is in the same class as Exxon’s (34.36).
Massive size has become part and parcel to how these companies do business.“Products don’t really get that interesting to turn into businesses until they have about 1 billion people using them,” Mark Zuckerberg said of WhatsApp in 2014. Ten years ago, there were hardly any companies that could count a billion customers. Coke? Pepsi? The entire internet had 1.2 billion users. The biggest tech platform in 2007 was Microsoft Windows and it had not crossed a billion users.
Now, there are a baker’s dozen individuals products with a billion users. Microsoft has Windows and Office. Google has Search, Gmail, Maps, YouTube, Android, Chrome, and Play. Facebook has the core product, Groups, Messenger, and WhatsApp.
All this to say: These companies are now dominant. And they are dominant in a way that almost no other company has been in another industry. They are the mutant giant creatures created by software eating the world.
It is worth reflecting on the strange fact that the five most valuable companies in the world are headquartered on the Pacific coast between Cupertino and Seattle. Has there ever been a more powerful region in the global economy? Living in the Bay, having spent my teenage years in Washington state, I’ve grown used to this state of affairs, but how strange this must seem from from Rome or Accra or Manila.
Even for a local, there are things about the current domination of the technology industry that are startling. Take the San Francisco skyline. In 2007, the visual core of the city was north of Market Street, in the chunky buildings of the downtown financial district. The TransAmerica Pyramid was a regional icon and had been the tallest building in the city since construction was completed in 1972. Finance companies were housed there. Traditional industries and power still reigned. Until quite recently, San Francisco had primarily been a culturalreservoir for the technology industries in Silicon Valley to the south.
But then came the growth of Twitter and Uber and Salesforce. To compete for talent with the big guys in Silicon Valley, the upstarts could offer a job in the city in which you wanted to live. Maybe Salesforce wasn’t as sexy as Google, but could Google offer a bike commute from the Mission?
Fast-forward 10 years and the skyline has been transformed. From Market Street to the landing of the Bay Bridge, in the swath known as South Market or, after the fashion of the day, SOMA, has been reshaped completely by steel and glass towers. At times over the last decade, a dozen cranes perched over the city, nearly all of them in SOMA. Further south, in Mission Bay, San Francisco’s mini-Rust Belt of former industrial facilities and cargo piers became just one big gleam of glass and steel on landfill. The Warriors will break ground on a new, tech industry-accessible basketball manse nearby. All in an area once called Butchertown, where Mission Creek ran red to the Bay with the blood of animals.
So, that’s what I’ll be covering back here at The Atlantic: technology and the ideas that animate its creation, starting with broad-spectrum reporting on the most powerful companies the world has ever known, but encompassing the fringes where the unexpected and novel lurk. These are globe-spanning companies whose impact can be felt at the macroeconomic scale, but they exist within this one tiny slice of the world. The place seeps into the products. The particulars and peccadilloes from a coast become embedded in the tools that half of humanity now finds indispensable.