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at #3841Tingting ZhangKeymaster
The rapid rise of today’s Silicon Valley giants, and the apparent power they wield over social and political life, suggest that we have entered a new epoch of economic history. If so, where is the digital revolution heading – how it may be harnessed for the public good?
CAMBRIDGE – The maturation of the digital revolution has defined the first two decades of the twenty-first century. The central economic disasters of this period – the 2008 global financial crisis and consequent “Great Recession” – were driven by the proliferation of digital securities and the illusion that digital programs could measure and manage their attendant risks. And the social environment in which individuals consume information and execute transactions has been reconstructed according to the terms set by Amazon, Apple, Google, and Facebook.
Of these four Big Tech firms, Google and Facebook have pursued the most contentious business models. Those who search for information and connect with others on these platforms generate data that are fed into richly detailed user profiles, which are then monetized through the sale of targeted advertising. This heavy reliance on advertising is perhaps the least revolutionary aspect of the digital revolution. After all, the broadcast radio industry settled on the same model when it started running advertisements in 1922, much to the dismay of then-US Secretary of Commerce Herbert Hoover. (See below: ‘Herbert Hoover: radio broadcast rules’).
And yet, digital advertising is radically more efficient than its predecessors when it comes to targeting specified audiences, recording users’ responses and engagement, and leveraging the micro- and metadata they produce. It’s so efficient, in fact, that Alphabet (Google’s parent company) and Facebook have become two of the most valuable companies in the history of capitalism. But, of course, advertisers go where their audiences go, and people have flocked to the major digital platforms for the obvious benefits they provide.
By: William H. Janeway
* Roger McNamee (2019). Zucked: Waking Up to the Facebook Catastrophe, Penguin Press
* Shoshana Zuboff (2019) The Age of Surveillance Capitalism: The Fight for a Human Future at the New Frontier of Power, Public Affairs.
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