Four Weddings & A Funeral

We witness border skirmishes between big tech firms on a regular basis. This year, one or more will erupt into a shooting war. Just as most wars are not a function of ideology but economics, the armies of search, handsets, and performative posts will begin landing paratroopers behind enemy lines and initiate heavy equipment assaults. Yes, I watch too much History Channel.

Wars also make strange bedfellows. For a hot minute (four years) we fought side by side with the USSR. Upon our collective victory, they promptly became our adversary. A weak DOJ and accretion of market cap for the biggest players make 2020 a year for high-profile acquisitions (weddings) and one spectacular failure (a funeral).

As I’ve written, big tech has no choice but to enter the fields of healthcare and education. These are the only two sectors, other than government, that offer the margin dollars required to sate investors’ growth expectations. Google and Facebook could wipe out the entire radio industry, and they’d still wake up hungry for more profits within 24-36 months based on investors’ expectations.

Every big tech firm must implicitly, or explicitly, assure investors there is a reasonable chance their stock will double in the next five years. Otherwise investors will buy Zoom, Lemonade (which filed to go public this week), or another “disruptive” firm. Big tech is running up against staggering appetites, like Brad Pitt being forced to feed off humans, as rats just can’t sate his thirst. Remember that movie? Pale and a bad haircut …

And. Still. Dreamy.

Anyway, the Four plus Microsoft need to add more than half a trillion dollars to their top-line incomes over the next five years. This will result in them entering new markets, and coming for each other.

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