The Age of Tech Is Over – The Atlantic

«Publicly traded companies that are classified as “tech” now trade at one of the smallest premiums in history, according to a recent JP Morgan analyst note. The most famous of these companies—the so-called faangs, of Facebook, Apple, Amazon, Netflix, and Google—have seen their price-earnings ratios collapse by more than 60 percent in the past two years.


Facebook and Google have grown to dominate digital advertising. But in the U.S., overall ad spending has historically averaged no more than 3 percent of GDP. How do you grow forever in a sector that isn’t growing? That’s easy: You don’t. There may be a Malthusian trap in the attention economy. Eventually, revenue growth bumps up against the natural limitations of population and waking hours. [Note: Not sure I see Malthus here, since the limitation is declared to be population, which grows geometrically, not arithmetically. I think somebody just wanted to use the word “Malthusian”. — John.]


Software ate media, and media went down pretty smoothly. Now it has to gnaw through the harder, crunchier parts of the global economy. Software eating life sciences? Software eating elderly care? Software eating household construction? Software eating money? Good luck.


[All the awful things that can go wrong with books:] When you buy Lolita on Amazon, you’re not worried that it will arrive missing the first page, or smelling like fish, or saying “by Dan Brown” on the cover.»

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