Here’s an item from the department of corporate megalomania: The global conglomerates should start thinking of themselves as countries rather than as companies, Google’s executive chairman, Eric Schmidt, urged last week.
Referring to Google’s antitrust battles and its wars with Apple, Schmidt told the Wall Street Journal that the “I have a gun, you have a gun, who shoots first?” model of competition no longer works in a world of megacompanies.
Schmidt’s recommendation is relevant at this moment when the Internet’s big four — Google, Apple, Amazon and Facebook — are not only battling each other but also gobbling up the corporate landscape.
It’s the “survival of the biggest,” headlined the Economist last week in a lead piece that declared “the corporate giants may be becoming too powerful for consumer good.”
The Economist’s analysis of the Internet could apply to Hollywood as well — indeed, the behavior of Apple and its rivals is reminiscent of Hollywood’s pioneer days. Its leaders would have been right at home building MGM and Paramount a century ago, which is relevant in view of the fact that the Big Four will likely end up owning Hollywood (Apple money initially funded Pixar, which is now owned by Disney).
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Apple making superhero sequels? It would be a piece of cake.
Apple has already become “a colossus of capitalism,” accounting for 4.3% of the value of the S&P 500. Google dominates search and online advertising worldwide just as Amazon rules the online retail sector and Facebook now has 1 billion users and an effective monopoly in the social-networking arena.
All this represents a triumph of free-market capitalism, except for the fact that these corporate nation states are pursuing monopolistic policies of supreme “corporate arrogance,” as the Economist describes it. Google is presently under the most pressure, with both the Federal Trade Commission and the European Commission investigating the company’s propensity to manipulate search results to favor its own services. Watchdogs are also looking into the policies of the corporate giants to get consumers locked onto their platforms.
On another front, Apple and Samsung were back in court last week in a fight over patent infringement and Apple’s effort to block sales of Samsung smartphones in the U.S.
Google’s Schmidt told the Wall Street Journal that he doesn’t quite understand why Apple threw YouTube off its iPad home screens. Companies of this size can’t compete like teenagers, he advised.
Or can they?
Facebook, the advocate of corporate democracy, is again asking its Facebook citizens to vote on company policy. Except that the topic being voted on is whether to abolish voting.
That sounds like teenage behavior to me.
Tough week for Murdoch, Mamet, more
With announcements of awards rolling in, everyone seems focused on the winners this week, so I would like to offer some empathetic comments about those at the other end of the spectrum: the losers. Especially those losers who are not accustomed to losing.
That includes Brad Pitt, whose crime drama, “Killing Them Softly,” landed at the box office with a thud. Even the usually adoring critics disdained the movie. Pitt’s acting “was not particularly inventive — he’s like Redford without the edge,” commented David Edelstein of New York Magazine. Does Redford still have an edge?
Then come the invincible hitmakers of Cirque du Soleil, who suddenly seem to shutting show after show — “Viva Elvis” in Las Vegas and the vaunted “Iris” in Hollywood. “Iris” opened late last year at the 3,400-seat Dolby Theater with a top ticket price of $253 and with Cirque hitting on the city of Los Angeles for a $30 million loan. “Iris” is now history.
Rupert Murdoch tells everyone who will listen that he never retreats, but he finally said bye-bye to his iPad venture, the Daily, last week. Rupert sunk at least $80 million into the online newspaper, but it lacked two qualities of his other publications: It was neither interesting nor ideologically toxic.
Another loser this week is the prolific (and feisty) playwright, David Mamet, whose new play, “The Anarchist,” is shutting down (his quickest flop) while a revival of his other show, “Glengarry Glen Ross,” is embroiled in trouble with critics. Due to delays in its opening, critics found themselves barred from the play until halfway through its run. The show, starring Al Pacino and with a $377 top ticket price, is nonetheless packing them in.
The final (and biggest) members of the losers club this week are the TV networks, whose ratings are plunging. In the key 18-49 demo, Fox is down 26, CBS down 18 and ABC down 7. (NBC is actually up.) The reasons? Viewers are increasingly addicted to delayed viewing, say some analysts. The new shows sucked, say others.
But it’s much more fun accepting awards than explaining losers, isn’t it?