The shadow investment wars of Alibaba and Tencent(lillianli.substack.com)
lillianli.substack.com
The shadow investment wars of Alibaba and Tencent
https://lillianli.substack.com/p/the-shadow-war-between-alibaba-and
20 comments
Fear of regulation is a large factor in strangling M&A here. In many respects, the U.S. government actively hampers and acts at the detriment to American tech companies, whereas it's the complete opposite in China.
Tech companies in America succeed in spite of our government. And this honestly baffles me. We should be enacting policy that supports, not hinders, the industry that quite literally is the only reason our country currently isn't in a recession.
Tech companies in America succeed in spite of our government. And this honestly baffles me. We should be enacting policy that supports, not hinders, the industry that quite literally is the only reason our country currently isn't in a recession.
You misunderstand success. Yes regulation inhibits profit. In return businesses are forced to offer more utility to users and to develop better technologies. The Chinese economy is more of a cartel with tight bonds between business and government all attempting to serve the government and meet its foreign policy goals. In a deregulated economy, the result is the same except it's private companies with no transparency or accountability owning and operating the cartel instead of a public organization like the government.
And the U.S. is in a depression. There is no plan for the Federal Reserve to recoup all the 6 trillion plus dollars it's invested in the last few months. Our economic demise is coming soon.
And the U.S. is in a depression. There is no plan for the Federal Reserve to recoup all the 6 trillion plus dollars it's invested in the last few months. Our economic demise is coming soon.
Which particular aspect of regulation is crushing American tech companies?
- Honesty in financial disclosure?
- Fairness in employment policies?
- Responsibility in data governance and handling?
Something else?
- Honesty in financial disclosure?
- Fairness in employment policies?
- Responsibility in data governance and handling?
Something else?
It's not formal law, but informal warnings straight from congress and who knows what else privately. Ex: The current investigation into big tech poo-pooing FB's acquisitions of WhatsApp & Instagram, who say that under current law that there isn't anything illegal going on, but maybe we, congress, should make that kind of stuff illegal too.
Everyone has learned from microsoft's antitrust trial you want some semblance of a competitor and not look too self serving.
Everyone has learned from microsoft's antitrust trial you want some semblance of a competitor and not look too self serving.
> the industry that quite literally is the only reason our country currently isn't in a recession.
Why do you believe this to be true?
Google, Facebook, Netflix, etc. don’t employ _that_ many workers. Yes, there are contractors associated with each, and localized impact for service workers (now surely less.)
But I’m not sure that we can say tech is saving our economy right now.
Amazon requires people to buy to increase revenue, meaning they have to have spending power already. So they have to either use savings or have income.
Apple the same. Netflix too.
There needs to be more information that Uber, Lyft, DoorDash, etc. are employing more people than before — i.e. backstopping what would otherwise be a crashing economy.
When you look at their numbers, that’s not the case. They’re not seeing explosive growth during the pandemic, despite expectations to the contrary.
If we look to the stock market as a measure of economic strength — and we shouldn’t — it has been propped up by lowered interest rates.
With bond yields as low as they are, investors have to put their money _somewhere_ and stocks are the seemingly appropriate risk/return for the moment. But that’s not a sign of a good economy. Quite the opposite.
Why do you believe this to be true?
Google, Facebook, Netflix, etc. don’t employ _that_ many workers. Yes, there are contractors associated with each, and localized impact for service workers (now surely less.)
But I’m not sure that we can say tech is saving our economy right now.
Amazon requires people to buy to increase revenue, meaning they have to have spending power already. So they have to either use savings or have income.
Apple the same. Netflix too.
There needs to be more information that Uber, Lyft, DoorDash, etc. are employing more people than before — i.e. backstopping what would otherwise be a crashing economy.
When you look at their numbers, that’s not the case. They’re not seeing explosive growth during the pandemic, despite expectations to the contrary.
If we look to the stock market as a measure of economic strength — and we shouldn’t — it has been propped up by lowered interest rates.
With bond yields as low as they are, investors have to put their money _somewhere_ and stocks are the seemingly appropriate risk/return for the moment. But that’s not a sign of a good economy. Quite the opposite.
We go to great lengths to protect US steel workers, and those three companies employ about 3x as many as all steel companies in the US combined.
So why don't tech companies pay out to their shareholders so that they can use that money to invest in other companies?
Many of the tech companies you see today wouldn’t exist, if the US policies allowed monopolies to exist unchecked.
can you tell me what exactly the purpose is of supporting an industry that is, by your own admission, not struggling?
I'm concerned that you don't seem to believe America is in a recession at present.
Even before COVID most economic growth in the USA was tech companies.
The US tech giants can't spend their huge cash piles.
Google, Facebook, Microsoft, Intel, Amazon, Apple, Cisco, etc. are not allowed to buy up the competition freely. That's a big reason they're sitting on so much cash, they can't really spend it on anything in a sane / responsible manner. About the only thing they can safely, legally do with it is toss it back to shareholders.
Intel for example would never have been allowed to buy TSMC while they were a lot smaller than Intel. Intel isn't allowed to buy ARM or AMD. Intel wasn't allowed to buy Nvidia when Nvidia was a lot smaller. Intel has had the dominance and cash for a very long time to eat all competing semiconductor companies globally, and they would never have been allowed to do that (thus they didn't; they would have loved to do so). Intel has been under heavy government observation regarding competition for decades now, they're half crippled.
Microsoft wouldn't have been allowed to acquire Apple circa 1998-2000, even though they trivially could have done so. And dozens of other tech companies are on the: may not be acquired by Microsoft list.
Facebook isn't allowed to buy TikTok or Twitter or Pinterest or Snapchat.
Google wouldn't be allowed to buy Bing from Microsoft. Google wouldn't have been allowed to acquire Yahoo.
Amazon wouldn't be allowed to acquire Netflix or Walmart or Target.
Juniper has been sitting out there forever because Cisco isn't allowed to acquire them, along with several other prominent competing companies. And simultaneously, since Cisco isn't allowed to acquire such companies under our economic system in the first place, they then also benefit from having Juniper out there as a competition prop to point to.
Google, Facebook, Microsoft, Intel, Amazon, Apple, Cisco, etc. are not allowed to buy up the competition freely. That's a big reason they're sitting on so much cash, they can't really spend it on anything in a sane / responsible manner. About the only thing they can safely, legally do with it is toss it back to shareholders.
Intel for example would never have been allowed to buy TSMC while they were a lot smaller than Intel. Intel isn't allowed to buy ARM or AMD. Intel wasn't allowed to buy Nvidia when Nvidia was a lot smaller. Intel has had the dominance and cash for a very long time to eat all competing semiconductor companies globally, and they would never have been allowed to do that (thus they didn't; they would have loved to do so). Intel has been under heavy government observation regarding competition for decades now, they're half crippled.
Microsoft wouldn't have been allowed to acquire Apple circa 1998-2000, even though they trivially could have done so. And dozens of other tech companies are on the: may not be acquired by Microsoft list.
Facebook isn't allowed to buy TikTok or Twitter or Pinterest or Snapchat.
Google wouldn't be allowed to buy Bing from Microsoft. Google wouldn't have been allowed to acquire Yahoo.
Amazon wouldn't be allowed to acquire Netflix or Walmart or Target.
Juniper has been sitting out there forever because Cisco isn't allowed to acquire them, along with several other prominent competing companies. And simultaneously, since Cisco isn't allowed to acquire such companies under our economic system in the first place, they then also benefit from having Juniper out there as a competition prop to point to.
I'd love to see some facts to backup these claims around "not allowed to", otherwise this is just armchair speculation. I get the premises of why these could be denied by regulating bodies, but as I'm writing a book relevant to the subject I'd like to see some sources.
What about Facebook buying Instagram and WhatsApp?
99% of this website, and a lot of Washington wants those acquisitions undone.
That actually is antitrust. And they broke the agreement which allowed them to even acquire them in the first place.
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This has begun to change in recent years as greater investments have occurred, but are in comparison still much smaller than what Asian tech companies are willing to throw down.
I wonder what the more correct strategy is here.
[0]: https://www.cnbc.com/2019/11/07/microsoft-apple-and-alphabet...