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Amazon and Google’s True Advantage

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These companies have mastered spending big to stay Big Tech.
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My colleagues wrote about the eye-popping sales numbers coming from America’s technology superstars, including Google, Facebook and Amazon. Their sales and profits this year, in the middle of a pandemic, are truly hard to fathom. It’s so much money, you guys.
But these companies also spend gobs of money, which in turn helps them make more money.
The ability to spend like crazy — because Big Tech has money and hardly anyone questions how the companies spend it — is one of the secrets to why the tech industry giants are so difficult to unseat.
A few examples: Amazon hired 250,000 full- and part-time employees — on average roughly 2,800 each day in the 90 days that ended in September — and then about 100,000 more people in October, the company said. Google has spent nearly $17 billion this year on things like hulking computer equipment — that’s about the same as Exxon’s comparable spending figure for digging oil and gas out of the ground.
Facebook’s Mark Zuckerberg talked excitedly on Thursday about spending whatever it takes on futuristic projects like eyeglasses that overlay virtual images with the real world. Imagine walking down the street and seeing a virtual list of menu items for the taco shop on the corner.
Some of this stuff, yes, can immediately help companies generate more of those eye-popping sales and profits that my colleagues wrote about. When Amazon hires people to work in its warehouses or to drive trucks, those workers help push more packages to your door this Christmas.
But a lot of this stuff, honestly, who knows. What the heck is Apple cooking up in its research labs, on which it spent $19 billion in the last year? Can Facebook get us to buy into a future of our world mixed with virtual images? Are Amazon’s gazillions of new package warehouses, transportation depots and computer centers really justified? This is the kind of stuff that might never pay off.
And that’s one reason Big Tech is so different. Few large companies get mostly patted on the back for spending money in ways that may — or may not — pay off.
This is part of the ultimate dilemma about these technology giants that dominate our lives and often our leisure and work hours. They make tons of money, which means they have more money to stay on top. (Also, governments and competitors say these companies break the rules to advantage themselves at the expense of rivals, hurting consumers like us.)
One of the most cringe-inducing words in business is “moat.” What this means is a company has some unique advantage — a globally recognized brand name for Coca-Cola, or a unique technology that helps Uber move cars around efficiently — that gives it an unbreachable border of water filled with monsters.
It’s a terrible, overused piece of jargon. But the tech superstars have a moat. (Imagine me cringing as I typed that.) Their unique advantage is access to giant piles of money. And they’re using it to dig that watery trench of monsters even deeper.
SEND US YOUR QUESTIONS: We want to hear your election tech questions. What are you curious or concerned about related to how tech companies are handling election-related misinformation, or how secure America’s election technology is? Send your questions to ontech@nytimes.com, and we’ll answer a selection. Please include your full name and location.
Retailers really, really, really want you to start your holiday shopping early, because — well, read this about possible holiday package shipping delays. That means Black Friday and other preholiday sales have already started. The problem is, a lot of times when websites scream DEAL it’s not actually a good deal.
Nathan Burrow from The New York Times’s product review website, Wirecutter, has these tips to make sure we’re not getting fooled by something that promises a discount but is a bad buy:
Comparison shop: The hot item that the website says you can’t find for less anywhere else? Yeah, you probably can. Type the name of the product into a shopping search in your web browser. (If you’re considering a “flash” sale online, first add the item to your shopping cart. Often you have up to 15 minutes to check out, enough time to check on the price.)
Read the reviews: Customer reviews aren’t always reliable. So read up on a product that intrigues you from multiple publications — may I suggest Wirecutter? This isn’t a guarantee that you’re getting a good price, but it will help you avoid getting excited by a sale and buying a junk product.
Use (free!) shopping tools: Websites like CamelCamelCamel.com or Keepa will give you a useful, albeit imperfect, idea of how much a given item has sold for on Amazon over time. That’s a good indication of whether you’re getting a good deal right now, or can wait.
Even when you’re not shopping on Amazon, you can check whether the retailer’s price is a good deal by comparing it to how much the same product tends to sell for on Amazon.
Have an informed plan: Don’t believe the hype, be patient and know that there are good discounts to be found. You may just need to cut through the noise to find them.
He’s a star on Facebook. He’s not sure why: My colleague Kevin Roose talked to Dan Bongino, the right-wing commentator who said he can’t really explain why he went from a B-list pundit to one of the most popular figures on Facebook. Kevin writes that it’s both charming and terrifying that people like Bongino get big on Facebook, YouTube and TikTok because their “personas happen to fit into the grooves of a platform’s algorithm.”
Listen to this to understand the antitrust case against Big Tech: Lina Khan helped reshape the legal views on how antitrust laws apply to big technology companies. On my colleague Kara Swisher’s podcast, “Sway,” Khan had a clear explanation of how she believed big technology companies hurt all of us, and she gave a glimpse inside Congress’s recent investigation into Big Tech power.
Sigh. Math problems by emoji is not a good solution: Bloomberg News writes about teachers in the Philippines improvising remote classes with printed handouts and lessons over Facebook Messenger, because a majority of the country’s households have limited internet access. One teacher started texting her students a daily math problem using emojis in place of numbers.
The best moment of my week was reading this article about people who are obsessed with the $300 12-foot Halloween skeleton sold by Home Depot. (Also hello to this video of a Home Depot skeleton lashed to the roof of a Mini Cooper.)
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