By Charlie Warzel / @cwarzel
We may need to change the way we look at big tech companies. If you saw last year’s, The Social Network, it’s easy to imagine Facebook in the context of a Harvard dorm room startup but as we’re seeing those days are long gone. Zuck may not have traded in his hoodie for a fitted suit yet, but as the money shows, big tech companies like Facebook, Google, and Microsoft are making money like traditional media and trying to buy Washington influence to match.
Earlier this week, we looked at Facebook’s expanded lobbying efforts and took a couple grand looks at the future. Turns out we weren’t the only ones. The Wall Street Journal also dug into Tech’s newfound influence in Washington, unearthing some interesting facts.
Silicon Valley has also developed into a major source of political contributions for President Obama and other lawmakers, rivaling traditional media companies. In 2008, employees of Google and Microsoft Corp. were No. 4 and No. 5, respectively, as sources of campaign donations for Mr. Obama’s presidential campaign, giving a combined total of about $1.7 million, according to the nonpartisan Center for Responsive Politics. Time Warner Inc., the top media company, trailed behind, with its employees ranking as the No. 8 source of donations to the Obama campaign that year.
Through September 2011, Microsoft employees ranked as the top supporters of the president’s re-election campaign, and Google employees were No. 5. Time Warner employees had slipped to No. 10.
This might all sound very obvious to you all. Yes, Facebook and Google and Microsoft have lots of money, so what? But i’m not certain we all see it that way. Last week’s SOPA reaction was a decisive victory for the tech and internet communities. The fight pitted Big Tech as underdogs in the face of lobbying powerhouses like the Motion Picture Association of America. This was accurate as, by and large, the tech community is a disorganized body. We all love the internet and support a free internet, but a lot of the discussion surrounding SOPA painted giants like Google and Facebook like fledgling startups, oppressed by ‘the man’. We have to get past this line of thinking as it sets a dangerous precedent.
So, what is a startup?
Glad you asked. We asked a few entrepreneurs ourselves to weigh in. Here is what we learned. Craig Dye, Director of University of Maryland’s VentureAccelerator, told us he subscribes to Steven Blank’s definition that, “A startup is an organization formed to search for a repeatable and scalable business model.”
From this definition, it is hard to judge exactly how Facebook and Google fit. Of course, they are always trying to replicate their initial success and expand to greater scale. Facebook is poised to have 1 billion users at some point this year, while the current figure hovers somewhere near the 800,000 range. But in terms of the word ‘search’, there is no question that the hard part has been done for Facebook. That, of course, being the construction of a powerful user network. Same with Google. To say that either company is still ‘searching’ for a scalable idea is patently untrue.
Matt Fellowes, Founder and CEO of HelloWallet told us that, while he believes there are many internal, cultural components to a startup like, “a real hunger in the organization to grow fast” and “a culture wide commitment to be nimble,” some companies exceed the startup threshold. “once you pass a certain valuation marker…you’re not a startup anymore…I don’t know what that is, but when you’re in the 100s of millions, you’re probably not.”
We’re inclined to agree with Fellowes on that last point. While startup culture can continue to pervade in companies that have been around decades, there comes a time when your influence and bottom lines say more than your jeans and hoodies. The Wall Street Journal reported that, “Eric Schmidt, and a Facebook representative were among those given the chance to make their case to White House Chief of Staff William Daley in December, helping to prompt the recent White House statement nodding to Google’s concerns about excessive regulation of the Internet,” which is proof enough that Google and Facebook matter in the same way that Exxon and Bank of America matter.
image via WSJ
Google and Facebook, along with other tech companies aren’t quite at the stratospheric level of lobbying contributions as traditional media, but they are getting there. Their influence is also arguably far greater, as politicians and organizations and individuals integrate social media and technology into their campaigns and infrastructures. Tech doesn’t have as big of a lobby, but technology makes Washington run, connects us globally, and disseminates the information and data that powers democracy.
Companies like Google are under increasing scrutiny (especially as of late) for the amount of private data they own and can access. Products from companies like Apple are ubiquitous in countries around the world, and Facebook boasts more users than all countries in the world but two. These guys are not startups anymore. They are extremely powerful, driven corporations with great access. We do not aim to say in any capacity that they are using their power for evil…in fact, we believe that much of their innovation can change the world in a positive way.
What we do wish to impart, however, is that the Facebooks and Googles of the world are aware of their status and influence in the world and they want a seat at the table in Washington. As citizens, we need to monitor this vigilantly and understand the implications of big tech in government. We believe that the integration could ultimately be positive for democracy in the United States and abroad, but like always, it pays to stay informed.
[Lead image via soshable.com]