Some of the Tech Magic Is Gone

At this time in 2021, technology was lifting the world and stock markets.

Right now… eh, not so much.

The Nasdaq index of nearly 100 tech stocks has fallen 14 percent since the end of December, significantly higher than the decline for US stockpiles that are not as heavy as tech. Tech superstars, including Facebook, Alibaba and Tesla, have slipped into the ranks of the world’s most valuable companies.

More governments are trying to control how tech companies operate. Some tech investors and observers have begun to question whether start-ups are losing a decade-long boom, and indeed this time around. Cryptocurrency should have their moment but instead the price is declining. Early public offers are mostly on break.

At multiple points in the last decade, a lot of people (including me) have asked if the tech bubble is over, and they were mostly wrong. I am not going to predict the future but will try to evaluate this moment for technology instead. Some strange things are happening.

Right now, some of the confidence in the ever-evolving march of technology seems to have evaporated. It’s not exactly a bubble bursting. It’s like a (perhaps temporary) lack of faith in the great magic of technology.

So what’s going on?

See, the world is rallying to stop the invasion of Ukraine, the coronavirus epidemic is in its third year and governments are trying to raise consumer prices. Those forces and other uncomfortable events make investors think more carefully about where to put their money, and in some cases tech companies, start-ups or Bitcoin no longer seem like good bets.

Previous tech freakouts, including the early months of the epidemic, proved to be temporary and could happen. But again, something does Experience Different this time. Maybe.

Every other day, some tech companies shout that their sales will not increase indefinitely, and their share price plummets. Zoom Video Communications, one of the tech companies that previously needed to match the share price in the epidemic, has now returned to its February 2020 share price.

It is a powerful symbol. People with money are now saying no to buying stock in hopes of years of future blockbuster sales. It is also the root cause of the recent loss of confidence in public companies, including stock trading app Robinhood, upstart electric vehicle company Revion and Chinese on-demand ride start-up Didi.

Dan Eves, a tech investment analyst at Wedbash Securities, told me that he believes the world’s digital transformation is just beginning and that technology companies will continue to grow and grow.

But he said investors are rethinking the potential of some young companies at the rate they were growing a year or two ago. In some quarters, Ives said, “Froth has clearly come out of the tech market.”

The decline in optimization is affecting young tech companies that are just starting out. Prices that investors are paying for start-ups in the early stages of growth peaked in the second half of 2021, according to the latest financial release from start-up investment firm Redpoint Ventures.

Axios journalist Dan Premack said two months ago that “go-go era is history” for tech start-ups and other types of young companies.

Premak knows that similar predictions are often not basic, but he cites evidence that investors are no longer throwing cash at anyone who speaks the word “innovation.” Investors in start-ups have long been rewarded for being reckless or financially irrational, and the premise is that wealth is not as big as it used to be.

Again, all of this may prove to be a blur, and tech may continue to add both wealth and importance. I also know that many of you do not shed tears over the created stock prices for Facebook and Netflix. Fair. Blind faith in technology is not only great for us, but faith in technology has also been beneficial.

That optimization in technology has given companies the cash and freedom to bring us zippy laptops, more options to work away from Doritos and the office in 15 minutes. If and when the tech party becomes less grand, the changes we’ve taken as given may disappear, which can be both potentially disruptive and unhealthy. We will see


Tip of the week

Brian X ChenThe New York Times consumer technology columnist recommends personal security measures for our smartphone cameras.

When you use your iPhone or Android camera, Apple and Google ask for your permission to share your location with the camera software. This is for “geotagging” or to point to a specific location where you took the photo.

This information is used to automatically create photo albums based on your location, such as your trip to Spain. This can be helpful, but it’s important to ask yourself whether the privacy risks are appropriate for marking the location on each photo you take.

Imagine meeting someone on a dating app and you send that person a selfie from your favorite coffee shop. If you’re there every morning, you probably don’t want the nearest stranger to be the exact location of the place you visit frequently.

My general advice is to turn off the location tagging feature by default and turn it on only for select occasions, such as remembering where you were when you were traveling on vacation and when you took a photo.

To check if you have geotagging enabled on the iPhone, open the Settings app, tap Privacy, select Location, and tap Camera. Click “Never” to disable geotagging.

On Android, open the Camera app, tap on Settings (or a gear-like image) and flip the option for location tagging.

  • Digital help for Ukraine: A city transport application in Kiev was recovered within 24 hours to warn residents about impending Russian attacks and to help them find shelter and essential supplies, The Guardian reports.

    And from The Washington Post: How the West is tearing down Russia’s propaganda wall, including technology to evade Russian Internet censorship and sending texts to strangers in Russia denying the Kremlin’s official line on the war.(Subscription may be required.)

  • How Google learned to lobby: A decade ago, the revolt of the general public and small web companies helped sink congressional bills on online copyrights. Protocol writes that Google learned from that episode both how to marshal the power of angry Internet users and the need to be an insider in Washington. The company is now using those strategies to combat congressional no-confidence motions that will affect it.

  • It is the first international blockbuster from China’s video game industry. And that’s an almost perfect replica of Japan’s current role-playing game, according to my colleagues Ben Dooley and Paul Mozur.

Look at this tiny little lamer, He hugs the stuffed toy when it is weighed. (Thanks to Tim Hunter, On Tech Reader in Durham, NC for the suggestion.)


A correction: Wednesday Newsletter Tasty’s configuration with Instacart is misrepresented. Viewers will have the option to purchase components from Instacart’s app, not from TikTok.

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