what is happening? Is big tech profitability collapsing? It seems like every big website is trying very hard to cut costs and find new sources of revenue right now
the tech industry now is a lot like the 1800s rail industry in that it’s changing society and hype drives investment but profitability just isn’t there
i firmly believe it’s the interest rate hike. the fed rate has been set to “free money” since the GFC in 2007.
[aside from a little blip between 2016 and COVID when rates were gradually increased up to a whopping 2% over 4 years before being flattened to “free money” when COVID hit].
now, in less than 1.5 years, it’s gone from “free money” to 5.5%. that’s enough to make “investors” [aka, people who negotiate giant loans from investment banks to invest in companies] squeamish about negotiating additional operating loans and pressuring executives to find money under the couch cushions, so to speak…
to be fair, i think the enshittification process of trying to squeeze a buck out of everything was inevitable to capitalism, but the rise of interest rates so high over such a short window set a fire under it.
what is happening? Is big tech profitability collapsing? It seems like every big website is trying very hard to cut costs and find new sources of revenue right now
it was never profitable. Its all sort of been a big scam from the beginning
the tech industry now is a lot like the 1800s rail industry in that it’s changing society and hype drives investment but profitability just isn’t there
i firmly believe it’s the interest rate hike. the fed rate has been set to “free money” since the GFC in 2007.
[aside from a little blip between 2016 and COVID when rates were gradually increased up to a whopping 2% over 4 years before being flattened to “free money” when COVID hit].
now, in less than 1.5 years, it’s gone from “free money” to 5.5%. that’s enough to make “investors” [aka, people who negotiate giant loans from investment banks to invest in companies] squeamish about negotiating additional operating loans and pressuring executives to find money under the couch cushions, so to speak…
to be fair, i think the enshittification process of trying to squeeze a buck out of everything was inevitable to capitalism, but the rise of interest rates so high over such a short window set a fire under it.
you could even call it enclosure