FOREWORD
20
FORTUNE.COM // JUNE.1.19
CONSIDER THIS FACT: Just 500 companies—the ones on this year’s
Fortune 500 list, to be precise—produced enough revenue last year to
equal two-thirds of the entire economic output of the United States.
Think about that a minute: just 500 companies.
These same American businesses sold an astounding $13.7 trillion
worth of goods and services, a record sum whether you measure it in
nominal dollars or adjusted for inflation. But focus in on the numbers
and you’ll discover something yet more remarkable: that just a tenth
of these companies account for nearly half (48%) of that total revenue.
Sharpen your microscope a bit more, and you’ll see that profits among
the group are more concentrated still—with a mere 40 companies
responsible for 52% of the combined earnings. Twenty-seven of these
household names earned at least $10 billion in their most recent fiscal
year. Six, moreover, are as rich as mighty nations, with at least $1 trillion
in assets on their balance sheets.
Each year, it seems, America’s biggest companies look more and more
like a set of matryoshka dolls; companies that a generation ago would
have been seen as corporate titans now appear as if they could be swal-
lowed up as midday snacks by the real behemoths. That’s one of the
domination ... in the very old-
world realm of couches and
cabinets. What’s Wayfair spend-
ing so ferociously on? Well, says
Jeffrey O’Brien, the company’s
2,300 in-house data geeks
should give you a hint.
Data, of course, may help a
company get to the top. But it
may not be enough to keep it
there. That’s another—and far
more important—lesson from
this year’s Fortune 500.
Consider the emperor of data
itself, Alphabet, which in just
14 years on the Fortune 500
has leaped from the No. 353
spot (in its erstwhile Google
identity) to No. 15 today. But as
Beth Kowitt reports in “Google’s
Civil War” (page 90), the
search giant is going through
the kind of growing pains that
could only occur in the modern
corporate era: The company’s
highly skilled and in-demand
workforce—who have been the
engine of its historic growth—
are now vocally challenging the
strategy set by management.
Our incredibly talented art,
photo, and graphics team helped
realize this unfolding story of
American business—a tale told
in the grandness of the forest
and the specificity of each tree—
in a series of magazine covers.
They include the cover we ulti-
mately ran, created by Fortune’s
information graphics editor
Nicolas Rapp, which reveals in
500 gleaming golden circles a
sphere encompassing the whole.
Art director Josue Evilla
commissioned the stylized
radio tower illustration by Tavis
Coburn, which captures the
venerable history and outsize
ambition of AT&T. To highlight
Jen’s story on Occidental Pe-
troleum, creative director Peter
Herbert worked with Liverpool-
based illustrator Justin Metz to
produce the stunning, twisting
takeaways from this year’s Fortune 500 ranking—the 65th running of
the list: The big are getting bigger, and the rich are getting richer. And,
as Erika Fry explores in an opening essay (please see “In the Land of
Giants,” on page 27), there are a host of reasons why—from the rise of
corporate ecosystems, to the increasing competitive need for scale, to the
power-concentrating effect of data and information technology.
This same broad narrative of American business winds through the
thousands of data points we’ve curated—with some abandon, it would
seem—in 45 pages of tables and charts. But perhaps more telling are the
implications of that story line—which emerge in each of the features in
this issue. Both AT&T (page 102) and CVS (page 114) have remade them-
selves into information-age colossi. The reinvented Ma Bell, writes For-
tune’s Geoff Colvin, is counting on massive scale and reach to overcome
the effects of old-economy gravity. (It isn’t exactly working.) CVS, for its
part, has combined with Aetna to become the health industry’s biggest
platypus: a drugstore-insurer-pharmacy benefit manager-walk-in clinic.
As Shawn Tully reports, investors aren’t buying this one either.
The prize of size is driving Occidental Petroleum (No. 167 on the list)
to buy Anadarko (No. 237), so it can outcompete Chevron (No. 11) in the
oil-rich Permian Basin (see Jen Wieczner’s timely story on page 190).
And it’s driving Wayfair into a wild, loss-leading gambit for e-commerce
THE PRIZE
OF SIZE
