The Economist April 30th 2022 Business 57done. That would imply giving thegreen
light to racist abuse, for instance, whichis
legal in some countries but not mostusers’
idea of fun. Other social networksthatbe
gan with the aim of allowing anythingle
gal, such as Parler and Gettr, eventually
tightened censorship after being deluged
with abusive language and porn.
If Twitter were to take a puristlineon
free speech, the immediate winnersmight
therefore be its more censoriousrivals,
suggests Evelyn Douek, an expertonon
line speech at Harvard Law School.Until
now, the main social networks haveset
roughly similar contentmoderationpoli
cies, each reluctant to be an outlier.“You
can imagine a Twitter with Trumpbackon
its platform just being in the headlinesall
day, every day, while the other platforms
sat back and ate their popcorn,” shesays.
Mr Musk has never seemed to mindbe
ing in the headlines. Even so, he mayfindit
harder than he expects to do awaywith
moderation. Twitter relies on the cooper
ation of other companies within thetech
“stack”, which could be withdrawn.Itsmo
bile app is distributed by Apple’s andGoo
gle’s app stores; both suspended Parler
after the Capitol riot. Even its presenceon
the web is conditional. Amazon kicked
Parler off its webhosting platformafter
discovering posts encouraging violence,
which broke its terms of service.
Governments are also tighteninglaws
on online speech. Twitter fielded43,000
contentremoval requests based onlocal
laws in first half of 2021, over doublethe
number two years earlier. Stricter lawsare
being drafted in Europe (see story onprevi
ous page). The easy passing of Twitterinto
the grip of one rich man may prompthard
er thought about regulation in America.
Much will depend on whether MrMusk
can stick to his own principles. Socialnet
works face a conflict of interest whenthe
people setting moderation policiesarealso
in charge of growth, notes Ms Douek.
Would Mr Musk’s approach to freespeech
be swayed by his other interests? Tesla
hopes to expand in China, whose stateme
dia are given prominent warning labelsby
Twitter. “Did the Chinese governmentjust
gain a bit of leverage over the town
square?” tweeted Jeff Bezos, the founderof
Amazon and owner of the WashingtonPost.
Mr Bezos later said he expected “complexi
ty in China for Tesla, rather thancensor
ship at Twitter”. Investors seemed toagree:
Tesla’s share price has fallen by overa tenth
since news of the Twitter deal broke.
Mr Musk insists that as the platform’s
owner he will be evenhanded. “I hopethat
even my worst critics remain onTwitter,
because that is what free speech means,”
he tweeted on April 25th, shortly beforethe
company’s board accepted his offer.Some
users had other ideas: on the same day,one
trending topic was “Trump’s Twitter”.n
TechnologyprofitsThe secrets of big tech
A
merica’s techgiants make ungodly
amounts of money. In 2021 the com
bined revenue of Alphabet, Amazon, Ap
ple, Meta and Microsoft reached $1.4trn.
These riches come from a wide and con
stantly expanding set of sources, from
phones and pharmaceuticals to video
streaming and virtual assistants. Analysts
expect the tech quintet’s combined sales to
surpass $340bn in the first three months of
2022, around 7% more than in the same
period last year.
In a quarterly ritual that kicked off on
April 26th, when the big five started report
ing their latest earnings, the staggering
headline numbers again hit headlines. Al
phabet unveiled revenues of $68bn, up by
23% compared with a year ago, though
slowing advertising growth saw net profit
dip to $16.4bn. On the same day Microsoft
announced revenues of $49.4bn, up by
18%, and net profits of $16.7bn. A day later
Meta revealed sales of $27.9bn with net
profits of $7.5bn. Amazon and Apple re
ported after The Economistwas published.
Big tech firms are understandably eager
to trumpet these impressive figures, as
well as their diverse offerings. They are
considerably more coy about how much
many of their products and services actual
ly make. Annual reports and other public
disclosures tend to lump large revenue
streams together and describe them in the
vaguest terms. Last year, for example, thefive giants’ sales were split out into 32 busi
ness segments in total. That compares
with 56 segments for America’s five high
estearning nontech firms.
Apple breaks its sales into five slices;
Meta into only three (see chart 1 on next
page). The category that Alphabet labels as
“Google Other’‘ made $28bn in revenue last
year. It includes Google’s app store, sales of
its smartphones and other devices, and
subscriptions from YouTube, a subsidiary.
Last year YouTube’s advertising revenue,
which Alphabet first revealed only in 2020,
reached $29bn. That means that in 2021
Google Other and YouTube’s ad business
each generated more money than four
fifths of the companies in the s&p500 in
dex of the biggest American firms.
The opacity makes business sense.
Keeping rivals in the dark helps ensure that
they will not try to replicate a prized busi
ness unit and eat into its margins. Andy
Jassy, Amazon’s boss, has lamented the
prospect of breaking out his firm’s finan
cials because they contain “useful compet
itive information”.
Annoyingly for the tech barons, the veil
of secrecy is getting thinner. Regulators,
lawmakers and investors see it as a pro
blem, and are calling for more transparen
cy about everything from how big tech’s
payments platforms work to the amount of
carbon the companies belch out. And new
sources of information are emerging, fromS AN FRANCISCO
We dig inside the finances of Apple, Alphabet and others