Why have technology companies become so greedy all over the world these days? Is it because recession is putting pressure on their revenues or have they collectively decided that time to cash in has come now?
Money is no longer free and abundant. Simply turning free investment money into growth and possible future revenue is no longer an option for most companies. Boards and bean counters have collectively started pressuring everyone to focus on revenue asap.
It's because they are ultimately beholden to "shareholders" and "shareholders" nowadays expect continual growth. Not maintaining the "growth" will cause the share price to plummet and will eventually get the CEO fired. Furthermore, the high interest rates we have now are squeezing the hell out of margins, requiring these CEOs to look for turnips from which they can squeeze some blood.
So tldr, the greed is a result of systemic forces, corporate structure, interest rates/inflation, and numbers on a spreadsheet.
These systemic forces were always there since almost over a decade now but they always focused on growth, not revenue. Now, it's as if their cash flows are depleting and revenue is where they are focusing even at the cost of growth. Reddit is a classic example where they're not even caring about users leaving the platform and going elsewhere. They're perhaps realizing that those users are of no use to Reddit unless they can somehow turn them into revenue - which ironically those 3rd party apps seem to be doing better than Reddit itself!
Continual growth has been there for decades, what's new is a focus on this thing called "profits." Until recently the incentive structure has favored growth almost to the exclusion of anything else, at least until you got very big.
The reason so many companies are doing such a terrible job of it right now, is that frankly there aren't many c-levels in tech who are mentally equipped to think about their business that way, and even fewer who have ever been in a position where they had to. Reddit's the latest example of this: 18 years and never been profitable? And Huffman calls himself a libertarian? Good grief.
I'm glad of it. Our industry is filled with basically con-men who have no idea how to run a business profitably (or interest in doing so) but have made up for it by having the right phone numbers etc. It's good that they're being squeezed, because it creates room for people who want to run an honest business.
