What's Different Between Facebook, Netflix, and Google?; Best articles on the tech giants

By Whitney Tilson

Thursday, August 8, 2019

1) In my latest video, I answer the question: What’s Different Between Facebook, Netflix, and Google? (23 minutes)

2) Speaking of the tech giants, there are dozens of articles every day on them and the challenges they face, so it can be hard to filter them for the ones worth reading. For what it’s worth, here are the best ones I’ve read recently:

Ranking the Top 100 Websites in the World. Excerpt:

As a greater portion of the world begins to live more of their life online, the world’s top 100 websites continue to see explosive growth in their traffic numbers.

To claim even the 100th spot in this ranking, your website would need around 350 million visits in a single month. Using data from SimilarWeb, we’ve visually mapped out the top 100 biggest websites on the internet. Examining the ranking reveals a lot about how people around the world search for information, which services they use, and how they spend time online.

Note: This is a ranking of biggest websites, specifically. Brands that extend across platforms or serve the majority of their users through an app will not necessarily rank well on this list. As a result, you’ll notice the absence of companies like WeChat and Snapchat.

The Top 100 Websites

The 100 biggest websites generated a staggering 206 billion visits in June 2019. Google, YouTube, and Facebook took the top spots, followed by Baidu and Wikipedia. Below is the full ranking…

3) This Chart Reveals Google’s True Dominance Over the Web. Excerpt:

Yes, we all know that Google is dominant in the realm of search.

But at the same time, the internet is also a huge place – and building a decent searching algorithm can’t be that hard, right?

This week’s chart is a bit mind-boggling, because it makes the case that Google is even more dominant than you may have guessed. Between all Google features and the search giant’s YouTube subsidiary, more than 90% of all internet searches are taking place through the company.

4) For Tech, We’re the Gift That Keeps on Giving. But We Get Prime! Excerpt:

“Congress and antitrust enforcers allowed these firms to regulate themselves with little oversight,” said Representative David Cicilline, Democrat of Rhode Island, who leads the antitrust committee in the House. “As a result, the Internet has become increasingly concentrated, less open and growingly hostile to innovation and entrepreneurship.”

This is a theme, of course, that European regulators have been sounding for a long time. So, does it mean that the reckoning is finally here in the United States, too?

Like Reddit’s Steve Huffman, I won’t hold my breath, largely because the record of the government in this area has been weak. And, of course, it is already overreaching, as we saw in Attorney General William Barr’s fatuous speech last week calling for tech companies to stop using advanced encryption. (Apple are you listening? No, you are not because you are not spies.)

But there is no question that the tech story is now a regulatory story, which is good because we need the kind of control that only government can impose. But it’s also sad because the tech story should be one of innovation. It should be a story of what’s next.

5) Chris Hughes Worked to Create Facebook. Now, He Is Working to Break It Up. Excerpt:

Chris Hughes used to huddle with Mark Zuckerberg in a Harvard dorm room building Facebook from scratch. Now, he’s huddling with regulators to explain why Facebook needs to be broken up.

In recent weeks, Mr. Hughes has joined two leading antitrust academics, Scott Hemphill of New York University and Tim Wu of Columbia University, in meetings with the Federal Trade Commission, the Justice Department and state attorneys general. In those meetings, the three have laid out a potential antitrust case against Facebook, Mr. Wu and Mr. Hemphill said.

For nearly a decade, they argue, Facebook has made “serial defensive acquisitions” to protect its dominant position in the market for social networks, according to slides they have shown government officials. Scooping up nascent rivals, they assert, can allow Facebook to charge advertisers higher prices and can give users worse experience.

Mr. Hughes’s involvement stands out because few founders have gone on to argue for the dismantling of their company. As the scrutiny of the world’s biggest tech companies has intensified in the last year, many of the complaints about them have come from competitors or academics.

6) My friend Marcelo Lima of hedge fund Heller House is quoted in this Barron’s article: Why Investors Shouldn’t Overreact to the DOJ’s Antitrust Review of Big Tech. Excerpt:

“Facebook and Google are large in digital advertising, but quite small in global advertising,” says Marcelo Lima, a hedge fund manager at Heller House. “The same is true for Amazon: large in e-commerce, small in retail sales. There is no reason to narrowly define these markets as digital only.”

7) Road-Tripping With the Amazon Nomads. Excerpt:

[Chris] Anderson is an Amazon nomad, part of a small group of merchants who travel the backroads of America searching clearance aisles and dying chains for goods to sell on Amazon. Some live out of RVs and vans, moving from town to town, only stopping long enough to pick the stores clean and ship their wares to Amazon’s fulfillment centers.

The majority of goods sold on Amazon are not sold by Amazon itself, but by more than 2 million merchants who use the company’s platform as their storefront and infrastructure. Some of these sellers make their own products, while others practice arbitrage, buying and reselling wares from other retailers. Amazon has made this easy to do, first by launching Fulfillment by Amazon, which allows sellers to send their goods to company warehouses and have Amazon handle storage and delivery, and then with an app that lets sellers scan goods to instantly check whether they’d be profitable to sell on the site. A few sellers, like Anderson, have figured out that the best way to find lucrative products is to be mobile, scouring remote stores and chasing hot-selling items from coast to coast.

“It’s almost like I’m the front end of the business and Amazon is just an extension of my arm,” says Sean-Patrick Iles, a nomad who spent weeks driving cross-country during Toys R Us’ final days. It was a feeding frenzy Anderson and others also hit the road for. “I find the products, and then they mail them to people.”

Best regards,


Whitney Tilson

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About Whitney Tilson

Prior to creating Empire Financial Research, Whitney Tilson founded and ran Kase Capital Management, which managed three value-oriented hedge funds and two mutual funds. Starting out of his bedroom with only $1 million, Tilson grew assets under management to nearly $200 million.

Tilson graduated magna cum laude from Harvard College with a bachelor’s degree in government in 1989. After college, he helped Wendy Kopp launch Teach for America and then spent two years as a consultant at the Boston Consulting Group. He earned his MBA from Harvard Business School in 1994, where he graduated in the top 5% of his class and was named a Baker Scholar.

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