Should Silicon Valley Be Worried About a Backlash?

Sat, Jun 5, 2010 at 1:43 pm

    Apple, Google and Facebook, the three companies that helped restore the luster of Silicon Valley’s reputation following the dark days of the dot-com bust, are now threatening that revival.

    In the wake of an economic meltdown that cost 200,000 people their jobs and discredited the valley’s entrepreneurial culture, these three did something amazing. They made startups and innovation cool again. And in the process they helped Silicon Valley regain its place in the popular imagination as the place where entrepreneurs come to pursue their dreams of changing the world.

    And that’s why I’ve watched, with no small amount of alarm, as each company has faced a growing backlash of its own making. The halos that surrounded their rise have been replaced, for many people, by black hats. The wonder inspired by their products, innovations and success has been supplanted by the perception that they have grown too powerful and the fear over how they might wield that influence.

    It is mostly just coincidence that all three have reached this inflection point in their identity at the same time. And if it were just one of them, I would be less worried. But the fact that all three are simultaneously under this black cloud has significant implications for Silicon Valley.

    While technology is officially the main product of the valley, what we really sell is the future: the idea that it can be better with the advances pioneered and promoted by companies here. It’s in the interest of Silicon Valley for consumers and investors alike to view the future with a sense of optimism and possibility. We need people to view technology as something that can inspire and help make the world a better place.

    If the future is viewed with fear and suspicion, then the valley and its success face a mortal threat.

    It’s remarkable that Apple finds itself in this position. The company’s comeback from near-oblivion has been one of tech’s most heartwarming stories, worthy of our applause for the way Apple innovated its way back to the top.

    But having reached that perch, Apple has suffered a series of self-inflicted missteps: the feud with Adobe over Flash, the legal pursuit of a blogger over an iPhone, and its control — suffocating control, its critics say — over app approval for the iPhone. There is even talk of an antitrust probe brewing in Washington, D.C.

    Concern about Google has grown for years, but it lately has also been bumping into greater antitrust scrutiny as it increases its pace of acquisitions.

    Just last week, Consumer Watchdog released a report claiming Google abuses its dominance of search to steer users to its other products. The revelation that the Google Street View team in Europe had “accidentally” collected large amounts of personal user data through Wi-Fi connections certainly hasn’t helped.

    And finally, the relative new kid on the block, Facebook, has managed to achieve status as the central nervous system of the Web. But it has done so while cultivating a kind of love-hate relationship with its close to 500 million users by periodically changing its privacy policies with little or no warning, leading to outcries from a vocal minority.

    In most ways, each set of problems is distinct to the companies and their services and products. But if there’s anything that ties all these threads together, it is this: We naturally fear the concentration of too much power in the hands of any single person or company. All of these companies have become immensely powerful in their own right, so they have a bigger burden to recognize that and use that position with caution.

    However, I doubt that any of them feel that larger sense of obligation to Silicon Valley. From the inside, it might be harder for their executives to see how these issues ripple out and affect the region as a whole. And there is no single caretaker charged with cultivating the image of Silicon Valley.

    For many people, these companies have become the foes, not friends, of progress. And if that means the future increasingly comes to be viewed as a dangerous thing that must be stopped, then Silicon Valley itself is also at risk of becoming the enemy.

    Contact Chris O’Brien at 415-298-0207 or [email protected]. Follow him at: and read his blog posts at:

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