Bigness of technology firms such as Alphabet, Amazon, Apple, Meta and Microsoft stares us in the eye. A point of inflection has been reached with the arrival of generative AI. Bigness of all parameters such as revenue, profitability, consumer engagement, all-pervasiveness, community is so challenging. To sustain this, a company has to combine technology, brand and business successfully. Being big and remaining big by itself is a challenge.

Google’s YouTube and Workspace productivity tools has more than 2 billion users per month. It has formidable offerings such as Google search, Chrome browser, Android operating system, Google Play Store of apps, Google Maps, Google Translate, Google Mail and more. On Alphabet’s platforms collectively human beings spend 22 billion hours a day. (The Economist).

Google has benefited most by digital advertising. There is a revenue of $300 billion per annum. There is an average annual growth rate of 28 per cent in revenue ever since its IPO in 2004. Of the total inflows, 80 per cent is accounted for by online ads. The share prices have soared 50-fold. It is the world’s fourth most valuable company. However, its bread and butter digital advertising business is maturing. The world is now data driver, and data is the new oil. Internet landscape is the refinery. There are no oil wells left to be exploited by Google. The ban on cookies restrict the growth.

Investors now want cost efficiency and capital discipline. The growth rate of digital ads should remain at 10 per cent or nearly that in the next few years. There is already a huge decline from 20 per cent witnessed in the past decade.

Google’s total pie is $700 billion. Any farther gain in share could invite the scrutiny from the regulators. Already, there is an anti-trust suit in the US. Search engine is lucrative business attracting targeted ads. However, there are parallel searches on YouTube. TikTok and Instagram. Videos, however, are not as monetisable in terms of value.

Google has been active in generative AI, but Microsoft in collaboration with OpenAI too has moved fast in this space. Apple too is a valueable company.

Apple has metamorphased from a desk-top to iPhone company. Mircrosoft has transformed itself from a Windows company to a cloud-computing company.

Facebook focused big on metaverse. Though Gartner is still hopeful about metaverse, still these are early days.

Year 2022 brought AI into mainstream. It could make Big Tech bigger or may challenge them. Big Tech is growing in revenues and profits for the last 10 years. However, there are seeds of challenge here. Big Tech may run out of ways to sustain bigness. Slight sign of a slow down, and the market punishes Big Tech disproportionately. Layoffs of manpower is a tell-tale sign.

Big Tech too attempts to purchase growth, e.g. Microsoft trying to acquire Activision.

Upstarts will bring new technologies to the market. Margins will be under stress. Growth will be stunted. Big Tech may shrink to make place for new players. Or else, Big Tech will reinvent themselves.