The Year In Tech Wrecks

It's once again time for Ars Technica's yearly Deathwatch party, where the website predicts the demise of various technology companies (or at least a big enough sea change to merit getting on the list), and I have to say, this year, if correct, is going to be really something.  First, last year's review:

To be a candidate for the Deathwatch, a company or product division of a company should have experienced at least one of the following:

• An extended period of lost market share in their particular category
• An extended period of financial losses or a pattern of annual losses
• Serious management, legal, or regulatory problems that raise questions about the business model or long-term strategy of the company or product line

Last year’s class has a high survival rate (for now). Faraday Future was looking like a dead car company walking before reaching a new investor agreement. Management changes at Uber have kept the company driving despite leaping into other markets—but it now faces a whole host of new competition in every segment, on top of its problems with its driverless car business. Twitter became profitable somehow (at least on paper) in 2018, despite the bad press the company garnered over Twitter being the favorite platform of government-sponsored information operations worldwide.

A few honorees remain on life support, however. SoundCloud has been treading water since it nearly ran out of cash in 2017, and it’s not clear what the survival strategy is for the company. HTC somehow also managed to eke out a profitable quarter in 2018—just one, mostly thanks to a cash infusion from a partial acquisition by Google. But that acquisition basically handed Google most of HTC's cell phone operations, so we’re counting HTC out for this year. LeEco, the company previously managed by Faraday Futures’ CEO, is also looking like roadkill in the US. Much of its operations have shut down as the company explores ways to recover.

We also put network neutrality on the Deathwatch last year. No matter how much the Internet mourns, it’s dead. It probably won’t be back any time soon. 

And this year, after putting Twitter and Uber on notice, Ars Technica goes straight for the jugular: the Social Network itself.

Last year, we left Facebook off our list for a number of reasons, starting with its insane profitability. While some readers called Facebook a “bubble,” it was clear that Facebook is the Internet’s version of “too big to fail”: deep pockets, well-entrenched, semi-diversified (with the acquisitions of Instagram and WhatsApp), and billions of users. Little Twitter may finally be profitable, but TWTR’s most recent quarterly earnings are a mere five percent of Facebook’s.

And yet, here we are, putting Facebook on Deathwatch. The reasons have only a little bit to do with financials. We don’t expect that Facebook will go away, but this year is going to probably determine whether Facebook’s management team will continue as it is—or whether there’s a stockholder rebellion, or a government lawsuit, or some combination of both that drives CEO Mark Zuckerberg and others out.

Facebook is in crisis, thanks to a stream of what some might refer to by the technical term “really bad management decisions” moves made by the company over the past six years to accelerate the company’s growth while skirting the limits placed by a settlement reached with the FTC over privacy issues finalized in 2012. The Cambridge Analytica “data breach” scandal, other privacy concerns, fake news, and Russian troll ops blowback created a perfect storm that left Zuckerberg looking like a deer in the headlights in front of a series of US congressional hearings (and his subsequent refusal to testify before legislators in seven other countries).

I have to agree.  I don't see how Zuck survives as CEO...well, unless he throws COO Sheryl Sandburg into the blender, which he very well might.

Also on Ars's Deathwatch this year: the unholy monstrosity that is the sutured-together corpse of Yahoo! and AOL now known as Verizon's Oath spinoff, Snap, the parent company of Snapchat, and Essential, the weirdest smartphone that precisely nobody bought.

We'll see how this all pans out, but if Zuck went out of pasture (along with Elon Musk and Jeff Bezos) I think the world would be a much better place.