Some of the tech magic is gone

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At this point in 2021, technology was eating up the world and stock markets.

Right now…ehhh, not so much.

A Nasdaq index of about 100 tech stocks has fallen 14% since late December, far more than declines in collections of less-tech U.S. stocks. Tech superstars including Facebook, Alibaba and Tesla have slipped into the ranks of the world’s most valuable companies.

More governments are trying to control the operation of technology companies. A bit of technology investors and observers are beginning to wonder if a decade-long start-up boom is running out of steam, and for real this time. Cryptocurrencies should have their moment, but instead their price is falling. Initial public offerings are mostly on break.

Many times over the past decade, many people (including me) have asked if the tech bubble is over, and they’ve usually been wrong. I’m not going to predict the future, but rather try to gauge this moment for technology. Strange things are happening.

By now, some faith in the ever-rising march of technology seems to have evaporated. It’s not exactly a bursting bubble. It’s more like a (perhaps temporary) lack of belief in the great magic of technology.

So what’s up?

Look, the world is mobilizing to stop the invasion in Ukraine, the coronavirus pandemic continues into its third year, and governments are trying to rein in rising consumer prices. These forces and other troubling events are causing investors to think more carefully about where they are putting their money, and in some cases tech companies, start-ups or bitcoin no longer feel like good bets.

Past tech panics, including in the early months of the pandemic, have proven to be temporary and this one could be too. But again, something does feel different this time. May be.

Every other day a tech company whispers than its sales won’t grow for infiniteand his share price falls into a crater. Zoom Video Communications, one of the technology companies that proved essential at the start of the pandemic with a rising share price, has now fallen back to its February 2020 price.

It is a powerful symbol. People with money are saying no right now to buying stocks in hopes of successful sales in the years to come. It is also a root cause for a loss of confidence in recently listed companies including stock trading app Robinhood, upstart electric vehicle company Rivian and Chinese on-demand transportation startup Didi.

Dan Ives, technology investment analyst at Wedbush Securities, told me he believes the global digital transformation is just beginning and technology companies will continue to grow and get stronger.

But he said investors are rethinking the ability of some young companies to continue growing at the pace they did a year or two ago. In some corners, Ives said, “the scum has clearly come off the tech market.”

Diminishing optimism is hitting young tech companies that are just getting started. The prices investors are paying for early-stage startups peaked in the second half of 2021, according to a recent report. financial presentation of the investment start-up Redpoint Ventures.

Dan Primack, a journalist at Axios, said two months ago that the “The go-go era is historyfor tech start-ups and other types of start-ups.

Primack knows that similar predictions have repeatedly been wrong, but he cited evidence that investors were no longer throwing money at anyone who said the word “innovation.” Being reckless or even financially irrational has long paid off for investors in start-ups, and Primack’s view was that riches weren’t as important as they used to be.

Again, this could all prove to be a blow, and technology could continue to add both richness and importance. I also know that few of you shed tears over the cratering stock prices for Facebook and Netflix. Fair. Blind faith in technology is not good for us, but belief in technology has also been beneficial.

This technological optimism has given companies the money and the freedom to bring us zipped laptops, Doritos delivered in 15 minutes, and more options for working away from a desk. If and when the tech party becomes less lavish, the changes we’ve taken for granted may fade away, in ways that can be both potentially disruptive and healthy. We’ll see.


Tip of the week

Brian X. Chenthe consumer technology columnist for the New York Times, recommends a personal safety step for our smartphone cameras.

When you use your iPhone or Android camera, Apple and Google ask your permission to share your location with the camera software. This is for the purpose of “geotagging” or pinpointing the exact location where you took a photo.

This information is used to automatically create photo albums based on your location, such as your trip to Spain. This can be helpful, but it’s important to ask yourself if it’s worth marking the location on every photo you take.

Imagine you met someone on a dating app and you send that person a selfie from your favorite cafe. If you’re there every morning, you might not want a near-stranger to know the exact location of a place you frequent regularly.

My general advice is to keep location tagging off by default and only turn it on for certain occasions, like when you’re traveling for vacation and want to remember where you were when you took a photo.

To check if geolocation is enabled on an iPhone, open the Settings app, tap Privacy, select Location, and tap Camera. Click “Never” to disable geolocation.

On an Android, open the Camera app, tap Settings (or the image that looks like a gear) and turn off location tagging.

  • Digital Help for Ukraine: A public transport application in Kyiv has been reused within 24 hours to warn residents of impending Russian attacks and help them find shelter and essential supplies, reports The Guardian.

    And from the Washington Post: How the West is Breaking the Russian Propaganda Wallincluding with technology to avoid Russian internet censorship and texts to foreigners in Russia with information that refute the official Kremlin line on war. (Subscription may be required.)

  • How Google learned to lobby: A decade ago, an uprising by everyday people and small web businesses helped defeat Congressional online copyright bills. Protocol writing that Google learned from this episode both how to harness the power of angry netizens and the need to be insiders in Washington. The company is now using these strategies to fight congressional antitrust proposals that would affect it.

  • It is the first international blockbuster of the Chinese video game industry. And it’s an almost perfect replica of an existing Japanese role-playing game, according to my colleagues Ben Dooley and Paul Mozur.

Look at this tiny little lemur! It’s hugging a stuffed toy while it’s being weighed. (Thanks to an On Tech reader, Tim Hunter in Durham, NC, for suggesting this one.)


A correction: Wednesday newsletter incorrectly describes Tasty’s arrangement with Instacart. Viewers will have the option to purchase ingredients from the Instacart app, not TikTok.

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