- In his new book, NYU professor Scott Galloway explains how Amazon, Apple, Google and Facebook have succeeded in exerting influence over our attention, our loyalty — and our personal information.
- "These companies avoid taxes, invade privacy, and destroy jobs to increase profits because ... they can," Galloway writes.
- Galloway tells CNBC about his new book: "We think these companies are progressive, when their behavior is more like Darth Vader crossed with Ayn Rand."
Scott Galloway is one angry guy.
He's a professor at the NYU Stern School of Business, where he teaches brand strategy and digital marketing, and he's the founder of consulting firm L2. Galloway has become a bit of a media star recently on his (accurate) prediction that Amazon should consider buying Whole Foods.
You might think his new book, "The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google," out Tuesday, would be an admiring examination of how these companies came to dominate the world.
On one level, it is. He explains how the tech giants have succeeded in exerting influence over our attention, our loyalty and our personal information.
"Facebook and Google own media; Apple owns the phone; and Amazon is about to molest the entire retail ecosystem," he says.
Fair enough, but that's not really what Galloway has set out to do. Galloway is upset, really upset, at what he says these companies are getting away with: "These companies avoid taxes, invade privacy and destroy jobs to increase profits because ... they can."
He's angry that the "Four Horsemen" — as he calls them — employ only 418,000 employees, about the population of Minneapolis, but they have a combined stock market value ($2.3 trillion) that is roughly the GDP of France, a developed nation of 67 million citizens.
He's angry that these companies create growth without prosperity. He knows that many people tend to blame global trade and immigrants for our problems, but he insists the tech economy and its "fetishization" is equally to blame: "It's dangerous for our society, and it shows no signs of slowing down. It hollows out the middle class, which leads to bankrupt towns, feeds the angry politics of those who feel cheated, and underpins the rise of demagogues."
It's not just that he doesn't like what these companies are doing. He also doesn't particularly like a lot of the people who run these companies. Doubt me? Here's a sample:
On the obsession with Apple founder : "Steve Jobs, in my view, spat on the universe. ... The world needs more homes with engaged parents, not a better ... phone."
On Apple's tax history: "Apple is the largest tax avoider in the history of U.S. business."
On the parallels between Google and : "Microsoft at its peak was notorious for having the most insufferable a------ employees in American business."
On why rich people are easier to sell to because they're all basically alike: "Rich people are more homogenous than any other cohort on Earth. ... The global elite, by contrast, is a rainbow of the same damn color."
On what Amazon CEO should really be doing with his company: "What's clear is that we need business leaders who envision, and enact, a future with more jobs — not billionaires who want the government to fund, with taxes they avoid, social programs for people to sit on their couches and watch Netflix all day."
Gee, thanks Scott. What is this? New Progressive? Intellectual Populism? Old-fashioned trust busting? Trump-era name calling?
Amazon declined comment on Galloway's book. Apple did not immediately return a call for comment.
In a phone interview, Galloway describes himself as an "irreverent progressive," telling me, "I'm a capitalist, but I'm smart enough to realize that idolatry of these firms are not going to take care of us when we are old. They are just here to make a profit. "
And what's wrong with that? Nothing, he insists, but then goes on: "We reward them with characteristics associated with kindness and generosity," none of which is true, he says. "They are being given the mother of all hall passes. We think these companies are progressive, when their behavior is more like Darth Vader crossed with Ayn Rand."
Galloway is seizing on a new zeitgeist that is starting to emerge, a new narrative about these companies, one that switches from gushing admiration to a more critical viewpoint of their impact on the rest of the world, what exactly we have all given up to them, and what we have really received in return.
Do they deserve such criticism? Galloway argues that their sheer size and influence demands that we be more critical toward them. Let's just focus on Amazon for the moment. He is amazed at:
1) The trust Amazon's consumer shows toward Amazon: "Amazon's customers trust it so much that they're allowing the company to listen in on their conversations and harvest their consumption data. This will give Amazon deeper penetration into the private lives and desires of consumers than any other company."
2) The way Wall Street gives a pass to Amazon: "Amazon has trained the Street to hold them to a different standard — to expect higher growth but lower profits."
3) The stunning success of Amazon Prime: "Prime members represent recurring revenue, loyalty and annual purchases that are 40 percent greater than non-Prime members."
4) How Amazon has made shipping the pillar of its success: "In 2015, Amazon spent $7 billion on shipping fees, a net shipping loss of $5 billion, and overall profits of $2.4 billion. Crazy, no?"
Not crazy, of course. A critical key to Amazon's success was the development of the world's most efficient physical distribution network. Lower costs, greater selection, faster delivery. Get to more and more households in less and less time.
Galloway's conclusion: Amazon is on a path to a trillion-dollar market cap (currently at $460 billion), through a combination of acquisitions, a further push into the last-mile delivery chain and opening more stores. Galloway spends considerable time explaining this oddity, why Amazon, the store killer, will expand into bricks and mortar: "Because e-commerce doesn't work, isn't economically viable, and no pure e-commerce firm will survive long term."
What's Amazon's next move? Galloway got considerable buzz a short while ago when he suggested that would be a logical acquisition (they are in talks to go private). But he suggests they are so big they could buy almost anything: "My bet is Amazon buys the rights to broadcast March Madness or the Super Bowl to juice their Prime membership ... as they can."
The real move to get them to a $1 trillion market cap, Galloway predicts, will be in artificial intelligence: "If Amazon tests an AI-like offering anticipating all your retail needs — sending stuff automatically and calibrating based on what you send back or edit via voice ... the stock will become antigravity matter and triple to a trillion dollars in value."
What about the competition? Is it all over for retail? No, Galloway says. He cites a small group of innovators — , , — that are investing in people and a strong in-store experience.