The Circle of Corporate Life

By Kevin D. Williamson

Sunday, July 24, 2022

 

Whatever your candidate was for the real-world equivalent to such sci-fi super-corporations as Tyrell, Cyberdyne, and Weyland-Yutani, here is a news flash from the business desk:

 

Facebook isn’t it.

 

Facebook, a company that has produced some genuinely groundbreaking innovations — ranging from the cute to the dystopian — is once again breaking ground, or at least new ground for Facebook: Meta, as Mark Zuckerberg’s wobbling juggernaut is now formally known, has reported declining revenues for the first time in its history.

 

The Achilles of 1 Hacker Way is starting to feel a strange sharp pain toward the back side of his ankle.

 

As corporations go, Facebook is just barely old enough to vote: The firm has been around for a little over 18 years. Where is that in the modern corporate life-cycle? For comparison, consider that Compaq, once a giant of the computer-hardware industry, never lived to be old enough to drink — though the company was at one point the world’s largest maker of personal computers, its corporate lifespan covered only 20 years, from 1982–2002. (The Compaq brand outlived the actual company for a few years, being used by Hewlett-Packard for low-end stuff.) Compaq’s journey from world-bestriding corporate titan to has-been was short, swift, and direct.

 

In science fiction, corporations are eternal, spanning eons and galaxies. In the real world of hyper-competitive and hyper-efficient global capitalism, they are fragile things — and, increasingly, short-lived things, with the average corporate life expectancy having been in decline for decades.

 

Millennials have seen names that once seemed like they should have been carved in marble along Wall Street fade and disappear: Kodak (1889–2012), Tower Records (1960–2004), Borders (1971–2011), Pan Am (1927–1991), Polaroid (1937–2001), etc. Some of the deaths were spectacular: Blockbuster Video was reduced to a stump seemingly overnight, and then vanished entirely. The company we still call General Motors isn’t really the same corporate entity that once bore that name, only a brand that has — for some reason that is entirely inexplicable to me and to anybody else who enjoys driving cars — lived on. Leveraged-buyout shark KKR fell off the Fortune 500 in 2015, along with former oil giants Hess and Marathon, and neighborhood corporate-coffee-chain-with-a-sideline-in-books Barnes & Noble. Hilton fell off the Fortune 500 in 2021, part of the general Covid-driven bloodbath in the hospitality industry. U.S. Steel, once the largest corporation in the world, was booted off the S&P 500 in 2014, and demoted to the S&P MidCap 400.

 

Conservatives who have long been irritated with Facebook and other social-media companies for political and cultural reasons have — stupidly, in my view — picked up the cudgel of antitrust regulation in the hopes of beating those companies into treating right-leaning content and sources a little better than they do. Antitrust law isn’t really the right tool for that, inasmuch as the problem isn’t mainly one of competition (Twitter has a lot of competitors, and it still sucks — the New York Times has a great deal of competition, for that matter), and a dozen little Facebooks would probably be about as awful, in sum, as the one big one we have.

 

Some of these companies look to casual observers like immovable monoliths of corporate power. Microsoft used to look like that, too, and it wasn’t the hysterically imbecilic antitrust action overseen by Judge Thomas Penfield Jackson that kneecapped Bill Gates & Co. — it was the Internet. The day before yesterday, Apple was small enough and struggling so woefully that there were plausible rumors of its becoming a minor division within Sony; today, it is five times the size of Sony by market capitalization, and seems untouchable. Before there was Facebook, there was MySpace, which was the largest social-networking site in the world as recently as 2009. It became a minor division within NewsCorp and then was owned by Justin Timberlake for a while, and today is part of the portfolio of a technology holding company you’ve never heard of that doesn’t even have a Wikipedia page.

 

Past is prologue.

 

I wish Facebook the best of luck — unlike a lot of my right-leaning friends who for some reason call themselves nationalists, I prefer to see American businesses and enterprises succeed and dominate worldwide markets, and I think that the country and the American people are as a whole better off when they do. (“Nationalists” love America — except for Silicon Valley, Wall Street, the Ivy League, the almost-Ivy League, 92 percent of professional sports, Hollywood, Amazon, all the states east of West Virginia save one little slice of Maine, and every city larger than Lubbock, Texas.) But I’d also like to see Facebook make a better product — and, being an old-fashioned sort, I still believe that competition is much more likely to effect that sort of innovation than is government regulation. And, if Facebook doesn’t get its act together, it’ll end up like MySpace or PanAm or U.S. Steel, and your Aunt Jeanie will have to yell virtually at people about her ignorant political beliefs in some other forum.

 

Facebook will get better or die without any need for intervention by regulators in Washington or in Brussels — which isn’t to say there is never any need for regulation of any kind, only that the market is an often merciless judge, and that we should give it a good long chance to work before jumping in and trying to supplant it. Meta shares already have lost more than half their value, the company is getting long in the tooth by contemporary standards, and Silicon Valley is full of hungry young things.

 

It’s the circle of corporate life.