Some companies seem to just inspire endless debate. Opinions are bipolar for these companies -- they are either changing the world, or going extinct. There is nothing in between. One company that is often the subject of such debate is Google. In a bold statement, tech guru Peter Thiel suggested Google is no longer a technology company. Whoa, dude.
He said what?
Peter Thiel, founder of PayPal, early investor in Facebook, and one-percenter, recently attended a technology conference in Aspen, Colo. He was seated opposite of Eric Schmidt, co-founder of Google
Moderated by a Fortune journalist, the discussion was sculpted around the question "What is the impact of technology on the world?" It's a slightly ridiculous question, but we can forgive it based on what followed.
Schmidt kicked off the debate by pumping up his company's products. He talked about how Android, the Nexus 7 tablet, and other Google toys bring access of information to nearly the entire world in its native languages. He is clearly the idealist half of the panel.
The moderator then turns his attention to Thiel, citing Thiel's Founders Fund manifesto slogan: "We wanted flying cars, instead we got 140 characters."
Immediately, Thiel fires the opening salvo: "Eric, you do a fantastic job as Google's minister of propaganda."
In between insulting Eric and his company, Thiel explains that, while there has been fast-paced innovation in certain areas, it has failed to help the global economy as a whole. He cites unimpressive wage growth over the decades, the utter failure to reduce the cost of energy, and a narrow-minded focus on the wrong kind of innovation -- computer-based innovation.
The two go back and forth, at times looking like they'll jump out of their seats and fight to the death. I won't recap the whole thing, but Thiel looks to win the argument when he says Google has $50 billion in cash and does nothing with it. The reason, Thiel says, is that Google has run out of ideas for investment. And the company can't return the money to shareholders in the form of a dividend, because that would be admitting that Google is no longer a tech company.
Well then, what is it?
Thiel suggests that Google is a search engine, and one created more than a decade ago. To invest in Google, in his view, is to bet against the ability of someone else to top that innovation -- and nothing else.
Now, I am not siding 100% with Thiel, though I think he has raised some startling points.
Companies like Apple
Apple makes some beautiful toys -- I'm using one to write this article while I text on another one and check my Facebook account on yet another one. So, understand, I am not bad-mouthing the quality of these companies. But where are the flying cars? Why does air travel take basically as long as it did in the 1960s? Why haven't we been innovating in agriculture and defeating the starvation that threatens millions in developing nations?
Why, instead of any of those ideas I've mentioned, am I tweeting cheap jokes to the Web?
Google Glasses are wicked cool. My iPad's screen is beautiful. The new Microsoft Office makes it even easier for me to throw my words at you. But I'm not totally sure any of this will matter in the grand scheme of things.
Thanks, Peter -- you gave me a quarter-life crisis to deal with.
Maybe it's not their fault
Schmidt raises a valid counter-point:
"What you discover in running these companies is that there are limits that are not cash. There are limits of recruiting, limits of real estate, regulatory limits."
The Google leader seems to want the same change that Thiel believes should be the focus of technology, but he thinks the structures around us prevent it. If that is the case, then that's a whole other issue, and one that seems even more daunting than the first.
It's an argument libertarians love to make: that the government prevents us from truly growing. Restrictions on things like nuclear power, catering to the social-media companies that are gaining more and more influence and handouts, aligning the incentives for corporations to chase profit, not change.
Putting my personal politics aside, I believe that both sides of the argument raised important points and questions. Google, Apple, and Microsoft all need to reconsider what it means to be a leader in the world of technology. These companies were founded on innovation, and I believe they have the capacity to do it again. But it may take a realignment of philosophy before we see that happen.
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