Privacy debates, net neutrality issues and iPhone technical difficulties expose the dark side of the tech giants
They’re supposed to be the good guys, right?
No longer. Over the past year, several technology giants have begun to shed their status as white knights. And it's precisely because they've been held to such a high standard that when they behave like the multi-billion-dollar corporations they are, their image takes a shellacking.
Move over, MIcrosoft. The tech triumvirate of Google, Apple and Facebook have surpassed even that longtime evil empire to become the new villains of New Media.
“These companies have wrapped themselves in a lot of the idealism surrounding the web, but their business realities are beginning to be in conflict with the rhetoric they use to promote themselves,” Nicholas Carr, a technology writer and the author of "The Big Switch: Rewiring the World, from Edison to Google," told TheWrap.
By failing to live up to their lofty talking points — Google's corporate philosophy states "you can make money without doing evil" — all three have suffered serious public relations hits.
• Apple’s troubles are linked with the iPhone 4 roll-out this summer. And it's not just the engineering problems: The company’s (read: Steve Jobs') combative response to customer complaints created enormous friction. That was on top of its decision to call for a police raid on a Gizmodo.com editor’s house after a prototype of the phone leaked.
• Google has presented itself as defender of net neutrality. Last week, however, the company backed away from that stance by entering into a joint agreement with Verizon on a policy for handling internet content. This plan could lead to movie studios being charged extra if they want to deliver high-quality downloads of films, as well as medical companies, sports and gaming.
• Facebook found itself embroiled in a debate over privacy concerns earlier this year. News that a loophole in the service’s privacy settings allowed advertisers to access user identification and personal information prompted a massive backlash.
Google searches for "how to delete Facebook" reportedly have doubled since the start of the year.
At the same time, the company's founder and CEO Mark Zuckerberg, has been the target of several lawsuits, the most damaging of which claims he signed away most of his company while still at Harvard.
Meanwhile, Bill Gates has been burnishing his image by giving away billions of dollars to improve health care and combat poverty through his foundation. How times have changed.
In a sign of how jarring the companies new bad-boy personae are, Jon Stewart took Apple to task following the Gizmodo debacle to sustained applause.
“You guys are busting down doors in Palo Alto while Commandant Gates is ridding the world of mosquitoes. What the f— is going on?” Stewart joked on “The Daily Show.”
It’s not clear whether the damage is a short-term blip or the sign of permanent shift in public perception.
“This could be a tipping point year, in that we are so reliant upon these services that we are made keenly aware whenever those services fall short,” Clive Thompson, a writer for Wired, told TheWrap.
Since the Verizon pact, Google has seen protests outside its Mountain Valley, California, headquarters and received scathing criticism from internet freedom groups.
Facebook, meantime, has launched a poorly received public relations campaign, trotting out Zuckerberg for appearances on “60 Minutes” and a poorly received opinion piece in the Washington Post, in which he vowed to improve privacy controls.
Not helping matters matters, as the scandal was breaking New York Times technology blogger Nick Bilton tweeted that a Facebook employee told him that Zuckerberg doesn't believe in personal privacy.
Largely in response to privacy concerns, Facebook scored an “Abysmal” rating among its users, according to a July customer satisfaction survey by research firm ForeSee Results.
After insisting at first that users just hold their phones differently, Apple's Jobs held a press conference to announce that the company would give away cases that fix the issue. He also spent much of the conference blaming the press for its coverage.
There was, in almost every instance, an extraordinary tone-deafness in the way each company handled its issues and a failure to master the current 24/7 news cycle. The lead-footedness is all the more surprising given that the products they produce are partly responsible for the rapid metabolism of news today.
“Things are moving faster, and it’s harder and harder to manage the news,” Joe Ciarallo, contributing editor to PRNewser, told TheWrap. “Brands are still trying to figure it all out. From the outside it seems easier to respond than it actually is. These are big organizations and there are a lot of constituents — the legal team, the sales team, the shareholders — so these have to be navigated carefully.”
At the very least, Ciarallo says these tech companies need to offer some response, even if it's only that they can’t comment because of legal issues. Instead, they’ve been slow to make a public comment or, in the case of Jobs, behaved defensively when questioned.
In some cases the culprit is a top-heavy corporate structure.
“The Apple PR people have one of the worst jobs in Silicon Valley, because they don’t have power to speak for the company,” Leander Kaheny, editor of CultofMac.com, told TheWrap. “They’re worried that if they say something they’ll get fired. Jobs is the only one who can speak his mind.”
Compounding the issue is that both Google and Facebook claim that they thrive on transparency.
“Facebook has proclaimed that every individual is best served by being completely transparent, and yet the way Facebook has addressed privacy issues is through obfuscation.” Carr said. “It’s hypocritical because they slide into corporate speak.”
Some analysts warn that the companies should take a look at the history books before making their arrogance so public.
“Remember, Microsoft used to have the world by the throat, and though its still profitable, there’s no sense anymore that they run the show,” Owen Thomas, executive editor of VentureBeat, told TheWrap. “Maybe this is the beginning of the emergence of competitors.”
So far, of course, the fallout has remained one of perception, not sales figures or stock price. Facebook logged its 500 millionth subscriber in July, and Google’s Android phones surpassed Apple’s iPhones in the first half of this year — before the introduction of iPhone 4.Google’s shares fell slightly on the news of the Verizon pact, but still stands at nearly $500.
“With Apple, the shelf life will be short,” Robert Cringely a technology writer and consultant, told TheWrap. “It was surprising to see Steve Jobs act like this, because no one else out there was being an asshole, but this guy has icon status. Jobs has good will and he’s trading on it.”
Cringely says all of the negative headlines will be forgotten as soon as Apple unveils its iPhone 5, rumored for next year — as long as there are no serious technical glitches. But engineering foibles aside, there’s also the question of succession that continues to plague the company. As the recent health scares demonstrate, Jobs won’t stay at the helm of Apple forever.
“With Jobs gone, Apple may just become a bland Fortune 500. It won’t have the same nimble vision,” Kahney said.
The problems at Google and Facebook, however, are potentially more symptomatic of their respective businesses. Both companies have ad-based revenue models, meaning that they are going to be forced to walk a fine line between monetizing the personal information of users and respecting their privacy.
There's also the ever-present threat of government intervention, should the outrage grow too loud (New York Senator Charles Schumer, for one, has publicly voiced his concerns about Facebook's privacy problems).
Indeed, of all the companies, Facebook looks to face another PR hurdle sooner rather than later. David Fincher’s highly anticipated film “The Social Network” takes a critical look at the company’s Harvard origins. If the trailer is any indication, it doesn't present a glowing picture of Zuckerberg. The Facebook founder’s legal problems and allegations that he stole other students’ ideas are exhaustively chronicled.
People may not like the on-screen version of Zuckerberg once they see the film. But if the last few months are any indication, they’re none too happy with the real Facebook, Google or Apple either.