As Farhad Manjoo explains in the New York Times, there are five seemingly unassailable companies running the world of technology right now — and their respective positions are so solid that everybody else must work with and around them to find a niche. (Manjoo points out that even a big player like Netflix must use Amazon’s servers.) Stock price whimsy and consumer surges (“the new iPhone’s here!”) make it seem like Apple may be ahead one week, Google the next, Amazon on another. But the “Frightful Five” — as he calls Amazon, Apple, Microsoft, Google, and Facebook — are all winning according to Manjoo (and any accountant worth her degree). Sometimes they even win together.
Take the case of Microsoft and Facebook. Unlike Google, Microsoft isn’t making a serious attempt at building a social network. Nor is the Redmond giant fading in importance, as naysayers have for a decade predicted. Indeed, Microsoft still dominates the desktop and is a major player in cloud computing and other healthy sectors. And Microsoft also does well when Facebook does well. That’s because Microsoft bought 1.6% of Facebook for $240 million back in 2007. At the time of Microsoft’s investment, Facebook was valued at $15 billion. Now Facebook is worth over $266 billion — and Microsoft’s share is worth around $4.25 billion. That’s a $4 billion gain.