Big Tech: The battles to come

For Silicon Valley giants to continue to grow, they need new markets. Their second acts may lead to head-on competition with each other.

A Google sign at the China Digital Entertainment Expo and Conference in Shanghai. Google still looks to search advertising for about 70 per cent of its revenues, but analysts say its significance is waning as the industry evolves. E-commerce giant Am
An Apple store in New York City. The technology company and iPhone maker became the first American public company to cross US$1 trillion in value last week. Apple stock is up more than 20 per cent this year.PHOTO: AGENCE FRANCE-PRESSE

There could hardly be a starker contrast in stock market fortunes. Apple's shares have perked up last week after a strong earnings report, making it the first company to be worth US$1 trillion (S$1.4 trillion). One week earlier, Facebook's stock plummeted on a downbeat forecast, wiping nearly US$120 billion from its worth in Wall Street's eyes - the biggest one-day destruction of value ever for a US company.

The dramatic headlines were partly a reminder of the outsized impact the tech giants have on the wider investment world. Facebook's reversal reflected the kind of change in perception that often happens when high-growth companies enter a more uncertain period - it is only the company's sheer size, its stock market value is still above US$500 billion, that made the effect so startling. The bigger they come, the harder they fall.

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A version of this article appeared in the print edition of The Sunday Times on August 05, 2018, with the headline 'Big Tech: The battles to come'. Subscribe