ow big can the largest tech compa- nies get? How completely can they come to dominate the economy? The "big five" -- Apple, Alphabet, Microsoft, Facebook and Amazon -- now have a combined valuation of over $3.3 trillion, andmake upmore than 40 percent of the value of the Nasdaq 100 index. As the digital economy continues to grow faster than the old economy, it's hard to see what can stop these juggernauts. Unless real- ity intrudes. After all, what exactly is their business? Who are their customers?What role do they play in the economy? Each answer points to- ward some limit on the size, scale and prof- itability of these giants. These companies are big for a reason: Nearly every aspect of the digital economy touches them in some way or another.We know that Facebook and Google represent a digital advertising duopoly.We know that Amazon is gobbling upmore andmore of e- commerce. Amazon, Google andMicrosoft are leaders in providing cloud services. Apple sells high-margin smartphones and other computing devices. Put it all together, and you're talking about hundreds of billions of dollars of annual revenue and tens of billions of dollars in profits. What's forgotten as these companies seemingly gobble up the rest of the economy is they remain dependent upon customers who get value from their services. Companies advertise on Facebook and Google only if they've determined it's more profitable than not doing so. Cloud revenue requires the ex- istence of profitable businesses that need business software and services. Third-party vendors choose to sell on Amazon because it's profitable for them to do so. In other words, for the most part, the big five tech companies exist at their current size and scale only because they serve a larger under- lying economy of profitable companies. But the disruptive nature of the tech com- panies raises questions about howmuch they can grow. Because, in a sense, at some point they'll only be able to grow by putting some of their customers out of business ei- ther directly or indirectly. Consider a couple examples. Blue Apron, a meal delivery com- pany that went public this year, has been a prolific advertiser online. If Amazon came out with a competing service that put them out of business, Facebook and Google would lose out on some advertising revenue, and Microsoft and Google (and Amazon) might lose some cloud revenue. Another company, Fossil Group, has struggledmightily over the past several quarters as consumers have bought fewer watches, perhaps in part be- cause of the AppleWatch. If the AppleWatch disrupts Fossil, Facebook and Google would lose ad sales fromFossil, and Amazon would lose Fossil watch sales as well. The retail vision put out by some tech op- timists would be devastating to overall adver- tising revenue. Imagine it in the extreme: If Amazon put all physical retail stores out of business, and private-label goods replaced all branded goods, you'd kill the source of a large swath of advertising demand. In a sense, Amazon could partially disrupt Face- book and Google without ever competing di- rectly with them. These tech platforms and the companies they serve exist in an ecosystem, where there must be some sort of balance. Profitable companies can allocate only somuch of their revenue to advertising, cloud services, infor- mation technology and the like. If their prof- its go away or are disrupted by tech companies, their ad and tech spending will go away. A few highly successful predators could decimate their ecosystem and wind up hungry. Markets and the overall economy got in trouble by making a similar mistake about another sector -- finance -- a decade ago. Fi- nance, like these tech companies, exists as a layer on top of an underlying economy. Mar- kets became irrational about how profitable the financial sector could become relative to the underlying economy, and in response to these market pressures, finance came up with increasingly elaborate schemes tomake money that weren't sustainable. We may not be quite there with tech yet, but as stock valuations climb higher and higher, tech will be feeling the same pres- sures thatWall Street did a decade ago. Ex- pect a similar collapse of the ecosystem. -B LOOMBERG V IEW News India Times November 24, 2017 4 Opinion H Published weekly, Founded in 1975.The views expressed on the opinion pages are those of the writers and do not necessarily reflect those of News IndiaTimes. Copyright © 2017, News IndiaTimes News IndiaTimes (ISSN 0199-901X) is published every Friday by ParikhWorldwide Media LLC., I15West 30th Street, Suite 1206, NewYork, NY 10001. Periodicals postage paid at NewYork, N.Y., and at additional mailing offices. Postmaster: Send address change to News IndiaTimes, 115West 30th Street, Suite 1206, NewYork, N.Y. 10001 Annual Subscription: United States: $28 Chairman & Publisher Dr. Sudhir M. Parikh Editor Ela Dutt Executive Editor Sujeet Rajan Reporters Ruchi Vaishnav Ahmedabad Bureau Chief Arun Shah Photographers Peter Ferreira, Deval Parikh Chief Operating Officer Ilyas Qureshi Executive Vice President Bhailal M. Patel Business Development Manager JimGallentine Senior Manager Advertising & Marketing Shahnaz Sheikh Advertising Manager Sonia Lalwani Advertising New York Shailu Desai Advertising Chicago Muslima Shethwala Syed Sheeraz Mahmood Consultant for Business Development Ahemdabad, India Digant Sompura Circulation Manager Hervender Singh Graphic Designer Ajita Kapoor Main Office Editorial & Corporate Headquarters 115 West 30th Street, Suite 1206 New York, NY 10001-4043 Tel. (212) 675-7515 Fax. (212) 675-7624 E-mails Website Chicago Office 2652 West Devon Avenue, Suite B Chicago, IL 60659 Tel. (773) 856-3345 California Office 650 Vermont Ave, Suite #46 Anaheim, CA 92805 Mumbai Office Nikita Ajay Pai Goregaon, West Mumbai Ahmedabad Office 303 Kashiparekh Complex C.G. Road, 29 Adarsh Society Ahmedabad 380009 Tel. 26446947 F ax. 26565596 Conor Sen Columnist for Bloombeg View Portfolio manager at New River Investments. The 'BigFive' CouldDestroy TheTechEcosystem I t would be wrong and counterproductive, though understandable, for an American president to fawn over foreign autocrats, put human rights on the back burner and bolster the propaganda of our principal ad- versary if the president came home with a basket of economic deals, geopolitical com- mitments and diplomatic wins. But to come back with nothing, as President Donald Trump did from his Asia trip, is nearly in- comprehensible. The Post reports: "Trump's preening is made worse by the fact that he won few concessions from any- one.White House aides boasted of hundreds of billions of dollars' worth of trade deals inked in China, which turned out to be mostly memorandums or preexisting agree- ments that likely won't come to fruition any time soon. Meanwhile, China didn't need to budge much on any of its core economic or geopolitical areas of disagreement with Washington. Trump even praised Chinese President Xi Jinping for his nation's taking 'advantage' of the United States. "'Trump teetered somewhere between a joke and a disgrace from an American per- spective - and an unbridled godsend from Xi's,' wrote Slate's Fred Kaplan." It is understandable that Trump can make little, if any, headway. Xi has taken the meas- ure of the man, found him a pushover and no doubt concluded that no action is re- quired on his part for now on trade, intellec- tual property theft, cyberattacks or North Korea. Throw the guy a parade and send him home. Allies, meanwhile, see himwildly bounce between pledges of unity and re-ele- vation of China. They see he wants bilateral deals where the United States can overpower smaller trading powers, not multilateral deals, so they make multilateral deals with- out him. Trump may tout discrete commercial deals for U.S. businesses, but those should not be confused with wins on major areas of concern. Melanie Hart reminds us: "From a U.S. perspective, there are broad systemic problems in U.S.-China commer- cial relations, and those problems require broad solutions. Beijing is enacting nonmar- ket regulatory policies that privilege Chinese industries and firms at U.S. expense. Those policies include measures such as foreign in- vestment restrictions in a wide array of sec- tors ranging frommanufacturing to education and entertainment; unequal pro- tection under Chinese law for Chinese ver- sus foreign firms; special regulatory exemptions for Chinese state-owned enter- prises; forced technology transfer; failure to adhere to timelines required by theWorld Trade Organization (WTO) to publish new laws, regulations, and measures in advance of their implementation; and intellectual property rights violations. In some indus- tries, Beijing also continues to provideWTO- prohibited subsidies that lower production costs and give Chinese firms a price advan- tage in global markets." Trump makes little progress with China, both because it has figured how to mollify him and because he has thrown away the best leverage he has - a unified economic front with democratic allies, as was possible in the Trans-Pacific Partnership. It's only when we stand shoulder to shoulder with al- lies that we can jointly make headway on is- sues of mutual economic concern. As Daniel Drezner points out, "There is a reason every time Trump tries to flesh out his grand strategy, he fails miserably. His mixture of erratic security pledges, mercan- tilist economic policy and transactional val- ues is less appetizing to the rest of the world than he realizes." And when Trump gives China the opening to play benevolent internationalist, leader on climate change and undisturbed autocrat (nary a mention of human rights on this trip), Trump turns the United States into sec- ond fiddle in the region. - T HE W ASHINGTON P OST TrumpWent ToAsia, AndAllHeGot WasALousyRedCarpet By Jennifer Rubin CORRECTION The Oct. 27, 2017 issue of News India Times article headlined "Indian-Americans Join President Trump To Celebrate Diwali At The White House' the Republican Hindu Coalition is incorrectly referred to as Hindu American Foundation. The mistake is regretted.