It’s that time of the year again – tech titans’ earnings season is upon us. In the midst of disturbing geopolitical events, you might wonder why we should care. Beyond the realm of finance and tech enthusiasts, these giants – Microsoft, Apple, Meta (formerly Facebook), Alphabet (Google’s parent company), and Amazon – are set to unveil their financial reports through the customary rituals of earnings calls, analyst call and CEO / CFO response, the PDF and Powerpoint parades, 10Q earnings reports, and Excel spreadsheets.

So, why should we keep a close eye on these corporations? They’ve evolved into more than just companies; they’ve morphed into global entities with an influence rivaling, or even surpassing, that of many nations. These tech giants are no longer confined by borders; they’ve transcended them to become stewards of power, wealth, and what we get as the output of innovation. They furnish us with the tools of thought, the very means of intellectual inquiry and networked communication systems that shape, frame, and at times distort our perception of the world. 

This interconnectedness, while seemingly innocuous, harbors a profound dimension. Decisions undertaken within the muted modernist product review meeting rooms and zooms of these corporate entities possess the potency to orchestrate consequences that reverberate across the sphere of economies, societies, and governments, transcending continental borders. In an era where geopolitical events can send shockwaves across borders, what do you think will happen – will there bit a hit or a miss to their earnings? What does it mean for your organization, your company, your livelihood if you depend on these companies to reach your audience or grow your customer base? 

Perpetual Motion Recombinators 

Unlike incumbents before them, the narrative does not merely stop at the preservation of their status quo. On the contrary, the tech titans are in perpetual motion, ceaselessly combining and recombining their business models and forming alliances companies and adaptations to countries. Their earnings reports, typically perceived as financial transcripts, assume an additional dimension, revealing insights into their strategic forays into novel markets and industries. Amazon, Google, and Microsoft have all made big bets in healthcare as funding in the startup sector has retreated. All of the tech titans are long in the only remaining hype cycle: generative AI. 

These developments underscore a broader story, as these corporations have transcended their conventional roles as mere product and service providers. They are now enmeshed in the very fabric of our cognitive processes, modes of communication, and modes of economic transaction. It is Google’s search engine that configures our access to the troves of digital information. Meta’s social platforms, meanwhile, exert an indelible influence over the contours of our public discourse.

Apple’s ecosystems of devices and marketplaces redefine our perception of how distributed technology can enrich our lives. In the organizational sphere, Microsoft’s software and platform infrastructure tools quietly wield transformative power, underpinning work institutions on a global scale. Simultaneously, Amazon’s intricate mesh of marketplaces, web services, and advertising perpetually feeds its original growth engine, seeping into every facet of our existence.

Earnings with a Side of Regulatory Moves and Countermoves

Considering this, the earnings season should not be divorced from the regulatory developments worldwide, especially within the European Union (EU), which is taking significant actions against these tech giants. Brussels is flexing its regulatory muscles, initiating disinformation investigations into X (formerly Twitter), as well as Facebook’s parent company, Meta, and TikTok. These actions stem from the aftermath of the attack on Israel on October 7, 2023, and proceeding counterattacks. The EU’s Digital Services Act, effective from February 17, 2024, casts its wide net over all platforms, and since August, it has already exerted its influence on very large platforms boasting over 45 million active monthly users.

These regulations bring forth responsibilities such as the swift removal of illegal content, prompt reporting of criminal offenses, annual transparency reports, suspension of frequent illegal content sharers, identity verification on online shopping sites, and stricter regulations on targeted advertising. This includes a ban on ads targeting children aged 17 and under and prohibits targeted advertising based on sensitive data like ethnicity, religion, or sexual orientation. All these measures aim to enhance user data protection and platform accountability.

On the other side of the Atlantic, the US Federal Trade Commission (FTC), along with 17 state attorneys general, has filed a lawsuit against Amazon, alleging that the tech giant has illegally maintained its monopoly power through anticompetitive practices. These practices hinder competitors’ growth, stifle innovation, and lead to inflated prices and reduced quality for consumers and businesses. Amazon’s exclusionary conduct impacts an extensive ecosystem encompassing hundreds of billions of dollars in retail sales, a multitude of products, and over a hundred million shoppers. The FTC, under the leadership of Lena Kahn, who previously studied Amazon’s monopoly power as a legal academic, is resolutely pursuing the case.

Meanwhile, the Department of Justice has set its sights on Google, accusing the tech giant of illegally funneling billions of dollars to Apple, Samsung, LG, and others to secure its position as the default search engine on smartphones and computers. This move has effectively stifled competitors like Microsoft Bing and DuckDuckGo.

Despite these regulatory challenges, tech titans invest heavily in lobbying. Microsoft, the elder tech titan, adeptly navigated its way through an antitrust complaint, and not for the first time. In its pursuit of regulatory approval for the $69 billion acquisition of Activision Blizzard, Microsoft employed a strategy that involved forging alliances with competitors like Sony, demonstrating their support for competing platforms. Critical conversations between Microsoft CEO Satya Nadella and Sony’s CEO Kenichiro Yoshida played a pivotal role in securing access to Activision’s Call of Duty on Sony and Nintendo platforms. 

In a world rife with crises and geopolitical uncertainty, the tech giants’ earnings season provides a moment to listen to the grand plans of the companies that seek to shape our sense of reality. The tech titans have transcended their corporate status to become economic, political, and cultural forces on par with entire nations. Their earnings reports reveal not just financial health, but their visions, aspirations, and the course for how their tools and instruments shape our lives and how we narrate our world.  Embracing this broader perspective on tech giants’ earnings season is an imperative for anyone attempting to transform systems, to understand the field upon which we currently play.