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A Simple Plan to Dissolve Facebook, Google, and Amazon
- nabla9 8y agoInstead of breaking companies when they become too large, there should be automatic mechanism that works as disincentive for firms to grow into gigants. For example acquisition tax that starts to grow exponentially as the function of company revenue. After some point big companies would have to really innovate instead of buying innovation from outside. At these sizes network externalities and market power of these companies dominate their growth and profits, not the internal innovation. Their internal 'moonshots' are not so good and companies are in constant startup acquisition spree. Microsoft had the same issue when it had monopoly power. Microsoft Research provided very little of value compared to various acquisitions.
- srean 8y agoA problem with publicly traded companies is that now they are an investment. Owners want them to grow faster than the competition or else they switch -- so there is an inherent, let me call it 'artificial', pressure to grow. Lets take the example of Twitter once they have everyone on the world on Twitter and lets say they are turning in a stable profit. For stock owners thats no good. So Twitter would have to figure out to expand and grow some other way and in my mind, at that point it is no longer Twitter, its something else and I would rather that be a different company. You can see this effect in Microsoft. Under 'normal' circumstances Microsoft's parts would be all different companies because they are so different from each other. They have no reason being a single company other than the pressure to grow.
- nabla9 8y agoSometimes companies voluntarily split when there is not enough synergy. Stock owners get shares in both companies.