The only vulnerability of the mighty "Techtopus" collusion plot

By Sarah Lacy , written on January 24, 2014

From The News Desk

Mark Ames' post on some of the most revered figures in Silicon Valley nakedly breaking antitrust laws -- and emailing one another admitting as much along the way -- has not only been one of our highest read stories of the week, it's likely going to be one of our highest read stories of all time.

Part of this is because the story sadly shatters the aspirational way many people in this industry like to think about our collective heroes like Steve Jobs, Eric Schmidt, and Bill Campbell. For others already fuming at the shift of power and giant gobs of cash coming out of the tech world, it may read like vindication that they were right and libertarian tech is evil after all.

There is truth in both. To me, it says more about how giant seemingly all-powerful corporations work in this country, more than it says anything about the tech world itself. For all its feel good "change the world" and "do no evil" ethos, tech kingpins can fall victim to the same tactics that the robber barons of old did. And there's probably much more we don't know.

But missing from the debate is one thing that does make the tech world and Silicon Valley different from this kind of collusion and corruption in industries like finance or health insurance: Comparatively, the giants don't stay the giants for very long. That means there's only so much control they can exert. This isn't happenstance -- it's the way the industry is set up. Silicon Valley is a machine that creates new multi-billion dollar companies every decade to disrupt the old. That means power is continually shifting.

Case in point: As the CEOs of Apple, Google, Intuit, Intel, Adobe and others were actively working to make sure that developer wages didn't spiral out of control, developer wages started to increase. Why? As TechCrunch covered in detail at the time, it started with an all-out aggressive bidding war for talent between Facebook and Google. The problem for the Techtopus? They didn't include surging giants like Facebook, LinkedIn, Twitter, and others in their pact. Today, those are some of the largest consumer Internet companies in the world, and no doubt better at recruiting top talent than Adobe or Intuit.

Frequently we bemoan the fact that tech companies today don't seem to have much staying power. We laugh at the idea that Evernote or Wealthfront or Zynga could be around for 100 years, when giants like Yahoo and RIM have so mightily stumbled. Unlike media or finance where the same companies dominate for centuries, tech's young regularly eats the old, frequently within a few decades. The Valley's economy depends on that and celebrates it.

There are certainly exceptions to this: Apple, Google, Oracle, and Amazon are arguably as powerful as they've ever been. But look at the market caps of Workday, Veeva, LinkedIn, Pandora, Twitter, and Facebook, among others. The old guard are hardly an oligopoly that can control the market -- much as they might try.

Follow all of our Techtopus coverage here.

[image via En Syungmam]