If you read history books such as most of us do, there is a bias from the writers which is normal and natural. Much of the world is formally in a hierarchical process and given the nature of the beast, it is much easier to research. In a book called The Square and The Tower by Niall Ferguson published by Penguin Press, NY, 2018, the author suggests that one should also concentrate on the informal change or networks of the people with power.

In terms of connectivity nothing is easier to see that the internet and the companies that we all use.

In 2000 Google began selling advertising associated with search keywords, on the basis of a combination of price bids and click-throughs. By 2011 this was the source of 96% of their revenues. Since 2011 this revenue source has allowed Google to expand to a multiple of other platforms – gmail (2004), Android (2007), Chrome (2008), buying companies which became Google Earth, Google Analytics, Google voice, You Tube and more.

Facebook which is about social interaction in the US 82% of the people who are 18-29; 79% between 30 to 49; 64% of the 50-64 and 48% of the age group 65 years plus.

In China, 3 companies dominate because the Chinese limit Google and Facebook. The 3 companies are BAT – Baidu (the search engine), Alibaba (similar to Amazon) and Tencent best known of We Chat. These 3 companies have revenues in excess of $20 billion. Tencent’s We Chat is used by 86% of Chinese Internet uses and is fast replacing the business card with the snap QR code. Alibaba’s revenue in China exceeded Amazon’s in the US in 2015; its share of the total retail revenue in China is twice that of Amazon in the US.

In India, the cellphone company Bharti Airtel has a customer base as large as the US population.

In Kenya it took 8 years for all households to have cellphones. It took 4 years for Safaricom’s pioneering M-Pesa payment system to reach 80% of households.

Giving the world’s poor mobile phones telephony is proving easier than providing them clean water.

In the technology world, similar to most industries corporations will pursue monopoly, duopoly or oligopoly if they are left free to do so. This is why a small number of companies dominate the information and technology sectors. Despite the claims to be the great levelers, social networks are thus inherently unfair and exclusionary. This leads to two kinds of people – those that own and run networks, and those that merely use them.

In traditional societies, the advent of market forces disrupts often hereditary networks, and as a result promotes social mobility and reduces inequality. Meritocracy prevails. But when networks and markets are aligned, as in our time, inequality explodes as the returns on the network flow overwhelmingly to the insiders who own it,

When you read about the above numbers, you have to think if the trends continue they will get more entrenched and bigger. As an investor you need to be exposed to those companies whether it is individually or in an index fund. Along the way, invariably all those companies shares will go up and down, but as this is the system in which we live in. Try to be an owner.

There are more questions than answers, till the next time – to raising questions.