More than 20 years ago, when I was struggling to get TheStreet off the ground, I had a meeting with the folks at America On-line. They decided to pay me $2 million for content related to their financial portal. They were gracious and welcoming and I was thrilled because there was really no way that you could become big unless you were allied with an important portal and that's exactly what AOL represented. They were so powerful it was ludicrous.
Then one day the legendary, revered, loved, idolized Bob Pittman came to my office, where I was trying to run TheStreet out of my old hedge fund.
The fantastic man who had scored it with MTV, so amazing, almost miraculous was now running AOL.
The godlike Pittman came to my office and presented a superb, dazzling even deck about how TheStreet and AOL could cement their relationship. I was ecstatic. Blessed by the man who now runs the special I Heart Media. Then I got to the last page. Instead of AOL paying us $2 million we had to pay them $2 million.
I was aghast. But the genius canny and savvy Pittman said hey, I didn't need AOL. I was free to trade away to reach people. Given that AOL helped our subscription business it was impossible to leave them although I tried.
That's all over with these days. These days you squawk to the Department of Justice and the print media and they take action.
That's really the Justice Department's case against Apple (AAPL) . You go to the App store, you pay Apple and they, for the most part, aren't too keen on letting you get links to pages that help you get subs. The App store is really the only game in town although, again, you don't have to use Apple, something the incredibly brilliant Pittman figured out for AOL.
That' the Apple case.
Alphabet's (GOOGL) Google? Here's a company that truly has trouble working with its partners because it often wants to go into business against them. So they might change the algorithm to make it so it's hard to get customers. I say Google's done a great job. Why not let them compete? It keeps prices down. Like Apple, you don't have to use Google. Although it's built out the premier search engine that's no immunity for justice.
Amazon (AMZN) and Facebook (FB) have steered people and abused them by giving up names to the highest bidder. So what if Amazon has been a beacon for lower prices, particularly for Amazon Web Services, how about all the retailers it put out of business. I get that one but it is in the interest of the consumer.
No one said you have to use Facebook but I admit the Facebook's dirty, so to speak, because of the exploitation of those who agreed to be exploited by using Facebook and Instagram are perfectly happy if you want to go to a competitor, it just hasn't happened yet.
Those are the cases. It's just like the Original Mr. Wonderful, Bob Pittman, take it or leave it and the government's going a third way.
Apple's in for special scorn: despite the fact that about two million people are employed making apps, two million people who continue to use the app, and because of its decision to kowtow to Chinese demands, they are entitled to special wrath: a tax on their exports here plus a tacit recognition that Apple will be castigated there.
Now you know what's going on, is it worth it to own them? I think you have to think through a Department of Justice which once endorsed these companies as leaders of our industry. But now their left wing nature and anti-Trump views have made them marked companies. They are no longer allowed to be Pittmans. I could have used this government when I started TheStreet. Instead I accepted the piper I had to pay because of their homegrown dominance. Now Trump's going to end that.
It pays to be Republican when you have a flamboyant Republican president who knows these are all the enemy of his state.
Now the stocks have to suffer. So what. Small price to pay. They should have backed fossil fuels when they had the chance. Now the gates of support have been closed and they are just plain out of luck until the agencies lose or modify things to drive numbers down.