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Top 10 Tech stories 2014: Backlash! Disrupting the disruptors

Marc Ferranti | Dec. 8, 2014
Blowing up entrenched business models and picking up the profits that spill onto the floor is a time-honored tradition in tech, these days known by the cliche of the moment, "disruption."

Uber's bumpy ride shakes up the "sharing" economy

Legal challenges and executives behaving badly marked the ascendancy of Uber this year as much as its explosive growth and sky-high valuation. The startup's hard-driving, take-no-prisoners culture has made it an unlikely poster child for the innocuous — and perhaps misleadingly labeled — "sharing" economy. Announcing the company's latest billion-dollar cash injection in December, CEO Travis Kalanick bragged that Uber had launched operations in 190 cities and 29 countries this year. The service is now valued at $40 billion. But the company's army of private drivers face legal challenges, inquiries and preliminary injunctions against operating, from Germany and the UK to various US states. Executives have made matters worse by threatening to dig up dirt on critical journalists and bragging about a tool called "god view" that lets employees access rider logs without permission. Rival app-based ride services like Lyft and Sidecar, whose operations are also the target of inquiries, are distancing themselves from Uber. Added to all this, there are complaints about the legality of other sorts of so-called sharing services, like apartment-rental site Airbnb, which has spawned not just opportunities for regular folks with an extra room and a hospitable nature, but created a class of real-estate investors who are de facto hoteliers. All this suggests that Web-based companies seeking a "share" of profits using middleman tech platforms to disrupt highly regulated businesses like taxis and lodging have some real battles against entrenched interests still to fight.

Facebook gambles $16 billion on WhatsApp

Established companies are snapping up upstarts at a pace not seen since the dot-com boom days, but in February Facebook's plan to buy WhatsApp for $16 billion had jaws dropping at the price tag. WhatsApp has hit about a half billion users with its mobile messaging alternative to old-school carriers. Facebook already had a chat feature, as well as a stand-alone mobile app called Messenger. But people don't use them for quick back and forth conversations, as CEO Mark Zuckerberg has acknowledged. At the Mobile World Congress in Barcelona, he confessed that he could not prove in charts and figures that WhatsApp is worth the money he spent, but said that not many companies in the world have a chance at cracking the billion-user mark, and that in itself is incredibly valuable.

Mt Gox implodes, deflating Bitcoin hype

Last year, Bitcoin seemed poised to disrupt conventional currencies. But this year the high-flying cryptocurrency hit some turbulence. The largest Bitcoin exchange in the world, Tokyo-based Mt Gox, fell to earth amid tears and lawsuits after an apparent hack cost the company about 750,000 bitcoins worth about $474 million. The company said a flaw in the Bitcoin software allowed an unknown party to steal the digital currency. A few weeks later Flexcoin, a smaller site, closed after it got hacked. The closures sent tremors of fear through the fledgling Bitcoin market. The leaders of Coinbase, Kraken, Bitstamp, BTC China, Blockchain and Circle all signed a statement lambasting Mt Gox for its "failings." But the incidents took the luster off Bitcoin. Still, New York's proposed Bitcoin regulations may establish a legal framework, and confidence, to help exchanges grow in one of the world's biggest financial centers. Bitcoin concepts may also spur spinoff technology. A company called Blockstream is pursuing ideas to use Bitcoin's so-called blockchain, a distributed, public ledger, as the basis for a platform for all sorts of transactional applications.

 

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