During Prohibition, Al Capone’s alcohol racket seemed unstoppable. Who would have thought we could bring the whole thing down with income tax evasion?
It might be that simple to prevent Big Tech from becoming Big Brother.
Parler is a social media platform for political conservatives. It had 15 million followers before being arbitrarily shut down by Amazon Web Services, a subsidiary of Amazon on January 10.
AWS claims that as a private company, they have the right to offer or refuse service to whom they want and the right of free speech does not apply to them.
What about the fiduciary responsibility to maximize shareholder value?
What Parler Pays Amazon
Parler was launched two years ago. It grew from a small idea to a social media behemoth with 15 million users.
Like most applications that scale up fast, their emphasis was on the front-end user experience.
However, their back end was what most back ends are for applications that are gaining a large audience quickly: piecemeal and sluggish.
That makes sense.
Why put money into something that will be a major issue a few years from now when you can focus on growing your audience, and using it to get mega financing. Once the ink on the venture capital check dries, you can then worry about your DevOps architecture.
As a result, they paid through the nose to store all the information their users were giving them, and even more to service the compute requests involved with managing 12 million people all asking the server to upload a picture, send a message, communicate this chat, register a “like” and the rest.
Who did they pay to handle all of this?
Amazon Web Services (AWS), their cloud provider.
How much did Parler pay Amazon?
Estimates range from $600,000 to a cool million dollars per month.
Did Amazon knowingly throw away a $10 million client?
I wonder what their shareholders think of that?
The Earnings Potential of Parler
Let’s do some simple detective work.
On January 10, 2021, when Amazon turned Parler off, President Donald Trump had less than 10 days remaining in his administration.
Twitter was likely waiting close out his account once he was a private citizen. The events of January 6 just gave them an excuse to do it sooner.
President Trump’s twitter account had over 88 million followers. Once twitter did the inevitable, all Mr. Trump had to do was announce he was using Parler as his primary social media platform and Parler could expect, at least, another 45 million users.
That’s three times the number of users it has currently.
Let’s do a little math.
Parler was paying Amazon $10 million to manage 15 million users, it could be paying $40 million per year to manage 60 million users.
That’s just the beginning.
For Parler to scale up that much so fast would mean their cloud infrastructure will be a nightmare. Paying $.66 per user might be a little conservative. Amazon could be making more than $40 million.
Twitter boasts 145 million daily active users. If Parler were to expand to have a third of that, it would be an up-and-coming competitor to Twitter. That means more funding. It means more services offered.
Over the long term, Parler would be paying even more money to Amazon.
The more you use a cloud platform, the more you are locked into their systems. If Parler were to scale up rapidly and do all of it on Amazon’s systems, it would be even more impossible for them to migrate to another platform.
Parler, willingly or not, would be an even longer-term customer to Amazon.
The case can be made that Amazon made a reckless decision to deny their shareholders of up to $100 million in revenue over the next three years. Amazon trades at a price to sales ratio of 4.6 so they deprived the shareholders of almost half a billion dollars.
That might not mean much to the executives, but to the teachers, firemen, and union workers who all rely on the share prices of the assets in their pension funds to be able to retire one day, this is significant.
Amazon executives actively sabotaged their company by cannibalizing an almost guaranteed income stream poised to grow exponentially.
This is grounds for a shareholder lawsuit against Amazon.
The punitive damages against a company for restraining its own financial growth over the personal political preference of a handful of members can be massive.
Massive enough to make sure any hi-tech company thinks twice the next time it tries to rape us of the freedom our fathers gave us with their blood and sacrifice.
Rudy Giuliani? Sidney Powell? Jason Greenblatt? David Friedman?
Is there a lawyer in the house?
David Ben Horin works as a marketing manager in a hi-tech company in Hadera and loves Israel passionately. He also is the web developer for http://highway60.net/, a blog about hi-tech, digital marketing, and Israel’s Highway 60.