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The major tech stocks have had a mixed year, with darlings such as Alphabet continuing to dominate the sector, whereas Twitter was one of the big losers of 2016. Ben Kumas of Seven Investment Management explains how Donald Trump will shape the tech industry in 2017.
As Ben says, 2017 will be all about giants consolidating their positions – Alphabet for example. But for Facebook, there could be further pitfalls ahead if the company keeps running into problems about data privacy.
Customer trust is becoming one of the most sought after elements when engaging in a social media and once this is broken it can rarely be restored. With this in mind, if Facebook continues to run into spats regularly with authorities, users could leave the site. For new tech firms, making their mark is tough considering the sector is monopolised by a handful of multi-billion dollar companies.
Uber is also under pressure to offer the best deals considering customer loyalty to a taxi firm is fickle and price is the overall decision maker when choosing which taxi app to open. For Twitter it is becoming increasingly tough to make the company marketable, profitable and user-friendly while also getting advertising revenue in. The people who are willing to engage with Twitter already use it. And in 2017, Twitter may face the ‘Trump effect’ considering he uses it as his main source of communication. Or another scenario is that Trump might even decide to buy the troubled tech stock. Tech stocks as a whole are wary of Trump’s plans to repatriate jobs back to America.