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Why do so many tech companies, like Reddit and Twitter are making their platforms worse for their users all of a sudden? (lemmy.world)

submitted 1 year ago by [email protected] to c/[email protected]

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[–] [email protected] 5 points 1 year ago

Interest rates had been historically low for a long time. Loans were cheap and venture capital was flowing freely. Tech companies could focus more on growing their market share with lots and lots of runway before they needed to become profitable.

Then during the pandemic, Congress gave a massive bailout to businesses. Inflation went skyrocketing, and the Fed had to raise interest rates to limit the damage.

Now money isn't flowing nearly as freely for tech companies. Loans are more expensive, and investors are more content to leave their money in high-yield bonds instead. Tech companies are pivoting to stop chasing market share and instead start taking their profits from their current market share, even if it means their market share stops growing.