I was watching Cassidy Williams' Twitch stream recently, where she was talking about FAANG companies:
These clips inspired me to make this meme, which as of writing this post, is still getting lots of engagement across the Twittersphere:
a l i 🪐FAANG is dead.
It's a FANMAG world now.21:15 PM - 03 Jun 2021
As I started to see engagement roll in, as well as sharing it across some meme channels, discussions began to breakout about FAANG, the origins of FAANG, and some people not even knowing what FAANG is.
I also became curious: Why is Microsoft not included in this ubiquitous slang?
Before giving a full definition of FAANG, a detour.
Here's the google results when I search "FAANG":
Wait a minute.... let's enhance this....
uhh... are you seeing what I see?
FAANG is an acronym standing for Facebook, Amazon, Apple, Netflix, and Google (Amazon and Apple are interchangeable in order).
So that picture above, says Microsoft and not Netflix....
According to Investopedia, the concept of FAANG can be attributed to Jim Cramer of CNBC's Mad Money show:
The term was coined by Jim Cramer, the television host of CNBC's Mad Money, in 2013, who praised these companies for being “totally dominant in their markets”.
If you want to read more about Cramer's prediction of FANG stocks in 2013, I found an article expanding more about his / his team's thought process.
The term has been coopted by the tech community to describe its illustrious companies - the largest, most renowned companies that represent the industry across the globe in every trade.
Big Tech... is BIG. If you ask someone in the Bay Area what are the big tech companies they'll probably say "Google, Amazon, Apple, Microsoft, and Facebook".... Yet, the term FAANG is still used to quickly refer to the biggest tech companies in the world.
Asking the original question: Why wasn't Microsoft originally included in the acronym?
Mad Money is a talk show on CNBC dedicated to help to give stock advice to the average person - someone who doesn't have the wealth to invest in hedge funds, access to financial advisors, etc. As a show, Mad Money aims to democratize stock investing. In such context, Cramer brought up the concept of FANG as a series of stocks to explore if you're interested in investing in the technology sector.
At the time of the recommendation, Microsoft was still under the leadership of the infamous Steve Ballmer - the successor to Bill Gates, and early employee of the Microsoft. Microsoft did a great job growing with Ballmer as chief dog at Microsoft, but they definitely missed trends with outstanding strike outs.
Things weren't looking good at Microsoft, from a trend perspective, and stock experts at Mad Money probably were not keen on its continued success and excluded it.
Chart showing Microsoft, Google, Facebook, Netflix, Apple, and Amazon stock prices over time between April 2012 and June 2014
If we look back to Investopedia we learn something important
Originally, the term FANG was used, with Apple—the second “A” in the acronym—added in 2017.
Apple wasn't even added until 2017.
Facebook, Amazon, Netflix, Google became the FAANG we know today.
Over time, FAANG grew to no longer describe the noted companies in stock, but the noted companies in reputation and success. It has become so colloquial - so much so that I've noticed that many in people who work tech don't know the origin of FAANG - only that it represents major tech companies.
The term has been coopted by the tech community to describe the illustrious companies in the tech industry - the largest, most omnipotent companies that represent the tech industry across the globe in every industry.
So why can't we make a term that better portrays a more accurate collective opinion of the tech industry?
At this point, using FAANG to describe just the official names of the abbreviated companies isn't even right - in 2015 the larger Google company renamed itself to Alphabet.
FAANG is a stock term - it's not reflective of the reputation, size, etc. of the modern tech industry. That's why we should use a term like FANMAG .
Also, in case you were curious about the FAANG stock concept now, Cramer has come out in support of changing the abbreviation - remove Netflix, add Microsoft.
I'll say it - reputation wise, Netflix flys quite under the radar in the tech industry compared to the other companies of the FANMAG abbreviation. So, why should it be included?
What Netflix lacks in company clout, it makes up for in global usage. In 2018, Sandvine estimated that Netflix accounts for 15% of global internet bandwidth and the top application of global internet traffic. Its prevalence in the modern consumer society is undeniable, and a valid argument for defending its continued existence in the FANMAG abbreviation.
(header adapted from AlphaSense)
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