Speaker 1: I'm Caroline Hired of Bloomberg's World headquarters in New York,
Speaker 1: med Ludlow in San Francisco. This is Bloomberg Technology and
Speaker 1: Activists to artificial Intelligence, two stocks just falling off a cliff. Caroline,
Speaker 1: What a week in the world of technology. The earnings
Speaker 1: are becoming thick and fast, we still start to digest them,
Speaker 1: and of course we look ahead to a pretty important
Speaker 1: big game come Sunday. Let's talk about all of it
Speaker 1: because coming up at a record plunge for Lift, the
Speaker 1: ride sharing giant sees shares plummet as it loses market
Speaker 1: share to competitor Uber or how that lates for you,
Speaker 1: and using automated intelligence to combat automated intelligence will speak
Speaker 1: to the CEO or of Seeker on how his company's
Speaker 1: technology is fighting the growing problem of misinformation in general.
Speaker 1: Tid Ai plus a countdown to the Super Bowl, from
Speaker 1: tickets to better things to advertising, will run through what
Speaker 1: to expect and even what to order when you're watching
Speaker 1: the big game this Sunday, is it Califlat All that
Speaker 1: and so much more coming up, Let's have a quick
Speaker 1: check or what's happening in the market. We are on
Speaker 1: a down day again, it is all about the MACO.
Speaker 1: It's more about the Federal Reserve. It's all about Therefore,
Speaker 1: tech stocks falling as boring costs rise, we yields up
Speaker 1: seven basis points in the tenure nazdac Off. Once again,
Speaker 1: we're seeing the Vixen next just stabilizing around twenty, but
Speaker 1: volatility is elevated as we think that these swirling movements
Speaker 1: in stocks are likely to prevail. Let's kick in on
Speaker 1: and show you what it meant for the week, and
Speaker 1: as that one was under pressure. In fact, is the
Speaker 1: worst week for this particular benchmark since December. So this year, yeah,
Speaker 1: I think. I mean seeing a similar story in individual names.
Speaker 1: It's about what happened Friday and then what happened in
Speaker 1: the week. You look at like a name like Tesla
Speaker 1: down five percent Friday, but actually finishing higher on the
Speaker 1: week by almost four percent. Alphabet continuing slide, more bodies
Speaker 1: decline of half a percentage point, but actually it's worst
Speaker 1: weeks since November, believe it or not. Caroline down for
Speaker 1: a third consecutive straight straight day. First that's happened since
Speaker 1: early December. So the market's really seizing onto those mishaps
Speaker 1: around its barred AI offering Spotify interesting up three point
Speaker 1: six percent. Dig into this in the show later on
Speaker 1: about Value Act taking a stake, supporting the strategy around
Speaker 1: cost cuts, and then of course Lift. I've got a
Speaker 1: different chart for you on Lift that that tells the
Speaker 1: story A picture paints a thousand words. Mr. Director, Give
Speaker 1: me my terminal chart, because this is the biggest drop
Speaker 1: on record for Lift. You can see the size and
Speaker 1: scope of the reaction from investors. I want to get
Speaker 1: more straightaway on Lift with Bloomberg's Jackie Daviloss, who covers
Speaker 1: all things gig economy and ride sharing in Washington. Jackie,
Speaker 1: what was the reaction to this plunge? Wall Street is
Speaker 1: very unhappy and you saw it in just the massive
Speaker 1: wave of downgrades a near day after the results yesterday,
Speaker 1: you had about eight major banks looking at the stock
Speaker 1: and saying, we don't know if it's worth as much
Speaker 1: as it was. Among those, you have JP Morgan basically saying,
Speaker 1: you know, we don't know if the right share rebound
Speaker 1: is really lifting all boats and Lift is missing out.
Speaker 1: You had Morgan Stanley looking at the slim profit margins
Speaker 1: that come from cutting those prices, and among them. One
Speaker 1: of the most pessimistic takes was from Bank of America,
Speaker 1: which lowered its price target to about ten dollars. That's
Speaker 1: massive considering the company I poed around the seventies um
Speaker 1: and they said, you know, we don't know if the
Speaker 1: growth outlook is here anymore, considering you're having to lower
Speaker 1: prices to get those consumers back. But there is one
Speaker 1: bright spot, which is uh, if there's anything to bring
Speaker 1: back some investor faith, it's what is it going to
Speaker 1: take to get some of those costs down even further
Speaker 1: and put more earnings back into investors pockets. So the
Speaker 1: company mentioned they were willing to look at additional cost cuts.
Speaker 1: Investors are waiting to see what those are going to
Speaker 1: be interesting. I'm gonna play Devil's Avoca and let's look
Speaker 1: at the silver linings a bit more. His a company
Speaker 1: that's saying we had the highest school to revenue in
Speaker 1: the history. There's a company is trying to say they
Speaker 1: had twenty point four million riders overall active riders. That's
Speaker 1: a new record. People are coming back and doing rides,
Speaker 1: sharing more often. Oh what about some of the narrative
Speaker 1: around the fact that we're getting more driver supply. Ultimately,
Speaker 1: are they able in any way to fight back to
Speaker 1: such a remarkable market move. You think that that's a
Speaker 1: good thing that drivers are coming back to the plaqueform.
Speaker 1: The problem last year was that there weren't enough and
Speaker 1: that meant higher prices. But it's an interesting dynamic because
Speaker 1: those higher prices helped Lift revenue and profit for both companies.
Speaker 1: But the disadvantage that Lift has here is that it's
Speaker 1: solely relying on a ride shur business. It doesn't have
Speaker 1: delivery the way Uber does. And so when you think
Speaker 1: about some of the supply and writer demand dynamics coming
Speaker 1: into play again and seeing less of those higher fares
Speaker 1: get into the revenue line, they have to find another
Speaker 1: way to grow. Jackie, I always appreciate Caroline silver Lying.
Speaker 1: I appreciate her every day playing devil's advocate. Let me
Speaker 1: bring us crashing back to reality and bring up this chart,
Speaker 1: and let's talk about market share, because you and I
Speaker 1: look really closely at the reality of this market share situation,
Speaker 1: and is it fair that Lift is becoming an even
Speaker 1: more distant second place to Uber. It's looking that way,
Speaker 1: and you know, when we think about where the two
Speaker 1: companies were at the beginning of the pandemic. Uber really
Speaker 1: hadn't grown out its food delivery business the way it
Speaker 1: hasn't just the last year. So I think the future
Speaker 1: for Lift is looking a little bit bleak. It's looking
Speaker 1: at its membership product to kind of tap some more
Speaker 1: customers get that retention up um, but so far that
Speaker 1: market share just keeps ticking down. And so we'll have
Speaker 1: to see what other tricks it has in his pockets,
Speaker 1: because investors are are waiting to see some more of
Speaker 1: those active writer's return. Bloombo's Jackie Davila was very busy
Speaker 1: week for you, very big contrast between Uber and Lift
Speaker 1: in their earnings prints and let's turn from right sharing
Speaker 1: two e vs. Tesla has hired a new legal chief
Speaker 1: after years of turn over. In a post on LinkedIn,
Speaker 1: Brandon Erhardt revealed he's assumed the role of Tesla's general
Speaker 1: counsel and corporate secretary after departing from Dish. The move
Speaker 1: comes after Musk tweeted last year that the company was
Speaker 1: quote building a hard core litigation department where we directly
Speaker 1: initiate and execute lawsuits and Caroline, speaking of Tesla in
Speaker 1: our weekly Twitter spaces earlier, we had our special guest
Speaker 1: speaker who had some choice words for Elon Musks. Take listen.
Speaker 1: I think it's crucially important to be able to take criticism,
Speaker 1: and this is something that over the years I realized
Speaker 1: with Elon. You know he's very thin skin and so
Speaker 1: thin skinned is Elon Musk that Ross gerber told you
Speaker 1: and I that he is going to make an activist
Speaker 1: play for Tesla's board. I think activism is the thing
Speaker 1: to be watching, isn't it. We're about to talk about
Speaker 1: it when it comes to Spotify as well. But what's
Speaker 1: so interesting with Ross GERBERO is he, in many ways
Speaker 1: have been saying that I've been out there talking about
Speaker 1: Tesla because the company itself won't talk about itself because
Speaker 1: they don't have a marketing play. They don't really go
Speaker 1: out there to the main mainstream media as they call it.
Speaker 1: He wants to change that. He wants to have changed
Speaker 1: from within. He wants to try and get a board seat.
Speaker 1: Fascinating what the reaction will be because ultimately he's a
Speaker 1: Tesla ball. It's not as though he's wanting completely rip
Speaker 1: up the script here. Yeah, I had to crunch the data.
Speaker 1: He has four dred and forty thousand shares or so
Speaker 1: at Gerber Kawasaki. That's zero point zero one percent of
Speaker 1: the float, right, so tiny player. But he told us
Speaker 1: he has the support and pledge of the single biggest
Speaker 1: individual shareholder, and he dropped some names on the institutional
Speaker 1: side as well, So if he gets momentum, let's see.
Speaker 1: But there was a lot of criticism and skepticism on
Speaker 1: Twitter at least when that news came out. So great
Speaker 1: to have these guests joining us on Twitter spaces. Come
Speaker 1: join us next Friday. Meanwhile, oh, let's turn to a
Speaker 1: story that we've been following all week, and wil Kracken
Speaker 1: has settled that SEC and will pay thirty million dollars
Speaker 1: amid allegations that broke the agency's rules with its crypto
Speaker 1: assets taking products. Now earlier, Bloomberg caught up with the
Speaker 1: SEC itself the chat again. Just take a listen. The
Speaker 1: significance is there's a business model in crypto whereby these
Speaker 1: um i'll call them storefronts. There their intermediaries. They asked
Speaker 1: the public and they solicit the public for their funds
Speaker 1: their crypto, and they said we'll give you a return,
Speaker 1: and they might call it lending in this case, it
Speaker 1: was called staking as a service and we'll give you
Speaker 1: four eight percent or even twenty one percent returns. And
Speaker 1: there in lies the issue. They were doing this without
Speaker 1: the proper disclosure, and the investing public gets to decide
Speaker 1: what risks they want to take. And these key questions
Speaker 1: was Cracked in or others that do this? Were they
Speaker 1: taking those tokens and doing what they're saying on their website?
Speaker 1: Are they lending them trading against um running other business models? Uh?
Speaker 1: And so the disclosure is critical for the investing public.
Speaker 1: So what my understanding is now, Cracking can no longer
Speaker 1: do this domestically in the United States for US citizens
Speaker 1: unless I guess they register as a security. Does that
Speaker 1: break the business model? Do you understand it? Does that
Speaker 1: mean they can't be in that business? Or can they
Speaker 1: just come back and say, oh, can ell a register
Speaker 1: will make the disclosures you want, it's it's I'll make
Speaker 1: it more generic. These storefronts, these crypto exchanges, crypto lending platforms,
Speaker 1: crypto staking as the service, they need to come into
Speaker 1: compliance and they are generally non compliant right now. The
Speaker 1: investing public is not only at risk by the speculative
Speaker 1: nature of crypto, but their at risk of ending up
Speaker 1: in line at a bankruptcy court because a lot of
Speaker 1: these platforms are doing things they're not disclosing. So to
Speaker 1: answer your question, yes, firms can come into compliance time
Speaker 1: tested roles, register they're off for rings and propperily disclosed
Speaker 1: the risk and what they're doing with your fines behind
Speaker 1: the scenes, and that would be a compliant field. In
Speaker 1: this case, crack and chose they didn't want to after
Speaker 1: this in the US and we settled sec J Gargans
Speaker 1: earlier with our own David Weston. Meanwhile, well, let's talk
Speaker 1: about President Joe Biden. He's ordering the Pentagon to shoot
Speaker 1: down we understood an object spotted at forty thou feet
Speaker 1: over Alaska. Less than a week of course, after fighter
Speaker 1: jets targeted an alleged Chinese surveillance balloon that across the
Speaker 1: US and provoked a national uproar, the US has also
Speaker 1: sanctioned six firms linked to Chinese aerospace programs, including airships
Speaker 1: and balloons. Like, any technology definitely has its limitation, So
Speaker 1: we actually like anything that you implement, you know, its limitations.
Speaker 1: Navan CEO Aerial Cohen. Yesterday, they're saying look, they know
Speaker 1: that the AI that that company is implemented in their business,
Speaker 1: it isn't perfect, and that they still need to rely
Speaker 1: on real people from time to time. And let's talk
Speaker 1: a little bit more about imperfection. Let's talk about the
Speaker 1: rush into artificial intelligence and indeed the risks there if
Speaker 1: whether it's ethical, whether it's ultimately security wise too pleased
Speaker 1: to welcome to the show. Patcondo, founder CEO of search
Speaker 1: engine and information evaluation provider Seeker, and first and foremost,
Speaker 1: your company basically uses artificial intelligence itself to analyze articles
Speaker 1: out there and provide well an analysis of how misleading,
Speaker 1: how factually correct they are. Just talk to us about
Speaker 1: chat gybt or other generative AI models and chatbots. How
Speaker 1: much could they feed dissemination disinformation? So they're going to
Speaker 1: create an explosion of content, which is the which is
Speaker 1: the objective here is by having it widely distributed and
Speaker 1: present in every application that we use. The whole idea
Speaker 1: is to create as much content as possible, and then
Speaker 1: of course they've got the compute resources behind that in
Speaker 1: their cloud to service that content. So it becomes almost
Speaker 1: a perfect engine. The more content, the more, the more usage,
Speaker 1: the more income is generated. So it's no surprise that
Speaker 1: they've introduced it at this time as their earnings begin
Speaker 1: to you know, flag a bit. This is yet a
Speaker 1: new way to to drive the earnings process. To take
Speaker 1: the other side, like, companies are also deeply excited by
Speaker 1: the productivity these sorts of innovations can bring. How artificial
Speaker 1: intelligence generative AI can really help fuel for the growth
Speaker 1: not just for their own companies, but for us, all
Speaker 1: for for economies, for people, for companies, for productivity. But
Speaker 1: talk to us therefore about what they could put in
Speaker 1: place to make sure that these movements are safe. We
Speaker 1: know open AI uses machines and humans to monitor content.
Speaker 1: What could they do pack well, you know, without transparency,
Speaker 1: there's no trust. And what we've seen today is there's
Speaker 1: a lack of transparency on the web and that's been
Speaker 1: growing over the last you know, four or five years.
Speaker 1: And so now we have something like a generative AI
Speaker 1: which is going to produce you know, even orders of
Speaker 1: magnitude content. So what needs to be put in place
Speaker 1: is what's been put in place over time, which our
Speaker 1: rating systems and a rating system can help gave a
Speaker 1: quality incredibility of the content that's being created, and with
Speaker 1: that you get the trust, and with the trust, you'll
Speaker 1: get use and you'll be able to yet again generate
Speaker 1: kind of another evolution in the use of this kind
Speaker 1: of capability. Right this week, UH seemed to sum up
Speaker 1: this conversation. Right, you had the risk with Alphabet on
Speaker 1: the on the one hand, and the sort of euphoria
Speaker 1: with Microsoft on the other. And what it took was
Speaker 1: a demo video from Google which demonstrated its barred AI
Speaker 1: giving an inaccurate reading, and the stocks had its worst
Speaker 1: week since November. This moment in time now, in your opinion,
Speaker 1: which was the bigger moment for artficial intelligence? What came
Speaker 1: out of Microsoft or what we see on the screen
Speaker 1: right now, which is the market reaction to Google's inaccuracy?
Speaker 1: It's problem. Well, I think everybody that that is a
Speaker 1: you know, users digital products online know that trust is
Speaker 1: an issue. And I think both companies have proven that
Speaker 1: by pushing something to market without having trust behind it
Speaker 1: or transparency is going to create more confusion and more
Speaker 1: concerned than it is benefit. Now, over time that can
Speaker 1: be ameliorated, but now they've got to actually defend something
Speaker 1: that had they set it out with the transparency and
Speaker 1: a measurement scheme on quality. They may not have been
Speaker 1: in this particular situation. Does open aies technology make Microsoft's
Speaker 1: thing more competitive in the search market, I would say
Speaker 1: it will at least maintain their position um Google. On
Speaker 1: the other hand, Google both have taken a different approach.
Speaker 1: Microsoft has approached it by introducing a conversational platform, but
Speaker 1: Google is actually approaching it by producing next generation of
Speaker 1: a search platform. And the difference here is the size
Speaker 1: of the data that's used, the source of the data,
Speaker 1: and the depth. And until we know both, it's very
Speaker 1: hard to tell. Let's talk about where else some sort
Speaker 1: of rails of the road could come in, and many
Speaker 1: would argue that's government's role. Department Commerce is released version
Speaker 1: one point of AI Risk Management Framework. We also know
Speaker 1: that the White House is released end of last year.
Speaker 1: I believe it was a framework for an AI Bill
Speaker 1: of rights, which some companies are pushing back on. Is
Speaker 1: there enough coming from an administration perspective here to have
Speaker 1: oversight to ensure that AI is built appropriately. I think
Speaker 1: in most democracies people are not interested in over regulation
Speaker 1: by the government. I think the source is going to
Speaker 1: be private companies, and I think giving those private companies
Speaker 1: visibility to their solutions is really what has to happen.
Speaker 1: I don't think it should come from government. Seek a
Speaker 1: founder and CEO Pat Condo. Thank you. Let's talk about
Speaker 1: artificial intelligence, some of the euphoria around it and people
Speaker 1: who want to get in on the action. Sound Ventures.
Speaker 1: It's the LA based firm from actor Ashton Kushcher. He's
Speaker 1: discussing raising a fund dedicated to AI investments. It's all
Speaker 1: according to a source. It may target around two on
Speaker 1: a million dollars for the vehicle, though the terms haven't
Speaker 1: yet been finalized and can still change. Other firms raising
Speaker 1: or planning to raise capital dedicated to artificial and intelligence
Speaker 1: include Radical Ventures, Air Street Capital, and Conviction Partners. So
Speaker 1: the ED coming up. For some, it's a dream come
Speaker 1: true being able to immerse yourself Caroline in the world
Speaker 1: of Harry Potter with a new game out today, but
Speaker 1: there's some controversy around it too. Will unpack it all next.
Speaker 1: This is Bloomberg. Harry Potter fans, a who lot of them,
Speaker 1: and many of long wish to inhabit, or at least
Speaker 1: visit Hogwarts Castle. Now it's possible with a new video
Speaker 1: game Hogwarts Legacy, which offers the most convincing recreation yet,
Speaker 1: but the culture wars surrounding the game arraging two. Let's
Speaker 1: bring in Jason Schreyer for more on this and just
Speaker 1: talk to us first and foremost about the cultural side
Speaker 1: of it. J k Rowling has by many even widely
Speaker 1: perceived to make transphobic comments dating back to eighteen. It's
Speaker 1: left many quandering whether they buy the game or not. Right, Yeah,
Speaker 1: this game has been controversial from the start. It was
Speaker 1: actually announced just a few months after J. K Rowland
Speaker 1: became open about her views on transgender people, and as
Speaker 1: a result, people started from the get go talking about
Speaker 1: Boycott's talking about not playing the game. How if you
Speaker 1: play the game or buy the game, you're supporting somebody
Speaker 1: whose views are seen by a lot of people to
Speaker 1: be transphobic. Um, somebody who has spoken out against legislation
Speaker 1: in Scotland that would make it easier for people to
Speaker 1: change their genders on their birth certificates, and a whole
Speaker 1: bunch of other stuff. So yes, i'mlike unlike the books
Speaker 1: of old the Harry Potter books, which I think came
Speaker 1: out and we're just blockbuster launches and and fans are
Speaker 1: lining up at midnight. This comes with a little bit
Speaker 1: more controversy. Well, look, this video game is seizing a
Speaker 1: big moment. You know, everyone's talking about it. You point
Speaker 1: out in the Business of video Games shout out game
Speaker 1: on newsletter from you, which I love reading that. Whatever
Speaker 1: you think about it, it's well reviewed. It's got people
Speaker 1: looking at the game itself. Yeah. What's interesting is in
Speaker 1: the past, um, the Harry Potter games were usually these
Speaker 1: movie tie in games that were rushed out, kind of
Speaker 1: um slap dash games that were put together to just
Speaker 1: make the release of the film, and they follow the
Speaker 1: same story as each of the films. This is completely original.
Speaker 1: It's set a hundred years before the books even took place.
Speaker 1: It's this high end game unlike any other Harry Potter
Speaker 1: game we've seen, and that is one of the reasons
Speaker 1: it's getting such high reviews. It's it's a game unlike
Speaker 1: it's a game we haven't seen before. We haven't seen
Speaker 1: a recreation of Hogwarts Castle. This detailed before and very
Speaker 1: inclusive details within some of that game as well, which
Speaker 1: in your Great Reporter you sort of say, almost as
Speaker 1: if they're really trying to combat to a significant amount
Speaker 1: any cultural that could envelop them. To your point, Jason,
Speaker 1: like when they are interweaving this sort of inclusion and
Speaker 1: they are making hospitable for many a young person to
Speaker 1: come and play. When it's a game that's good, is
Speaker 1: it really good? Is it going to attract people no
Speaker 1: matter what? Because it feels like the sales have been
Speaker 1: pretty grate. Yeah. I mean sales are great first and
Speaker 1: foremost because of Harry Potter. There are some games that
Speaker 1: are critically claimed but don't sell the kind of the
Speaker 1: critical mass that this is reaching. Um that said, yes
Speaker 1: to your point about inclusion, it's really interesting, especially in
Speaker 1: the way gave j. K. Rowling's views. And I won't
Speaker 1: get into everything because it would take us so many
Speaker 1: hours to unpack all of that criticism that's been held
Speaker 1: about the Harry Potter series in general and minorities and
Speaker 1: race and anti Semiti tropes and all that other stuff.
Speaker 1: But this game feels like it's trying to be extremely welcoming.
Speaker 1: The character creator. For example, when you start a new
Speaker 1: character in the game, when you that's the who you
Speaker 1: play as in the game, um, you can create one
Speaker 1: that has a voice and a body tape that is
Speaker 1: completely independent from their dormitory choice of male and female.
Speaker 1: So you can create a pretty trans friendly character, which
Speaker 1: is really a unique thing and something that is very
Speaker 1: refreshing and I think would be welcome by a lot
Speaker 1: of people if not for all the baggage that the
Speaker 1: series author has has come with Bloomberg's Jason Stria, thank
Speaker 1: you so much. If you don't do subcribe, subscribe to
Speaker 1: the game on newsletter that Jason and his team put out.
Speaker 1: Welcome actively Bog Technology. I'm Carlin Hide in New York
Speaker 1: and I oh i medst in San Francisco. It's a
Speaker 1: Friday vibe, and it's a Friday vibe because it's about
Speaker 1: to be a big Sunday vibe to the super Bowl
Speaker 1: and it's going viral. Fanjul expecting record bets on this
Speaker 1: platform on Sunday. CEO Amy Host spoke to Bloomberg Markets earlier.
Speaker 1: Take listen. We're projecting seventeen million bets on the platform,
Speaker 1: which is more than double what we would have seen
Speaker 1: last year. There's three new states online this year, but
Speaker 1: it's also it's our biggest acquisition moment of the year.
Speaker 1: We'll probably bring half a million new users onto the
Speaker 1: platform leading up to and on the day of, and
Speaker 1: it's a great opportunity they get to you know, you
Speaker 1: bet on hundreds of different player props. So it's, um,
Speaker 1: it's going to be an exciting day for fans. Maybe
Speaker 1: good morning, get this guy. Is it going to be
Speaker 1: profitable for you? Is it going to be a good
Speaker 1: day for you? How does this snack up in terms
Speaker 1: of the bottom line? Oh, listen, it's going to be
Speaker 1: a big day, and you know, it all depends on
Speaker 1: the outcome of the game. I think the most important
Speaker 1: thing is consumers bet based on the narrative that they
Speaker 1: want to see, and I think you know what you're
Speaker 1: seeing is right now. The money is definitely flowing to
Speaker 1: the Philadelphia Eagles. So apologies of your Chiefs fan, um,
Speaker 1: but what's what's most exciting is the player props. Right
Speaker 1: of our bets will contain these one player prop. We
Speaker 1: think thirty of our bets will be the same game parlay,
Speaker 1: and so that's exciting, right. You can you can bet
Speaker 1: on the fact that the Kelsey brothers will both score touchdown. Uh,
Speaker 1: you know the correct score. Everyone. There's thirty thousand bets
Speaker 1: on the Eagles beating the Chiefs thirty four. So there's
Speaker 1: just so many different bets you can you can choose from.
Speaker 1: Then if hopefully it's a consumer friendly day. But I mean, Amy,
Speaker 1: how big are those parlay bets gonna be? Um in
Speaker 1: terms of the volume and also the profitability? Then for
Speaker 1: you guys, um their huge I mean, listen, same game
Speaker 1: parlay has been a big advantage for fansl were owned
Speaker 1: by our our parent company, Flutter Entertainment, and this is
Speaker 1: a product that we brought over from Australia and other
Speaker 1: parts of the world. We were the first to market
Speaker 1: and so for us, it's a much higher percentage of
Speaker 1: our overall mix. It's driven a big structural margin advantage
Speaker 1: for us UM. But it's also why I think sports
Speaker 1: betting has really taken off. It's you know, when you're
Speaker 1: invested in a player or a certain parlay, it makes
Speaker 1: the game that much more exciting, even if the games
Speaker 1: blow up. May you mentioned a moment ago that this
Speaker 1: is gonna be a big day for you in terms
Speaker 1: of customer acquisition. What if the cost of acquisition for
Speaker 1: those customers? I mean, listen, what one of the things
Speaker 1: that's really driven Sandul success is we've been way more
Speaker 1: efficient in how we drive customers to the platform. Right,
Speaker 1: we have a massive scale advantage in the US where
Speaker 1: we've got a fort share of the market, but we've
Speaker 1: we've been able to be about more efficient in bringing
Speaker 1: customers onto the platform. You know, a big part of
Speaker 1: that has been the head start we had with our
Speaker 1: fantasy sports business, but we've also had a level of discipline.
Speaker 1: So you know, your acquisition costs are obviously going to
Speaker 1: vary depending on the events, and this is an important event.
Speaker 1: This is an important event for us. Are you still
Speaker 1: thinking to profitability by the end of this year? Could
Speaker 1: it be sooner later? What are the factors? Yeah, we
Speaker 1: feel very confident about our path to profitability. For three
Speaker 1: we were the first operator at least US operator to
Speaker 1: be profitable and que two of this year, fundamentals of
Speaker 1: our business are looking very strong, and so we remained
Speaker 1: very confident about full your profitability this year. Hm. That
Speaker 1: was Fan Jewels CEO Amy how then has continued the
Speaker 1: conversation Bloomberg Senior Executive editor, head of Global Tech coverage
Speaker 1: Brad Stone and Brad you were writing this week in
Speaker 1: one of our Bloomberg Tech Daily newsletters that this could
Speaker 1: be the biggest weekend for the U s betting industry
Speaker 1: and history. But the story is a tech one. It's
Speaker 1: about online and it's about the apps. That's right, ed,
Speaker 1: I mean, the single most bet upon sporting event in
Speaker 1: US history, and it's setting all kinds of records. You know,
Speaker 1: for a number of reasons. Since two thousand and eighteen,
Speaker 1: sports betting has been legal in the US. That was
Speaker 1: a Supreme Court decision. Um, you've had these, as Amy
Speaker 1: House said, these fantasy apps like Vanduel and DraftKings pivoting
Speaker 1: into the sports betting business, and then thirty three states
Speaker 1: legalizing it. Now Here in California, we can't get in
Speaker 1: on the action. Voters turned down a ballot proposition last November.
Speaker 1: But recently, in states like Ohio and Massachusetts and Indiana,
Speaker 1: sports betting is legal and people are embracing it. And
Speaker 1: then why when a how's that being pushed about? Profitability's
Speaker 1: talking it up, but the shap price of hers of competitors,
Speaker 1: I mean, so under pressia, why is everyone sort of
Speaker 1: taking a step back to think, oh, maybe this hasn't
Speaker 1: been quite the well wind success we expected. Well, I mean, Caroline,
Speaker 1: you turn on a football game and you see JB. Smooth,
Speaker 1: the comedian advertising for Caesars, and the Manning Brothers Um
Speaker 1: actually Manning Brothers also advertising for Caesar's. Jamie Fox, Bet
Speaker 1: mgm Um Fan Duel and DraftKings are everywhere. It's it's
Speaker 1: it's the competition, and this has been a gold rush.
Speaker 1: As Amy House said, there is a scramble, particularly around
Speaker 1: the Super Bowl to acquire new users. It basically mirrors
Speaker 1: what's happened in the tech industry at large, you know,
Speaker 1: discarding notions of profitability, trying to acquire new customers, marketing, spending, hiring,
Speaker 1: and now you know, with the recession and all this competition,
Speaker 1: investors are looking for profitability and that's why we've seen
Speaker 1: some of the stock prices come down. I am a
Speaker 1: fair Weather forty nine is fan, and so I'm still
Speaker 1: going to my Super Bowl party this Sunday with very
Speaker 1: little interest or anything to share about. I don't have
Speaker 1: a horse in this race. But my friends are talking
Speaker 1: about Parlay's and I have no idea what they're talking about.
Speaker 1: What is it that they're talking about. Well, first of all, Ed,
Speaker 1: I have to say, my my mother is from Philadelphia.
Speaker 1: We have a lot of family so I'm going with
Speaker 1: the Eagles and and Jalen Hurts on Sunday. But you're right,
Speaker 1: this thing called Parley's Amy Amy how mentioned it is
Speaker 1: such a big phenomenon right now. I think FanDuel saying
Speaker 1: of all the bets will be on Parley's. And think
Speaker 1: about that as a lottery ticket. You're betting on a
Speaker 1: number of things to happen, and if they all do,
Speaker 1: then you win. So let's say you can bet the
Speaker 1: Chief sold win. Patrick Mahomes all will pass for over
Speaker 1: three hundred yards. Um, they're you know, they're they're they're
Speaker 1: tight end at Parvis Kelsey will catch a touchdown that
Speaker 1: would be called like a three leg par lay, I believe,
Speaker 1: and if you hit that, you win. But as these
Speaker 1: bets get longer and more sophisticated, the odds get better
Speaker 1: in the potential payout increases. Brad, may the best team
Speaker 1: win for your household. Thank you, Blomberg, Head of Global
Speaker 1: Tech coverage, Bradstone. Great to check in with him, and
Speaker 1: well let's continue the conversation because look, maybe it's not
Speaker 1: going to get too psyched about with team wins, but
Speaker 1: maybe he's gonna get into the ads or is I'm
Speaker 1: going to Rihanna, Well, we can talk about all of it,
Speaker 1: the advertising angle with Kevin Krim, his CEO and president
Speaker 1: of d O and Entertainment Data Oracle. It's a platform
Speaker 1: measuring predictive behavior, is driven by convergent TV advertising. So Kevin,
Speaker 1: first and foremost, we're just gonna bring you a pole
Speaker 1: from our own audience who went to them to toilet
Speaker 1: to aslet What are you caring about the Super Bowl?
Speaker 1: Are you caring about the actual game, the actual play,
Speaker 1: or are you caring about the ads? Actually about said, yeah,
Speaker 1: actually they really care about the adverts, which is pretty
Speaker 1: a lot when actually less than of saying it's about
Speaker 1: the game with me on Rihanna, But talk to us
Speaker 1: about why we care about the ads so much? Why
Speaker 1: do people on Twitter? I think that it's all about
Speaker 1: the ads on Sunday this is a special event in
Speaker 1: American culture. It brings together a much broader demographic than
Speaker 1: you see in a normal NFL game, And frankly, it's
Speaker 1: the largest audience that TV attracts all year by a
Speaker 1: law large margin. So what you get is a diverse audience,
Speaker 1: and you know, the advertising industry realizes that they can
Speaker 1: reach more people in one short moment than any other
Speaker 1: time of the year, so they bring out their best
Speaker 1: creative ideas and so that comes together and and shows
Speaker 1: that the ads can be as entertaining as that as
Speaker 1: the action in the game. Now, of course, my mind
Speaker 1: goes back to last year, and quite often people would say,
Speaker 1: perhaps this is the canary in the coal mine. The
Speaker 1: people who spend the biggest actually end up being the
Speaker 1: companies you shouldn't be betting on in real life. Ultimately,
Speaker 1: it was Crypto. Crypto owned the space this time last year,
Speaker 1: and we know what's happened since that. For the industry
Speaker 1: group talk to us about who's going to be putting
Speaker 1: money out there on some very expensive advertising spots. Well,
Speaker 1: Crypto's pain was sports bettings game this year in the NFL.
Speaker 1: So you know, I really think that the sports betting
Speaker 1: sites that you were featuring just just now, um, they
Speaker 1: will be major spenders in this game. You're gonna see
Speaker 1: a lot from the beer and alcohol category. This is
Speaker 1: the first year in a long time where Annahezzer Bush
Speaker 1: didn't have the exclusive on the category, so you're seeing
Speaker 1: more competition there, and I think competition is one of
Speaker 1: the really interesting themes. This year, you're gonna see a
Speaker 1: big presence from the delivery competitors Uber Eats with its
Speaker 1: Uber one subscription and door Dash, and you know, both
Speaker 1: of those are indicative of some of the themes of
Speaker 1: what we see are the best performing ads in a
Speaker 1: Super Bowl, like Caroline Kevin. My mind goes back to
Speaker 1: last year in a different I guess phenomenon is the
Speaker 1: right word. But there's one company I cover closely which
Speaker 1: does not advertise in traditional methods, which is Tesla, And
Speaker 1: yet following two Super Bowl Tesla shared data that they
Speaker 1: saw a massive surge in interest and orders because their
Speaker 1: competitors have put so much energy and money into advertising
Speaker 1: at the Super Bowl. Is there anything you can speak
Speaker 1: to about that The indirect effects of all of this
Speaker 1: effort to get primetime splots on Super Bowl Sunday absolutely
Speaker 1: pull Star, the electric vehicle company, had the single best
Speaker 1: performing ad in our rankings last year. It generated the
Speaker 1: most engagement from consumers after that ad aired, and it
Speaker 1: was a powerful ad. It really took a swiming at Tesla.
Speaker 1: And what we see in the data is that consumers
Speaker 1: first of all, love electric vehicles. They respond at a
Speaker 1: much higher rate on a per person basis than they
Speaker 1: do for gas powered regular vehicles, um across all of
Speaker 1: automotive advertising on TV year round, and so the automakers
Speaker 1: responded with a flurry of EV ads last year. And
Speaker 1: what you do see in our data is that consumers
Speaker 1: do get confused occasionally and they'll search for a competitors
Speaker 1: brand when um, it's a different brand that's actually advertising
Speaker 1: and that certainly will have that sort of a rising
Speaker 1: tide lifts all boat's kind of effect for a whole
Speaker 1: category when you see that kind of um, big push
Speaker 1: behind evs. Look, I know the nations excited for the
Speaker 1: Super Bowl, but we spent most of this year so
Speaker 1: far and pretty much and talking about the slowdown in
Speaker 1: the ad market, talking about uh, you know, advertisers pulling
Speaker 1: back and then the new players that are encroaching right
Speaker 1: in the world of streaming. How does that factor into
Speaker 1: this Sunday, Well, just on that subject of automakers, you're
Speaker 1: gonna see a lot fewer automobile ads than you would
Speaker 1: have in many of the past years. Um, it's gonna
Speaker 1: be a market drop in in automotive advertising and a
Speaker 1: category like streaming, which is incredibly competitive right now, Um,
Speaker 1: you're gonna see a lot more streaming ads, um from
Speaker 1: basically every player in the marketplace. They will all be
Speaker 1: president in this game. Kevin Cram, CEO and president of DEO.
Speaker 1: Just great insight. You know you have to wait for
Speaker 1: the ads, right, you have to wait and see what
Speaker 1: happens Sunday. But at least now and we'll look and
Speaker 1: you'll and you'll be able to see our rankings of
Speaker 1: the best performing ads early Monday morning on ad week
Speaker 1: dot com. So take a look at that, all right,
Speaker 1: well look out, thank you very much. Now, m Bergs
Speaker 1: learned that Fox has turned down offers of more than
Speaker 1: two billion dollars for its to be streaming service. That's
Speaker 1: more than four times what it paid for the business.
Speaker 1: But Fox CEO Lucan Murdoch wants to keep to be
Speaker 1: as it continues to grow to be as a free,
Speaker 1: ad supported service, and it's free online TV that's bringing
Speaker 1: in the viewers these days. This is consumers, as we
Speaker 1: all know, migrate from traditional cable TV to a combination
Speaker 1: of subscription and free to watch services. Revenue at to Be,
Speaker 1: another ad based video on demand services, is expected to
Speaker 1: double to thirty billion dollars in the US that according
Speaker 1: to Digital TV research now coming up no rest for
Speaker 1: the activist investors. Spotify is the latest target. There's one
Speaker 1: firm seats to support cost cutting measures at music streaming Giant.
Speaker 1: Will bring you the details next, this is Bloomberg. So
Speaker 1: Spotify as the latest company now to be targeted by
Speaker 1: an activist investor. It's Value Act. Capital Managements build a
Speaker 1: position we understand in the music streaming Giant, and it's
Speaker 1: supporting the company's plans to tighten down on spending and
Speaker 1: become more efficient. For more on the news to help
Speaker 1: break it all putting magic Blanna Baker and I mean
Speaker 1: Value Act has been busy. They've already just taken aboard
Speaker 1: seat at Salesforce. In fact, activist investors in general have
Speaker 1: been pretty busy at the moment. Land It's true, it's
Speaker 1: been a busy week for activis investors. Though at Disney
Speaker 1: and Nelson's Helps is not doing a proxy find anymore,
Speaker 1: so we don't have to worry about that. But Value
Speaker 1: Act based in San Francisco, they're very involved in tech
Speaker 1: right now. Mason more Fit gave a speech this morning
Speaker 1: at Columbia and New York and that's where if he
Speaker 1: revealed that they were now Spotify. He sat on boards
Speaker 1: like Microsoft you mentioned he's on salesforce and board. So
Speaker 1: right now we don't know how big their steak is
Speaker 1: or what exactly they're doing behind the scenes, but Spotify
Speaker 1: has been cutting park and they like that. Well, I
Speaker 1: guess that's my question. I know that they're looking at
Speaker 1: technology of late, but why Spotify? What is it about
Speaker 1: defied that makes them a target. They're kind of already
Speaker 1: doing the things that many activist investors come in and
Speaker 1: push for. Well, they haven't had an activist before, so
Speaker 1: that's one thing that could be compelling that would attract
Speaker 1: an investor to try to shake things up. But Spotify,
Speaker 1: like many tech companies, expanded its headcoun during the pandemic
Speaker 1: by a lot, and they really saw their cost balloon
Speaker 1: as they got further into podcasting and content. So it
Speaker 1: seems like there could be a lot of fat to
Speaker 1: trim here, and that is kind of what is attracting
Speaker 1: value act um. They've started to make some changes, but
Speaker 1: you know, there could always be more and we'll we'll
Speaker 1: see what happens with Spotify. It it's founder controlled the
Speaker 1: CEO is also the founder and that's always a bit
Speaker 1: complicated for activists. But Value Act has gone into companies before,
Speaker 1: like the New York Times that also were controlled by families. Bannah.
Speaker 1: What was interesting about your scoop was the information was
Speaker 1: sort of coming from a speech the Value Acts the CEO,
Speaker 1: Mason Morten, had made at the Columbia University. And just
Speaker 1: tell me through how this usually unfolds because when used
Speaker 1: to read the story and you hear what he's saying
Speaker 1: about Spotify, it all seems really rather complimentary. What are
Speaker 1: usually the tax that they take? Did they tend to
Speaker 1: go for the jungular? Do they tend to say, look,
Speaker 1: we're really aligning ourselves in the business here and we
Speaker 1: want to be a long time investors bloody blood, So
Speaker 1: I would say Value Act there. What they their strategy
Speaker 1: is usually to be friendlier to companies. It's sort of jargon,
Speaker 1: but they're known as constructivists, uh, instead of activists, which
Speaker 1: would be the normal term, and they like to ind
Speaker 1: involved behind the scenes. So when Madson more fits out
Speaker 1: of Microsoft's board, maybe we didn't hear from him, but
Speaker 1: Microsoft made a lot of changes that you know, helped
Speaker 1: get it where it is today. So they are very
Speaker 1: behind the scenes, but they did make this publicly known
Speaker 1: in a speech today, so that was a bit surprising.
Speaker 1: You don't always see a new investor come out bring
Speaker 1: a speech. Usually it's a five. But there's so little
Speaker 1: detail right now on how big the stake is, so
Speaker 1: we'll be we'll be looking for more detail. Those thee
Speaker 1: on a Baker terrific reporting once again, Happy Friday. Now
Speaker 1: turning to Expedia, the online travel name receiving a wave
Speaker 1: of analysts upgrades as the company sees a strong start
Speaker 1: to the year. Earlier, we heard from CEO Peter Kern,
Speaker 1: who explained how they've been able to buck the trend
Speaker 1: of tech layoffs. We actually did a lot during COVID
Speaker 1: and pre COVID to right size our business, so we
Speaker 1: were way ahead of the curve. And while a lot
Speaker 1: of tech companies were adding quite aggressively during COVID, we
Speaker 1: were actually stable to down. So we're in a great
Speaker 1: place now. We've added a lot of technology capabilities and
Speaker 1: a lot of more people in engineering and product than
Speaker 1: we used to have, but in general we are we're
Speaker 1: in a really good spot and we're we're continuing invest
Speaker 1: in the product and our capabilities for the consumers, so
Speaker 1: we don't expect to see any major downsizing. And on technology,
Speaker 1: I heard you everyone's talking about AII talk talking about
Speaker 1: personalization on your conference call, Peter. If if the story
Speaker 1: ahead is one where there could continue to be growth,
Speaker 1: where are you expecting to see that growth in three
Speaker 1: I know there's been a lot of focus on what
Speaker 1: happens in Asia, particularly with China's reopening. Yes, so it's
Speaker 1: a couple of parts for US. There's definitely some geographical
Speaker 1: opportunities in Asia, but to a large extent, we've been
Speaker 1: rebuilding our whole technical platform for the last couple of
Speaker 1: years and rolling out our new marketing strategy in the US,
Speaker 1: which is really focused on long term customer retention, high
Speaker 1: value consumers and really working on retention, great products, sticky product,
Speaker 1: great loyalty programs. And that's really been working in the US,
Speaker 1: and we are now starting to roll that out to
Speaker 1: more places UH and more brands as those capabilities expand
Speaker 1: and we get our technological transformation finished. So that's really
Speaker 1: going to drive our growth. But geographically, we expect the
Speaker 1: West to be strong, Asia to come back UH. And
Speaker 1: so far, notwithstanding all your commentary about the economies of
Speaker 1: the world. Everything's been really strong and travel well, it
Speaker 1: feels like that's almost showed up in a way when
Speaker 1: it comes to the effects of pressures. In the fourth quarter,
Speaker 1: looks like your revenue took a four d base point
Speaker 1: hit due to just a really strong dollar. You're speaking
Speaker 1: about the geopolitical pressures. Is that something that you see
Speaker 1: continuing in the year ahead. Yeah, I don't think so.
Speaker 1: I mean, obviously it does impact, you know, comps and
Speaker 1: comparing historical results to current results, but I think in
Speaker 1: general it hasn't been an issue. You know, pricing has
Speaker 1: been high. We've seen inflation and travel considerable inflation over
Speaker 1: the last several years, but those prices seem to be
Speaker 1: holding quite well, whether it's airfares or hotel rates, etcetera.
Speaker 1: And uh, the consumers seem to be more than willing
Speaker 1: to pay for it, so demand remains really strong, and uh,
Speaker 1: I don't see much change coming from that. And I
Speaker 1: don't think you know, you may have some vectors impacted
Speaker 1: where certain travelers might want to might not want to
Speaker 1: come to the US, or or what ever, but we
Speaker 1: are very strong in the US and it's strong that
Speaker 1: our actually helps us on international travel. Expedia CEO P
Speaker 1: Deken there earlier on Bloomberg he's sounded pretty positive, optimistic,
Speaker 1: But look over the last couple of days, you've seen
Speaker 1: Expedia on the downside, off by more than nine percent.
Speaker 1: Fact today having its worst day since May twenty two,
Speaker 1: So clearly still some concerns among those fourth quarter misses
Speaker 1: amid the weather. Let's talk tech layoffs right now, because
Speaker 1: they continue, and this time the fintech industry really being
Speaker 1: singled out at the moment where thousands are losing their
Speaker 1: jobs as companies cut costs for the first time. Just
Speaker 1: think about a firm, think about Upstart firing one in
Speaker 1: every five of their workers, and other firms have made
Speaker 1: deeper cuts. If you pivot into the world of silicon
Speaker 1: Micron also cutting costs as this time in the C
Speaker 1: suite in fact, but they're one company booking back in
Speaker 1: the trend, and is it Apple. Look at this chart.
Speaker 1: During the industry's pandemic field hiring binge, Apple added fewer
Speaker 1: employees than other big tech firms. Now, on top of that,
Speaker 1: the company generated far more revenue per new higher check
Speaker 1: out that overall, according to data compiled by Bloomberg So
Speaker 1: look at revenue per additional head count two and a
Speaker 1: half million for Apple. I mean, we know that they
Speaker 1: are just so profitable alphabet one and a quarter million
Speaker 1: per higher. But ultimately it is as signed that Apple
Speaker 1: managed to weather this downturn a little bit better. Yeah,
Speaker 1: and you know, might McKie Bloomberg Economics correspondent always points
Speaker 1: out to me, look at the jobless claims number in
Speaker 1: these tech layoffs don't show up, partly because they may
Speaker 1: not have happened yet or they're finding new jobs pretty quick.
Speaker 1: But the theme being lean and mean, that's the takeaway. Yeah,
Speaker 1: we continue to discuss this, I mean, Lena mean that
Speaker 1: does it for this addition of Bloomberg Technology, And don't
Speaker 1: forget our podcast wherever you get it recap this week
Speaker 1: on Spotify, iHeart and Apple. This is Bloomberg