WEBVTT - Pinterest Meets Estimates, and Big Tech and Antitrust (Podcast) 0:00:02.200 --> 0:00:05.560 From the heart of where innovation, money and power collive 0:00:06.320 --> 0:00:10.880 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:10.920 --> 0:00:27.040 Emily Jay I'm Emily checking San Francisco in This is 0:00:27.040 --> 0:00:30.080 Bloomberg Technology. Coming up in the next hour, pinterest shares 0:00:30.440 --> 0:00:33.680 soaring after hours, revenue meeting estimates with a forecast for 0:00:33.920 --> 0:00:37.040 so modest growth is becoming order. More on the future 0:00:37.080 --> 0:00:40.360 of pinterest in the social and e commerce landscape under 0:00:40.360 --> 0:00:43.720 its new CEO just a moment, plus the future of 0:00:43.720 --> 0:00:47.320 big tech antitrust maybe better getting closer. Over the next hour, 0:00:47.440 --> 0:00:51.000 we will explore the American Innovation and Choice Act and 0:00:51.000 --> 0:00:53.800 how this could be the bill that gets enough bipartisan 0:00:53.880 --> 0:00:58.280 support to put big tech in its place, and how 0:00:58.360 --> 0:01:01.320 do you balance innovation and regulation when it comes to crypto. 0:01:01.440 --> 0:01:03.560 We will ask the former Assistant d o J Attorney 0:01:03.600 --> 0:01:07.200 General where he weighs in on this rapidly evolving debate. 0:01:07.720 --> 0:01:09.160 All of that in a moment, But first I want 0:01:09.160 --> 0:01:12.160 to bring in role hit called Carney MKM Partners Managing Director. 0:01:12.280 --> 0:01:14.360 So row is this where we are that we're expecting 0:01:14.360 --> 0:01:18.480 such bad news when pinterest meets expectations and forecasts modest 0:01:18.600 --> 0:01:23.920 growth that the state shares go bonkers. I think it's 0:01:23.959 --> 0:01:26.520 a it's a fact. It's a function of two things. 0:01:26.600 --> 0:01:29.319 One is obviously the fundamentals, and I think equally important 0:01:29.440 --> 0:01:33.839 is Elliott's press release. Um, so expectations were low, they're 0:01:33.880 --> 0:01:37.120 getting lower. Interest was trading as if it's going out 0:01:37.120 --> 0:01:39.400 of business, to be honest, not like a growth company. 0:01:39.720 --> 0:01:42.520 And now they jump over a very low bar. And 0:01:42.560 --> 0:01:45.119 I think the most important thing here is the third 0:01:45.200 --> 0:01:49.120 quarter of revenue outlook. Facebook is telling us sequential declines, 0:01:49.520 --> 0:01:52.520 Snap is telling us sequential declines in the revenues, and 0:01:52.600 --> 0:01:55.840 Pinterest comes along and says, okay, we might grow sequentially. 0:01:55.960 --> 0:01:58.800 So this is uh, this is something not what people 0:01:58.840 --> 0:02:01.800 have expected. On top of that, Elliott gives you this 0:02:01.880 --> 0:02:06.760 presidentally is about Pinterest, them being the largest shareholder in pinterest. 0:02:06.800 --> 0:02:09.639 So I think a lot of bad news was priced 0:02:09.680 --> 0:02:12.840 in and here we here we are up twenty persons. 0:02:13.440 --> 0:02:15.360 You of course have a big leadership change that's happened 0:02:15.360 --> 0:02:18.320 at pincer as the co founder, longtime CEO Ben Silverman 0:02:18.440 --> 0:02:23.400 out Bill Ready of Google long time payments executive is in. 0:02:23.560 --> 0:02:27.280 How do you see Pinterests challenges differing from what's facing 0:02:27.480 --> 0:02:32.800 Facebook and snap um Painters has always been a tweener. 0:02:32.880 --> 0:02:35.119 There is always a debate between are they a real 0:02:35.200 --> 0:02:37.480 social media company or are they a company that is 0:02:38.000 --> 0:02:41.840 just singularly focused on a single person's hobbies needs and 0:02:42.000 --> 0:02:43.880 going down the funnel of what they may want to 0:02:43.919 --> 0:02:48.000 buy to convert their hobbies and needs into want and 0:02:47.520 --> 0:02:49.919 uh and put ads in front of them. So as 0:02:49.960 --> 0:02:52.639 we go down the funnel, Pinteress is doing what they 0:02:52.680 --> 0:02:56.000 need to do, putting shopping on the social media platform, 0:02:56.480 --> 0:03:00.000 putting payments, tagging along some of the bells and whistles 0:03:00.040 --> 0:03:02.240 along with it. But I think they've been doing it 0:03:02.440 --> 0:03:05.160 very slowly. If Bill Ready comes in, he has a 0:03:05.240 --> 0:03:08.120 very complimentary skill set. You talked about well he was 0:03:08.160 --> 0:03:11.320 advent more Bradery, now you talk about Google Commerce. So 0:03:11.480 --> 0:03:14.840 he's bringing a very commerce oriented skill set here. And 0:03:14.880 --> 0:03:17.840 that's what probably is something to be excited about. And 0:03:17.880 --> 0:03:20.840 we'll be watching it from the sidelines here now Petters 0:03:20.919 --> 0:03:22.640 is of course it's a much smaller player than of 0:03:22.639 --> 0:03:25.560 course Meta, you know, even Snap and Twitter. But do 0:03:25.600 --> 0:03:28.360 you see what what's happening here as some sort of 0:03:28.480 --> 0:03:31.600 broader signal about what's happening in the broader economy or 0:03:31.639 --> 0:03:36.720 with digital adspent um. Broadly, we are quite certain the 0:03:36.760 --> 0:03:41.280 digital AdSpend is shifting slowly downwards, the pie shrinking in 0:03:41.360 --> 0:03:45.520 there the pie. I think market share is shifting. For example, 0:03:45.600 --> 0:03:47.760 we think that Google is getting a little bit of 0:03:47.800 --> 0:03:50.360 extra market share away from so some of the social 0:03:50.360 --> 0:03:53.640 media platforms, as Google is more bottom of funlance, searches 0:03:53.720 --> 0:03:56.400 doing well. Search tends to do better in recessions, and 0:03:56.440 --> 0:03:59.560 tends to do better when advertisers getting very very cautious 0:03:59.560 --> 0:04:02.560 about end um. That's what is happening. But when Pinterest, 0:04:02.600 --> 0:04:05.000 it's a very small player, it could just be a 0:04:05.080 --> 0:04:07.040 play on Okay, what do you think some of the 0:04:07.040 --> 0:04:10.960 suburban moms are thinking about holiday shopping? That could be 0:04:11.400 --> 0:04:15.040 they're not completely pessimistic about it. So that's if you 0:04:15.040 --> 0:04:17.520 look at engagement on Pinterest, I think that may be 0:04:17.600 --> 0:04:19.880 the only leading in data. But it's still too small 0:04:19.920 --> 0:04:22.400 for us to make a macro call right now. All right, 0:04:22.480 --> 0:04:25.080 you do cover Uber and Left. We're expecting their earnings 0:04:25.080 --> 0:04:28.279 out later this week as well. What are you looking 0:04:28.279 --> 0:04:31.800 for their um? Again? I think in terms of Uber, 0:04:31.880 --> 0:04:34.960 we prefer Uber versus Left, but both companies should have 0:04:35.440 --> 0:04:39.560 should have earnings that should probably exceed expectations. I think 0:04:39.600 --> 0:04:42.400 the biggest kind of question mark. There are two question 0:04:42.440 --> 0:04:45.440 marks in front of investors. Do higher gas prices way 0:04:45.480 --> 0:04:48.000 on drivers? We think so yes? And how does that 0:04:48.040 --> 0:04:50.920 translate into driver incentives? That's been a very big debate. 0:04:51.240 --> 0:04:53.240 We think that's been a way on the staff tomorrow 0:04:53.360 --> 0:04:57.000 for Uber. And the second question is with inflation, with 0:04:57.080 --> 0:05:01.280 consumer discretionaries spend with rising right share prices, how does 0:05:01.320 --> 0:05:03.880 that rain do on the share of wallet for right sharing? 0:05:03.960 --> 0:05:06.800 We think that is very basiliant. So with that, for 0:05:07.000 --> 0:05:09.039 that we give them a checkmouk a question amount for 0:05:09.120 --> 0:05:13.480 driving incentives? What we like heading into earnings tomorrow? All right, 0:05:13.920 --> 0:05:16.479 hit called Carney Mcam partners. Thank you so much for 0:05:16.560 --> 0:05:19.200 joining us. Of course, we'll be across Uber, Lift and 0:05:19.279 --> 0:05:30.839 many more companies reporting this week. We compete hard, we 0:05:30.880 --> 0:05:33.640 compete fairly. We try to be the best. We have 0:05:33.920 --> 0:05:38.360 fierce competition at the developers side and the customer SIDEBC 0:05:38.640 --> 0:05:42.400 vigorous competition. Our business model is advertising and we faced 0:05:42.440 --> 0:05:46.880 intense competition. We don't have a dominant share in any market. 0:05:47.040 --> 0:05:52.080 We have a policy against using individual seller data to 0:05:52.160 --> 0:05:54.240 compete with our private label. I would describe it as 0:05:54.279 --> 0:05:57.159 a street fight for market share in the smartphone business. 0:05:57.279 --> 0:05:59.520 I've been clear that Instagram was a competitor. It wouldn't 0:05:59.560 --> 0:06:02.839 surprise me. Refilexus sometimes does promote our own products. Competition 0:06:02.920 --> 0:06:05.839 drives us to history shows that if we don't keep innovating, 0:06:06.279 --> 0:06:12.880 someone will replace every company here today Mark Zuckerberg, Jeff Bezos, 0:06:12.880 --> 0:06:15.919 Sundar Pachai, and Tim Cook just two years ago testifying 0:06:15.920 --> 0:06:19.080 it a virtual hearing focused on big tech power in 0:06:19.960 --> 0:06:23.760 two years later, regulators and lawmakers are still considering rules 0:06:23.760 --> 0:06:26.120 that will rain in big tech's biggest players. In an 0:06:26.120 --> 0:06:29.880 effort to boost competition and protect consumers, The American Innovation 0:06:29.880 --> 0:06:32.760 and Choice on Line Act would bar major platforms from 0:06:32.760 --> 0:06:36.120 giving advantages to their own products over those of rivals. 0:06:36.120 --> 0:06:39.440 This is the legislation proposed by Senators Clobuscher and Grassley 0:06:39.560 --> 0:06:42.680 last year. Joining me now David Kapatrick, founder and editor 0:06:42.720 --> 0:06:46.280 in chief of Teconomy, as well as bloombergs Emily Burnbaum 0:06:46.320 --> 0:06:48.640 in d C, who covers big tech anti tries, Emily, 0:06:48.680 --> 0:06:50.440 let's start with you set the stage for us. Because 0:06:50.440 --> 0:06:53.920 there've been so many competing bills, so many competing approaches 0:06:53.960 --> 0:06:57.760 here but this one seems to be gaining steam. Talk 0:06:57.839 --> 0:07:01.560 to us about what klobus are actually have proposed and 0:07:01.640 --> 0:07:04.600 the status of it at this moment. Yeah. So there 0:07:04.720 --> 0:07:08.080 was a wide array of tech related anti trust build 0:07:08.160 --> 0:07:12.320 that passed the House Fishery Committee UH last year. Since then, 0:07:12.440 --> 0:07:16.160 the conversation is coalesced around. UM. This legislation you're talking about, 0:07:16.320 --> 0:07:19.160 the American Innovation and Choice Online Act. UM. It would 0:07:19.200 --> 0:07:24.080 prevent the companies from UH giving preference to their own products. 0:07:24.080 --> 0:07:27.520 So for instance, on you know, Amazon, UH, Amazon's e 0:07:27.520 --> 0:07:31.600 commerce platform, it couldn't privilege its own private label products 0:07:31.640 --> 0:07:35.480 over UM products from small businesses that rely on its platform. UM. 0:07:35.560 --> 0:07:38.280 Right now. You know, there was a huge amount of 0:07:38.280 --> 0:07:42.520 momentum behind this legislation. UM. There was serious talk that 0:07:42.920 --> 0:07:45.960 this legislation is going to get a vote this summer. UM, 0:07:46.280 --> 0:07:50.200 and Chuck Schumer himself had pledged to put it on 0:07:50.240 --> 0:07:52.920 the floor. UM in the early summer. It didn't happen. 0:07:53.000 --> 0:07:55.920 Now we have a week till August resets. It's not 0:07:55.960 --> 0:07:58.600 going to be happening this week. His office has confirmed, 0:07:58.640 --> 0:08:01.800 and we reported recently that he told a group of 0:08:01.840 --> 0:08:04.360 donors that it wasn't going to happen, but now people 0:08:04.360 --> 0:08:09.040 are looking to fall potentially in September. Um, this legislation 0:08:09.120 --> 0:08:11.400 might come to a vote, but that's a very unusual 0:08:11.400 --> 0:08:16.160 time for bills to be considered a mid terms though. UM, 0:08:16.160 --> 0:08:19.400 it's all up in the air right now. Interested indeed, David, 0:08:19.480 --> 0:08:22.960 that big tech stance on big tech could become you know, 0:08:23.000 --> 0:08:27.080 a real issue for voters, uh in the November midterms 0:08:27.120 --> 0:08:31.560 after so many years of figuring out how to regulate them. 0:08:31.600 --> 0:08:35.720 What do you make of this particular bill and how 0:08:35.800 --> 0:08:39.400 it could impact these companies. First of all, I loved 0:08:39.400 --> 0:08:41.679 your montage at the beginning of the segment. It was 0:08:41.760 --> 0:08:45.920 quite amusing. Uh. To be honest, I don't think even 0:08:45.920 --> 0:08:50.480 though surveys show that most consumers slash voters do feel 0:08:50.520 --> 0:08:53.760 that tech companies are too powerful, I don't think this 0:08:53.880 --> 0:08:56.800 kind of issue is anywhere near the top of the 0:08:56.880 --> 0:09:01.480 agenda for voters in general. So I think legislators do 0:09:01.679 --> 0:09:05.040 have to be careful as they're taking actions that might 0:09:05.120 --> 0:09:08.439 seem based on hearings they've had, etcetera, to be rational 0:09:08.480 --> 0:09:12.040 ones that they don't annoy the voters that put them 0:09:12.040 --> 0:09:16.720 in office. Because the problem with regulating Amazon, Apple, Google, 0:09:17.000 --> 0:09:22.000 Meta etcetera. Is these services are essentially as present in 0:09:22.120 --> 0:09:26.480 people's lives as government itself, so you don't want to 0:09:26.520 --> 0:09:29.640 mess with them lightly. Now, I do think many of 0:09:29.679 --> 0:09:32.960 the things that were demonstrated in especially the House hearings 0:09:33.240 --> 0:09:37.760 were egregious. That quote from Bezos just based on reporting 0:09:37.760 --> 0:09:40.280 that we've seen elsewhere and some of the evidence that 0:09:40.360 --> 0:09:43.559 the hearing is flat wrong. They do preference their own 0:09:43.600 --> 0:09:46.720 products at Amazon, so some things need to be fixed. 0:09:46.920 --> 0:09:49.240 But I just worry that we have a sledgehammer here 0:09:49.280 --> 0:09:52.360 and maybe we need like a very fine tooth nail, 0:09:52.760 --> 0:09:56.880 you know, and find nail in a very little hammer. Emily, 0:09:57.600 --> 0:09:59.480 what do you make of that? And and talk to 0:09:59.559 --> 0:10:02.800 us about how sentiment towards big tech has changed since. 0:10:03.640 --> 0:10:06.440 I mean, we're still too we're too long years now 0:10:06.880 --> 0:10:10.760 away from that, A lot has changed and it doesn't 0:10:10.800 --> 0:10:15.320 look good for tech. Yeah, sentiment soured on the big 0:10:15.360 --> 0:10:18.280 tech companies, you know. It started souring in twenty six 0:10:19.120 --> 0:10:23.880 UM mostly related to concerns around than Facebook now Meta Um, 0:10:23.920 --> 0:10:27.239 and it's only continued to become more and more politically 0:10:27.320 --> 0:10:30.400 potent to UM, you know, put yourself in opposition to 0:10:30.880 --> 0:10:33.400 the major tech companies, you know, as part of a 0:10:33.440 --> 0:10:37.880 broader sort of anti corporate push UM during the Biden 0:10:37.880 --> 0:10:43.079 administration and during the Biden presidency. UM. So uh at 0:10:43.120 --> 0:10:48.000 this point, UM, the major message that's being pushed by 0:10:48.040 --> 0:10:51.720 the tech companies is, um, this is not what your 0:10:51.800 --> 0:10:56.280 voters care about. Um. They are running um uh tens 0:10:56.320 --> 0:10:58.840 of millions of dollars worth of ads. We did account 0:10:58.960 --> 0:11:01.600 um this week. They've spent a hundred and twenty million 0:11:01.640 --> 0:11:06.480 dollars on advertising, essentially trying to convince voters. Um, you know, 0:11:06.559 --> 0:11:10.079 Congress is trying to meddle in your phone while so 0:11:10.120 --> 0:11:12.200 many other more important things are going on, you know, 0:11:12.320 --> 0:11:15.920 inflation and uh, the and uh you know gas prices 0:11:15.920 --> 0:11:18.760 that affect you. Why are they looking at this and 0:11:19.160 --> 0:11:21.400 so Um It's yet to be seen if that's a 0:11:21.440 --> 0:11:25.319 winning argument, but it definitely was voting enough that Schumer 0:11:25.400 --> 0:11:29.000 didn't put the those up for vote. Now, David, I 0:11:29.040 --> 0:11:31.600 want to get your thoughts on this latest action from 0:11:31.600 --> 0:11:35.400 the FTC suing Meta over its attempt to buy this 0:11:36.200 --> 0:11:40.679 fairly small VR company within unlimited. The FTC is now 0:11:40.760 --> 0:11:44.319 challenging this, and we've learned that, uh, the FTC filed 0:11:44.360 --> 0:11:47.640 this lawsuit because Lena Khan wanted to do it, even 0:11:47.640 --> 0:11:51.120 though her staff disagreed. What do you make of this 0:11:51.200 --> 0:11:53.640 that it seems the FTC, or at least Lena con 0:11:53.760 --> 0:11:58.160 is determined not to let Meta grow by acquisition like 0:11:58.200 --> 0:12:02.360 it did with Instagram? And what's that? Really good question? 0:12:02.440 --> 0:12:05.000 But before I answer, I just want to make it 0:12:05.080 --> 0:12:09.280 clear I don't intend to echo industry talking points about 0:12:09.400 --> 0:12:13.000 this big bill. I do think the industry has made 0:12:13.200 --> 0:12:16.920 enormous errors and and there's huge resentment against big tech, 0:12:17.000 --> 0:12:20.640 big corporate generally, as as the other Emily said, but 0:12:21.440 --> 0:12:24.680 I just think it's very risky to just go after 0:12:24.760 --> 0:12:28.120 these companies wholesale the way they're doing it. But back 0:12:28.120 --> 0:12:31.240 to Meta and within at the moment, I think that 0:12:31.520 --> 0:12:34.840 Meta has made so many mistakes and gotten so many 0:12:34.880 --> 0:12:38.000 people angry that there is going to be support for 0:12:38.040 --> 0:12:41.680 almost any pushback against that particular company, And to some extent, 0:12:41.920 --> 0:12:44.240 I think even on the other bill, one of the 0:12:44.280 --> 0:12:47.040 reasons so many legislators are so willing to go after 0:12:47.080 --> 0:12:51.280 the entire group of companies is because Meta slash Facebook's 0:12:51.400 --> 0:12:56.200 crimes are really so vividly obvious that it seems justified 0:12:56.240 --> 0:13:00.280 to go after quote unquote big tech. But I think 0:13:00.280 --> 0:13:02.960 It's going to be very hard for Zuckerberg to get 0:13:03.000 --> 0:13:06.880 any kind of significant acquisition through with Lena khan Um 0:13:06.960 --> 0:13:11.239 in there. And certainly maybe he'll even succeed in ultimately 0:13:11.320 --> 0:13:16.680 achieving this acquisition, but everything is gonna encounter pushback. And 0:13:16.880 --> 0:13:18.560 one other point I just want to make. Let's not 0:13:18.600 --> 0:13:21.520 forget what's happening in Europe with the Digital Markets Act 0:13:21.600 --> 0:13:24.480 Digital Services Act, which is very parallel to some of 0:13:24.480 --> 0:13:26.440 the efforts being made in the US, and which is 0:13:26.679 --> 0:13:31.320 further along legislative Absolutely, Europe is a whole another hour 0:13:31.400 --> 0:13:34.040 long show in itself. Emily, I gotta ask you, what 0:13:34.120 --> 0:13:38.360 are the chances the FTC can stop this latest Meta deal, 0:13:38.480 --> 0:13:42.679 even though it is smaller scale. Yeah. I think a 0:13:42.720 --> 0:13:47.079 lot of experts looking at this particular lawsuit by the 0:13:47.160 --> 0:13:50.560 FTC are saying this is a very novel theory, um 0:13:50.640 --> 0:13:54.400 because essentially they're not challenging um. You know, they're not 0:13:54.480 --> 0:13:58.720 saying Meta is currently monopoly in the virtual reality space. 0:13:58.720 --> 0:14:01.240 Is saying that this acquisition could set the stage for 0:14:01.320 --> 0:14:03.800 them monopolize and get another market. This is a sort 0:14:03.800 --> 0:14:08.120 of untested and a new way of approaching acquisitions. Um. 0:14:08.360 --> 0:14:11.280 So there's a lot the you know, there's a lot 0:14:11.320 --> 0:14:14.320 of people who are skeptical about how winning this argument 0:14:14.360 --> 0:14:18.040 could be under correct antitrust laws. But it's not even 0:14:18.080 --> 0:14:22.600 about blocking this particular acquisition. Um. It's it's more a 0:14:22.680 --> 0:14:25.960 show of course by Nina Kan's FTC. You know, she said, 0:14:26.080 --> 0:14:28.200 you have to bring cases even if you're not going 0:14:28.240 --> 0:14:30.720 to win them, because that's how, you know, if you 0:14:30.840 --> 0:14:34.960 change practices within particular industries. Um. And that's how you 0:14:35.160 --> 0:14:38.080 kind of like, you know, put fear in companies that 0:14:38.200 --> 0:14:41.520 they make these kinds of acquisitions. Well, certainly an interesting 0:14:41.880 --> 0:14:44.000 step by the FTC, and we'll be watching to see 0:14:44.040 --> 0:14:46.640 how that one plays APT bloom Examily, bern Bam. Thank you, 0:14:46.680 --> 0:14:50.280 along with our Teconomy founder and editor in chief David Kirkpatrick. 0:14:50.440 --> 0:14:53.840 So much here to continue to discuss over months and 0:14:53.920 --> 0:14:57.520 I'm sure years. Meantime, the White House has urged China 0:14:57.720 --> 0:15:00.520 not to escalate tensions in the with the US in 0:15:00.560 --> 0:15:03.880 response to how Speaker Nancy Pelosi's expected visit to Taiwan, 0:15:04.280 --> 0:15:08.040 signaling that the Biden administration is preparing for Beijing to retaliate. 0:15:08.400 --> 0:15:11.160 A Pelosi visit would be a landmark move by a 0:15:11.280 --> 0:15:14.240 US official and raise the risk of a military confrontation 0:15:14.360 --> 0:15:17.400 given China's view that Taiwan is part of its territory. 0:15:17.560 --> 0:15:20.160 The White House detailed possible actions China could take in 0:15:20.200 --> 0:15:23.720 response to Pelosi's trip, including firing missiles into the Taiwan 0:15:23.840 --> 0:15:28.040 straight Pelosi's office has yet to officially confirm her visit 0:15:29.600 --> 0:15:33.160 and coming up Activision results also out. Where does it's 0:15:33.200 --> 0:15:37.280 deal with microstos stand will give you an update on that. Next, 0:15:37.440 --> 0:15:59.240 this is Bloomberg. Let's get back to earnings and shares 0:15:59.280 --> 0:16:01.560 of Activision? Is there a touch higher in late training 0:16:01.560 --> 0:16:04.640 after the video GameMaker posted sales and been expectations, but 0:16:04.720 --> 0:16:08.240 had little to say about its pending deal with Microsoft 0:16:08.120 --> 0:16:10.600 or at Ludlow. Here with the top lines, let's talk 0:16:10.600 --> 0:16:13.760 about the numbers. First, Where are we so better than expected? 0:16:13.840 --> 0:16:16.320 Revenue one point six four billion dollars? Very nice, but 0:16:16.480 --> 0:16:19.920 context down fifteen percent from a year ago, Earnings half 0:16:19.960 --> 0:16:22.360 what they were a year ago. And you know, it's 0:16:22.360 --> 0:16:26.400 a weird situation for Activision Blizzard right with depending acquisition. 0:16:26.640 --> 0:16:29.200 But the reality is that the video games instruced is 0:16:29.240 --> 0:16:31.160 not as strong right now as it was last year. 0:16:31.200 --> 0:16:33.040 You know Call of Duty Vanguard, which came out in 0:16:33.080 --> 0:16:35.840 the fall has performed poorly. That's had an impact on 0:16:36.080 --> 0:16:38.880 the company's finances, and frankly, we're all at home anymore. 0:16:38.880 --> 0:16:41.520 I've stopped playing as much video games as many video 0:16:41.560 --> 0:16:44.440 games and some of their competitors, like Halo, for example, 0:16:44.480 --> 0:16:47.120 have just done better to gravitate what interest there is. 0:16:47.240 --> 0:16:49.560 How much of this has to do with uncertainty surrounding 0:16:49.560 --> 0:16:52.080 the deal. I mean, this would be the biggest acquisition 0:16:52.080 --> 0:16:54.640 in the last year at least, and we don't know 0:16:54.640 --> 0:16:56.480 if it's going to happen or not, so I think 0:16:56.920 --> 0:16:59.480 merger arbitrary specialists that Bloomberg spoken to say the odds 0:16:59.520 --> 0:17:02.280 of it going through around sevent Bloomberg Intelligence think there's 0:17:02.280 --> 0:17:04.880 going to be tough, but it will ultimately go through. 0:17:04.880 --> 0:17:07.120 And if you look at the stock, you know it's game. 0:17:07.760 --> 0:17:10.439 Since the deals announced, it trades a significant discount to 0:17:10.480 --> 0:17:14.160 the A share that were offered. But it's a mega deal, 0:17:14.440 --> 0:17:16.840 and you know, we always thought there would be regulatory scrutiny, 0:17:16.920 --> 0:17:20.639 and investors seem confident. But as we've learned with well, 0:17:20.720 --> 0:17:22.879 let's not go their Twitter and mask anything could happen 0:17:22.880 --> 0:17:24.959 with a deal of this size. Activision has also been 0:17:24.960 --> 0:17:27.440 dealing with some cultural issues. There's questions about the future 0:17:27.440 --> 0:17:31.480 of CEO Bobby Kolda stays on Microsoft or if this 0:17:31.560 --> 0:17:34.399 deal is the start of his swansan. Yeah, And what 0:17:34.440 --> 0:17:36.800 analysts a point to is that Microsoft went into the 0:17:36.800 --> 0:17:39.080 deal with their eyes open, So it seems you know 0:17:39.160 --> 0:17:42.200 that they bought the company or said they would buy 0:17:42.200 --> 0:17:43.640 the company of the time that that was going through. 0:17:44.080 --> 0:17:46.520 The biggest kind of world card is one Lena can 0:17:46.600 --> 0:17:48.240 I think you were just discussing in the last blog 0:17:48.480 --> 0:17:50.400 as this sort of general appetite to look at big 0:17:50.440 --> 0:17:53.960 tech deals. In the first quarter, the FTC asked both 0:17:54.000 --> 0:17:57.920 sides for evidence. We thought we'd get responses on Monday 0:17:58.040 --> 0:18:00.439 as part of earnings, but in the earnings statement they 0:18:00.440 --> 0:18:03.159 just said, Hey, as is normal, we're pending a deal. Sorry, 0:18:03.240 --> 0:18:06.399 can't comment, can't give you any more information. Maybe by 0:18:06.440 --> 0:18:08.520 the fourth quarters what bloom bag intelligence things will get 0:18:08.520 --> 0:18:10.240 some more detail here. Well, its interest is to see, 0:18:10.280 --> 0:18:14.680 Lena can't scrutinizing a much smaller deal between Meta and uh, 0:18:14.800 --> 0:18:18.280 you know, a small VR company, and not to have 0:18:18.440 --> 0:18:21.239 the same kind of scrutiny of Microsoft and Activision yet 0:18:21.520 --> 0:18:24.040 that we know of. Yet again, we're in a pretty 0:18:24.040 --> 0:18:27.280 primary stage and the deal is on tracked close in June, 0:18:28.160 --> 0:18:30.400 which you know, given the new cycle, seems a very 0:18:30.440 --> 0:18:32.639 long way away. And don't think it. This isn't just 0:18:32.760 --> 0:18:35.720 us story. The cmn UK announced early July they're looking 0:18:35.720 --> 0:18:38.200 at this. This is a global player. Activation has partners 0:18:38.200 --> 0:18:40.159 in China with Nettes. It's going to get a lot 0:18:40.160 --> 0:18:42.960 of attention alright, a lot at stake at Bloodlow. Thank 0:18:43.000 --> 0:18:54.919 you for that update. I think simply because you've been 0:18:54.960 --> 0:18:59.159 successful in a few different businesses doesn't somehow mean that 0:18:59.240 --> 0:19:01.880 you have a napped from market power. It just means 0:19:01.880 --> 0:19:04.400 you've been successful in a couple of different customer experiences. 0:19:04.480 --> 0:19:07.359 I look at the opportunity we provide. I look at 0:19:07.359 --> 0:19:10.320 the skills people are learning through YouTube, you know. I 0:19:10.320 --> 0:19:13.280 feel like everywhere when I go talk to people and 0:19:13.280 --> 0:19:16.560 and providing access to information and knowledge, I think we'll 0:19:16.600 --> 0:19:18.240 end up being on the right side of history as well. 0:19:18.560 --> 0:19:21.240 I don't think big by itself is bad or but 0:19:21.400 --> 0:19:25.400 competition is good. And every business, in particular the businesses 0:19:25.440 --> 0:19:29.119 that are large and have high scale. The unintended consequences 0:19:29.160 --> 0:19:32.159 of your scale cannot be dealt after the fact. They 0:19:32.160 --> 0:19:35.439 need to be dealt while you're scaling. Regulation will have 0:19:35.480 --> 0:19:38.160 an important role to play here. I think privacy regulation 0:19:38.280 --> 0:19:41.800 is important. In the areas like AI regulation will be important. 0:19:43.640 --> 0:19:45.920 Some thoughts there from my interviews with various big text 0:19:45.920 --> 0:19:48.840 CEOs in the last eighteen months. As big tech regulation 0:19:48.960 --> 0:19:52.800 is still pending in Washington, can Congress rain in these 0:19:53.000 --> 0:19:57.200 major platforms well. The American Innovation and Choice Online Act 0:19:57.280 --> 0:20:00.480 is Congress's first major effort to regulate big since the 0:20:00.520 --> 0:20:04.359 inception of the Internet, and it has bipartisan support. Here's 0:20:04.359 --> 0:20:09.720 the bills leading Democratic sponsor, Senator Amy Klobuchar. At some point, 0:20:10.119 --> 0:20:14.120 if there's no competition, these companies are allowed to become 0:20:14.200 --> 0:20:20.040 these monopolistic, dominant um providers. And in the case of 0:20:20.080 --> 0:20:22.600 a t n T, no one wanted to destroy a 0:20:22.720 --> 0:20:24.960 t n T. They just wanted to make sure that 0:20:25.119 --> 0:20:31.000 new competitors can develop. Votes could come before November's mid terms, 0:20:31.040 --> 0:20:34.119 and if it passes, what does it mean for big tech? Really? 0:20:34.320 --> 0:20:37.159 Let's discuss that and more with the Chamber of Progress 0:20:37.160 --> 0:20:40.159 founder and CEO. Adam Kovakovitch, a long time former Google 0:20:40.160 --> 0:20:44.359 executive and Charlotte's Laman competition policy director at Public Knowledge, 0:20:44.359 --> 0:20:47.040 an organization that works to promote freedom of expression and 0:20:47.359 --> 0:20:49.640 an open Internet. So Charlotte will start with you. What's 0:20:49.680 --> 0:20:54.520 your sense of this bill? Does it go far enough? Yes? 0:20:54.600 --> 0:20:57.560 I think it would be a huge step forward. Of course, 0:20:57.600 --> 0:21:00.040 there is a lot more that we are hoping and 0:21:00.200 --> 0:21:04.480 happen in the future, but being able to stop the 0:21:04.560 --> 0:21:07.920 anti competitive discrimination that these companies are engaging in to 0:21:08.480 --> 0:21:12.000 prevent small competitors from getting a fair shot would make 0:21:12.040 --> 0:21:15.600 a huge difference towards promoting competition and making sure that 0:21:15.640 --> 0:21:20.359 consumers actually have access to the best products. Adam, would 0:21:20.359 --> 0:21:24.480 you agree or does this bill go too far? Respectfully disagree? 0:21:24.680 --> 0:21:26.719 I I have great respect for Charlotte, but we disagree 0:21:26.720 --> 0:21:28.560 on this one. Look, I think this this bill is 0:21:28.600 --> 0:21:30.760 languishing for a pretty simple reason, which is that what 0:21:30.840 --> 0:21:33.520 it's proposing to do just isn't that popular if you 0:21:33.560 --> 0:21:36.080 look at another space, which is drugs. Right now, in contrast, 0:21:36.160 --> 0:21:38.560 Congress is on the verge of passing an extremely popular 0:21:38.640 --> 0:21:42.080 regulatory change over the objections of the pharmaceutical industry, which 0:21:42.080 --> 0:21:44.840 is allowing Medicare to negotiate drug prices. That's something that 0:21:45.119 --> 0:21:48.320 voters have been clamoring for for decades. It's their pocketbooks. 0:21:48.520 --> 0:21:50.840 They've have senators about it at town hall meetings. Tech 0:21:50.920 --> 0:21:53.320 regulation isn't like that. I think we see the polls 0:21:53.320 --> 0:21:56.400 show that the public favors regulation of big tech platforms 0:21:56.400 --> 0:21:59.440 in general. But this bill does something in particular that's 0:21:59.480 --> 0:22:02.359 not particularly popular, which is banned big tech from offering 0:22:02.440 --> 0:22:06.159 vertically integrated services like Google Maps, Amazon Basics. And it's 0:22:06.200 --> 0:22:09.000 always been clear why smaller companies like Yelp and Spotify 0:22:09.040 --> 0:22:11.520 and match would benefit from that law. But I think 0:22:11.560 --> 0:22:13.640 senators have sort of seen for themselves of the last 0:22:13.680 --> 0:22:15.520 couple of months that no voters are really marching on 0:22:15.600 --> 0:22:19.200 Washington to demand big changes to Google search results or 0:22:19.240 --> 0:22:22.399 Amazon Prime and and that's just the reality. Charlotte, how 0:22:22.440 --> 0:22:25.840 do you respond to that? So I think it may 0:22:25.920 --> 0:22:31.720 not be yet a household discussion about um competition and antitrust, 0:22:31.880 --> 0:22:34.440 But I think what people notice is that these products 0:22:34.480 --> 0:22:37.159 are not serving them. They might not know that that 0:22:37.280 --> 0:22:40.400 is because of a lack of competition, because, uh, these 0:22:40.480 --> 0:22:45.360 gatekeepers don't have to face the new entrepreneurs who sometimes 0:22:45.359 --> 0:22:48.199 have better ideas, and that's why we're stuck with the 0:22:48.240 --> 0:22:51.240 same old products. UM. So, I think, you know, people 0:22:51.280 --> 0:22:54.000 are learning, and that's part of the effort of advocacy 0:22:54.119 --> 0:22:57.160 for this legislation. People are learning what the root causes 0:22:57.320 --> 0:22:59.400 and that it's a lack of competition. But I think 0:22:59.400 --> 0:23:01.760 people are are familiar with the results of that lack 0:23:01.800 --> 0:23:04.280