Speaker 1: From the heart of where Innovation, money and power Colli
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily jay I remember my check in San Francisco, and
Speaker 1: this is Bloomberg Technology coming up in the next hour.
Speaker 1: This week marks the beginning of a new chapter in
Speaker 1: the already long and twisty elon Musk Twitter saga, moves
Speaker 1: from the Chief Twitter over the weekend, and what's next
Speaker 1: Claus Pinterest's latest earnings beat was a welcome bright spot
Speaker 1: compared to its peers like Snap Meta Alphabet. We'll catch
Speaker 1: up with CEO Bill Ready to talk about its strategy
Speaker 1: to reignite the platform. And in China and exitus of
Speaker 1: workers has threatened to disrupt output at the world's largest
Speaker 1: iPhone plant operated by fox On Now. The company is
Speaker 1: said to be raising wages by as much as to
Speaker 1: keep production going. We're gonna have all the details later
Speaker 1: this hour. This week, of course, marks the beginning of
Speaker 1: a new chapter in the Musk Twitter saga. In the
Speaker 1: span of just two days, he has completed the acquisition,
Speaker 1: fired Twitter's top executives, and taken over as Chief Twitter.
Speaker 1: Joining us now for more. Mark Mhaney, Senior managing director
Speaker 1: at Evercore, I s I who covered Twitter as a
Speaker 1: public company, and our very own senior executive tech editor,
Speaker 1: Brad Stone. So Brad, he's also dissolved the board. He's
Speaker 1: the only board member as of now. What's actually happening
Speaker 1: inside Twitter at this moment. I think there's a lot
Speaker 1: of anxiety and confusion and speculation right now. Emily employees
Speaker 1: are bracing for layoffs. They're swapping phone numbers, connecting on LinkedIn,
Speaker 1: a lot of people assuming they're probably about to get
Speaker 1: kicked out of the system. We know thanks to Mike
Speaker 1: colleague Kurt Wagner, a lot of managers had to create
Speaker 1: lists over the weekend of employees that they were planning
Speaker 1: to let go today. Nothing's been announced, but it really
Speaker 1: only seems a matter of time. And then other than that,
Speaker 1: they're throwing a lot of things against the wall. You
Speaker 1: heard this thing about maybe reviving Vine, Twitter's old video
Speaker 1: sharing service that they closed in two thousand sixteen. Twitter
Speaker 1: would have to rebuild it to convince creators to come back.
Speaker 1: They haven't been able to make money on that when
Speaker 1: they when they had it, so that would be a
Speaker 1: big challenge. And then this idea of getting people to
Speaker 1: pay for that blue check mark that we enjoy. Emily,
Speaker 1: the verification um twenty dollars a month was floated. I
Speaker 1: think they're throwing some things against the wall. We do
Speaker 1: know that Ellen wants to revive subscriptions at Twitter, so
Speaker 1: maybe that's one piece of a broader plan. But it's
Speaker 1: still very early. Mark, I someone who covered the company
Speaker 1: as an analyst four years, What do you make of it?
Speaker 1: What of what? What kind of a proposition is this
Speaker 1: really for investors today? Well, I think it's gonna be
Speaker 1: a it's gonna be completely revamped over the next year too.
Speaker 1: And um, you know, I listened to much very carefully
Speaker 1: for the last six months. I didn't necessarily to hear
Speaker 1: business plans. I think he had a lot of other
Speaker 1: reasons for owning the asset, and so it's his now.
Speaker 1: I think from a from if this were to come
Speaker 1: out into the public markets again, I guess that this
Speaker 1: business will be completely revampeded. But if I just step back,
Speaker 1: Twitter didn't really do much in the public markets. She
Speaker 1: was there for what seven years, and uh, it barely
Speaker 1: moved over that course of that time. It is very volatile.
Speaker 1: It um, it never really gained dramatic share amongst amongst
Speaker 1: advertisers marketers. They generated reasonable a modern revenue five billion
Speaker 1: a year, They had reasonable free cash flow, but they
Speaker 1: could never really break through beyond being like a second
Speaker 1: or even a third tier advertising platform. I haven't heard
Speaker 1: anything from from us that suggests he's got a plan
Speaker 1: to to break him out of that. I think subscriptions
Speaker 1: are are limited as to long term strategy for Twitter.
Speaker 1: Good strategy, but they don't dramatically move the needles. So
Speaker 1: I'm sort of I'm skeptically watching this from a distance.
Speaker 1: I hope he can improve the business model there, but
Speaker 1: I'm not I'm not holding my breath on that. But
Speaker 1: if he can, wonderful In the meantime, I think his
Speaker 1: intentions were very different than improving the business, and you know,
Speaker 1: I wish him good luck with the rest that he's
Speaker 1: trying to do with the business. Brad We reported that
Speaker 1: in the hours after his takeover, hate speech surged on
Speaker 1: the platform. Twitter responded saying a lot of that was
Speaker 1: inauthentic behavior. Over the weekend, Must also retweeted an article
Speaker 1: with a conspiracy theory about the attack on now speaker
Speaker 1: Nancy Policy's husband, obviously, this is a person with a
Speaker 1: huge audience that obviously creates huge opportunities but also real dangers.
Speaker 1: What does all of this tell you, Well, I mean,
Speaker 1: there was a breathtaking lack of respect with that tweet
Speaker 1: for the former Senator and First Lady Hillary Clinton, for
Speaker 1: the Speaker of the House and her husband, for the
Speaker 1: facts of the case which are now very well established
Speaker 1: by the criminal complaint coming out of San Francisco. I mean,
Speaker 1: really believe the conspiracy theories? I don't think so. What
Speaker 1: it tells me is that like owning the lips, provoking
Speaker 1: Democrats being contrariant, this is kind of the animating philosophy
Speaker 1: right now, not only the right wing Republicans, but the
Speaker 1: pro business moderates like Elon and David Sachs. They just
Speaker 1: enjoy this pointless provocation. And you know this is penn
Speaker 1: Elon m o on Twitter for quite some time now,
Speaker 1: Jack Dorsey, We're just getting this headline, Jack Dorsey contributing
Speaker 1: eighteen million Twitter shares to retain an indirect stake in
Speaker 1: this company under Elon musk Mark. What do you make
Speaker 1: of that? And what do potential advertisers who have been
Speaker 1: working with Twitter for all these years make of what's
Speaker 1: to come. I mean, clearly there's a lot of uncertainty. Well,
Speaker 1: I'll just hit on the second part of the second question, Emily.
Speaker 1: So this is this is key. I mean, this is
Speaker 1: this is how of the revenue from Twitter and the
Speaker 1: pass came from advertising. I find I don't really see
Speaker 1: a business model in the future that doesn't still have
Speaker 1: plus to the revenue come from advertising, like it does
Speaker 1: with every other social media asset. There's nothing wrong with that.
Speaker 1: It's a high margin business. Wonderful thing about social media
Speaker 1: is that they don't have to pay the content providers
Speaker 1: or play largely don't, so it's a very high margin business.
Speaker 1: You just need to sell effectively adds against it. One
Speaker 1: of the things that Twitter has been trying to do
Speaker 1: for the last couple of years is moved beyond brand
Speaker 1: advertising to direct response advertising, which has kind of always
Speaker 1: been the power alley of Internet advertising. The problem is
Speaker 1: that those dollars have gone to Google, and they've gone
Speaker 1: to Facebook and a few other places, and they've only
Speaker 1: trickled down to Twitter because in part because Twitter has
Speaker 1: never really had great tools for direct response advertisers. So
Speaker 1: maybe that's all part of the fix at Twitter. From
Speaker 1: a business model perspective, that's not going to happen in
Speaker 1: a quarter or two. That's a year or two slog
Speaker 1: for that to happen. In the meantime. Marketers all this
Speaker 1: debate about whether there's um uh censorship or not on
Speaker 1: on Twitter. Marketers, I think they just want something that's
Speaker 1: relatively well regulated. They don't want their brands put against
Speaker 1: nasty content, whether that's whether that's a verbal or whether
Speaker 1: it's graphic. Uh and um so I think uh if
Speaker 1: something changes in the marketplace that makes it less user friendly,
Speaker 1: makes it makes it if there's more vulgarity on the site,
Speaker 1: I think advertisers will pull back from that. So there's
Speaker 1: a real tough balancing act here between what must he
Speaker 1: is trying to do and what marketers want. And you know,
Speaker 1: I saw his tweets to market to marketers over the weekend.
Speaker 1: He said he would try to avoid the place becoming
Speaker 1: a hellscape. I think he does that for personal philosophical reasons,
Speaker 1: but also for business reasons, because if it does become
Speaker 1: a healthscape, advertisers will flee. Rad Curious what your take
Speaker 1: is on these Jack Dorsey filings. We're getting this all
Speaker 1: from a third ten d that Jack Dorrisey still retaining
Speaker 1: an indirect stake in Twitter. I mean Jack Dorsey is
Speaker 1: the author of this whole situation. He personally solicited Ellen
Speaker 1: to come by the company. He long felt that Twitter
Speaker 1: would do better as a private company. He helped taking
Speaker 1: a public with one of the company's big mistakes. So
Speaker 1: you know, it doesn't surprise me. He's a big fan
Speaker 1: of Elon's. He wants to be a small part of
Speaker 1: of Twitter's makeover. He cares deeply for the company. Uh,
Speaker 1: so you know he's putting his money where his mouth is. Um,
Speaker 1: it'll be interesting to see if he has any operational
Speaker 1: or advisory role in the new Twitter. Of course, it's
Speaker 1: it's too soon to tell. But no, this doesn't surprise
Speaker 1: me at all. Well, speaking of that, I'm curious what
Speaker 1: you think about him surrounding himself Elon Musk surrounding himself
Speaker 1: with people like David Sacks and Jason Calcannis, both of
Speaker 1: the All In Pod, both with a point of view.
Speaker 1: You've also got Amy Klobuchar, Senator Amy Klobuchar out there
Speaker 1: saying that she's worried that hate speeches an even bigger
Speaker 1: liability now on Twitter. Um, you know, clearly we're still
Speaker 1: waiting for the plans to form. But you know, how
Speaker 1: what sort of conclusions are we supposed to draw here
Speaker 1: about what kind of company he's going to be running. Well, well, look,
Speaker 1: I think everybody was bracing for Donald Trump to be
Speaker 1: reinstated onto Twitter at the very first day of Elan
Speaker 1: owning the company, and it did happen. You know, I
Speaker 1: feel a little sheepish praising Ellen here for exercising restraint.
Speaker 1: But to go back to Mark's point, I think he's
Speaker 1: now got to balance some of his rhetoric with the
Speaker 1: realities of running a company and keeping the advertising base
Speaker 1: and keeping advertisers happy and and fostering you know, kind
Speaker 1: of kind of reasonably safe dialogue on the on the surface.
Speaker 1: You know they've talked about in oversight board. We don't
Speaker 1: there's a lot we don't know. Is that, like Facebook's
Speaker 1: oversight board, a sort of kind of veto appellate body,
Speaker 1: or is it more than management of the company. You know,
Speaker 1: these are all real serious, hard questions that Ellen and
Speaker 1: his his friends now who all have other jobs, by
Speaker 1: the way, have to have to determine. And you know,
Speaker 1: I wish them well. These are these are tough decisions.
Speaker 1: Are who knows that's CEO position, according to Ellen is open.
Speaker 1: He's just the chief twit for now, Bloomberg's Bradstone. Thank
Speaker 1: you so much. Mark Mahaney of ever Card, Mark, you're
Speaker 1: going to stick with us and help us break down
Speaker 1: some of the big tech results we've seen of the
Speaker 1: last couple of weeks. Sticking with Twitter, Democratic Senator Chris
Speaker 1: Murphy said Musque's purchase of the platform should be scrutinized.
Speaker 1: Murphy tweeting today, I'm requesting the Committee on Foreign Investment
Speaker 1: to conduct an investigation into the national security implications of
Speaker 1: Saudi Arabia's purchase of Twitter. Now, among the investors backing
Speaker 1: must take over, Saudi Prince Alwa lead been to lall
Speaker 1: through the Kingdom holding Company and his private office, which
Speaker 1: agreed to roll over nearly thirty five million Twitter shares
Speaker 1: worth about one point nine billion dollars. Back now with
Speaker 1: Mark Mahoney of Avercor to talk about big tech results. Mark,
Speaker 1: I gotta start with Meta. It's sold off more than
Speaker 1: sevent so far this year. I just checked its market cap,
Speaker 1: less than two hundred fifty million dollars. We're back to
Speaker 1: October levels. I mean, would you have ever thought this
Speaker 1: could be possible? Um, after this company has achieved such
Speaker 1: historic high I didn't think it would be possible. Um Well,
Speaker 1: I guess I thought it was possible, but I didn't
Speaker 1: think it was probable, or else I would have had
Speaker 1: a buy on it. Mikel has been dead wrong on
Speaker 1: this for the last twelve months or even longer. This
Speaker 1: company hit this buzz saw of these Apple privacy changes,
Speaker 1: competition from from TikTok, and now an advertising economic recession,
Speaker 1: and then this fourth kind of spoiler alert issue or
Speaker 1: spoiler issue, which is what really came up last week,
Speaker 1: which is that the market wants them to cut out
Speaker 1: the spend on the metaverse, slash it in half, rain
Speaker 1: and expenses. It's a recession. When when that happens, you're
Speaker 1: supposed to kind of marry down, ratchet down expenses and
Speaker 1: investments to kind of kind of match up with with
Speaker 1: the deteriorating revenue. And the company is sort of refusing
Speaker 1: to do that. Zuckerberger's refusing to do that. And I
Speaker 1: think this last part is really just fight selling on
Speaker 1: a part of investors who were saying you know, the
Speaker 1: It's wasn't the revenue results. People expected softness there. It
Speaker 1: was that they that the clinging to this aggressive investment
Speaker 1: horizon in this environment, and the market has said no,
Speaker 1: that too much. It's no mosque, We're out of here.
Speaker 1: We're selling now. There were a couple of companies that
Speaker 1: had strong quarters Apple Pinterest, which is interesting given their
Speaker 1: role in the advertising business. But of course Alphabet, Meta, Microsoft, Amazon,
Speaker 1: all having a really tough quarter reporting. What's the common
Speaker 1: thread here, Well, just the only thing I uh equivabal
Speaker 1: with you on is Pinterest. Pinterest revenue results actually deteriorated. Now,
Speaker 1: the expectations have been set low enough that results came
Speaker 1: in a little bit better than expected. By the way
Speaker 1: they did with Meta too, ad revenue came in a
Speaker 1: smidgin better than expected. So it wasn't a revenue problem.
Speaker 1: Is that people just don't want them investing out, particularly
Speaker 1: they don't want them investing in the metaverse with their
Speaker 1: return on that investment dollar is so uncertain. What's happening
Speaker 1: is demanded softening across the board. So the two most
Speaker 1: interesting parts to me, Emily were Google. This was the
Speaker 1: first quarter that Google said there was weakness and search.
Speaker 1: They hadn't said that in March, they hadn't said that
Speaker 1: in June quarter. They said that in the September quarter.
Speaker 1: And search is usually considered to be the most not
Speaker 1: recession proof, but recession resilient of all the ad platforms.
Speaker 1: So if Google seeing it in search, you can you
Speaker 1: can be pretty sure that just about every other company
Speaker 1: is seeing it. And then there's Amazon. Amazon, and the
Speaker 1: June quarter was specifically asked whether they've seen any signs
Speaker 1: of consumer softness in the CEFO said no, Well things
Speaker 1: have changed now they're starting to see softness, and they
Speaker 1: saw it in Europe maybe not surprisingly, and now I'm
Speaker 1: starting to bleed over to the US. So the real
Speaker 1: question is how much worse could it get? We know
Speaker 1: what's getting softer, will it continue to get softer and
Speaker 1: for how long? And that's that's a really hard one
Speaker 1: to know. But it's a macro call. And I think
Speaker 1: all of these companies, especially they have exposure to the consumer,
Speaker 1: but even Microsoft and and Amazon with a WS are
Speaker 1: are saying that enterprises are starting to slow down to
Speaker 1: we're heading into recession demand trends or softening across the board,
Speaker 1: and any company who tells you that that's not the case.
Speaker 1: It's probably be either doesn't know their business or is
Speaker 1: not being honest. Interesting point you made about Pinterest. Bill Ready,
Speaker 1: the new CEO is going to be on the show
Speaker 1: in in in a few minutes. I'm gonna put your
Speaker 1: point to him. I do want to ask about the
Speaker 1: broader advertising landscape and what your outlook is. You know,
Speaker 1: you also cover Netflix, which reversed the decline and subscribers
Speaker 1: for the first time in a while. You've got now
Speaker 1: the streamers going after a piece of the advertising pie
Speaker 1: in addition to the social media companies going after the
Speaker 1: advertising pie. How is this all going to play out well?
Speaker 1: By the way I think Pinterest is maybe really will
Speaker 1: set up here. You know, you've got a turnaround story,
Speaker 1: um executive with a very good execution track record, asset
Speaker 1: that may not have been run that well in the past.
Speaker 1: So there's a turnaround story. By the way, there's sort
Speaker 1: of is a Netflix too, which is why the stock
Speaker 1: has been a monster stock to the upside finally over
Speaker 1: the last couple of months, because there's this new revenue
Speaker 1: team that they're going to go from zero to a huntred.
Speaker 1: Question is just how quickly. But you know there there's
Speaker 1: there's enormous demand for from advertisers for access to Netflix's base.
Speaker 1: I mean two or your twenty million people who use
Speaker 1: the site, you know, an hour or two hours a day.
Speaker 1: So you've got reach, you've got frequency, and you've got
Speaker 1: almost like a primetime audience. You know that that prime
Speaker 1: audience I meant like Amazon Prime s. The average household
Speaker 1: probably rescuse middle to upper middle income globally for Netflix.
Speaker 1: So there's just a lot that brand advertisers can tap into.
Speaker 1: For the first time ever, you can own Netflix inventory,
Speaker 1: so that that's what there's something new. If you don't,
Speaker 1: if you don't have something new, brand new in your
Speaker 1: in your fundamentals, they are going to get weaker in
Speaker 1: the back half year and going into next year. That's
Speaker 1: the advantage that Netflix has right here. I like Netflix
Speaker 1: is one of my topics, so is Meta. I just didn't.
Speaker 1: I just thought Metal was gonna show more cost and
Speaker 1: investment discipline than than they've led on mark human covering
Speaker 1: tech for two decades. Do you think we're seeing a
Speaker 1: real inflection point here? Is there further to fall? And
Speaker 1: how how long does it take before this turns around well,
Speaker 1: so to two thoughts, Um and I love the way
Speaker 1: you set up the question. So yeah, we have a
Speaker 1: negative inflection here. These are tech is bigger than it
Speaker 1: was during the last cycle O eight oh nine with
Speaker 1: the great housing, great financial crisis, Great housing, great financial crisis.
Speaker 1: Those are the same thing, and so it's much bigger.
Speaker 1: So it's more cyclical than it was back then. Look,
Speaker 1: our our our firm aber Coorien size call is that
Speaker 1: overall advertising is going to decline mid single digits next year,
Speaker 1: which probably means to digital advertising is going to be
Speaker 1: flat up five percent. There's another inflection point yield that
Speaker 1: I'm super interested in. We'll have to come back to it.
Speaker 1: But that's AI. So what Facebook and Google are doing,
Speaker 1: met and alphabet they're spending seventy billion dollars combined next
Speaker 1: year on capex related to AI, artificial intelligence and machine learning.
Speaker 1: I'm fascinating And Bill Ready has been uh, very thoughtful
Speaker 1: on this topic too. I'm fascinated by what's gonna come
Speaker 1: out of this. The market is assuming that there's very
Speaker 1: little return on that AI investment, that AI capital expenditures.
Speaker 1: My guess is at Google and and men have probably
Speaker 1: know what they're doing, and we're going to see some
Speaker 1: sort of return on it. But but and so when
Speaker 1: we see that, I don't think that's pricing. I think
Speaker 1: that creates some wonderful long term buying opportunities on these
Speaker 1: two stocks. What I fear is that the stocks are
Speaker 1: first going to go down because of macro and recession
Speaker 1: before they start moving up because of artificial intelligence. All Right,
Speaker 1: we're gonna have to dig in to artificial intelligence with
Speaker 1: you next time you're back on the show. Markmahenny of
Speaker 1: ever Core, I s, I always appreciate your perspective, and
Speaker 1: especially your historical perspective. Given how many years you've been
Speaker 1: doing this, We're gonna have much more ahead. Stay with us.
Speaker 1: This is Bloomberg, another story we're continuing to watch. Electronic
Speaker 1: Arts will develop three video games inspired by Marvel comic
Speaker 1: book characters. That gives the company access to the most
Speaker 1: popular entertainment franchise in the world. The scheme e A
Speaker 1: is making is based on Iron Man, that is, the
Speaker 1: billionaire inventor and superhero who was the main character in
Speaker 1: one of the first hit Marvel movies. Welcome back to
Speaker 1: Bloomberg Technology and Emily Changing in San Francisco. Let's get
Speaker 1: back to the markets and social media stocks on the move.
Speaker 1: Bloomberg's at Ludlow is back and take it away. Yeah,
Speaker 1: there was a pocket of weakness in the market when
Speaker 1: it comes to social media shares. We talked about how
Speaker 1: Meta closed its lowest level since October. There were reports
Speaker 1: from down to detect to seven thousand incidences of people
Speaker 1: saying that Instagram had crashed and was having some glitches
Speaker 1: and was down. But you would suspect that a lot
Speaker 1: of the pressure on this stock stems from that disappointing
Speaker 1: earnings report last week. Snap caught up with that down
Speaker 1: one point sent Pinterest Interesting had its best day in
Speaker 1: more than two months last Friday after strong earnings. I
Speaker 1: think the street really liked what they saw, but giving
Speaker 1: up some of those gains in Monday session down one
Speaker 1: Pinterest really interesting stories. We look at the stock year
Speaker 1: to day relative to met Her and Snap. We know
Speaker 1: about softness and the advertizing space, but actually relative to
Speaker 1: its peers, Pinterest is held up really well. I'm really
Speaker 1: interested in what the story is here and what invests
Speaker 1: see in Pinterest relative to a Meta, relative to a Snap.
Speaker 1: That said, of course, it is still down pretty significantly
Speaker 1: year today, and I'm hoping that you can ask which
Speaker 1: direction the stock goes from here? All right, I will
Speaker 1: indeed thank you. Pinterest has been out pacing its peers,
Speaker 1: as I mentioned, posting strong third quarter results with an
Speaker 1: uptick and monthly active users after three straight quarters of declines.
Speaker 1: This as the social media industry grapples with a decrease
Speaker 1: in digital ad spend while marketers worry about economic uncertainty.
Speaker 1: Joining me now for more on this bi already, Pinterest
Speaker 1: CEO has been on the job since late June. So
Speaker 1: how is it that Pinterest seemed to buck the ad
Speaker 1: media spiral we saw with Snap and Meta and others.
Speaker 1: Bill Well, first of all, thanks for having me Emily.
Speaker 1: Always a pleasure, UM, And I feel really great about
Speaker 1: how our team performed in Q three. I think you
Speaker 1: know we're we're doing some things that are fundingly different
Speaker 1: than the rest of social media, and I think you're
Speaker 1: seeing that start to cut through with advertisers, uh, and
Speaker 1: and with users. We grew teen percent year on year
Speaker 1: on a constant currency basis. UH, really outpacing a decelerating
Speaker 1: market and growing faster than a lot of our peers,
Speaker 1: which means we're taking share. Uh. And I think part
Speaker 1: of that is that, you know, number one, we're a
Speaker 1: positive platform. We're not a place where people go to
Speaker 1: shout about their politics or to present their seemly perfect
Speaker 1: life that makes others feel negative. Uh. It's it's a
Speaker 1: place where people go to find inspiration. UH. It's a
Speaker 1: place where people go with an intent and a purpose.
Speaker 1: And that's a very unique thing in the space, both
Speaker 1: for what the users get as well as what advertisers get.
Speaker 1: It's a full funnel ADS solution in the advertisers can
Speaker 1: connect at the upper, mid and lower funnel and really
Speaker 1: meet you. There's a multiple points along their journey. And
Speaker 1: so the brand safe nature of the platform, paired with
Speaker 1: the full funnel nature of it, UH, user growth returning,
Speaker 1: these things are all starting to really cut through. UH.
Speaker 1: And I think you see it demonstrated in our results.
Speaker 1: Let's talk about what advertisers get, because obviously we're seeing
Speaker 1: a broader ad pullback. What is your outlook as we
Speaker 1: head into three and how much of that you know,
Speaker 1: pinterest gains? Do you do potentially gain ad market share
Speaker 1: or not As we head into a potentially pronounced long
Speaker 1: term economic downturn. Yeah, well, I think it's clear when
Speaker 1: you look at our performance relative. Here's this past quarter
Speaker 1: that we've been gaining share, uh and where a smaller
Speaker 1: player than many of the others, and so I think
Speaker 1: there's a lot more opportunity for us to pick up share.
Speaker 1: That said, we know we outran a decelerating ad market
Speaker 1: this past quarter, and you know the market looks to
Speaker 1: still be choppy, and so we're looking to make sure
Speaker 1: that we show up with really great value for our advertisers.
Speaker 1: And we're doing that through you know, a number of dimensions.
Speaker 1: You know, a couple of which I mentioned around really
Speaker 1: help helping the advertisers meet the users throughout the full funnel.
Speaker 1: I think that's quite unique when you compare us to
Speaker 1: other social media platforms. Most of them have the user
Speaker 1: and sort of a lean back entertainment mode where the
Speaker 1: user is there for some other purpose, whether it's to
Speaker 1: watch a funny dance video or to view pictures of
Speaker 1: their friends. People come on Pinterest looking for products. More
Speaker 1: than half of them are there to shop, and so
Speaker 1: they're there with an intent and a purpose. And the
Speaker 1: fact that we get users at the upper, mid and
Speaker 1: lower stage of their journeys means that we're able to
Speaker 1: help the advertiser connect across those and really meet users
Speaker 1: at this sort of magic moment where they have an idea,
Speaker 1: a general idea of what they want, but they haven't
Speaker 1: decided what to buy yet, and so that's really cutting through.
Speaker 1: And then finally, I just say, you know, every CMO
Speaker 1: out there has been approached by their CFO saying Okay,
Speaker 1: you've got to go drive performance, and sometimes that results
Speaker 1: in a bit of a Sophie's choice where that means
Speaker 1: that they oftentimes rushed to last click, but it means
Speaker 1: they're not getting to tell their brand story. And what
Speaker 1: pinterest is delivering that we're finding really resonant with advertisers
Speaker 1: is the ability to tell their brand story in a
Speaker 1: performant way because we do have the lower funnel aspect
Speaker 1: of that as well, and and can connect across that
Speaker 1: that user journey. Let's talk a little bit about users,
Speaker 1: because obviously investors are excited about the reignition of growth.
Speaker 1: Here we had Mark Mhaney, who covers pinterest on earlier
Speaker 1: in the show, he said, to be fair, expectations for
Speaker 1: Pinterests were low, though he is very optimistic about you
Speaker 1: coming in and you know, bringing a new perspective on
Speaker 1: how to manage this company. What are you doing to
Speaker 1: attract gen z and how and what is the evidence
Speaker 1: that that is working. Yeah, so you know, we return
Speaker 1: to user growth this quarter. We stabilize the user based
Speaker 1: based return to user growth, and we really doing doing
Speaker 1: that by leaning into the uniqueness of the platform. When
Speaker 1: you think about it as a positive place and a
Speaker 1: place where people go with intent and purpose, it really
Speaker 1: is unique across social media. It's also quite unique and
Speaker 1: that it's a place where people go to express their creativity.
Speaker 1: And so we're leveraging those things, leaning into them more,
Speaker 1: drawing the contrast from the rest of social media, and
Speaker 1: you know, really leveraging the unique human curation that happens
Speaker 1: on our platform to drive better and more personalized experiences
Speaker 1: for our users. To give you a tangible example of that,
Speaker 1: you know, you can go lots of places to find
Speaker 1: a great new dress, but if you think about how
Speaker 1: to put together a great outfit and what handbag and
Speaker 1: shoes and accessories might go really well with that dress.
Speaker 1: M Yes, we're doing a lot with machine learning, as
Speaker 1: many others are, but machine learning is only as good
Speaker 1: as a signal that is acting upon, and we have
Speaker 1: hundreds of millions of pinners that come to our platform
Speaker 1: and curate boards that tell us what kind of accessories
Speaker 1: might go well with that dress. So when you get
Speaker 1: recommendations here, it's not just from really great machine learning,
Speaker 1: it's really great machine learning acting upon signals from hundreds
Speaker 1: of millions of pinners that are telling us what things
Speaker 1: go well together, whether it's putting together an outfit, or
Speaker 1: putting together a room, or thinking about how to put
Speaker 1: together really great holiday plans for what a great meal
Speaker 1: might be. All these things. We have great human curation
Speaker 1: that happens on the platform at scale. They're just completely
Speaker 1: unique across the space. I don't think you really see
Speaker 1: it happening any place else. And we pair that with
Speaker 1: great machine learning, great advertising capabilities. It's really cutting through
Speaker 1: to drive user growth and revenue growth. Now, even the
Speaker 1: point that Pinteresque you see as as being very different
Speaker 1: from other social media platforms, I'm so curious what you
Speaker 1: think about what's happening at Twitter. You know, it's unclear
Speaker 1: what the business model is even going to be unclear
Speaker 1: whether advertisers are going to stick around. Is Twitter under
Speaker 1: Elon Musk, possibly an opportunity for pinterrests to take some
Speaker 1: of those ad dollars or even to take some of
Speaker 1: that mind share, or is it a totally different proposition. Well,
Speaker 1: I mean, I can't comment on any one specific player,
Speaker 1: but I would say that when you compare pinterest to
Speaker 1: social media more broadly, Uh, First, I'd say, you know
Speaker 1: where this really unique intersection between social search and commerce,
Speaker 1: which is totally different than other platforms. I think when
Speaker 1: add on to that the positive nature of our platform,
Speaker 1: which we tune for intentionally, uh, and we hear from
Speaker 1: users that it's a place that they feel uplifted, they
Speaker 1: feel inspired, whereas oftentimes on other platforms they're you know,
Speaker 1: seeing people shout about their politics or you know, you
Speaker 1: know generally activity that you can lead them feeling leave
Speaker 1: them feeling anxious or depressed or these kinds of things.
Speaker 1: And they feel lifted up on our platform. And so
Speaker 1: we're leaning into that, and as we do that, it
Speaker 1: makes it a brand safe space for advertisers. And so
Speaker 1: that's something that advertisers understood about Penchess for some time.
Speaker 1: We're leaning more and more into that and we're seeing
Speaker 1: it cut through more and more versus the rest of
Speaker 1: social media. How has your Google commerce background come into
Speaker 1: play thus far and have you had any sort of
Speaker 1: light bulb moments about how to make that connection from
Speaker 1: something you see on pinter as to something that you
Speaker 1: buy much more concrete? Well, this is a great question
Speaker 1: because while Pinterest is a full funnel platform, uh, you know,
Speaker 1: his historically been stronger in the upper and mid funnel,
Speaker 1: where people would find a lot of things they found
Speaker 1: interesting on Pinterest, but then they have to go somewhere
Speaker 1: else to go act upon that. And part of what
Speaker 1: we're doing is making sure that as people find things
Speaker 1: on Pinterest, that we're leaning into that intent to action,
Speaker 1: making things much more actionable. So I talked about on
Speaker 1: our earnings call. We want to make it so that
Speaker 1: every image of every product that you encounter on Pinterest
Speaker 1: becomes shoppable, whether you find that in a scene or
Speaker 1: in user generated content. When you see a great product,
Speaker 1: even if it's you know, some celebrity that's wearing it,
Speaker 1: you say, oh, I want that product or I want
Speaker 1: that same look. Uh. That we're making that more and
Speaker 1: more shoppable for people. And as we do that, connecting
Speaker 1: that intent to action strengthens the lower funnel part of
Speaker 1: our business, and we think there's a lot more opportunity
Speaker 1: to go there. I think it's historically again been a
Speaker 1: place where the platform wasn't as strong, and we're making
Speaker 1: that much stronger over time. And there's good progress already.
Speaker 1: I talked about shopping as being up fifty year on
Speaker 1: year conversions, so really good progress there, but a lot
Speaker 1: more to do there and as we do it that
Speaker 1: will be better and better engagement for users and also
Speaker 1: really great advertising opportunities for our partners. Now, your collage
Speaker 1: making app, Shuffles, has seen really good traction, I know,
Speaker 1: especially in the United States, helping with engagement and active users.
Speaker 1: What's the longer term vision there and how can you
Speaker 1: integrate sort of what you're learning from Shuffles into the
Speaker 1: broader experience. Yeah, so great question, Emily, Shuffles. We've been,
Speaker 1: you know, quite excited by the progress with Shuffles. There
Speaker 1: are college making app that has just really resonated with
Speaker 1: gen Z and I think it's indicative of how there
Speaker 1: are a number of adjacent use cases that we can
Speaker 1: explore with Pinterest. They really lean into the unique nature
Speaker 1: of our platform where we do have people in that
Speaker 1: lean forward mode looking to express our creativity. So I
Speaker 1: think we have license to bring those kinds of experiences
Speaker 1: to users. Shuffles is one example of that, and I
Speaker 1: also say it's just one example of how we're cutting
Speaker 1: through with gen Z. Even separate from Shuffles, our gen
Speaker 1: Z user base has more than doubled since Q three
Speaker 1: of nineteen, and for this quarter it was our fastest
Speaker 1: growing demographic. So Pinterests is cutting through with gen Z users,
Speaker 1: and I think for a lot of the reasons that
Speaker 1: I shared already that it is a positive place. It's
Speaker 1: a bit of an oasis in the world of social
Speaker 1: media for free users, where uh, it's a it's a
Speaker 1: smaller circle. It's a place where the who you know
Speaker 1: collaborate with closer friends versus you know, having to worry
Speaker 1: about being shouted down or these kinds of things. Uh.
Speaker 1: It's just felt as a safer and more inspiring space
Speaker 1: by many users. And so that's really resonating with gen Z,
Speaker 1: and as we give them more and more tools like Shuffles,
Speaker 1: we think there's a lot more we can do to
Speaker 1: serve that as a great up and coming demographic. Alright,
Speaker 1: pinterest CEO Bill already, Bill, thank you so much for
Speaker 1: joining us as always created from you. Appreciate the extended conversation.
Speaker 1: All right, coming up, getting a second look. A new
Speaker 1: team is taking a crack and investigating Tether and whether
Speaker 1: the stable coin executives committed a crime. That is next.
Speaker 1: This is Bloomberg, a Justice Department probe into the stable
Speaker 1: coin Tether is getting a fresh pair of eyes after
Speaker 1: struggling to reach a conclusion. Joining us now our Bloomber
Speaker 1: crypto reporter Matt Robinson And Matt, it's very unusual to
Speaker 1: redirect an investigation like this. What exactly is the d
Speaker 1: o J looking into? Right? So, the Justice Department has
Speaker 1: long been looking into Tether the last few years about
Speaker 1: a variety of its statements, for for instance, how much
Speaker 1: money they have to back the stable coin, also to
Speaker 1: what they told banks when they were transacting. So this
Speaker 1: investigation started with Maine justin has moved to prosecutors in Manhattan. UM.
Speaker 1: So they're looking to see if any sort of you know,
Speaker 1: if there's bank fraud violations. Uh, you know, given the
Speaker 1: size of um Tether, it's the third largest cryptocurrency beyond
Speaker 1: excuse me, behind bitcoin and Ethereum they want to make
Speaker 1: sure that those uh, you know, what they've told the
Speaker 1: banks and is accurate. Remind us what is tether. This
Speaker 1: is the third largest cryptocurrency. The creators have said it's
Speaker 1: backed by the US dollar. What does it actually mean
Speaker 1: to the crypto ecosystem. It's it's very important. It's very
Speaker 1: unusual part of the excuse me, crypto ecosystem because it's
Speaker 1: it's designed as a stable coin. It's it's like a
Speaker 1: digital uh stand in for dollars. They get started. You know,
Speaker 1: this was time in the industry where you know, there
Speaker 1: wasn't a lot that was stable. They wanted to keep
Speaker 1: your cash or you wanted to keep your dollars and
Speaker 1: something that you know, I wasn't going to move, you know,
Speaker 1: dramatically overnight. So it became just a crucial part of
Speaker 1: the excuse me of the market because often folks, oftentimes
Speaker 1: folks are going to be trading Bitcoin with Tether or
Speaker 1: you know, ethereum and tether. And so it's grown to
Speaker 1: almost seventy billion dollars um, you know, a massive fund
Speaker 1: and and you know, the company has come into some
Speaker 1: other regulatory probes from from other agencies. For instance, the
Speaker 1: CFTC over the amount of money, the amount of cash
Speaker 1: backing their stable coin. So it's an enormously important part
Speaker 1: of the market and how it functions, um, you know,
Speaker 1: with traders being able to use it to to make
Speaker 1: speculative bets on on other cryptocurrencies. What's the likelihood map
Speaker 1: that criminal charges actually happened here? Uh, you know that's
Speaker 1: that's obviously up for d o J to decide. Um.
Speaker 1: You know that, as we reported, the tether is looking
Speaker 1: for declination letters, which is basically the Justice Department saying
Speaker 1: you know, we we've looked at this and now you
Speaker 1: know we're we're declining to pursue any charges. So that
Speaker 1: that's you know, that remains to be seen, all right,
Speaker 1: Bloomberg's Matt Robinson, Matt, thank you so much for that.
Speaker 1: We will follow your reporting to stay up to date
Speaker 1: on this investigation. Workers at a fox Con production plant
Speaker 1: in central China, the largest iPhone factory in the world,
Speaker 1: are walking off the job, hitching rides and dipping into
Speaker 1: their savings to escape another COVID lockdown. Bloomberg's Debby Woo
Speaker 1: has all of the details for us. Debbie, in your story,
Speaker 1: you profile woman named Dong Wan Wan who is literally
Speaker 1: walked I believe twenty five miles um and quit the
Speaker 1: job to get out of there. Tell us more about
Speaker 1: what is happening. So what is happening is COVID recently
Speaker 1: yells right through well Fox comes up two people's site
Speaker 1: in central China that makes the world's most iPhones. And
Speaker 1: after lot also following a lot, the we have seen
Speaker 1: no trash piling up in dormitories nearly campused. And also
Speaker 1: that the people who got into a quarantine sometimes are
Speaker 1: not getting uh meals meals in time, and then uh
Speaker 1: sometimes they are just uh sort of getting only a
Speaker 1: bread for meals. So because of all these issues, uh,
Speaker 1: some workers have decided that they just want to quit
Speaker 1: and go home. And because of a lack of our
Speaker 1: transportation and also strict COVID controls, let's still uh in
Speaker 1: place in the places at home. So what workers have
Speaker 1: to walk back to where they come from. So in
Speaker 1: the story that we reported, uh list twenty year old
Speaker 1: have to walk about nine hours to get home. You know,
Speaker 1: the rigid you know, sometimes brutal hours at a fox
Speaker 1: can plant has been well documented documented. What is Fox
Speaker 1: can't doing to get around this and is it impacting
Speaker 1: supply at all because this slowd own iPhone production, So
Speaker 1: what is happening in South fox Song is raising wages
Speaker 1: by almost a third, and then it is also trying
Speaker 1: to get the backup capacity elsewhere online to make sure
Speaker 1: that the supply impact of supply will be minimized. And
Speaker 1: at the same time, UH we have reported previously that
Speaker 1: the UH, due to weakeningment, Apple is actually canceling the
Speaker 1: UH ideas for any more orders for our new iPhones
Speaker 1: this year. So this is like a given economic headwinds
Speaker 1: on the one hand, and also giving UH the number
Speaker 1: of workers require, it's probably not as many I think
Speaker 1: it is. We still need weight kind more time to
Speaker 1: figure out what exactly the impact is coming out of
Speaker 1: this COVID UH incident in Central China and talk to
Speaker 1: us a little bit about how this fits into how
Speaker 1: President she has been handling COVID more recently against the
Speaker 1: backdrop of what's happening with the Chinese Communist Party. So
Speaker 1: after the party congress originally previously, people may be expecting
Speaker 1: that there may be indication that China can come out
Speaker 1: of UH. THEREI COVID and then no focus more on
Speaker 1: economic growth, but clearly it's not happening. So for instance,
Speaker 1: in uh Hanan or in a Zeno where are foxhansa
Speaker 1: iPhone campus is located in the local leaders there are
Speaker 1: still uh saying that they need to a prioritize zero
Speaker 1: COVID and then not to implement COVID combating measures. So
Speaker 1: I think it is going to be a bit difficult
Speaker 1: and challenging for what China ready to come out of
Speaker 1: zero COVID, And then I think it's hard to predict
Speaker 1: when list might be a completely uh go away. All right,
Speaker 1: Uh well, your story definitely worth a read, reading about
Speaker 1: Don Juan Wan and many more that we will for
Speaker 1: Bloomberg News. Thank you, and that does it for this
Speaker 1: edition of Bloomberg Technology. Make sure you tune in Tuesday
Speaker 1: our conversation which uber CEO Dara CAUs Rashah after the
Speaker 1: company reports results. You don't want to miss that. And
Speaker 1: of course check out our podcast wherever you get your podcasts.
Speaker 1: I'm Emily Changing, San Francisco. This is Bloomberg