WEBVTT - Twitter's New Chapter, Pinterest Outperforming Peers 0:00:02.240 --> 0:00:05.520 From the heart of where Innovation, money and power Colli 0:00:06.360 --> 0:00:10.879 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:10.960 --> 0:00:27.320 Emily jay I remember my check in San Francisco, and 0:00:27.360 --> 0:00:30.080 this is Bloomberg Technology coming up in the next hour. 0:00:30.240 --> 0:00:32.760 This week marks the beginning of a new chapter in 0:00:32.800 --> 0:00:37.120 the already long and twisty elon Musk Twitter saga, moves 0:00:37.200 --> 0:00:40.320 from the Chief Twitter over the weekend, and what's next 0:00:41.040 --> 0:00:44.440 Claus Pinterest's latest earnings beat was a welcome bright spot 0:00:44.440 --> 0:00:48.120 compared to its peers like Snap Meta Alphabet. We'll catch 0:00:48.159 --> 0:00:50.520 up with CEO Bill Ready to talk about its strategy 0:00:50.600 --> 0:00:55.240 to reignite the platform. And in China and exitus of 0:00:55.320 --> 0:00:57.960 workers has threatened to disrupt output at the world's largest 0:00:57.960 --> 0:01:01.200 iPhone plant operated by fox On Now. The company is 0:01:01.200 --> 0:01:03.800 said to be raising wages by as much as to 0:01:03.880 --> 0:01:06.679 keep production going. We're gonna have all the details later 0:01:06.720 --> 0:01:10.480 this hour. This week, of course, marks the beginning of 0:01:10.480 --> 0:01:12.800 a new chapter in the Musk Twitter saga. In the 0:01:12.840 --> 0:01:15.360 span of just two days, he has completed the acquisition, 0:01:15.720 --> 0:01:18.840 fired Twitter's top executives, and taken over as Chief Twitter. 0:01:19.160 --> 0:01:21.679 Joining us now for more. Mark Mhaney, Senior managing director 0:01:21.680 --> 0:01:23.959 at Evercore, I s I who covered Twitter as a 0:01:24.000 --> 0:01:27.120 public company, and our very own senior executive tech editor, 0:01:27.440 --> 0:01:30.440 Brad Stone. So Brad, he's also dissolved the board. He's 0:01:30.480 --> 0:01:33.759 the only board member as of now. What's actually happening 0:01:34.120 --> 0:01:36.800 inside Twitter at this moment. I think there's a lot 0:01:36.800 --> 0:01:40.840 of anxiety and confusion and speculation right now. Emily employees 0:01:40.840 --> 0:01:44.880 are bracing for layoffs. They're swapping phone numbers, connecting on LinkedIn, 0:01:45.319 --> 0:01:47.600 a lot of people assuming they're probably about to get 0:01:47.680 --> 0:01:50.080 kicked out of the system. We know thanks to Mike 0:01:50.120 --> 0:01:52.680 colleague Kurt Wagner, a lot of managers had to create 0:01:52.760 --> 0:01:55.600 lists over the weekend of employees that they were planning 0:01:55.640 --> 0:01:58.520 to let go today. Nothing's been announced, but it really 0:01:58.600 --> 0:02:01.640 only seems a matter of time. And then other than that, 0:02:01.840 --> 0:02:03.640 they're throwing a lot of things against the wall. You 0:02:03.720 --> 0:02:07.240 heard this thing about maybe reviving Vine, Twitter's old video 0:02:07.280 --> 0:02:11.040 sharing service that they closed in two thousand sixteen. Twitter 0:02:11.080 --> 0:02:14.120 would have to rebuild it to convince creators to come back. 0:02:14.560 --> 0:02:16.880 They haven't been able to make money on that when 0:02:16.880 --> 0:02:18.280 they when they had it, so that would be a 0:02:18.320 --> 0:02:20.880 big challenge. And then this idea of getting people to 0:02:20.960 --> 0:02:23.920 pay for that blue check mark that we enjoy. Emily, 0:02:24.000 --> 0:02:28.239 the verification um twenty dollars a month was floated. I 0:02:28.560 --> 0:02:31.200 think they're throwing some things against the wall. We do 0:02:31.320 --> 0:02:34.600 know that Ellen wants to revive subscriptions at Twitter, so 0:02:34.639 --> 0:02:37.359 maybe that's one piece of a broader plan. But it's 0:02:37.360 --> 0:02:40.440 still very early. Mark, I someone who covered the company 0:02:40.680 --> 0:02:44.240 as an analyst four years, What do you make of it? 0:02:44.600 --> 0:02:46.960 What of what? What kind of a proposition is this 0:02:47.080 --> 0:02:50.200 really for investors today? Well, I think it's gonna be 0:02:50.280 --> 0:02:54.000 a it's gonna be completely revamped over the next year too. 0:02:54.160 --> 0:02:57.600 And um, you know, I listened to much very carefully 0:02:57.639 --> 0:03:00.200 for the last six months. I didn't necessarily to hear 0:03:00.240 --> 0:03:02.720 business plans. I think he had a lot of other 0:03:02.760 --> 0:03:05.600 reasons for owning the asset, and so it's his now. 0:03:06.200 --> 0:03:08.359 I think from a from if this were to come 0:03:08.360 --> 0:03:10.960 out into the public markets again, I guess that this 0:03:11.040 --> 0:03:13.720 business will be completely revampeded. But if I just step back, 0:03:13.720 --> 0:03:16.120 Twitter didn't really do much in the public markets. She 0:03:16.240 --> 0:03:19.000 was there for what seven years, and uh, it barely 0:03:19.040 --> 0:03:21.400 moved over that course of that time. It is very volatile. 0:03:21.760 --> 0:03:26.800 It um, it never really gained dramatic share amongst amongst 0:03:26.800 --> 0:03:30.400 advertisers marketers. They generated reasonable a modern revenue five billion 0:03:30.480 --> 0:03:33.040 a year, They had reasonable free cash flow, but they 0:03:33.040 --> 0:03:36.280 could never really break through beyond being like a second 0:03:36.360 --> 0:03:39.440 or even a third tier advertising platform. I haven't heard 0:03:39.440 --> 0:03:41.960 anything from from us that suggests he's got a plan 0:03:42.080 --> 0:03:44.680 to to break him out of that. I think subscriptions 0:03:44.680 --> 0:03:48.320 are are limited as to long term strategy for Twitter. 0:03:48.440 --> 0:03:51.240 Good strategy, but they don't dramatically move the needles. So 0:03:51.840 --> 0:03:55.000 I'm sort of I'm skeptically watching this from a distance. 0:03:55.040 --> 0:03:57.920 I hope he can improve the business model there, but 0:03:58.600 --> 0:04:00.440 I'm not I'm not holding my breath on that. But 0:04:00.480 --> 0:04:03.120 if he can, wonderful In the meantime, I think his 0:04:03.160 --> 0:04:06.600 intentions were very different than improving the business, and you know, 0:04:06.640 --> 0:04:08.800 I wish him good luck with the rest that he's 0:04:08.840 --> 0:04:12.160 trying to do with the business. Brad We reported that 0:04:12.200 --> 0:04:16.000 in the hours after his takeover, hate speech surged on 0:04:16.080 --> 0:04:18.359 the platform. Twitter responded saying a lot of that was 0:04:18.440 --> 0:04:23.679 inauthentic behavior. Over the weekend, Must also retweeted an article 0:04:23.880 --> 0:04:27.680 with a conspiracy theory about the attack on now speaker 0:04:27.760 --> 0:04:31.560 Nancy Policy's husband, obviously, this is a person with a 0:04:31.680 --> 0:04:36.960 huge audience that obviously creates huge opportunities but also real dangers. 0:04:37.480 --> 0:04:39.520 What does all of this tell you, Well, I mean, 0:04:39.520 --> 0:04:42.239 there was a breathtaking lack of respect with that tweet 0:04:42.520 --> 0:04:44.960 for the former Senator and First Lady Hillary Clinton, for 0:04:45.000 --> 0:04:47.359 the Speaker of the House and her husband, for the 0:04:47.400 --> 0:04:49.720 facts of the case which are now very well established 0:04:49.720 --> 0:04:52.840 by the criminal complaint coming out of San Francisco. I mean, 0:04:53.440 --> 0:04:56.400 really believe the conspiracy theories? I don't think so. What 0:04:56.440 --> 0:04:59.279 it tells me is that like owning the lips, provoking 0:04:59.279 --> 0:05:03.280 Democrats being contrariant, this is kind of the animating philosophy 0:05:03.400 --> 0:05:06.560 right now, not only the right wing Republicans, but the 0:05:06.600 --> 0:05:10.120 pro business moderates like Elon and David Sachs. They just 0:05:10.400 --> 0:05:14.440 enjoy this pointless provocation. And you know this is penn 0:05:14.520 --> 0:05:17.000 Elon m o on Twitter for quite some time now, 0:05:17.160 --> 0:05:20.200 Jack Dorsey, We're just getting this headline, Jack Dorsey contributing 0:05:20.360 --> 0:05:25.680 eighteen million Twitter shares to retain an indirect stake in 0:05:25.720 --> 0:05:30.080 this company under Elon musk Mark. What do you make 0:05:30.120 --> 0:05:33.600 of that? And what do potential advertisers who have been 0:05:33.600 --> 0:05:37.159 working with Twitter for all these years make of what's 0:05:37.160 --> 0:05:39.880 to come. I mean, clearly there's a lot of uncertainty. Well, 0:05:40.040 --> 0:05:43.560 I'll just hit on the second part of the second question, Emily. 0:05:43.800 --> 0:05:45.320 So this is this is key. I mean, this is 0:05:45.400 --> 0:05:49.440 this is how of the revenue from Twitter and the 0:05:49.520 --> 0:05:52.200 pass came from advertising. I find I don't really see 0:05:52.240 --> 0:05:54.800 a business model in the future that doesn't still have 0:05:55.760 --> 0:05:57.920 plus to the revenue come from advertising, like it does 0:05:58.000 --> 0:06:00.680 with every other social media asset. There's nothing wrong with that. 0:06:00.720 --> 0:06:03.640 It's a high margin business. Wonderful thing about social media 0:06:03.680 --> 0:06:05.760 is that they don't have to pay the content providers 0:06:05.839 --> 0:06:08.799 or play largely don't, so it's a very high margin business. 0:06:08.800 --> 0:06:11.120 You just need to sell effectively adds against it. One 0:06:11.160 --> 0:06:12.440 of the things that Twitter has been trying to do 0:06:12.480 --> 0:06:14.760 for the last couple of years is moved beyond brand 0:06:14.760 --> 0:06:18.240 advertising to direct response advertising, which has kind of always 0:06:18.240 --> 0:06:21.159 been the power alley of Internet advertising. The problem is 0:06:21.200 --> 0:06:23.440 that those dollars have gone to Google, and they've gone 0:06:23.440 --> 0:06:25.880 to Facebook and a few other places, and they've only 0:06:25.920 --> 0:06:29.400 trickled down to Twitter because in part because Twitter has 0:06:29.400 --> 0:06:32.000 never really had great tools for direct response advertisers. So 0:06:32.200 --> 0:06:35.840 maybe that's all part of the fix at Twitter. From 0:06:35.839 --> 0:06:37.960 a business model perspective, that's not going to happen in 0:06:37.960 --> 0:06:40.160 a quarter or two. That's a year or two slog 0:06:40.240 --> 0:06:42.880 for that to happen. In the meantime. Marketers all this 0:06:43.040 --> 0:06:47.560 debate about whether there's um uh censorship or not on 0:06:47.560 --> 0:06:50.080 on Twitter. Marketers, I think they just want something that's 0:06:50.120 --> 0:06:53.400 relatively well regulated. They don't want their brands put against 0:06:53.880 --> 0:06:57.200 nasty content, whether that's whether that's a verbal or whether 0:06:57.240 --> 0:07:00.960 it's graphic. Uh and um so I think uh if 0:07:01.000 --> 0:07:04.719 something changes in the marketplace that makes it less user friendly, 0:07:05.080 --> 0:07:08.600 makes it makes it if there's more vulgarity on the site, 0:07:08.640 --> 0:07:11.120 I think advertisers will pull back from that. So there's 0:07:11.120 --> 0:07:13.800 a real tough balancing act here between what must he 0:07:13.880 --> 0:07:16.280 is trying to do and what marketers want. And you know, 0:07:16.320 --> 0:07:18.800 I saw his tweets to market to marketers over the weekend. 0:07:19.040 --> 0:07:21.120 He said he would try to avoid the place becoming 0:07:21.120 --> 0:07:24.720 a hellscape. I think he does that for personal philosophical reasons, 0:07:24.720 --> 0:07:26.720 but also for business reasons, because if it does become 0:07:26.760 --> 0:07:30.560 a healthscape, advertisers will flee. Rad Curious what your take 0:07:30.680 --> 0:07:32.880 is on these Jack Dorsey filings. We're getting this all 0:07:32.960 --> 0:07:36.320 from a third ten d that Jack Dorrisey still retaining 0:07:36.680 --> 0:07:40.080 an indirect stake in Twitter. I mean Jack Dorsey is 0:07:40.520 --> 0:07:45.360 the author of this whole situation. He personally solicited Ellen 0:07:45.520 --> 0:07:48.920 to come by the company. He long felt that Twitter 0:07:49.280 --> 0:07:52.680 would do better as a private company. He helped taking 0:07:52.680 --> 0:07:55.640 a public with one of the company's big mistakes. So 0:07:55.800 --> 0:07:57.880 you know, it doesn't surprise me. He's a big fan 0:07:57.920 --> 0:08:01.240 of Elon's. He wants to be a small part of 0:08:01.240 --> 0:08:04.320 of Twitter's makeover. He cares deeply for the company. Uh, 0:08:04.360 --> 0:08:07.320 so you know he's putting his money where his mouth is. Um, 0:08:07.320 --> 0:08:10.440 it'll be interesting to see if he has any operational 0:08:10.520 --> 0:08:12.840 or advisory role in the new Twitter. Of course, it's 0:08:12.960 --> 0:08:15.000 it's too soon to tell. But no, this doesn't surprise 0:08:15.040 --> 0:08:17.120 me at all. Well, speaking of that, I'm curious what 0:08:17.160 --> 0:08:20.920 you think about him surrounding himself Elon Musk surrounding himself 0:08:20.920 --> 0:08:24.840 with people like David Sacks and Jason Calcannis, both of 0:08:24.920 --> 0:08:27.800 the All In Pod, both with a point of view. 0:08:27.920 --> 0:08:30.920 You've also got Amy Klobuchar, Senator Amy Klobuchar out there 0:08:31.120 --> 0:08:33.960 saying that she's worried that hate speeches an even bigger 0:08:34.000 --> 0:08:39.480 liability now on Twitter. Um, you know, clearly we're still 0:08:39.480 --> 0:08:43.120 waiting for the plans to form. But you know, how 0:08:43.600 --> 0:08:46.400 what sort of conclusions are we supposed to draw here 0:08:46.440 --> 0:08:50.480 about what kind of company he's going to be running. Well, well, look, 0:08:51.280 --> 0:08:54.520 I think everybody was bracing for Donald Trump to be 0:08:54.640 --> 0:08:58.520 reinstated onto Twitter at the very first day of Elan 0:08:58.600 --> 0:09:01.040 owning the company, and it did happen. You know, I 0:09:01.040 --> 0:09:04.160 feel a little sheepish praising Ellen here for exercising restraint. 0:09:04.360 --> 0:09:06.600 But to go back to Mark's point, I think he's 0:09:06.600 --> 0:09:09.240 now got to balance some of his rhetoric with the 0:09:09.280 --> 0:09:12.760 realities of running a company and keeping the advertising base 0:09:12.840 --> 0:09:16.400 and keeping advertisers happy and and fostering you know, kind 0:09:16.400 --> 0:09:20.400 of kind of reasonably safe dialogue on the on the surface. 0:09:20.720 --> 0:09:23.000 You know they've talked about in oversight board. We don't 0:09:23.200 --> 0:09:25.120 there's a lot we don't know. Is that, like Facebook's 0:09:25.160 --> 0:09:29.559 oversight board, a sort of kind of veto appellate body, 0:09:30.280 --> 0:09:32.800 or is it more than management of the company. You know, 0:09:32.920 --> 0:09:36.520 these are all real serious, hard questions that Ellen and 0:09:36.640 --> 0:09:39.760 his his friends now who all have other jobs, by 0:09:39.760 --> 0:09:42.440 the way, have to have to determine. And you know, 0:09:42.520 --> 0:09:45.280 I wish them well. These are these are tough decisions. 0:09:45.400 --> 0:09:48.640 Are who knows that's CEO position, according to Ellen is open. 0:09:48.720 --> 0:09:53.079 He's just the chief twit for now, Bloomberg's Bradstone. Thank 0:09:53.080 --> 0:09:55.520 you so much. Mark Mahaney of ever Card, Mark, you're 0:09:55.520 --> 0:09:57.760 going to stick with us and help us break down 0:09:58.280 --> 0:10:00.080 some of the big tech results we've seen of the 0:10:00.160 --> 0:10:04.000 last couple of weeks. Sticking with Twitter, Democratic Senator Chris 0:10:04.120 --> 0:10:07.680 Murphy said Musque's purchase of the platform should be scrutinized. 0:10:07.720 --> 0:10:11.040 Murphy tweeting today, I'm requesting the Committee on Foreign Investment 0:10:11.120 --> 0:10:14.760 to conduct an investigation into the national security implications of 0:10:14.760 --> 0:10:19.200 Saudi Arabia's purchase of Twitter. Now, among the investors backing 0:10:19.280 --> 0:10:21.960 must take over, Saudi Prince Alwa lead been to lall 0:10:22.080 --> 0:10:24.680 through the Kingdom holding Company and his private office, which 0:10:24.679 --> 0:10:28.280 agreed to roll over nearly thirty five million Twitter shares 0:10:28.280 --> 0:10:41.199 worth about one point nine billion dollars. Back now with 0:10:41.400 --> 0:10:44.240 Mark Mahoney of Avercor to talk about big tech results. Mark, 0:10:44.280 --> 0:10:47.040 I gotta start with Meta. It's sold off more than 0:10:47.120 --> 0:10:50.400 sevent so far this year. I just checked its market cap, 0:10:50.679 --> 0:10:53.400 less than two hundred fifty million dollars. We're back to 0:10:53.480 --> 0:10:59.280 October levels. I mean, would you have ever thought this 0:11:00.000 --> 0:11:04.320 could be possible? Um, after this company has achieved such 0:11:04.400 --> 0:11:08.520 historic high I didn't think it would be possible. Um Well, 0:11:08.559 --> 0:11:10.040 I guess I thought it was possible, but I didn't 0:11:10.040 --> 0:11:11.800 think it was probable, or else I would have had 0:11:11.840 --> 0:11:13.760 a buy on it. Mikel has been dead wrong on 0:11:13.800 --> 0:11:16.320 this for the last twelve months or even longer. This 0:11:16.360 --> 0:11:19.640 company hit this buzz saw of these Apple privacy changes, 0:11:20.559 --> 0:11:26.040 competition from from TikTok, and now an advertising economic recession, 0:11:26.520 --> 0:11:29.520 and then this fourth kind of spoiler alert issue or 0:11:29.559 --> 0:11:32.280 spoiler issue, which is what really came up last week, 0:11:32.320 --> 0:11:34.960 which is that the market wants them to cut out 0:11:35.040 --> 0:11:38.440 the spend on the metaverse, slash it in half, rain 0:11:38.559 --> 0:11:42.280 and expenses. It's a recession. When when that happens, you're 0:11:42.280 --> 0:11:45.800 supposed to kind of marry down, ratchet down expenses and 0:11:45.840 --> 0:11:49.120 investments to kind of kind of match up with with 0:11:49.240 --> 0:11:52.240 the deteriorating revenue. And the company is sort of refusing 0:11:52.280 --> 0:11:54.720 to do that. Zuckerberger's refusing to do that. And I 0:11:54.720 --> 0:11:57.240 think this last part is really just fight selling on 0:11:57.280 --> 0:11:59.760 a part of investors who were saying you know, the 0:11:59.800 --> 0:12:02.720 It's wasn't the revenue results. People expected softness there. It 0:12:02.840 --> 0:12:05.920 was that they that the clinging to this aggressive investment 0:12:05.920 --> 0:12:08.480 horizon in this environment, and the market has said no, 0:12:09.080 --> 0:12:11.640 that too much. It's no mosque, We're out of here. 0:12:11.640 --> 0:12:14.080 We're selling now. There were a couple of companies that 0:12:14.200 --> 0:12:19.160 had strong quarters Apple Pinterest, which is interesting given their 0:12:19.240 --> 0:12:24.040 role in the advertising business. But of course Alphabet, Meta, Microsoft, Amazon, 0:12:24.240 --> 0:12:29.040 all having a really tough quarter reporting. What's the common 0:12:29.080 --> 0:12:32.440 thread here, Well, just the only thing I uh equivabal 0:12:32.520 --> 0:12:36.320 with you on is Pinterest. Pinterest revenue results actually deteriorated. Now, 0:12:36.559 --> 0:12:39.480 the expectations have been set low enough that results came 0:12:39.520 --> 0:12:41.120 in a little bit better than expected. By the way 0:12:41.200 --> 0:12:43.599 they did with Meta too, ad revenue came in a 0:12:43.640 --> 0:12:46.520 smidgin better than expected. So it wasn't a revenue problem. 0:12:46.720 --> 0:12:48.920 Is that people just don't want them investing out, particularly 0:12:48.920 --> 0:12:51.240 they don't want them investing in the metaverse with their 0:12:51.280 --> 0:12:54.640 return on that investment dollar is so uncertain. What's happening 0:12:54.720 --> 0:12:57.600 is demanded softening across the board. So the two most 0:12:57.640 --> 0:13:01.040 interesting parts to me, Emily were Google. This was the 0:13:01.080 --> 0:13:03.400 first quarter that Google said there was weakness and search. 0:13:03.559 --> 0:13:05.320 They hadn't said that in March, they hadn't said that 0:13:05.400 --> 0:13:07.400 in June quarter. They said that in the September quarter. 0:13:07.720 --> 0:13:10.760 And search is usually considered to be the most not 0:13:11.120 --> 0:13:14.400 recession proof, but recession resilient of all the ad platforms. 0:13:14.480 --> 0:13:16.640 So if Google seeing it in search, you can you 0:13:16.679 --> 0:13:19.520 can be pretty sure that just about every other company 0:13:19.559 --> 0:13:21.800 is seeing it. And then there's Amazon. Amazon, and the 0:13:21.920 --> 0:13:24.920 June quarter was specifically asked whether they've seen any signs 0:13:24.920 --> 0:13:27.840 of consumer softness in the CEFO said no, Well things 0:13:27.840 --> 0:13:30.480 have changed now they're starting to see softness, and they 0:13:30.520 --> 0:13:33.040 saw it in Europe maybe not surprisingly, and now I'm 0:13:33.040 --> 0:13:35.320 starting to bleed over to the US. So the real 0:13:35.400 --> 0:13:37.560 question is how much worse could it get? We know 0:13:37.640 --> 0:13:39.720 what's getting softer, will it continue to get softer and 0:13:39.800 --> 0:13:42.640 for how long? And that's that's a really hard one 0:13:42.679 --> 0:13:44.240 to know. But it's a macro call. And I think 0:13:44.240 --> 0:13:46.800 all of these companies, especially they have exposure to the consumer, 0:13:46.920 --> 0:13:50.320 but even Microsoft and and Amazon with a WS are 0:13:50.440 --> 0:13:53.079 are saying that enterprises are starting to slow down to 0:13:53.440 --> 0:13:56.680 we're heading into recession demand trends or softening across the board, 0:13:56.920 --> 0:13:59.280 and any company who tells you that that's not the case. 0:13:59.360 --> 0:14:01.599 It's probably be either doesn't know their business or is 0:14:01.640 --> 0:14:04.880 not being honest. Interesting point you made about Pinterest. Bill Ready, 0:14:04.880 --> 0:14:07.400 the new CEO is going to be on the show 0:14:07.840 --> 0:14:09.800 in in in a few minutes. I'm gonna put your 0:14:09.840 --> 0:14:12.319 point to him. I do want to ask about the 0:14:12.360 --> 0:14:15.520 broader advertising landscape and what your outlook is. You know, 0:14:15.600 --> 0:14:19.200 you also cover Netflix, which reversed the decline and subscribers 0:14:19.240 --> 0:14:21.200 for the first time in a while. You've got now 0:14:21.240 --> 0:14:24.160 the streamers going after a piece of the advertising pie 0:14:24.240 --> 0:14:27.440 in addition to the social media companies going after the 0:14:27.520 --> 0:14:30.760 advertising pie. How is this all going to play out well? 0:14:30.960 --> 0:14:33.360 By the way I think Pinterest is maybe really will 0:14:33.440 --> 0:14:36.240 set up here. You know, you've got a turnaround story, 0:14:36.440 --> 0:14:40.680 um executive with a very good execution track record, asset 0:14:40.720 --> 0:14:42.800 that may not have been run that well in the past. 0:14:42.880 --> 0:14:45.040 So there's a turnaround story. By the way, there's sort 0:14:45.080 --> 0:14:46.880 of is a Netflix too, which is why the stock 0:14:46.920 --> 0:14:50.360 has been a monster stock to the upside finally over 0:14:50.360 --> 0:14:53.040 the last couple of months, because there's this new revenue 0:14:53.080 --> 0:14:55.040 team that they're going to go from zero to a huntred. 0:14:55.240 --> 0:14:58.000 Question is just how quickly. But you know there there's 0:14:58.240 --> 0:15:04.640 there's enormous demand for from advertisers for access to Netflix's base. 0:15:04.800 --> 0:15:06.920 I mean two or your twenty million people who use 0:15:07.000 --> 0:15:09.040 the site, you know, an hour or two hours a day. 0:15:09.040 --> 0:15:11.960 So you've got reach, you've got frequency, and you've got 0:15:12.000 --> 0:15:14.680 almost like a primetime audience. You know that that prime 0:15:14.720 --> 0:15:18.240 audience I meant like Amazon Prime s. The average household 0:15:18.240 --> 0:15:22.560 probably rescuse middle to upper middle income globally for Netflix. 0:15:22.600 --> 0:15:25.400 So there's just a lot that brand advertisers can tap into. 0:15:25.440 --> 0:15:28.280 For the first time ever, you can own Netflix inventory, 0:15:28.400 --> 0:15:31.320 so that that's what there's something new. If you don't, 0:15:31.360 --> 0:15:33.320 if you don't have something new, brand new in your 0:15:33.360 --> 0:15:35.560 in your fundamentals, they are going to get weaker in 0:15:35.600 --> 0:15:38.080 the back half year and going into next year. That's 0:15:38.080 --> 0:15:40.600 the advantage that Netflix has right here. I like Netflix 0:15:40.680 --> 0:15:43.360 is one of my topics, so is Meta. I just didn't. 0:15:43.440 --> 0:15:46.320 I just thought Metal was gonna show more cost and 0:15:46.480 --> 0:15:50.720 investment discipline than than they've led on mark human covering 0:15:50.800 --> 0:15:55.400 tech for two decades. Do you think we're seeing a 0:15:55.400 --> 0:15:58.560 real inflection point here? Is there further to fall? And 0:15:58.600 --> 0:16:01.400 how how long does it take before this turns around well, 0:16:01.560 --> 0:16:03.680 so to two thoughts, Um and I love the way 0:16:03.720 --> 0:16:05.320 you set up the question. So yeah, we have a 0:16:05.360 --> 0:16:08.320 negative inflection here. These are tech is bigger than it 0:16:08.400 --> 0:16:10.880 was during the last cycle O eight oh nine with 0:16:10.960 --> 0:16:14.680 the great housing, great financial crisis, Great housing, great financial crisis. 0:16:14.720 --> 0:16:17.480 Those are the same thing, and so it's much bigger. 0:16:17.480 --> 0:16:20.080 So it's more cyclical than it was back then. Look, 0:16:20.080 --> 0:16:22.440 our our our firm aber Coorien size call is that 0:16:22.600 --> 0:16:25.880 overall advertising is going to decline mid single digits next year, 0:16:26.040 --> 0:16:28.640 which probably means to digital advertising is going to be 0:16:29.080 --> 0:16:31.960 flat up five percent. There's another inflection point yield that 0:16:31.960 --> 0:16:33.920 I'm super interested in. We'll have to come back to it. 0:16:33.960 --> 0:16:37.920 But that's AI. So what Facebook and Google are doing, 0:16:38.000 --> 0:16:42.160 met and alphabet they're spending seventy billion dollars combined next 0:16:42.200 --> 0:16:45.920 year on capex related to AI, artificial intelligence and machine learning. 0:16:46.120 --> 0:16:49.480 I'm fascinating And Bill Ready has been uh, very thoughtful 0:16:49.520 --> 0:16:52.000 on this topic too. I'm fascinated by what's gonna come 0:16:52.000 --> 0:16:54.040 out of this. The market is assuming that there's very 0:16:54.040 --> 0:16:58.160 little return on that AI investment, that AI capital expenditures. 0:16:58.640 --> 0:17:00.800 My guess is at Google and and men have probably 0:17:00.800 --> 0:17:02.360 know what they're doing, and we're going to see some 0:17:02.440 --> 0:17:04.840 sort of return on it. But but and so when 0:17:04.880 --> 0:17:06.560 we see that, I don't think that's pricing. I think 0:17:06.560 --> 0:17:09.800 that creates some wonderful long term buying opportunities on these 0:17:09.840 --> 0:17:12.119 two stocks. What I fear is that the stocks are 0:17:12.160 --> 0:17:14.720 first going to go down because of macro and recession 0:17:14.960 --> 0:17:18.439 before they start moving up because of artificial intelligence. All Right, 0:17:18.600 --> 0:17:21.399 we're gonna have to dig in to artificial intelligence with 0:17:21.440 --> 0:17:23.840 you next time you're back on the show. Markmahenny of 0:17:23.840 --> 0:17:26.119 ever Core, I s, I always appreciate your perspective, and 0:17:26.200 --> 0:17:30.439 especially your historical perspective. Given how many years you've been 0:17:30.480 --> 0:17:33.120 doing this, We're gonna have much more ahead. Stay with us. 0:17:33.280 --> 0:17:50.600 This is Bloomberg, another story we're continuing to watch. Electronic 0:17:50.680 --> 0:17:54.200 Arts will develop three video games inspired by Marvel comic 0:17:54.280 --> 0:17:57.240 book characters. That gives the company access to the most 0:17:57.240 --> 0:18:00.800 popular entertainment franchise in the world. The scheme e A 0:18:01.160 --> 0:18:03.720 is making is based on Iron Man, that is, the 0:18:03.760 --> 0:18:06.760 billionaire inventor and superhero who was the main character in 0:18:06.800 --> 0:18:17.800 one of the first hit Marvel movies. Welcome back to 0:18:17.840 --> 0:18:20.199 Bloomberg Technology and Emily Changing in San Francisco. Let's get 0:18:20.240 --> 0:18:23.040 back to the markets and social media stocks on the move. 0:18:23.280 --> 0:18:26.440 Bloomberg's at Ludlow is back and take it away. Yeah, 0:18:26.440 --> 0:18:28.240 there was a pocket of weakness in the market when 0:18:28.240 --> 0:18:30.360 it comes to social media shares. We talked about how 0:18:30.359 --> 0:18:34.440 Meta closed its lowest level since October. There were reports 0:18:34.760 --> 0:18:38.440 from down to detect to seven thousand incidences of people 0:18:38.520 --> 0:18:42.639 saying that Instagram had crashed and was having some glitches 0:18:42.680 --> 0:18:44.680 and was down. But you would suspect that a lot 0:18:44.680 --> 0:18:47.280 of the pressure on this stock stems from that disappointing 0:18:47.640 --> 0:18:50.240 earnings report last week. Snap caught up with that down 0:18:50.240 --> 0:18:53.520 one point sent Pinterest Interesting had its best day in 0:18:53.560 --> 0:18:56.320 more than two months last Friday after strong earnings. I 0:18:56.320 --> 0:18:58.720 think the street really liked what they saw, but giving 0:18:58.800 --> 0:19:01.840 up some of those gains in Monday session down one 0:19:01.840 --> 0:19:05.480 Pinterest really interesting stories. We look at the stock year 0:19:05.520 --> 0:19:08.119 to day relative to met Her and Snap. We know 0:19:08.160 --> 0:19:11.960 about softness and the advertizing space, but actually relative to 0:19:12.000 --> 0:19:14.680 its peers, Pinterest is held up really well. I'm really 0:19:14.680 --> 0:19:16.960 interested in what the story is here and what invests 0:19:17.040 --> 0:19:20.600 see in Pinterest relative to a Meta, relative to a Snap. 0:19:20.640 --> 0:19:23.719 That said, of course, it is still down pretty significantly 0:19:23.760 --> 0:19:26.399 year today, and I'm hoping that you can ask which 0:19:26.440 --> 0:19:30.520 direction the stock goes from here? All right, I will 0:19:30.560 --> 0:19:35.119 indeed thank you. Pinterest has been out pacing its peers, 0:19:35.119 --> 0:19:37.439 as I mentioned, posting strong third quarter results with an 0:19:37.480 --> 0:19:41.480 uptick and monthly active users after three straight quarters of declines. 0:19:41.960 --> 0:19:44.520 This as the social media industry grapples with a decrease 0:19:44.560 --> 0:19:49.000 in digital ad spend while marketers worry about economic uncertainty. 0:19:49.200 --> 0:19:52.040 Joining me now for more on this bi already, Pinterest 0:19:52.040 --> 0:19:54.880 CEO has been on the job since late June. So 0:19:55.240 --> 0:19:58.280 how is it that Pinterest seemed to buck the ad 0:19:58.400 --> 0:20:02.520 media spiral we saw with Snap and Meta and others. 0:20:02.680 --> 0:20:05.960 Bill Well, first of all, thanks for having me Emily. 0:20:06.160 --> 0:20:08.920 Always a pleasure, UM, And I feel really great about 0:20:08.920 --> 0:20:11.280 how our team performed in Q three. I think you 0:20:11.320 --> 0:20:13.680 know we're we're doing some things that are fundingly different 0:20:13.720 --> 0:20:16.040 than the rest of social media, and I think you're 0:20:16.040 --> 0:20:18.920 seeing that start to cut through with advertisers, uh, and 0:20:18.920 --> 0:20:21.280 and with users. We grew teen percent year on year 0:20:21.320 --> 0:20:25.119 on a constant currency basis. UH, really outpacing a decelerating 0:20:25.160 --> 0:20:26.920 market and growing faster than a lot of our peers, 0:20:26.960 --> 0:20:29.640 which means we're taking share. Uh. And I think part 0:20:29.640 --> 0:20:32.359 of that is that, you know, number one, we're a 0:20:32.400 --> 0:20:34.480 positive platform. We're not a place where people go to 0:20:34.480 --> 0:20:37.760 shout about their politics or to present their seemly perfect 0:20:37.760 --> 0:20:40.440 life that makes others feel negative. Uh. It's it's a 0:20:40.440 --> 0:20:43.040 place where people go to find inspiration. UH. It's a 0:20:43.040 --> 0:20:45.320 place where people go with an intent and a purpose. 0:20:45.960 --> 0:20:49.320 And that's a very unique thing in the space, both 0:20:49.359 --> 0:20:52.360 for what the users get as well as what advertisers get. 0:20:52.400 --> 0:20:56.080 It's a full funnel ADS solution in the advertisers can 0:20:56.080 --> 0:20:59.600 connect at the upper, mid and lower funnel and really 0:20:59.640 --> 0:21:02.280 meet you. There's a multiple points along their journey. And 0:21:02.320 --> 0:21:04.800 so the brand safe nature of the platform, paired with 0:21:04.840 --> 0:21:07.960 the full funnel nature of it, UH, user growth returning, 0:21:08.280 --> 0:21:10.560 these things are all starting to really cut through. UH. 0:21:10.600 --> 0:21:12.400 And I think you see it demonstrated in our results. 0:21:12.640 --> 0:21:15.760 Let's talk about what advertisers get, because obviously we're seeing 0:21:15.760 --> 0:21:18.320 a broader ad pullback. What is your outlook as we 0:21:18.320 --> 0:21:21.320 head into three and how much of that you know, 0:21:21.400 --> 0:21:25.520