WEBVTT - David Kirkpatrick on Meta Earnings (Audio)

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<v Speaker 1>Let's get to David Kirkpatrick now he's founder and editor

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<v Speaker 1>in chief of Taconomy to discuss the day's earnings from

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<v Speaker 1>Meta and David cootally sales falling for the first time ever.

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<v Speaker 1>I would have made to have to say about this. Well,

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<v Speaker 1>they said that it's probably going to be difficult. Advertising

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<v Speaker 1>environment is going to continue, and I'm sure they're right

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<v Speaker 1>about that. The company is poorly positioned in a number

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<v Speaker 1>of ways, and um it's growth is going to be

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<v Speaker 1>dramatically less this year. It will still grow for the year,

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<v Speaker 1>but probably more than ten points less than it has

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<v Speaker 1>in other recent years. And you know, this is a

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<v Speaker 1>company that's never really been through a real downturn, which

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<v Speaker 1>is what the economy is dealing it now, and it's

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<v Speaker 1>just figuring out how to handle it. David. As you know,

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<v Speaker 1>these results mark the end of the career for ad Meta.

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<v Speaker 1>For Cheryl Sandberg, she's now stepping down as the chief

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<v Speaker 1>operating officer. What does her departure mean for this company

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<v Speaker 1>as it faces a more challenging future. I think it's

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<v Speaker 1>poor timing for the company that Cheryl Sandberg is leaving now,

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<v Speaker 1>even though it seems to me that she hasn't done

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<v Speaker 1>as good a job as I would have hoped, and

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<v Speaker 1>I think many of us hoped in sort of restraining

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<v Speaker 1>some of Zuckerberg's more destructive instincts. That she hasn't helped

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<v Speaker 1>enough to ameliorate harmful speech and political disinformation that's flowing

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<v Speaker 1>in country after country. But nonetheless, she is a more

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<v Speaker 1>experienced business leader than anyone else really at the company

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<v Speaker 1>and senior positions, and to lose her now when the

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<v Speaker 1>company is facing such extreme headwinds seems very unfortunate, really sad.

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<v Speaker 1>And I also think Facebook Meta is just not going

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<v Speaker 1>to feel the same without Cheryl Sandberg, even to its

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<v Speaker 1>own employees, and I think that's a risky transition. Well,

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<v Speaker 1>we've got some other changing of the God's admit her

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<v Speaker 1>as well, and you SEEFO, how significant is this move?

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<v Speaker 1>I think it's not terribly significant, because you know, at Meta,

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<v Speaker 1>nobody really has power except for Zuckerberg, which goes back

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<v Speaker 1>to what I was saying about Cheryl Sandberg. She ended

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<v Speaker 1>up not really having power, which I think is one

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<v Speaker 1>reason she left. Dave Wayner, who has been the CFO since,

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<v Speaker 1>is moving into a Chief Strategy role, which is a

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<v Speaker 1>newly created position and one that I think, you know,

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<v Speaker 1>may suit him. Uh. We we don't really know what

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<v Speaker 1>he's thinking about strategy would be, I don't think but uh.

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<v Speaker 1>And they've promoted somebody from within to be the new CFO. UM.

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<v Speaker 1>I don't see that as a major change in terms

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<v Speaker 1>of the company's long term direction. What they have to

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<v Speaker 1>deal with is a declining economic environment that hurts advertising

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<v Speaker 1>and a what I consider ill advised, early premature, shall

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<v Speaker 1>we say, transition to a metaverse growth strategy long before

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<v Speaker 1>there's really a business there. And I think that that

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<v Speaker 1>is seriously problematic. But they're also being pressured, aren't they

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<v Speaker 1>not by competition from TikTok And what how are they

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<v Speaker 1>going to crack that nut? Well, that's a good question,

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<v Speaker 1>It's absolutely true. I mean, TikTok is the increasing you know,

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<v Speaker 1>bear in the room that's really threatening all the other

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<v Speaker 1>consumer social media companies, especially on Facebook metas Instagram product um.

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<v Speaker 1>And they are furiously attempting to change the design of

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<v Speaker 1>both Instagram and Facebook to put more short form video

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<v Speaker 1>that isn't created by your friends in front of the

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<v Speaker 1>average user, which is sort of the way that TikTok works. Um.

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<v Speaker 1>They don't really have an answer, though, I don't think

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<v Speaker 1>those efforts have born enough fruit even remotely. So far,

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<v Speaker 1>m TikTok continues to grow, continues to be by far

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<v Speaker 1>of the de facto choice of young people in pretty

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<v Speaker 1>much every developed country and increasingly the developing world. So

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<v Speaker 1>it's a problem. It's a real problem. TikTok's executing beautifully.

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<v Speaker 1>Um Instagram and Facebook are not. I just want to

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<v Speaker 1>return to that remark that you made about the metaverse

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<v Speaker 1>and how the will may not quite be ready for it.

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<v Speaker 1>Can you explain your your logical a little bit more? Dan, Well,

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<v Speaker 1>you know, I think one of the reasons that Time

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<v Speaker 1>magazines new cover story is that the metaverse is going

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<v Speaker 1>to change everything. You know, Facebook meta really did an

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<v Speaker 1>extraordinarily successful pr move when it changed its name at

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<v Speaker 1>exactly the moment when criticism was at its height for

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<v Speaker 1>Facebook's failures to remediate harmful speech and disinformation, particularly in

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<v Speaker 1>the political realm, and they did a great job of

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<v Speaker 1>changing the narrative and the world ate it up. And now,

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<v Speaker 1>because this massive company changed its name, I think there

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<v Speaker 1>it's become acceptable to believe that the metaverse is the

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<v Speaker 1>next phase of technology in the near term. I accept

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<v Speaker 1>that long term, some combination of virtual and physical and

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<v Speaker 1>you know, a r VR world will be a major,

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<v Speaker 1>major opportunity for consumer tech, but it is not anywhere

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<v Speaker 1>in the near term. And one reason it's not even

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<v Speaker 1>if it were a big deal in the United States

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<v Speaker 1>and Europe. You know, this company's business is a global business.

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<v Speaker 1>They're huge in India, Indonesia, South Africa, Brazil, et cetera.

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<v Speaker 1>Most of users in those places do not have high

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<v Speaker 1>bandwidth connections or technology that can really be used for

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<v Speaker 1>a metaverse type experience, and the chances that that will

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<v Speaker 1>happen in the near term, I think are very small.

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<v Speaker 1>So it's really a developed world strategy that's premature even

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<v Speaker 1>for the developer. Interesting too, today that we had the

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<v Speaker 1>FTC suing to block metas acquisition of the virtual reality

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<v Speaker 1>company within limited, maybe that's gonna also create a bit

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<v Speaker 1>of uh, some restraint. David, Thanks for being with us

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<v Speaker 1>and sharing your perspective. Always appreciated. David Kirkpatrick, founder and

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<v Speaker 1>editor in chief Technoomy, discussing the meta earnings today and

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<v Speaker 1>the disappointment on that front,