WEBVTT - Meta Earnings and Musk In Twitter's Office 0:00:02.200 --> 0:00:05.480 From the heart of where innovation, money and power COLLI 0:00:06.320 --> 0:00:10.880 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:10.920 --> 0:00:27.920 Emily Jay. I'm Emily Check in San Francisco, and this 0:00:27.960 --> 0:00:30.600 is Bloomberg Technology coming up in the next hour. Meta 0:00:30.680 --> 0:00:33.800 takes a beating as the making of the metaverse gets 0:00:33.960 --> 0:00:37.960 more and more expensive. It is the second straight quarter 0:00:38.159 --> 0:00:42.000 of yearly revenue declines. Ever, but there are some bright 0:00:42.040 --> 0:00:46.440 spots for Facebook and Instagram we'll discuss. Plus. Elon Musk 0:00:46.520 --> 0:00:50.159 is in the building at the Twitter office where on 0:00:50.200 --> 0:00:52.760 Friday he will address the staff. He reported with plans 0:00:52.800 --> 0:00:56.880 to cut by more details on a Bloomberg scoop in 0:00:56.920 --> 0:00:59.800 a moment, and it is one of the biggest ipeos 0:00:59.800 --> 0:01:02.280 of the year. The CEO of Intel self driving startup 0:01:02.320 --> 0:01:06.319 Mobili tells us about the law quote ahead all of 0:01:06.360 --> 0:01:07.680 that in a moment, but first I want to dig 0:01:07.840 --> 0:01:10.679 a little deeper now into Meta's results with Jasmine Edinburgh, 0:01:10.920 --> 0:01:14.920 principal analysts at Insider Intelligence. Jasmine, of course focusing on 0:01:14.920 --> 0:01:19.360 on the forecast and also profit. Quarterly profit being cut 0:01:19.400 --> 0:01:23.080 basically in half. I mean that's a big number for 0:01:23.120 --> 0:01:26.680 a company as big as Meta. Yeah, and we're also 0:01:26.760 --> 0:01:30.640 coming up on Meta's one year anniversary of the name change, 0:01:30.680 --> 0:01:33.440 and what I would start with is that Meta today 0:01:33.480 --> 0:01:37.200 is a far cry from what Facebook was just one 0:01:37.280 --> 0:01:41.200 year ago. As Facebook, the company was able to generate 0:01:41.280 --> 0:01:45.240 double digit growth every year, revenue growth every year, and 0:01:45.319 --> 0:01:48.360 last year it posted about thirty seven percent revenue growth. 0:01:48.600 --> 0:01:52.360 Now it had two consecutive quarters of revenue declines, and 0:01:52.400 --> 0:01:56.400 an insider intelligence our brand new forecast shows that Meta 0:01:56.560 --> 0:01:59.400 is going to post its first ever year over year 0:01:59.680 --> 0:02:02.280 declar line and worldwide AD revenues for the full year 0:02:02.320 --> 0:02:08.320 two as well. Now, let's talk about the bets that 0:02:08.440 --> 0:02:10.679 Meta is making. The two big ones, the shift to 0:02:10.800 --> 0:02:14.480 reels and also the metaverse. Is there any evidence that 0:02:14.639 --> 0:02:19.320 either of these are actually paying off well? Zuckerberg's bet 0:02:19.320 --> 0:02:22.480 on the metaverse is clearly jeopardizing the short term health 0:02:22.520 --> 0:02:25.080 of its business. I will say that there is, you know, 0:02:25.320 --> 0:02:28.400 some business interest in the metaverse. We have seen some 0:02:28.480 --> 0:02:32.240 activations from some businesses, but those activations are also coming 0:02:32.240 --> 0:02:34.919 out of experimental budgets for the first part, for the 0:02:34.960 --> 0:02:38.360 most part, which means that they're also potentially able to 0:02:38.440 --> 0:02:42.320 be cut um if these macro ect economic conditions weaken. Now, 0:02:42.520 --> 0:02:46.040 Reels is where Facebook and Instagram should really be focusing 0:02:46.040 --> 0:02:48.920 on right now. It is where the competition within social 0:02:48.960 --> 0:02:52.720 media remains, and Reels is still lagging very far behind 0:02:53.000 --> 0:02:55.640 TikTok Um, and it needs to catch up in order 0:02:55.680 --> 0:03:01.120 to be able to continue to grow its ad business. Now, 0:03:01.720 --> 0:03:04.040 let's talk about the broader changes happening to the ad business. 0:03:04.040 --> 0:03:06.800 You've obviously got met at hitting back at Apple for 0:03:06.840 --> 0:03:09.960 the changes that Apple is making that are impacting not 0:03:10.040 --> 0:03:13.880 just Meta but other social media companies. How much bigger 0:03:13.919 --> 0:03:16.160 of a cut is Apple going to get? And how 0:03:16.280 --> 0:03:18.800 much smaller of a cut is Facebook or Meta going 0:03:18.840 --> 0:03:21.200 to get? And what does that mean to you over 0:03:21.240 --> 0:03:24.760 the longer term? Yeah, I mean the effects of Apple's 0:03:24.840 --> 0:03:29.040 privacy changes continue to plague all of the social platforms. 0:03:29.040 --> 0:03:32.160 We have seen that in multiple earnings that have already 0:03:32.200 --> 0:03:35.480 come out. You know, Apple in some ways maybe benefiting 0:03:35.520 --> 0:03:38.680 it's also launched its own ad business um. But you know, 0:03:38.800 --> 0:03:42.800 these companies really need to work to develop and deploy 0:03:42.960 --> 0:03:46.640 effective solutions for ad attribution if they want to keep 0:03:46.720 --> 0:03:50.240 up and continue to grow their businesses in this new environment. 0:03:53.360 --> 0:03:57.400 Twitter was supposed to report earnings today, didn't happen That 0:03:57.480 --> 0:03:59.400 was at least the estimated date. Of course, now we 0:03:59.400 --> 0:04:02.920 have Elon Usk going into Twitter today with the kitchen 0:04:03.000 --> 0:04:07.560 sink a very powerful metaphor there there are we're reporting that, uh, 0:04:07.880 --> 0:04:12.400 you know, he's planning to cut of Twitter's work force. 0:04:12.600 --> 0:04:16.880 What do you imagine happens on Friday? Well, Muska has 0:04:16.960 --> 0:04:20.279 every reason to want to close this deal by Friday. 0:04:20.680 --> 0:04:23.200 If it doesn't close, of course, this this case goes 0:04:23.240 --> 0:04:26.040 to court, and it's likely that that Twitter will win 0:04:26.200 --> 0:04:28.640 anyway and Musk will be able to avoid some of 0:04:28.680 --> 0:04:32.560 the reputational damage that might ensue if if the case 0:04:32.680 --> 0:04:36.200 actually goes to trial. Now a must own Twitter is 0:04:36.279 --> 0:04:39.640 likely going to result in even more chaos. We already 0:04:39.680 --> 0:04:43.960 know that the employee morale is low. Some employees have left, 0:04:44.000 --> 0:04:46.839 Others are really concerned about massive layoffs, and that is 0:04:46.880 --> 0:04:50.400 a valid concern now in terms of how that might 0:04:50.440 --> 0:04:54.080 affect its business. You know, even if these massive cuts 0:04:54.160 --> 0:04:56.880 don't take place, or don't take place immediately, just the 0:04:56.880 --> 0:04:59.880 fact that this idea is being floated around by muff 0:05:00.320 --> 0:05:03.320 It's might be enough to spook some advertisers as well. 0:05:03.720 --> 0:05:06.680 You know, advertisers want to spend their ad dollars on 0:05:06.760 --> 0:05:09.440 platforms that they view as stable and right now that 0:05:09.560 --> 0:05:14.719 certainly isn't Twitter. What's your sense of what these you know, 0:05:14.760 --> 0:05:18.360 potentially people at Twitter do that he seems to think 0:05:18.600 --> 0:05:23.400 are expendable and if the platform can be run with 0:05:23.640 --> 0:05:27.560 you know, the necessary oversight with two thousand people. So 0:05:27.600 --> 0:05:30.000 I think where these cuts take place, if they do 0:05:30.080 --> 0:05:32.320 take place, will give us a really good indication of 0:05:32.320 --> 0:05:35.400 what Musk intends to do with the platform. If, for example, 0:05:35.480 --> 0:05:39.640 he reduces head counts significantly in the ads division at Twitter, 0:05:39.760 --> 0:05:43.000 it's an indication that he may be making good on 0:05:43.160 --> 0:05:47.040 his promise to reduce Twitter's reliance on advertising. He could 0:05:47.040 --> 0:05:51.200 potentially cut in the content moderation division, which could prove 0:05:51.440 --> 0:05:53.839 or show that he intends to loosen some of those 0:05:53.839 --> 0:05:56.320 content moderation guard rails, which is also something that he 0:05:56.400 --> 0:06:02.280 has been really vocal about. Okay, So given all of these, 0:06:02.320 --> 0:06:06.520 massive's got major evolutions changes happening a Facebook. You've got, 0:06:06.520 --> 0:06:10.320 potentially on Friday, Twitter becoming a private company. You've got 0:06:10.360 --> 0:06:13.000 Apple moving in and trying to take a bigger cut 0:06:13.279 --> 0:06:16.840 of social media ad revenue. You mentioned how different Meta 0:06:16.880 --> 0:06:18.760 looks today than it did a year ago. How different 0:06:18.760 --> 0:06:21.880 does the social media industry look a year from now 0:06:22.000 --> 0:06:26.000 than it looks today different. I actually believe that the 0:06:26.040 --> 0:06:28.560 time is right for some more disruption in the social 0:06:28.600 --> 0:06:31.560 media industry. I mean, TikTok was the biggest destructor to 0:06:32.240 --> 0:06:35.719 UM usage and to to revenue in the social media 0:06:35.800 --> 0:06:38.920 landscape for many, many years. But we're seeing now that 0:06:39.000 --> 0:06:41.599 there are some other social apps that are starting to 0:06:41.640 --> 0:06:44.599 bubble up and capture the attention of the coveted gen 0:06:44.680 --> 0:06:47.599 Z audience. And I believe that we'll start to see 0:06:47.640 --> 0:06:51.080 even more of that in three and UM. Have these 0:06:51.160 --> 0:06:55.920 established social platforms really continue to to scramble to keep 0:06:55.960 --> 0:07:01.679 their audiences and continue to grow their businesses? I wonder 0:07:01.680 --> 0:07:04.239 what it means for Snap. We heard from Snap CEO 0:07:04.440 --> 0:07:07.320 Evan Spiegel at the Wall Street Journal Technology Conference. He 0:07:07.440 --> 0:07:10.920 blasted the metaverse, saying something along the lines of the 0:07:11.000 --> 0:07:12.440 last thing I want to do when I get home 0:07:12.440 --> 0:07:18.000 from work after a long day is live inside a computer. Um. 0:07:18.040 --> 0:07:21.280 You know there are two questions in there, A what 0:07:21.320 --> 0:07:24.480 does this mean for Snap? And be this this? You know? Uh, 0:07:24.560 --> 0:07:27.120 you know, infatuation that some brands might have with the 0:07:27.160 --> 0:07:30.320 metaverse just just dry up, especially as we go into 0:07:30.600 --> 0:07:35.960 a pronounced economic downturn. Yeah, so Snap has positioned itself 0:07:36.000 --> 0:07:39.360 as anti metaverse for for quite some time now. It's 0:07:39.400 --> 0:07:42.280 also been really susceptible to a lot of the challenges 0:07:42.320 --> 0:07:44.760 that are plaguing all of the social platforms. We saw 0:07:44.800 --> 0:07:47.720 that in its Q through Q three earnings just last week. 0:07:48.440 --> 0:07:51.200 Part of the problem is that Snap is considered a 0:07:51.360 --> 0:07:55.520 less essential platform than say, Meta, although Meta is experiencing 0:07:55.560 --> 0:07:58.760 cuts as well. Um And, but it's easy for advertisers 0:07:58.760 --> 0:08:02.240 to justify pulling ads and and pulling budget from Snap. 0:08:02.240 --> 0:08:04.960 And it certainly doesn't help that, you know, it has 0:08:05.000 --> 0:08:08.400 staked its future on augmented reality, which is an even 0:08:08.400 --> 0:08:12.320 more experimental format for a lot of advertisers. Snap does 0:08:12.480 --> 0:08:16.520 have something um that Meta and Twitter have really struggled 0:08:16.520 --> 0:08:19.760 to articulate, and that is a long term vision. Um. 0:08:19.800 --> 0:08:22.880 But having a long term vision is not really a 0:08:22.920 --> 0:08:26.000 way to help it in the short term. And Snap 0:08:26.040 --> 0:08:28.520 really has to turn things around now if it wants 0:08:28.560 --> 0:08:33.359 to make its vision a reality. Do you think augmented 0:08:33.400 --> 0:08:39.560 reality is more likely? Are you more optimistic about the 0:08:39.559 --> 0:08:44.040 future of augmented reality than virtual reality? So? I think 0:08:44.080 --> 0:08:47.520 augmented reality holds a lot of long term promise, especially 0:08:47.559 --> 0:08:51.240 among the audience that is using Snapchat. UM. We are 0:08:51.320 --> 0:08:54.600 already seeing young users communicate with each other UM and 0:08:54.760 --> 0:08:58.000 entertain each other through a our filters. We are seeing 0:08:58.080 --> 0:09:00.959 some brands and some consumers leaning to a R as 0:09:01.000 --> 0:09:04.000 a shopping tool, and I believe that that will continue 0:09:04.000 --> 0:09:07.240 to grow. I don't necessarily believe it's going to reach 0:09:07.440 --> 0:09:11.079 mass adoption, but I do think that it's becoming more 0:09:11.200 --> 0:09:14.160 of a utility and will continue to do so over 0:09:14.200 --> 0:09:20.079 the next couple of years. All right, Jasmine Emberg Insider Intelligence, 0:09:20.080 --> 0:09:23.800 Thank you, as always Jasmine for your insights here. Obviously 0:09:23.880 --> 0:09:36.079 lots to continue to watch. Questions are looming about Spotify's 0:09:36.080 --> 0:09:40.040 profitability after its earnings report subscribe to growth topping estimates. 0:09:40.040 --> 0:09:42.360 But it's another one of the many tech companies being 0:09:42.440 --> 0:09:45.559 hit by a slowdown and ad spent sending shares down 0:09:46.000 --> 0:09:49.960 more than nine percent. Bloomberg's Ashuley Carmen cover Spotify for US. So, 0:09:50.000 --> 0:09:53.079 actually we're talking about Twitter and metas struggles Snap as well. 0:09:53.120 --> 0:09:57.160 Their struggles. UM, given the ad crisis earlier, how is 0:09:57.200 --> 0:10:01.040 that impacting Spotify? Yeah, spot f I said that actually, 0:10:01.120 --> 0:10:04.080 it's AD revenue also grew this quarter, but more slowly. 0:10:04.120 --> 0:10:06.320 Than an anticipated and it's blaming that on the broader 0:10:06.360 --> 0:10:12.520 macroeconomic issues that we're seeing. So what kind of troubleshooting 0:10:12.920 --> 0:10:16.680 are they doing? What are the solutions? It's tricky, I mean, 0:10:16.880 --> 0:10:19.959 so daniel A, the CEO, says that, and this is true, 0:10:20.240 --> 0:10:22.920 ad revenue doesn't represent a huge portion of their business. 0:10:22.920 --> 0:10:26.000 They're obviously mostly a subscriber based business. So obviously they 0:10:26.040 --> 0:10:28.760 want to keep growing those premium subscribers, which they also 0:10:28.800 --> 0:10:32.400 did this quarter, beating analysts expectations. But at the same time, 0:10:32.640 --> 0:10:34.960 they really need to keep doubling down on that podcast 0:10:34.960 --> 0:10:37.760 business because that's where they say they're really benefiting from 0:10:37.760 --> 0:10:42.160 this advertiser money. Apple seems to be the enemy and 0:10:42.200 --> 0:10:45.160 the conversations about social media advertising, and I wonder where 0:10:45.160 --> 0:10:50.120 where does Apple Music, Spotify's main competitor, fit in. Yeah, 0:10:50.160 --> 0:10:52.319 there's been a couple of interesting developments that are Apple 0:10:52.400 --> 0:10:54.840 related this quarter or I guess for this past quarter 0:10:54.880 --> 0:10:57.839 in Apple world. So first off, Apple Music raised his 0:10:57.920 --> 0:11:01.080 prices this week, and of course daniel Luck was asked 0:11:01.080 --> 0:11:03.040 about that on the earnings call, and he says, they're 0:11:03.040 --> 0:11:05.680 going to have conversations about raising their prices. In turn, 0:11:05.880 --> 0:11:07.560 they just have to go to their label partners and 0:11:07.600 --> 0:11:11.480 have those conversations. And then also the Spotify came out 0:11:11.559 --> 0:11:15.200 kind of They've always been talking about Apple and antitrust 0:11:15.280 --> 0:11:17.240 and kind of the app store fees that they have 0:11:17.320 --> 0:11:21.480 to pay, And recently in September, Spotify launched audio books 0:11:21.480 --> 0:11:24.720 on the platform. And originally you could, I mean it 0:11:24.760 --> 0:11:26.320 was a bit of a pain, but you could buy 0:11:26.320 --> 0:11:28.520 audiobooks through the app. You would get the price and 0:11:28.559 --> 0:11:31.079 the purchase link email to you, so in that way 0:11:31.120 --> 0:11:33.240 it was kind of going around Apple's app store fees. 0:11:33.520 --> 0:11:35.800 But now on iOS you can't purchase them at all. 0:11:36.200 --> 0:11:38.720 So Spotify came out saying, you know, they're really unhappy 0:11:38.760 --> 0:11:41.719 with this experience. And on Google you can still kind 0:11:41.720 --> 0:11:44.360 of have that odd emailed system, but at least you 0:11:44.400 --> 0:11:49.680 can buy audio books. What is next for podcasts and 0:11:50.080 --> 0:11:53.679 audio streaming? You know, I think there are still some 0:11:53.920 --> 0:11:58.000 questions that remain about just how big the podcasting advertising 0:11:58.040 --> 0:12:01.680 market really is. Yeah, so we've seen a lot of 0:12:01.720 --> 0:12:05.079 these big players like I heeart Media and Spotify and 0:12:05.320 --> 0:12:09.520 Cumulus really try to bolster their podcast businesses and focus 0:12:09.520 --> 0:12:12.680 on programmatic advertising. So really bringing in these big brands, 0:12:12.880 --> 0:12:15.920 the Coca Cola is the Geico's and get them to 0:12:15.960 --> 0:12:18.719 spend in podcasting, an industry we typically think of as 0:12:18.720 --> 0:12:21.920 like the cast firm, mattresses, and the direct response advertisers. 0:12:21.960 --> 0:12:24.120 So that's really what these big companies are focusing on, 0:12:24.240 --> 0:12:26.800 is bringing them into the mix, even as the economy 0:12:26.880 --> 0:12:30.800 maybe is taken a downturn. Can you give us the 0:12:30.880 --> 0:12:34.080 latest on Daniel K. Moore broadly? I mean, it feels 0:12:34.120 --> 0:12:37.080 like just yesterday he was, you know, making a bid 0:12:37.120 --> 0:12:40.000 for the Arsenal football team, and now his company is 0:12:40.040 --> 0:12:44.640 going through some significant struggles. What has that meant for 0:12:44.920 --> 0:12:49.319 some of his other aspirations? You know, I'm not totally 0:12:49.360 --> 0:12:51.800 sure how it's it's changed his other goals. I will 0:12:51.840 --> 0:12:54.640 say that he doesn't in the earnings call project any 0:12:54.679 --> 0:12:57.240 sort of concern about or any sort of struggles for 0:12:57.240 --> 0:12:59.760 the company. He really sees it as, hey, we've told 0:12:59.760 --> 0:13:02.800 you pursuing podcasting, we're pursuing audiobooks. We need to make 0:13:02.840 --> 0:13:06.200 some necessary investments into those space in order to eventually 0:13:06.200 --> 0:13:08.760 continue to grow and have a better gross margin. So 0:13:08.880 --> 0:13:11.960 he views this as like charting the course. Obviously, investors 0:13:11.960 --> 0:13:17.120 have kind of turned on the company though, all right, Uh, well, 0:13:17.800 --> 0:13:20.920 more to write I'm sure more to the story. Bloomberg's 0:13:20.920 --> 0:13:24.439 actually Carmen, thank you for weighing him coming up our 0:13:24.440 --> 0:13:28.000 conversation with Mobilized CEO and founder on the heels of 0:13:28.040 --> 0:13:31.360 the first day as a public company. That is next. 0:13:31.600 --> 0:13:45.959 This is Bloomberg Intel's Mobile I unit, which developed software 0:13:45.960 --> 0:13:49.520 and self driving technology, just started trading on Wall Street. 0:13:49.559 --> 0:13:52.440 Bloomberg's had Ludlow caught up with Mobilized CEO and founder. 0:13:52.760 --> 0:13:57.720 I'm non Shasha earlier. Take a listen. Our plan is 0:13:57.800 --> 0:14:01.400 to view the spectrum from driving assist to to fully 0:14:01.440 --> 0:14:06.400 autonomous driving, say robotaxis, as a spectrum of solutions. And 0:14:06.679 --> 0:14:10.520 we started with a base solution, which is, you know, 0:14:10.600 --> 0:14:14.760 our our silicon connected to eleven cameras surrounding the car, 0:14:14.880 --> 0:14:18.520 seven long range and four parking cameras. All this information 0:14:18.600 --> 0:14:20.880 is being used for an eye on, you know, hands 0:14:20.880 --> 0:14:25.640 free driving. And then through a modular expansion by adding 0:14:25.880 --> 0:14:31.280 active sensors to create eyes off solutions with expanding operational 0:14:31.280 --> 0:14:34.320 design domain. So for example, you know, you start with 0:14:34.400 --> 0:14:37.320 this camera built at the front facing ladder, you can 0:14:37.440 --> 0:14:41.360 enable eyes off autonomy on highways, add corner radars, you 0:14:41.400 --> 0:14:45.240 can enable lane changes and light traffic. Add imaging radars, 0:14:45.280 --> 0:14:49.000 you can enable lane changes and condense traffic unprotected turns. 0:14:49.320 --> 0:14:52.360 Added tell operation you get a robotaxi. So it creates 0:14:52.400 --> 0:14:56.360 a spectrum of solutions. And we have been already shipping 0:14:56.440 --> 0:14:59.240 this based system. We have already fifty cars already with 0:14:59.280 --> 0:15:02.800 the based system. Right, how critical is China to the 0:15:02.840 --> 0:15:05.680 growth story if your business? Do you see the business 0:15:05.680 --> 0:15:08.600 growing with pace in China which is a really important 0:15:08.960 --> 0:15:13.000 global auto market. Now, wonder when we look at China 0:15:13.120 --> 0:15:15.600 that there were two attractive things. That one is the 0:15:15.600 --> 0:15:19.240 market itself. Now, market share in China has been going 0:15:19.320 --> 0:15:23.720 over over the year substantially, but more importantly, we found 0:15:23.720 --> 0:15:28.400 that China is slightly more take forward uh than than 0:15:28.440 --> 0:15:30.800 the rest of the world. And and we we took 0:15:30.840 --> 0:15:35.400 advantage of putting our latest innovation starting in China, the 0:15:35.480 --> 0:15:37.960 system that I mentioned before with eleven cameras that's called 0:15:37.960 --> 0:15:44.000 Supervision already shipped in China and then generating interest with 0:15:44.160 --> 0:15:46.840 other o e m's Western o ems. And in the 0:15:46.840 --> 0:15:52.240 past five months we started getting significant attraction with the 0:15:52.400 --> 0:15:55.400 six o EM is already designed in to this to 0:15:55.480 --> 0:15:59.280 this basis and called the Supervision going forward from three 0:15:59.360 --> 0:16:03.360 or five. What about doing business going forward? We know 0:16:03.400 --> 0:16:06.200 about the trade restrictions when it comes to technology in China, 0:16:06.280 --> 0:16:09.000 do you see the need to build new partnerships in 0:16:09.040 --> 0:16:12.600 that market? Now we have, we have multiple partnerships in 0:16:13.240 --> 0:16:17.360 that market. We are less concerned about our type of product, 0:16:17.560 --> 0:16:20.560 Like the i Q chip is not a supercomputer. It's 0:16:20.560 --> 0:16:22.400 not programmable. You know you're gonna put it on a 0:16:22.480 --> 0:16:25.080 data center and write any code you like. It's really 0:16:25.080 --> 0:16:26.880 it's really purpose built to sit in the car with 0:16:27.080 --> 0:16:30.840 mobilize the code. So we don't see our chip at 0:16:30.840 --> 0:16:35.000 the forefront of you know, export controls UM. So we 0:16:35.040 --> 0:16:38.880 are focusing on, you know, building a great products, creating partnerships, 0:16:39.800 --> 0:16:43.880 using the tech forward approach to to then migrates to 0:16:44.520 --> 0:16:48.720 to outside of China, and it's it's proving itself quite successfully. 0:16:48.880 --> 0:16:50.600 I'm not you and I have been talking about this 0:16:50.720 --> 0:16:53.840 for years now. Do you really see a business where 0:16:53.880 --> 0:16:57.440 mobile i makes money from true autonomy? When does that happen? 0:16:57.520 --> 0:17:01.280 When does mobili start making money as a service provided 0:17:01.360 --> 0:17:03.920 not just a maker of chips and system on chips. 0:17:04.720 --> 0:17:07.199 I think what has changed in our view in the 0:17:07.240 --> 0:17:09.920 past five years. Let's not change, but more new ones 0:17:10.720 --> 0:17:12.959 is that now when you talk about autonomy, is not 0:17:13.040 --> 0:17:17.240 just robotaxis. Now there are companies competitors of hours that 0:17:17.240 --> 0:17:21.640 are focused only on robotaxis, but we see something much 0:17:21.720 --> 0:17:24.280 more new ones and what I mentioned before, these kind 0:17:24.320 --> 0:17:27.359 of autonomous blades as you go from our base system 0:17:27.400 --> 0:17:31.119 and adding more active sensors. So a robotax is just 0:17:31.320 --> 0:17:35.439 one end of a long spectrum of solutions and we 0:17:35.480 --> 0:17:38.200 are working on it. Means where at the final stages 0:17:38.240 --> 0:17:41.840 of certification and mollegation of our ROBOTAXI. We have about 0:17:41.920 --> 0:17:48.080 ten pocs with public transport operators of next year that 0:17:48.119 --> 0:17:51.439 we made public a few a few months ago. We 0:17:51.520 --> 0:17:54.600 have a fleet of about one hundred vehicles dedicated for 0:17:54.720 --> 0:17:57.760 those pocs and the purpose of those pocs is to 0:17:57.800 --> 0:18:01.439 start building a business model. Business model that makes sense 0:18:01.480 --> 0:18:04.119 for us. We don't want to be CAPEX heavy. We 0:18:04.200 --> 0:18:08.040 want to go forward with this service idea with partners 0:18:08.280 --> 0:18:10.440 where we supply the self driving system or the self 0:18:10.520 --> 0:18:15.080 driving vehicle and our partners will take you. Now we'll 0:18:15.119 --> 0:18:17.720 do the service themselves, could be using our software to 0:18:17.760 --> 0:18:21.240 be licensed to them, but they have the expertise, the 0:18:21.280 --> 0:18:24.360 financial know how of how to manage fleets of vehicles. 0:18:24.400 --> 0:18:26.119 It's not an area that we want to to be 0:18:26.160 --> 0:18:32.439 active in mobili CEO and founder there with Bloomberg's at Ludlow. 0:18:32.480 --> 0:18:44.000 You can catch that full interview at Boomberg dot com. 0:18:44.040 --> 0:18:46.600 Welcome back to boomer Technology, Emily Chain in San Francisco. 0:18:46.640 --> 0:18:49.360 I want to get back to matters. Results are at 0:18:49.359 --> 0:18:51.240 what Low has been listening in to the call at 0:18:51.240 --> 0:18:54.320 what are we hearing? Yeah, there's a lot of explanation 0:18:54.400 --> 0:18:57.040 about why costs and operating expenses are going to be 0:18:57.119 --> 0:18:59.520 higher in the near term before they kind of real 0:18:59.560 --> 0:19:01.720 look at the budget in the future. They're talking about 0:19:01.800 --> 0:19:05.600 dramatically slur slowing the rate of hiring. In the third 0:19:05.680 --> 0:19:08.919 quarter they added about thirty seven people. Despite what we 0:19:08.960 --> 0:19:12.440 heard last month right about Zuckerberg really pushing to cut costs, 0:19:12.480 --> 0:19:15.240 there's going to continue to be infrastructure investments in AI 0:19:15.359 --> 0:19:18.600 why well meta Previously, Facebook has always said it needs 0:19:18.680 --> 0:19:21.879 to invest in AI to improve the algorithms that power 0:19:21.920 --> 0:19:25.440 the core Facebook platform as well as that transition to 0:19:25.480 --> 0:19:28.240 the metaverse. And this one's for you. This jumped out 0:19:28.240 --> 0:19:30.000 and me. I've been blogging about this on the Bloomberg 0:19:30.000 --> 0:19:34.119 Top Live blog, Instagram and WhatsApp now each have two 0:19:34.160 --> 0:19:38.200 billion users, and when that headline hit, the market didn't 0:19:38.200 --> 0:19:41.440 do anything. We're still down more than fift and after hours. 0:19:41.480 --> 0:19:44.760 You remember, right when that was everything. How is Instagram 0:19:44.800 --> 0:19:47.159 going to drive growth in the future, How are we 0:19:47.200 --> 0:19:50.080 going to monetize WhatsApp? I haven't heard anything about that 0:19:50.080 --> 0:19:52.720 in ages and yet Zuckerberg in his prepared remarks kind 0:19:52.720 --> 0:19:54.760 of leads with that. I think it's very telling about 0:19:54.800 --> 0:19:58.919 the story they're trying to tell right now. Indeed, but 0:19:59.000 --> 0:20:02.240 of course a lot happening under the hood. Ad Ludlow, 0:20:02.480 --> 0:20:07.040 thank you. Meantime, Meta criticized Apple over new changes to 0:20:07.320 --> 0:20:09.920 its app store, which takes a cut of social media 0:20:09.960 --> 0:20:13.280 advertising revenue or mark eerment. Of course covers all things 0:20:13.280 --> 0:20:16.040 Apple mark This has been happening for a while, but 0:20:16.320 --> 0:20:19.800 remind us how these changes, you know, what the intention 0:20:19.840 --> 0:20:23.080 of these changes was, and how they're working in practice. 0:20:24.240 --> 0:20:26.919 So two years ago, Apple announced the feature called a 0:20:27.040 --> 0:20:30.320 t T or App Tracking Transparency. And what this does 0:20:30.480 --> 0:20:33.440 is it throws up a pop up two users before 0:20:33.640 --> 0:20:37.280 it'll before the system will allow an application to track 0:20:37.359 --> 0:20:42.439 you for advertising based purposes across different applications and different 0:20:42.440 --> 0:20:45.439 websites and So from Apple's perspective, all this pop up 0:20:45.440 --> 0:20:48.480 does is puts that permission in the hands of the user. 0:20:48.560 --> 0:20:51.439 It sounds pretty simple, but from the perspective of Meta, 0:20:51.920 --> 0:20:55.359 of Snapchat, of Twitter, of other social media platforms, that 0:20:55.440 --> 0:20:58.439 makes their advertising a lot less powerful and makes it 0:20:58.480 --> 0:21:01.240 so advertisers are going to be hang a lot less 0:21:01.280 --> 0:21:03.400 and for Facebook and these companies to make a lot 0:21:03.440 --> 0:21:06.280 less money. And it's interesting to me that Facebook went 0:21:06.280 --> 0:21:09.600 on the offensive yesterday regarding the latest changes to the 0:21:09.600 --> 0:21:11.800 app store rules right ahead of their earnings, which as 0:21:11.800 --> 0:21:15.679 we see right now, are fairly disappointing to Wall Street 0:21:15.840 --> 0:21:19.879 right and investors and such. But from what we understand 0:21:19.920 --> 0:21:22.760 from Meta and from other people we've spoken to, the 0:21:22.840 --> 0:21:26.440 latest string of changes related to Apple wanting a thirty 0:21:26.520 --> 0:21:29.800 percent cut or a commission on boosts, which is a 0:21:29.840 --> 0:21:33.119 type of advertising within Facebook and other platforms, it's not 0:21:33.200 --> 0:21:36.200 really going to have a material impact on Meta at least. 0:21:38.119 --> 0:21:42.360 What's our sense of how much these Apple changes specifically 0:21:42.359 --> 0:21:46.520 are impacting let's say Facebook or Instagram and how much 0:21:46.560 --> 0:21:52.400 Apple is benefiting from these changes. So, from what we've 0:21:52.440 --> 0:21:55.959 seen so far, in terms of a financial standpoint, Apple 0:21:56.040 --> 0:21:59.880 really is not benefiting from these changes. Uh In any way, 0:22:00.040 --> 0:22:04.280 the company is working on its own new advertising push. 0:22:04.320 --> 0:22:06.520 You may have seen in the app store now they've 0:22:06.520 --> 0:22:08.879 added a couple of new ad slots, but that doesn't 0:22:08.920 --> 0:22:11.640 really impact Meta. It wasn't like Meta was previously able 0:22:11.680 --> 0:22:14.720 to advertise within the app store. Apples also going to 0:22:14.720 --> 0:22:18.879 bring advertisements, I'm told to the Maps application. That really doesn't, 0:22:18.960 --> 0:22:22.040 you know, impact Meta either, because Apple is going to 0:22:22.080 --> 0:22:24.800 be the only provider of ads within that platform. Right, 0:22:25.000 --> 0:22:28.520 so Apple is not really benefiting here, but Meta certainly losing. 0:22:28.680 --> 0:22:30.640 I remember a couple of years ago they threw out 0:22:30.680 --> 0:22:33.880 a ten billion dollar estimate related to the impact there. 0:22:34.200 --> 0:22:36.760 Some people said that ten billion dollars actually is related 0:22:36.760 --> 0:22:40.160 to the Reality Labs their VR unit, right, And you've 0:22:40.160 --> 0:22:42.719 seen the losses there are piling up. So it's not 0:22:42.800 --> 0:22:46.760 exactly cut and dry how much these companies are losing there, 0:22:46.800 --> 0:22:50.399 it clearly is a significant financial impact. Last night was 0:22:50.440 --> 0:22:52.960 actually at a conference in Laguna Beach, and Craig Federigi, 0:22:53.040 --> 0:22:55.159 the head of software who was pretty instrumental in the 0:22:55.160 --> 0:22:57.560 development of a t T and other privacy features, was 0:22:57.600 --> 0:22:59.440 that was asked about this and he said they really 0:22:59.440 --> 0:23:02.920 didn't consider or the financial impact this would have on 0:23:02.960 --> 0:23:06.600 other companies when implementing the feature. Their standpoint clearly is 0:23:06.720 --> 0:23:11.600 from a user perspective, throwing up that permission sheet. Well, 0:23:11.840 --> 0:23:13.879 you do have the skeptics who might think, well, does 0:23:13.920 --> 0:23:15.720 an Apple have all this data and are they going 0:23:15.760 --> 0:23:19.440 to build their own you know, social you know, advertising 0:23:19.520 --> 0:23:21.679 juggernaut on the back of, you know, all of this 0:23:21.800 --> 0:23:26.280 information that they're now preventing other companies from having access to. 0:23:27.480 --> 0:23:30.119 That's an extremely fair point. I made the same point 0:23:30.640 --> 0:23:33.000 in a recent calm for power On and by the way, 0:23:33.160 --> 0:23:35.920 anyone listening to this should subscribe at bloomber dot com 0:23:35.920 --> 0:23:39.120 slash power on. And that is true. They are building 0:23:39.119 --> 0:23:42.600 and advertising juggernaut themselves. They want to push ads eventually 0:23:42.960 --> 0:23:46.400