Speaker 1: This is Bloomberg Business Week. I'm Carole Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanovik. We're here every day bringing
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Speaker 1: YouTube search Bloomberg Clovel News. Alright, bunch of headlines when
Speaker 1: it comes to COVID. Today's City Bank. Uh, Tim, you
Speaker 1: pointed this out just before we got going today, requiring
Speaker 1: all use employees to be vaccinated against COVID as a
Speaker 1: condition of their employment, citing new orders from President Biden.
Speaker 1: I think that we're going to start seeing more and
Speaker 1: more of this from the big companies. Also Florida suing
Speaker 1: the Biden administration over vaccine mandates for federal contractors. This
Speaker 1: is the latest in a wave of Republican pushbacks against
Speaker 1: the President's orders to fight off the pandemic Closer to
Speaker 1: home where we are in New York City, the city
Speaker 1: saying it will temporarily outlaw days off for sanitation workers
Speaker 1: as needed ahead of an anticipated employee shortage stemming from
Speaker 1: a vaccine mandate is going into effect next week. We
Speaker 1: talked about supply chains. The U. S. Government has bought
Speaker 1: an additial fifty million doses of the fiser beyond bion
Speaker 1: Tech vaccine, and a push to secure supply for kids.
Speaker 1: All right, let's get to it. The Dr Anna Durban,
Speaker 1: Professor of International Health, Director of the Center for Immunization
Speaker 1: Research at the Johns Hopkins Bloomberg School of Public Health,
Speaker 1: supported by Michael R. Bloomberg, Founder, Bloomberg LP and Bloomberg Philanthropies.
Speaker 1: Dr Durban on the phone once again from Baltimore. Dr Durbin,
Speaker 1: Nice to have you back here on Bloomberg Radio. It's
Speaker 1: all about kids. Uh, what do you make of the
Speaker 1: progress so far? I think it's really excellent. I mean,
Speaker 1: I think it's it's good news that we're we have
Speaker 1: a vaccine that um will likely get approval from the
Speaker 1: CDC and their meeting next week. As we saw it
Speaker 1: was shown to be safe and efficacious. Uh, and the
Speaker 1: FDA approved the use of the vaccine and kids. It
Speaker 1: is a lower os um which I think is important
Speaker 1: to know because these kids are much smaller and don't
Speaker 1: need as much vaccine as adults, and that means that
Speaker 1: the side effects are are you know, less severing kids,
Speaker 1: which is good news. Dr Durban I was at the
Speaker 1: doctor yesterday. I was talking to a woman there who
Speaker 1: is a healthcare worker. She we're talking about our family.
Speaker 1: She said that her kids are over the age of five,
Speaker 1: and I said, that's great. They can get the vaccines
Speaker 1: very soon. And she said, I'm not going to get
Speaker 1: it for them now. I'm going to hold off on it.
Speaker 1: What would you say to parents who want to hold
Speaker 1: off and wait for more information. Well, what I would
Speaker 1: say is this, we know that, um, you know, the
Speaker 1: group now that's probably most susceptible to COVID is kids
Speaker 1: younger than twelve because they haven't had a vaccine available.
Speaker 1: We know that the virus can infect kids. We know
Speaker 1: that they can become symptomatic. It's true they aren't hospitalized
Speaker 1: to the high degree that particularly older adults are, but
Speaker 1: we do see severe disease in kids. We see multisystem
Speaker 1: inflammatory syndrome in kids. We see kids who are hospitalized
Speaker 1: to go to the i c U and we don't
Speaker 1: really understand why. You know, it's some kids may be
Speaker 1: affected more than others. Um I would try to reassure
Speaker 1: her that there is a lot of safety data of
Speaker 1: the vaccine, that we these vaccines have been studied in
Speaker 1: young kids, that the safety profile looks excellent, and that
Speaker 1: we can prevent again, we can prevent more transmission of
Speaker 1: the virus when kids are vaccinated when they're in schools. UM.
Speaker 1: It just provides greater safety for the population. The more
Speaker 1: people that we get vaccinated. So there's a headline, we've
Speaker 1: got a story on the Bloomberg. Vaccinated people also spread
Speaker 1: the delta variant. This is according to a year long study.
Speaker 1: So we're talking about people inoculated against COVID nineteen are
Speaker 1: just as likely to spread the delta variant of the
Speaker 1: virus to contacts in their household as those who have
Speaker 1: not had shots as according to some new research. It
Speaker 1: was a study a year long study people in the
Speaker 1: UK with mild COVID nineteam and scientists an that their
Speaker 1: peak viral load was similar regardless of vaccination status. According
Speaker 1: to paper published today in the Lancet Infectious Diseases Medical Journal.
Speaker 1: People are going to see the see that it probably
Speaker 1: sees on and say, see, I don't need to get
Speaker 1: the vaccine. Help us here. Yeah, So I think there's
Speaker 1: a couple of really important things to keep in mind
Speaker 1: when we look at PCR. When we look at at
Speaker 1: you know, measurements of the virus by PCR, it doesn't
Speaker 1: tell you whether that virus is a live or debt.
Speaker 1: It just tells you that there's pieces of the virus.
Speaker 1: We do know from studies that people who are vaccinated
Speaker 1: shed the virus for a shorter period of time, so
Speaker 1: they transmit the virus for a shorter period of time,
Speaker 1: and they actually transmit less live virus than people who
Speaker 1: are unvaccinated. It is true that vaccinated people can transmit
Speaker 1: the virus. We steam break Dr Durban forgive me just
Speaker 1: because we have been nuts and I know our audiences
Speaker 1: nuts about this. But Facebook is rebranding their company. The
Speaker 1: name change will be a m et A Facebook changing
Speaker 1: its name to Meta m E t A. We're gonna
Speaker 1: get back to that in just a moment um. But
Speaker 1: again it's something that we know our audience has been
Speaker 1: waiting for. We were expecting that name change as a
Speaker 1: host that event out there at Facebook headquarters. We're gonna
Speaker 1: get back to it in just a moment. Forgive me,
Speaker 1: Dr Durbin, please finish your thought. No no, I was
Speaker 1: just going to say, we you know, it's true that
Speaker 1: their breakthrough infections and vaccinated people, but we know that
Speaker 1: vaccinated people, even though they can shed the virus to
Speaker 1: transmit the virus, it's for a shorter period of time
Speaker 1: and it does provide protection. Um. The other thing that
Speaker 1: I would say is that how much virus shoes shed
Speaker 1: also is dependent on how ill you are, and we
Speaker 1: know that vaccines reduced the severity of illness incredibly. You know,
Speaker 1: people hospitalized now are unvaccinated, so there are a lot
Speaker 1: of factors that go into it. Their studies that have
Speaker 1: shown that vaccinated people are less likely to effect family
Speaker 1: members who are unvaccinated. So, um, you know, just having
Speaker 1: recovery of the virus by PCR isn't the whole story.
Speaker 1: And we know from multiple studies that vaccination reduces transmission.
Speaker 1: Dr Drvin, thank you so much, as always, over JOHNS. Hopkins,
Speaker 1: Bloomberg School of Public Health, on the phone from Baltimore.
Speaker 1: All right, we've got it. The name change for Facebook.
Speaker 1: It is Meta M E T A. And this obviously
Speaker 1: plays into the new focus, or a big focus at
Speaker 1: the company, the metaverse. Let's get to Tom Giles. He's
Speaker 1: Bloomberg Technology executive editor, joining us from our Bloomberg got
Speaker 1: San Francisco bureau. Tom, We've got it. Yeah, they finally
Speaker 1: they finally unveiled the new name. As you said, it's Meta. Um.
Speaker 1: This is really about Mark Zuckerberg and the rest of
Speaker 1: the executives at Facebook trying to rebrand, reimagine, get you
Speaker 1: to think about Facebook in a different way. UM. It's
Speaker 1: really emphasizing their planned multibillion dollar bet on the metaverse.
Speaker 1: This is this immersive world. UM. Think of it as
Speaker 1: a three D worldwide web that they want to be
Speaker 1: at the ground level of creating. UM, and they want
Speaker 1: you to think about their company as really a pioneer
Speaker 1: in this space. Um. They just spent an hour talking
Speaker 1: about the new hardware and software and other tools that
Speaker 1: they're created to give users the opportunity to immerse themselves
Speaker 1: in this thing called the metaverse, and they just chuckle. There.
Speaker 1: I did was a fascinating study of of kind of
Speaker 1: what they're what they're thinking about. It was really a
Speaker 1: trip inside the heads of Mark Zuckerberg and the other
Speaker 1: executives there um. And they're taking it very seriously and
Speaker 1: it's a big, bold and risky bet that they're taking.
Speaker 1: They're going to spend billions of dollars over the next
Speaker 1: five to ten years to build this out. How do
Speaker 1: they monetize this? I mean, I was watching part of
Speaker 1: this presentation as I was prepared for our programs. Tim,
Speaker 1: You're so silly monetization, But that's what investors care about,
Speaker 1: and first you got to get the eyeballs right. Well,
Speaker 1: I gotta tell you, even after watching that, I like
Speaker 1: life as it is and don't necessarily want to live
Speaker 1: in the metaverse or any time in the metaverse. How
Speaker 1: do they convince us to do that? And how do
Speaker 1: they make money doing it right? That's going to be
Speaker 1: a big challenge. So to answer your first question about
Speaker 1: the monetization, they are talking about all kinds of tools
Speaker 1: that you are going to be able to use. Spend
Speaker 1: a lot of time talking about e commerce. So you know,
Speaker 1: we've seen lots of big tech companies Amazon comes to mind,
Speaker 1: that have been able to monetize the way you buy
Speaker 1: and sell stuff, you know, virtually. Um, that's one thing
Speaker 1: they're also gaming. Um. They talked about Grand Theft Auto
Speaker 1: being one of the games that they're going to sell.
Speaker 1: And certainly as you look at wearing headsets, immersing yourself
Speaker 1: in these worlds, whether it's through a VR Virtual reality
Speaker 1: experience or an a R experience, you can imagine that
Speaker 1: there's going to be advertising sales. They didn't talk a
Speaker 1: lot about that, um, but I think that they will
Speaker 1: find ways to absolutely monetize this, although you know, and
Speaker 1: probably not right at the outset. Hey, Tom, I'm struck
Speaker 1: by something that I saw Shinali Bask, our colleague on
Speaker 1: Bloomberg TV right now, just tweet. She said that Zuckerberg said,
Speaker 1: from now on, we're going to be metaverse first, not
Speaker 1: Facebook first. It really makes me think back to when
Speaker 1: Mark Zuckerberg said that Facebook was going to be a
Speaker 1: mobile first company, and it emerged that he was making
Speaker 1: everybody only use their phones to access Facebook to build
Speaker 1: a mobile product. Fast forward where we are now. This
Speaker 1: is a company that is that really succeeded when it
Speaker 1: came to mobile and really surprised investors by by holding
Speaker 1: onto that. Yeah. Remember, and you know, at the time
Speaker 1: of their I p O, one of the things that
Speaker 1: really tripped them up for those first scary several months
Speaker 1: of their publicly tried but after their debut was that
Speaker 1: they hadn't mastered mobile. But as you said, that's something
Speaker 1: that they really tackled. They got us all, uh or
Speaker 1: all their users or many of their users to experience
Speaker 1: Facebook on the smartphone, and now they want to kind
Speaker 1: of move beyond that, and they want to be what's
Speaker 1: what's interesting about, you know, kind of making you think
Speaker 1: about Facebook differently. Facebook's name has really been the brand
Speaker 1: has really been tarnished by all of the things that
Speaker 1: we and others have been writing about for weeks and
Speaker 1: months and years, which is the preponderance of harmful content,
Speaker 1: whether it's hate speech, whether it's dis or disc or misinformation,
Speaker 1: um anti vax um, conspiracy theories. The list goes on
Speaker 1: and on and on the ways that Facebook has become
Speaker 1: a place that we associate with a lack of safety
Speaker 1: and a lack of protection. They want to start kind
Speaker 1: of over um and this is how they're going to
Speaker 1: do it. Right. Hey, you know, Mark Zuckerberg putting out
Speaker 1: a letter I'm just reading through it as as I
Speaker 1: wrote no original founders letter quote. We don't build services
Speaker 1: to make money. We make money to build better services.
Speaker 1: It's interesting, though, Tom, it comes at a time, just
Speaker 1: quickly twenty seconds as you say, this company is being
Speaker 1: looked at very very closely for its impact negatively on society. Absolutely,
Speaker 1: and you have a lot of lawmakers out there really
Speaker 1: taking a jaundice view of Facebook and the things that
Speaker 1: they say. Um, the stock is up, interestingly, so somebody
Speaker 1: likes what he's selling right now. Well, it could have
Speaker 1: been Facebook two point oh, that wouldn't have been so good.
Speaker 1: Tom Giles, you are amazing. Thank you for breaking it
Speaker 1: down and just making sense when it comes to Facebook's history.
Speaker 1: We're gonna talk and continue this conversation on Facebook's new name.
Speaker 1: It's meta at Level. Will be joining us from Menlo Park.
Speaker 1: He's on the ground there at Facebook headquarters. You're listening
Speaker 1: to Bloomberg Radio. This is Bloomberg Business Week with Carol
Speaker 1: Messer and Bloomberg Quick Takes. Tim Stinovich from Bloomberg Radio.
Speaker 1: I must read in the new shoe Bloomberg Business Week
Speaker 1: by pri and Non and Mark Bergen. It's about a
Speaker 1: company called Go Guardian, the leading developer of ed text
Speaker 1: software educational tech software, and I guessed him to be fair,
Speaker 1: to be transparent. It's really about kind of educational surveillance software.
Speaker 1: That's right, Big teacher is watching spyware business sneaks into schools.
Speaker 1: Joe Weber is editor at Bloomberg Business Week. He's with
Speaker 1: us in the Bloomberg Interactive Broker Studio. Pre Ada's venture
Speaker 1: capital reporter for Bloomberg News. She joins us from San Francisco. Joel,
Speaker 1: What is the software Go Guardian? So it's it's one
Speaker 1: of a few that have become incredibly popular, uh, since
Speaker 1: the beginning of the pandemic, where you know, if you
Speaker 1: had a kid and the kid was in school maybe
Speaker 1: or not in school, but at home. Um, there was
Speaker 1: just this proliferation of devices all of a sudden. So
Speaker 1: so kids had iPads and laptops in a way that
Speaker 1: maybe they didn't always have before. And if it came
Speaker 1: from a school, if it was a you know, the
Speaker 1: Department of Education issued thing, chances are the school wanted
Speaker 1: to make sure that he could keep an eye on
Speaker 1: what the kid was doing. And now these companies have
Speaker 1: really boomed. Go guardian is the one that pre uh
Speaker 1: dug into for the story. Uh and yeah, what what
Speaker 1: do you think a kid is looking at during the
Speaker 1: school other than school? Right? Well, you know if you
Speaker 1: have gil guard Yeah, that's right. Uh So it also
Speaker 1: raises all kinds of privacy issues. So so pre what
Speaker 1: did you learn as you dug into this uh story?
Speaker 1: That's right? So the pandemic, I mean every school that
Speaker 1: hadn't given kids, um a laptop or a tablet of
Speaker 1: some sort, so many schools were forced to gross these
Speaker 1: things into kids's hands. And when they did that, they
Speaker 1: wanted to make sure they could ensure that kids weren't
Speaker 1: searching for I guess for our radio listeners all say
Speaker 1: problematic stuff on their school computers right when they're giving
Speaker 1: them access to the internet. So administrators at schools principles
Speaker 1: teachers we spoke with for this story, they all love this.
Speaker 1: Teachers say that even in the classroom when they're not
Speaker 1: you know, remote, now that they're back, it helps them
Speaker 1: when they want kids to look at maybe a worksheet
Speaker 1: of some sort, or have an exam open that's online,
Speaker 1: which is much easier to grade for them, um, And
Speaker 1: then they can make sure that the kid only has
Speaker 1: the certain tabs open that they have said are okay
Speaker 1: during class. So a math teacher can block YouTube, for example,
Speaker 1: during their class. If they see a kid open another
Speaker 1: tab with a game or something like that, they can
Speaker 1: close out that tab immediately for them from their own
Speaker 1: computer at their desk. And teachers think that this is
Speaker 1: a way to like, you know, actually be able to
Speaker 1: focus on teaching, right if you can block all the
Speaker 1: other stuff that, you know, the kid can't access anything
Speaker 1: else in their computer. Kind of sounds like the Bloomberg
Speaker 1: firewalls just putting it out there. Um, but we understand
Speaker 1: why we have a lot of information to protect here. Um.
Speaker 1: The schools decide, though, right what to block on kids computers.
Speaker 1: The schools decide what to block on kids as computers.
Speaker 1: But the interesting thing is that the schools can also
Speaker 1: decide to turn on a feature that allows them too.
Speaker 1: If the kids logged into their school account on a
Speaker 1: personal computer at home, go Guardian can still continue tracking, monitoring,
Speaker 1: et cetera while the kid has logged into that school account. Now,
Speaker 1: not every school turns this on. Go Guardian wouldn't give
Speaker 1: us a bigger on how many schools that they're involved
Speaker 1: with have turned this on. But there was protests in Montclair,
Speaker 1: New Jersey over this um and parents wondered, you know,
Speaker 1: where does the tracking end then if if this can
Speaker 1: happen on a personal device preta. One thing that you
Speaker 1: explore in the piece is just about the role of
Speaker 1: computers in school because for your Silicon Valley and even
Speaker 1: Mark Zuckerberg in Newark almost a decade ago, wanted to
Speaker 1: help connect classrooms. And I'm wondering what you learned and
Speaker 1: what you can tell us about the role of computers
Speaker 1: in school. Did they reach a turning point during the
Speaker 1: pandemic because of remote learning? That's right. So what struck
Speaker 1: me about companies like go Guardian is how much scale
Speaker 1: they've been able to achieve the far right, just how
Speaker 1: many schools across the country they reach and how many
Speaker 1: students across the country reach Go Guardian, for example, they're
Speaker 1: one of the biggest companies that makes these kind of
Speaker 1: tracking tools and their reach is a potential twenty three
Speaker 1: million and students or more. Entire states have signed up,
Speaker 1: like Delaware and West Virginia, giving access to all the
Speaker 1: schools in their states, which means the school can decide
Speaker 1: whether or not they want to use these tools. But um,
Speaker 1: you know, New York City has signed up large school
Speaker 1: district in the country. So that's what struck us as
Speaker 1: as quite different from a lot of the other efforts
Speaker 1: in education technology. Right. I mean, a bunch of Googlers
Speaker 1: started a company called Old School a couple of years back. Um,
Speaker 1: it ended up shutting down the schools it started. The
Speaker 1: schools had like three D printers and and all this
Speaker 1: fancy high tech stuff. But then they got out of
Speaker 1: the business spout bring of schools and they only even
Speaker 1: had you know, not that many, nothing at this scale.
Speaker 1: And the Zuckerberg New Work relationship that was that was
Speaker 1: just new Work, right, It wasn't UM across the country.
Speaker 1: So so this really struck us as something that you know,
Speaker 1: even though the pandemic UM really gave them a big
Speaker 1: boost in popularity, it doesn't seem like this kind of
Speaker 1: monitoring technology is going away. Um now that things are
Speaker 1: are back in person and they have achieved just a
Speaker 1: much larger base of users across the country. I gotta
Speaker 1: say it seems pretty basic to put a little firewall
Speaker 1: on an education device and limit what kids might be
Speaker 1: able to access and give some teachers ability to see
Speaker 1: what they're looking at. What are the numbers? Like, how
Speaker 1: lucrative of a business idea is this? Go Guardian UM
Speaker 1: They themselves charge about five dollars per student per product
Speaker 1: at a school or school district on that's more than
Speaker 1: the school lunch I think they've got. They've got multiple
Speaker 1: products going on too. There's like a you know, a
Speaker 1: whole host of tools for teachers, specifically a host of
Speaker 1: tools for administrators, UM, a host of tools to kind
Speaker 1: of assigned devices to different kids and like track where
Speaker 1: they are. So it's depended on how they set up
Speaker 1: you know, the service, but you have five dollars per
Speaker 1: student at minimum, right, So okay, the most one of
Speaker 1: the one of the most uh searched for things that
Speaker 1: out when students are on Go Guardian is how do
Speaker 1: you get around Go Guardian? How do you get around it?
Speaker 1: You know? So actually we asked a company about this
Speaker 1: and you're like, hey, you know we heard that kids
Speaker 1: kids do constantly search like how to get around your
Speaker 1: tech and and their engineers watch those videos too, and
Speaker 1: if they see something, they you know, close it up.
Speaker 1: But it's not something they seem to be that worried
Speaker 1: about they think they've got things pretty locked down. I
Speaker 1: just think it's funny on a day where we just
Speaker 1: had Facebook getting a new name Meta because we know
Speaker 1: they're focusing on the metaverse and that actually with Go Guardian,
Speaker 1: there is a penalty box, right kind of, I guess
Speaker 1: a virtual one that they can that kids can be
Speaker 1: put in. And I just think you can see a
Speaker 1: melding of the metaverse, right the kids are put in
Speaker 1: like a penalty metaverse. Remembering the kids I went to
Speaker 1: school with who were in that box. Now you know,
Speaker 1: like they probably are still in it. You know, it's
Speaker 1: just crazy, like how it's all gonna meil together? Um?
Speaker 1: Is this a company that's going to probably go public
Speaker 1: at sometime just quickly? You know. Earlier this year they
Speaker 1: raised two million dollars put their valuation at over a
Speaker 1: billion dollars. So given the recent fundraising, who knows right
Speaker 1: that they have a lot of money right now at
Speaker 1: least sixth band unbelievable, Um and fascinating and deep dive.
Speaker 1: There's so much to this story. Thank you so much,
Speaker 1: really appreciate Bloomberg News Venture Capital reporter Priya and Non
Speaker 1: joining us on the phone. From San Francisco on with
Speaker 1: Bloomberg business Week at or Joel Webber, what do you
Speaker 1: think of Meta? Uh? Roofline in the magazine coming out now?
Speaker 1: That shift yesterday is Facebook's meta pivot. I feel like
Speaker 1: I should be in the gambling universe. I just go
Speaker 1: ahead of the curve man. All right, everybody, we gotta
Speaker 1: run um Joe Weber, thank you so much, Business Week editor,
Speaker 1: of course, and check out that new issue. It is
Speaker 1: on newsstands on the Bloomberg and at business Week dot com.
Speaker 1: You're listening to Bloomberg business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. So it's official, uh,
Speaker 1: Meta formerly known as Facebook the artist formerly known as Facebook?
Speaker 1: Are you gonna keep calling it Facebook? Are you gonna
Speaker 1: start calling from three? Technically, it's still trading right under Facebook.
Speaker 1: It doesn't start trading under the new ticker until December one,
Speaker 1: So I guess it's going to be kind of one
Speaker 1: of those Google slash alphabet like you know that confusion
Speaker 1: that we went through initially when they made the name change. Well,
Speaker 1: that's what I'm wondering. Unfortunately, now Ed Lovelow is joining US.
Speaker 1: He's West Coast corresponding at Bloomberg News. He's on site
Speaker 1: from Facebook headquarters in Menlo Park, California. I believe he's
Speaker 1: a one hacker away in front of what was until
Speaker 1: today a famous Facebook like sign thumbs up that you're
Speaker 1: seeing on YouTube right now. But now the sign has changed.
Speaker 1: Ed when did they When did they pull the cover
Speaker 1: off that brand new sign that you're standing in front
Speaker 1: of nine seconds well to Mark Zuckerberg announced it nine
Speaker 1: and it was amazing. Over my shoulder, you know, they're
Speaker 1: standing there, had this temporary canvas over it, and whoosh,
Speaker 1: they just pull the canvas off. The sign is that
Speaker 1: famous sign everyone knows, right for our radio audience as well,
Speaker 1: with the thumbs up like symbol, and it's changed now
Speaker 1: to this meta symbol. But what you guys were discussing
Speaker 1: in the intro is the most important part. What changes,
Speaker 1: And really this is a change in name only, no
Speaker 1: change to Facebook's corporate structure and no change to the
Speaker 1: names of his properties. Right Facebook, the website and apps
Speaker 1: stays the same. What's that? The same? Instagram the same,
Speaker 1: And many had speculated that they might form a new
Speaker 1: entity restructure with a holding company like Alphabet did, but
Speaker 1: that wasn't the case. So what's the significance of this?
Speaker 1: Is this a company just like when they were late
Speaker 1: to mobile but quickly pivoted to mobile? Um? Is this
Speaker 1: a company realizing the future is going to be different
Speaker 1: going forward and we're gonna pivot now and we're gonna,
Speaker 1: you know, telegraph that very clearly to the world. What
Speaker 1: are we as investors? The stats up three percent and
Speaker 1: now as we did see a kick up on this news,
Speaker 1: what are we supposed to take away from the set?
Speaker 1: To be fair, Zuckerberg and other executives have been talking
Speaker 1: about the metaverse for some time, about how for Facebook,
Speaker 1: the metaverseus the future where we interact with one another virtually,
Speaker 1: not just for simply gaming. But during his presentation, Zuckerberg
Speaker 1: talks about e commerce, about conducting business eatings through virtual
Speaker 1: and augmented reality using the Oculus headsets. He talks about
Speaker 1: healthcare using the Oculus headset, exercising in virtual spaces with
Speaker 1: other imagine a Peloton class that is virtual. I can't
Speaker 1: quite get my head around that. But what has been
Speaker 1: made so clear about the Facebook equity story in the
Speaker 1: prior court in the court had just gone this week.
Speaker 1: In the prior courter is its vulnerability to those Apple
Speaker 1: iOS changes, and by extension, it's dependence on ad revenues.
Speaker 1: And they we know that they bought Instagram, we know
Speaker 1: that they bought what bought, whatsopp but they've found it
Speaker 1: hard to monetize those And really this is face Zackerberg
Speaker 1: saying this is the first big step for us towards
Speaker 1: the future where we monetize through our virtual reality investment
Speaker 1: in Oculus, which is two thousand fourteen. It also has
Speaker 1: made me think a lot over the last Go ahead, girl,
Speaker 1: Now you know what I'm thinking. Now, I'm I'm like
Speaker 1: watching the video that Mark Zuckerberg put out here. And
Speaker 1: at a time where we are talking about the world
Speaker 1: needing greater transparency, we're now talking about creating, you know,
Speaker 1: an alt reality that could mask so much. And so
Speaker 1: I guess I'm trying to get my head around it.
Speaker 1: Just call me a purist, what can I say? Well,
Speaker 1: one of the big big points that Facebook stressed was
Speaker 1: that privacy is going to be central to this right.
Speaker 1: They said that there will be the same parental controls,
Speaker 1: the same privacy policies in Horizon, the Apple platform that
Speaker 1: the metaverse will exist in or you know what I mean,
Speaker 1: but also that there will be no substantive changes to
Speaker 1: data to use a data, how they handle it. I
Speaker 1: think there's a big questions. One hypothesis put forward by
Speaker 1: Wall Street is that if Facebook had gone further and
Speaker 1: had done a holding company where each individual business unit
Speaker 1: was separate and isolated, it might have given them some
Speaker 1: reprieve or insulation from antitrust interest right from regulators. But
Speaker 1: they didn't do that, And really, likes of Reid Hoffman
Speaker 1: have raised this question. Right, this doesn't change anything from
Speaker 1: Facebook's existing problems. Right. What I was going to say is,
Speaker 1: almost twenty years ago to the day, Philip Morris in
Speaker 1: the US changed its name to Altria, and they did
Speaker 1: that partly to associate the name of the company from
Speaker 1: cigarettes and from the danger that cigarettes have caused the
Speaker 1: world and the and the the US. And I'm wondering
Speaker 1: if this changes anything for regulators or makes them makes
Speaker 1: them think at all differently about the company. Yeah, I
Speaker 1: don't have the answer to that, and I know that's
Speaker 1: a bit of a cop out, but you know, as
Speaker 1: I said, it's a change in name. Only you know
Speaker 1: Zuckerberg and Nick Klegg, who's the vice president of corporate affairs,
Speaker 1: you know, the former British Deputy Prime minister, just stress that, look,
Speaker 1: we are aware of the criticisms that people level at Facebook.
Speaker 1: Zuckerberg actually said there's no good time for Facebook to
Speaker 1: set out its plan for the future because people will
Speaker 1: raise questions about what it's doing with its present issues.
Speaker 1: But he said there's no time like the present. You
Speaker 1: know that they acknowledge all of the criticism around content moderation,
Speaker 1: about the safety of the platform for children. But at
Speaker 1: the end of the day, as they said, this is
Speaker 1: about diversifying, moving away from the ad platform that we know,
Speaker 1: the core blue Facebook dot com platform, to a future
Speaker 1: where people engage differently with one another. Well, and to
Speaker 1: be fair, we are now having a very different conversation
Speaker 1: about face Book slash Meta right now because we're talking
Speaker 1: about the name change and then the focus of the company.
Speaker 1: And if I look at Wall Street, you know, investors
Speaker 1: are cool. More than of the analysts that cover it
Speaker 1: put a by rating fifty. One of the analysts that
Speaker 1: we survey here at Bloomberg have a by rating eight
Speaker 1: holds three cells. I mean overwhelmingly like investors seem to
Speaker 1: be okay about all of it. Ed, we're talking about
Speaker 1: a company that is going to record a hundred and
Speaker 1: eighteen billion dollars in fiscal twenty one according to estimates,
Speaker 1: that regularly post top and bottom line growth that is
Speaker 1: in the very high double digits. There was disappointment in
Speaker 1: this quarter. Why because we saw the brunt of the
Speaker 1: impact from the Apple privacy tracking changes. Right, that was clear,
Speaker 1: and there was commentary about it on the call. But
Speaker 1: at the end of the day, this is an incredibly
Speaker 1: high margin business that is setting out the future where
Speaker 1: it's not dependent on that high margin business. It's going
Speaker 1: into other areas that it's confident that can generate revenue.
Speaker 1: One real quick one, Zuckerberg said, by the end of
Speaker 1: the decade, the metaverse may each a billion people, one billion,
Speaker 1: but it will generate in the region of hundreds of
Speaker 1: millions of dollars of revenue. That gives you a sense
Speaker 1: of scale. Right, It's going to be a long long
Speaker 1: time before this is the core of the business, but
Speaker 1: it's the first big step to diversify. Just very very briefly,
Speaker 1: twenty seconds, how do they monetize the metaverse? Two ways?
Speaker 1: Hardware Oculus brand new headset announced today. High end, expensive,
Speaker 1: high level of functionality, second wave services. Think about video games, roadblocks, Minecraft,
Speaker 1: you buy things within the game, and that's in zeed
Speaker 1: what Facebook wants to do. But it wants to do
Speaker 1: e commerce. It wants to do business to business interactions, meeting,
Speaker 1: so you don't take an airplane. And as I said,
Speaker 1: healthcare was a really interesting take for me. Another headline
Speaker 1: crossing from that event Meta unifying payments financial services under
Speaker 1: Facebook's Novie brand. That was a brand name I think
Speaker 1: created back in for kind of the digital wallet, uh
Speaker 1: that they created. Um, ever, will be careful get off
Speaker 1: that highway. We're worried about you outside Facebook slash Meta headquarters.
Speaker 1: You're listening to Blueberg Radio. Bro. Yeah, but you let
Speaker 1: me drive? Oh no, no, no no, this is not
Speaker 1: a toy. All right, please, I'll goodridevels. I want to drive.
Speaker 1: It's a good question. Good drive. This is the drive
Speaker 1: to the globe down on Bluemberg Radio. All right, just
Speaker 1: about ten and a half minutes left from the end
Speaker 1: of trading on this Thursday, this Friday's Eve and bouncing around.
Speaker 1: But it looks like we're take a little bit of
Speaker 1: a lake up here on those major equity averages near
Speaker 1: our highs of the day, certainly on the SNP and
Speaker 1: the Nastac Nastac once again the app performer. This whole
Speaker 1: week is about those big tech names, and then include
Speaker 1: some of the results we're gonna get after the closing bell.
Speaker 1: We have Amazon with Apple what am I missing? Not
Speaker 1: really call themselves tech with the online or there is
Speaker 1: an app apps the app is huge and there will
Speaker 1: be a lot of questions about the app. Well. Someone
Speaker 1: who knows about all these brands is our next guest,
Speaker 1: Eric Clark, his portfolio manager at Rational Dynamic Brands Fund.
Speaker 1: His fund, by the way, continued to be just about
Speaker 1: all of its peers over the last five years, up
Speaker 1: on average annually, putting his fund in the nine percent
Speaker 1: according to Bloomberg Data. He's back with us on the
Speaker 1: phone from San Diego. By the way. Top holdings in
Speaker 1: the fund include Alphabet and Apple, which, as we said,
Speaker 1: report after uh no, Apple reports after the close. Google
Speaker 1: already reported Google already earlier this week. Trying to keep
Speaker 1: it straight. Um, yeah, exactly, Eric, How are you? I'm great?
Speaker 1: How are you? Carol? Doing well? Doing well? So let's
Speaker 1: talk about Um. First of all, can we just go
Speaker 1: to a tweet because you put out a tweet and
Speaker 1: you tweeted about the name change of Facebook to meta
Speaker 1: and you said, what happens in a few years when
Speaker 1: we all realized we actually like being outside and enjoying
Speaker 1: real life. Um, what happens? Do you have some thoughts
Speaker 1: about this one? Well, you know, probably about three years ago,
Speaker 1: I was constantly saying, you know, in my opinion, Facebook
Speaker 1: has a real brand problem, and it stems from a
Speaker 1: lot of their business practices, etcetera. So I mean, on
Speaker 1: one hand, it's good to see them finally addressed that
Speaker 1: that's an issue. You know, they've told people in their
Speaker 1: earnings release that they're going to spend like ten billion
Speaker 1: dollars on the development of this metaverse through Capex, and so,
Speaker 1: you know, a brand name change focused on the future
Speaker 1: driver of growth. Is that that's logical and it makes
Speaker 1: a lot of sense. I'm just skeptical about what the
Speaker 1: metaverse looks like and what kind of revenue can be generated.
Speaker 1: And you know, my cynical nature even from my tweet
Speaker 1: that could that's great If I go in the metaverse,
Speaker 1: Am I going to be advertised to death there too,
Speaker 1: So when the real world and on the betaverse, I
Speaker 1: don't know. I don't love Facebook in general, so I'm
Speaker 1: probably not the best guy, you know, to opine on
Speaker 1: the positive parts of Facebook. Do you do you hold
Speaker 1: any Facebook? We do not know. It's been a it's
Speaker 1: been a good trade for us. We traded it, you know, Uh,
Speaker 1: I don't know. I I put a a little note
Speaker 1: to my team saying, hey, you know, we're about eight
Speaker 1: percent of the way from the trillion dollar mark, and
Speaker 1: be shocking if we didn't kiss that level, just like
Speaker 1: Tesla did the other day. And when that happens, If
Speaker 1: that happens, we're out. And that's what we did, and
Speaker 1: we haven't been back since. You know, what's interesting to
Speaker 1: staying on Facebook is the idea that the company is
Speaker 1: going all in on this. They're saying, hey, we are
Speaker 1: we believe in that this is the future so much
Speaker 1: we're changing our name. What if it doesn't work, what
Speaker 1: if we don't want to be in that metaverse? Like
Speaker 1: you said, I I think I think that it certainly
Speaker 1: changes the risk profile of the business. And you know
Speaker 1: that's okay, you know, that's their decision to make. I
Speaker 1: just it's such an unknown, and I do see there's
Speaker 1: some real value in the metaverse or work and for business,
Speaker 1: it's already there with gaming, and there's a there's social
Speaker 1: commerce happening inside of gaming already. So in some way
Speaker 1: it's just an extension of that. But the other part
Speaker 1: of that, what that actually looks like, what the demographic
Speaker 1: of people that are going to be in the metaverse
Speaker 1: is clearly i'm'm fifty three, I'm you know, call me
Speaker 1: a dinosaur. I like the real world. I like the smell, touch,
Speaker 1: and and taste. I don't know that you're gonna be
Speaker 1: able to overcome that in the metaverse though. This is
Speaker 1: clearly a next generation demographic story. And you know, we'll
Speaker 1: have to just see how they how they build this thing.
Speaker 1: And they're certainly they've gone all in from a CAPEX perspective, Well,
Speaker 1: if I go all dystopian on everybody, if if we
Speaker 1: continue on this trajectory, when it comes to our environment
Speaker 1: and climate, we will be allowed to be outside and
Speaker 1: so a metaverse no, I'm sorry, but if you think
Speaker 1: about it, that we might need to be inside and
Speaker 1: that all we will have our metaversees, uh in terms
Speaker 1: of safety, So there you have it. Sorry, dark day,
Speaker 1: I'm not that out of this world. There are parts
Speaker 1: where you don't want to be outside because of pollution. Alright,
Speaker 1: so okay, Eric, let's let's get away from the Eric. Meanwhile,
Speaker 1: back at the ranch, um you do own Amazon, They're
Speaker 1: going to be a report after the closes. We're gonna
Speaker 1: be all over. We want to see what's going on
Speaker 1: with e commerce? You know, might the web Amazon web services,
Speaker 1: uh take care of any weakness within the e commerce
Speaker 1: part of their business? What are you expecting? What is
Speaker 1: it that you like and continue to like about this
Speaker 1: company in this brand? Well, I mean the stock in
Speaker 1: general hasn't really done much for the last twelve months.
Speaker 1: I don't love any stock that goes hot into a print.
Speaker 1: But you know, overall, the things largely underperformed because they're
Speaker 1: in their spending mode and when you know, when they
Speaker 1: spend their hiring you know, some an absurd amount of
Speaker 1: workers with with higher pay. So certainly one side of
Speaker 1: the business is going to be you know, higher and spend,
Speaker 1: so a lot of big expenses. But you know the
Speaker 1: history of Amazon is when we spend for a period
Speaker 1: of time, then we reap the benefits of that spend
Speaker 1: in forward quarters, So you know, I don't really know
Speaker 1: one quarter to the next, but I'm sure AWS is
Speaker 1: probably going to be strong. The trends on that side
Speaker 1: of the business will be good, maybe to offset some
Speaker 1: of the the capex and the spending that's happening on
Speaker 1: the other side of the business. But you know, I
Speaker 1: love the business, I love the brand, So it's just
Speaker 1: a buy on dip for me. It's just it's been
Speaker 1: a top holding, and you know, you don't love it
Speaker 1: that it hasn't performed real well for for a year
Speaker 1: or so, but it tends to do that. It ramps
Speaker 1: up and then it tends to consolidate for a while,
Speaker 1: and then it ramps up again. Do you love both
Speaker 1: the e commerce? Do you love the Amazon Web services?
Speaker 1: Do you love all the business? Just quickly, yeah, I
Speaker 1: love it all. I love it all. I mean, it
Speaker 1: serves different markets, and you know, if you're a small business,
Speaker 1: you hate Amazon. But the reality has served a purpose
Speaker 1: and we all love it even more after after cope,
Speaker 1: so we're that much more loyal to the business and
Speaker 1: and their logistics is no joke. Okay, just thirty seconds left.
Speaker 1: Eric Apple, also one of your top holdings. They're reporting
Speaker 1: after the bell too. What are you looking for? Yeah,
Speaker 1: I mean could see some softness because of the supply issues.
Speaker 1: I mean, demand is not a problem for for their products,
Speaker 1: in particularly the iPhone thirteen. It's just hard to come by,
Speaker 1: So any any misses that come today will just be
Speaker 1: made up when they have some supply. So any dips
Speaker 1: on that one, I'll be aggressive and BUYO to any
Speaker 1: dips You'll be buying. So any dips on that or Amazon,
Speaker 1: you'll be buying correct. All right, good to know. Um,
Speaker 1: really love it. Thank you so much, really appreciate it.
Speaker 1: In front of follow your tweets as well. Eric Eric
Speaker 1: Clark excuse me, portfolio manager of the Rational Dynamic Brands Fund,
Speaker 1: top performer in the past five years, joining us on
Speaker 1: the phone from San Diego. Thanks for listening to Bloomberg
Speaker 1: Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg
Speaker 1: dot com, and you can also listen to our radio
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Speaker 1: us on YouTube. Sarah to Bloomberg Global News