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Speaker 1: Okay, we we're gonna a look at the Facebook and

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Speaker 1: Instagram owner meta meta platforms, giving a revenue forecast that

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Speaker 1: was at the low end of endless estimates. Getting over

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Speaker 1: now to David Kirkpatrick, who has found an editor in

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Speaker 1: chief of Techonomy. David, thank you so much for joining.

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Speaker 1: Is I think you make the valid point here that

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Speaker 1: everything in the results which came out earlier were at

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Speaker 1: or above expectations except for one key parameter. Profit That's

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Speaker 1: not not ideal, is it. Here's a company that really

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Speaker 1: has gone through a historic transformation since it changed its

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Speaker 1: name just a year ago. Uh. Not only were you know,

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Speaker 1: revenues down for the second quarter in a row, but

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Speaker 1: that wasn't expected, but profits were more than fifty below

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Speaker 1: a year ago. And it's largely because this is a

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Speaker 1: company that has shifted from a priority on its central business,

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Speaker 1: which is social media for three point seven billion people

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Speaker 1: in the world. Just per say that to yourself a

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Speaker 1: few times, to a a prospective business that doesn't exist

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Speaker 1: and may not exist for many years around the metaverse

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Speaker 1: that they're spending ten billion a year on plus Uh

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Speaker 1: and it's just not working. Yeah. This letter of from

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Speaker 1: Altimeter from Brad Gursner got a lot of play and Uh,

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Speaker 1: basically I'm curious whether or not you agree with a

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Speaker 1: lot of this. It's almost like, um, they need a

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Speaker 1: ruth poor Ade or something there to help with the management.

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Speaker 1: That they should be more mindful of profit. They should

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Speaker 1: be more mindful of expenses. Like you said the Reality Labs,

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Speaker 1: the expenditure there more than ten billion a year and

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Speaker 1: and Brad wrote in his letters should be more like

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Speaker 1: five billion. Um, there's a lot of a lot of

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Speaker 1: interesting points here. Do you do you? I mean, what

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Speaker 1: would your prognostication be for for how Facebook could write

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Speaker 1: the ship? Well, don't forget for fourteen years until just

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Speaker 1: a month or so ago, they had an ex Google

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Speaker 1: senior leader, Cheryl Sandberg, who was in there helping, and

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Speaker 1: she maybe voted with her feet by leaving. She doesn't

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Speaker 1: seem to believe in what they're doing. What they need

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Speaker 1: to really write the ship, unfortunately doesn't seem in prospect,

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Speaker 1: which is governance and collective leadership of the type that

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Speaker 1: any company with an active board is familiar with. But

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Speaker 1: this is a company where all power resides in one

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Speaker 1: individual who has no obligation to listen to anybody, because

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Speaker 1: he literally controls more than of the voting shares, and

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Speaker 1: he is obsessed with this metaverse future and doesn't seem

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Speaker 1: to care that much about the existing businesses, despite all

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Speaker 1: kinds of reasons why any rational person at least on

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Speaker 1: the outside, believes he should do that. So that I

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Speaker 1: don't think even a Rutport type person coming in would

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Speaker 1: make any difference unless Mark Zuckerberg decided to listen to them.

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Speaker 1: But he doesn't listen even to his board. That's it

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Speaker 1: isn't it's it doesn't does it? This is coming now?

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Speaker 1: If if it is an obsession, that probably the intriment

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Speaker 1: of as you mentioned earlier, the cool business and the

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Speaker 1: cool business perhaps could by this I suppose neglect lead

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Speaker 1: to it being in trouble for all sorts of things

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Speaker 1: such as oversight. Well, I mean it's in trouble because

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Speaker 1: when when the stock since this morning, the stock is

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Speaker 1: down to almost and you know, it's down from its peak.

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Speaker 1: This is one of the great growth stories of modern

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Speaker 1: business that has suddenly turned into something completely different, and

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Speaker 1: it's it's almost hard to contemplate what a turnaround this

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Speaker 1: is for what was for a long time the most

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Speaker 1: profitable company in capitalism on a per dollar of revenue basis.

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Speaker 1: So um, it's hard to understand why there isn't a

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Speaker 1: sense of you know, ten ten bell alarm to to

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Speaker 1: do things differently. But they just keep acting like, yes,

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Speaker 1: this is the kind of what it was going to

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Speaker 1: be like, and we're okay. So the work doesn't on

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Speaker 1: the direction going forward. I mean, there's nothing wrong with

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Speaker 1: pursuing the metaverse. I suppose perhaps it just needs to

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Speaker 1: happen more slowly and so the expenses would be you know,

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Speaker 1: less of a drag. What else I mean, he's not

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Speaker 1: reducing Yeah, he said that they should they should cut

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Speaker 1: their investment in the metaverse at least by half. That also,

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Speaker 1: they said that they should reduce their head count by

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Speaker 1: about which sounds reasonable. They still have over more people

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Speaker 1: than they had a year ago, so you know, they

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Speaker 1: could lose a lot of people and still be a

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Speaker 1: very robust, well governed company from an employee point of view,

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Speaker 1: a lot of people that are very capable. But again,

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Speaker 1: it's weird because the sense of crisis doesn't really seem

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Speaker 1: to be there. And you know, when you have somebody

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Speaker 1: who has absolute power who doesn't seem to care what

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Speaker 1: other people think. It's a very unusual situation in a

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Speaker 1: company of this scale. At some point he'll hear what

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Speaker 1: other investors are saying. We don't have time now, unfortunately, David,

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Speaker 1: But uh, you know, I mean, it's only a matter

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Speaker 1: of time. I think many would say that messages like

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Speaker 1: that one that we we talked about from Brad Gersoner

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Speaker 1: and others, and you, uh, he'll he'll ultimately hear it,

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Speaker 1: I suppose, is the argument. David Kirkpatrick, founder and editor

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Speaker 1: in chief of Teconomy