WEBVTT - Is the Tech Boom Coming to an End? 0:00:04.280 --> 0:00:06.520 We're going to start this episode with a bit of 0:00:06.600 --> 0:00:11.520 ancient history. On August two, Apple crossed a trillion dollars 0:00:11.520 --> 0:00:15.600 in market value. Paid off big time yesterday when Apple 0:00:15.640 --> 0:00:19.800 became the first publicly traded company in US history to 0:00:19.920 --> 0:00:24.600 hit one trillion bucks in value. That's one with twelve 0:00:24.720 --> 0:00:27.280 zeros after it. To put things in Perspei, Apple held 0:00:27.280 --> 0:00:31.400 onto its stratospheric valuation for all of three months. On 0:00:31.440 --> 0:00:34.240 November two, it closed the trading day at a value 0:00:34.280 --> 0:00:38.400 of nine eight six point six billion dollars. For part 0:00:38.440 --> 0:00:41.920 of a single trading day. In September, Amazon also preached 0:00:42.000 --> 0:00:46.920 the threshold we start with. Amazing Amazon somewhere CEO Jeff 0:00:46.920 --> 0:00:49.800 Bezos is smiling, maybe even laughing, as the company becomes 0:00:49.800 --> 0:00:52.520 a second one ever to hit a trillion dollar valuation, 0:00:52.720 --> 0:00:54.960 coming in right behind Apple a month ago. It's a 0:00:54.960 --> 0:00:57.040 sign of just how much the tech industry has come 0:00:57.080 --> 0:01:01.400 to dominate the economy, but perhaps also represented some kind 0:01:01.440 --> 0:01:05.319 of high water mark for tech. Apple is lost about 0:01:05.959 --> 0:01:09.080 of its market value since the peak. Amazon is down 0:01:09.120 --> 0:01:14.039 around twenty and Wall Street is punishing other tech stocks. 0:01:14.319 --> 0:01:18.480 Alphabet's down about from its peak, Facebook's down twice that much. 0:01:19.080 --> 0:01:21.680 What had been a simmering problem for tech stocks seemed 0:01:21.720 --> 0:01:24.119 to reach a boil just before Thanksgiving, as the tech 0:01:24.160 --> 0:01:27.080 inferno rages on. How much worse can they get? What 0:01:27.160 --> 0:01:30.240 do you do with tech? The closing bell ending one 0:01:30.240 --> 0:01:32.360 of the worst days on Wall Street, a drop of 0:01:32.440 --> 0:01:35.880 over six hundred points on the Dow, bringing financial markets 0:01:35.880 --> 0:01:39.120 to the lowest levels since March two thousand nine. For 0:01:39.200 --> 0:01:42.440 the last decade, Americans have been very enthusiastic about the 0:01:42.480 --> 0:01:46.199 big tech companies, but that mood is shifting. Social media 0:01:46.240 --> 0:01:49.880 undermining democracy. How scared should we be about our loss 0:01:49.880 --> 0:01:52.840 of privacy? And should the government break up the big 0:01:52.880 --> 0:01:57.279 tech companies like Amazon? This market turmoil comes after months 0:01:57.280 --> 0:02:00.360 of these mounting concerns. Now seems like a good time 0:02:00.400 --> 0:02:03.080 to ask if there are leaner times ahead, what does 0:02:03.080 --> 0:02:05.400 it mean for big tech and how does that affect 0:02:05.400 --> 0:02:18.880 the rest of US? I am brab Stone and I'm 0:02:18.960 --> 0:02:22.640 Joshua Brewsting, and this week on Decrypted, we'll take a 0:02:22.639 --> 0:02:25.160 look at what's driving investors on Wall Streets to start 0:02:25.240 --> 0:02:28.880 jumping tech stocks and masks, and if the market continues 0:02:28.919 --> 0:02:34.919 to punish Silicon Valley, what unintended copquence is gonna play out? Elsewhere. Now, 0:02:34.919 --> 0:02:37.480 it is worth noting that predicting a tech shakeout has 0:02:37.480 --> 0:02:39.440 been a pretty sure fire way to be dead wrong 0:02:39.480 --> 0:02:43.160 over the last couple of years. Back in smart people 0:02:43.200 --> 0:02:45.800 warned that Facebook would be laid low by its inability 0:02:45.840 --> 0:02:48.919 to adapt the smartphone. Others at the time said Apple's 0:02:48.919 --> 0:02:52.320 growth would soon hit some basic limits of economics. The 0:02:52.400 --> 0:02:54.960 debate over the bubble in the tech industry continued on 0:02:55.000 --> 0:03:02.360 through last year and straight onto today. So we'll see 0:03:02.400 --> 0:03:12.640 if this time is different. Stay with us, So, Josh, 0:03:12.840 --> 0:03:16.440 we're keeping this on the Tuesday before the Thanksgiving holiday 0:03:16.440 --> 0:03:19.160 here in the US, and uh, the last few weeks 0:03:19.160 --> 0:03:22.400 have been pretty brutal for tik stocks, right. There have 0:03:22.480 --> 0:03:26.680 been some recent events that have caused a real directional shift. 0:03:27.120 --> 0:03:31.000 There were some reports from suppliers to Apple that a 0:03:31.200 --> 0:03:35.560 large customer was reducing its orders, and this really forwarded 0:03:35.560 --> 0:03:38.480 the same narrative that's coming out from Apple itself that 0:03:38.560 --> 0:03:41.320 iPhone sales are probably not going to be what they 0:03:41.320 --> 0:03:44.440 have been in the past. For Facebook. At the same time, 0:03:44.480 --> 0:03:47.119 there have been increasing reports about the way that it's 0:03:47.120 --> 0:03:50.560 really mishandled its response to some of the criticism regarding 0:03:50.600 --> 0:03:55.360 disinformation um and election issues, and those two companies have 0:03:55.440 --> 0:03:57.840 really been hit hard. You've seen the other companies go 0:03:57.920 --> 0:04:02.320 with them. These tech companies, by any tangible standard, have 0:04:02.400 --> 0:04:05.880 been phenomenally successful and continue to be successful. You know, 0:04:05.960 --> 0:04:08.480 Amazon is not going out of business, but at the 0:04:08.560 --> 0:04:12.640 same time, they are entering a period where growth seems 0:04:12.680 --> 0:04:14.880 like it's going to be harder to come by. And 0:04:14.920 --> 0:04:18.240 that's partially just because they are so big and they've 0:04:18.279 --> 0:04:21.760 infiltrated so deeply into our lives that how can they 0:04:21.800 --> 0:04:25.440 really get much deeper? Right, Well, let's take these companies 0:04:25.480 --> 0:04:28.560 one at a time. You mentioned Apple. Obviously, you know 0:04:28.600 --> 0:04:31.880 that the company seems to have cut its own expectations 0:04:31.920 --> 0:04:34.800 for the iPhone. Certainly suppliers have been more public about that. 0:04:35.200 --> 0:04:39.880 A Golden Sacks lowered its rating on Apple recently, and 0:04:39.960 --> 0:04:42.480 we're seeing reports of week iPhone demand in China and 0:04:42.520 --> 0:04:45.680 other emerging markets not a great reception for that kind 0:04:45.680 --> 0:04:49.159 of top of the line iPhone X Are Is Apple 0:04:49.200 --> 0:04:52.400 a victim of its own success here? Yeah? I think 0:04:52.400 --> 0:04:56.200 that sounds right. One thing about Apple um is that 0:04:56.680 --> 0:04:59.960 it started making smartphones that people really wanted to buy 0:05:00.000 --> 0:05:03.160 I every two years if they already had one, or 0:05:03.920 --> 0:05:06.839 maybe by their first smartphone, and both of those trends 0:05:06.880 --> 0:05:09.680 have kind of reached, um, you know, they're really reaching 0:05:09.720 --> 0:05:13.760 their limit. People are buying new smartphones much less, and 0:05:13.839 --> 0:05:17.040 people who wanted smartphones pretty much already have one at 0:05:17.040 --> 0:05:20.360 this point. Apple has acknowledged this. In its most recent 0:05:20.440 --> 0:05:22.800 earnings report. It said it was just gonna stop saying 0:05:22.800 --> 0:05:26.119 how many smartphones it selled, and UM, you don't stop 0:05:26.120 --> 0:05:28.160 saying how many smartphones you sell if you think you're 0:05:28.160 --> 0:05:30.720 going to continue to sell more and more and more. Um. 0:05:30.760 --> 0:05:32.279 It also said that it was going to look to 0:05:32.320 --> 0:05:36.080 make more money from services. So Apple's acknowledging that, you know, 0:05:36.200 --> 0:05:38.120 it's reached a point where it's going to be a 0:05:38.160 --> 0:05:46.880 slightly different company going forward. Josh, let's talk about Amazon. Now, certainly, 0:05:46.920 --> 0:05:48.960 you know, one of the companies that has performed the 0:05:49.000 --> 0:05:51.920 best in in in the markets over the last five years, 0:05:52.320 --> 0:05:54.720 and yet since it hit that intra day high of 0:05:54.800 --> 0:05:57.599 a trillion dollars a few weeks ago, it's been really 0:05:57.640 --> 0:06:01.320 nothing but down since. Um. One big component of the 0:06:01.360 --> 0:06:04.120 market pessimism seems to be is that core retail business, 0:06:04.160 --> 0:06:06.960 which grew at just eleven percent in the third quarter. 0:06:07.160 --> 0:06:10.760 You know, things like AWS the cloud business, advertising continue 0:06:10.800 --> 0:06:13.720 to grow so quickly, but you know, maybe they hit 0:06:13.720 --> 0:06:16.080 a saturation point. I mean in the US, I think 0:06:16.120 --> 0:06:19.239 it's like sixty percent of all households are already Amazon 0:06:19.320 --> 0:06:23.200 Prime members, So what room do they have to grow? Yeah, 0:06:23.240 --> 0:06:25.279 I think the story here is that you'd rather be 0:06:25.400 --> 0:06:30.359 Amazon than any other e commerce company, but that eventually 0:06:30.400 --> 0:06:32.600 Amazon is going to reach the limits of its own 0:06:32.640 --> 0:06:34.760 growth in the same way that Apple does. Really, yeah, 0:06:34.800 --> 0:06:37.800 I think Amazon kind of foresaw this moment, and yet 0:06:37.839 --> 0:06:40.160 the things that it was relying on to to save 0:06:40.200 --> 0:06:44.000 it and continue the fast pace of retail growth were 0:06:44.120 --> 0:06:48.799 were businesses like their business in India, the grocery business 0:06:48.800 --> 0:06:51.480 and the acquisition the Whole Foods, and those just haven't 0:06:51.480 --> 0:06:54.320 paid the immediate dividends that Amazon is needed to keep 0:06:54.320 --> 0:06:58.200 growing at in the retail business. And when we talk 0:06:58.279 --> 0:07:02.279 about the kind of hail Mary passes to continue growth, 0:07:02.400 --> 0:07:05.359 it also kind of reminds me of Google, because you know, 0:07:05.680 --> 0:07:08.560 Google sort of the same slowdown as the other tech companies, 0:07:08.839 --> 0:07:12.280 and it's those businesses like um self driving cars with 0:07:12.320 --> 0:07:15.760 the Waymo division, and and and maybe like a revived 0:07:15.800 --> 0:07:18.960 business in China that haven't come in and rescued the 0:07:18.960 --> 0:07:22.080 slowdown in the in the core business. Yeah, I think 0:07:22.160 --> 0:07:24.440 Google has a real disconnect. There are the things that 0:07:24.480 --> 0:07:26.880 people like to talk about that Google is doing, as 0:07:26.920 --> 0:07:29.080 you mentioned, the self driving cars, sort of the moon 0:07:29.120 --> 0:07:31.040 shots as they've been called, and then there's the way 0:07:31.080 --> 0:07:34.440 that Google makes money, and that's selling digital advertising. It's 0:07:34.440 --> 0:07:37.040 a great business for Google, it continues to be, but 0:07:37.680 --> 0:07:40.680 there are is a limited amount of advertising that the 0:07:40.720 --> 0:07:44.200 businesses of the world are willing to buy. And Google 0:07:44.440 --> 0:07:47.360 is such a large proportion of the digital ad sales 0:07:47.360 --> 0:07:50.240 at this point that it's going to have trouble continuing 0:07:50.280 --> 0:07:52.720 to grow at the rates it has in the past. 0:07:53.280 --> 0:07:56.440 Um And that's a similar dynamic with Facebook because it's 0:07:56.440 --> 0:07:58.920 the other kind of big player in the digital ad market. 0:07:59.360 --> 0:08:02.360 But Brad uh, Facebook's also had some other problems which 0:08:02.400 --> 0:08:05.920 I think are kind of the leading edge of sort 0:08:05.920 --> 0:08:08.160 of broader concerns about tech and and those are the 0:08:08.360 --> 0:08:10.560 social problems. What do you think about those? Well, I 0:08:10.600 --> 0:08:13.200 mean I think they're existential for Facebook. I mean people 0:08:13.600 --> 0:08:16.680 spend so much other lives on on the service, on 0:08:17.040 --> 0:08:20.720 you know, ancillary services like Instagram and WhatsApp, and you know, 0:08:20.800 --> 0:08:23.320 part part of the like The contract I think Facebook 0:08:23.360 --> 0:08:25.600 has with its users is that you know that the 0:08:25.640 --> 0:08:29.760 service like improves their lives. It helps them connect to 0:08:30.040 --> 0:08:32.520 uh to friends and family and and there it's a 0:08:32.520 --> 0:08:34.920 productive use of their time. And I think all the criticism, 0:08:35.000 --> 0:08:38.640 criticism and scandals around the company has made people feel 0:08:38.640 --> 0:08:41.320 a lot more ambivalent about about the service, you know, 0:08:41.400 --> 0:08:44.320 And so I think Facebook faces some real challenges and 0:08:44.320 --> 0:08:48.160 we're seeing the impact of these controversies in its quarterly numbers. 0:08:48.200 --> 0:08:51.800 You know, the membership growth has slowed, the revenue growth 0:08:51.880 --> 0:08:54.880 is now slower than investors expected. So I think we're 0:08:54.880 --> 0:08:56.960 beginning to see the impact from what has really been 0:08:57.000 --> 0:09:00.640 a year of NonStop conflict and controversy. Yeah. Think Facebook 0:09:00.679 --> 0:09:04.360 kind of represents the extreme view of a number of 0:09:04.440 --> 0:09:07.520 dynamics that are sort of broadly within the tech company. 0:09:07.720 --> 0:09:11.319 You know, people don't necessarily feel good about using Facebook. Um, 0:09:11.600 --> 0:09:13.560 there have been Facebook has been sort of front and 0:09:13.559 --> 0:09:17.200 center and the questions about its role in democracy and 0:09:17.240 --> 0:09:20.920 the political debate, and then also its response to these 0:09:20.960 --> 0:09:25.040 problems has been kind of the most tenured, uh the 0:09:25.160 --> 0:09:28.520 most bungled of of any company really, and so you 0:09:28.600 --> 0:09:31.240 have all of the things that are bothering people about 0:09:31.240 --> 0:09:34.000 tech in general seem to be happening at Facebook to 0:09:34.080 --> 0:09:38.640 the greatest extent. But Facebook doesn't have a monopoly on 0:09:38.720 --> 0:09:42.880 those concerns. And and speaking of monopoly, I think it's 0:09:42.880 --> 0:09:46.400 another thing that it's maybe worrying investors and kind of 0:09:46.480 --> 0:09:49.319 challenging some of the expectations of growth around these companies 0:09:49.360 --> 0:09:51.439 that you know, they're now being thought of as kind 0:09:51.440 --> 0:09:56.560 of monolithic companies who whose impacts on communities might not 0:09:56.600 --> 0:10:00.280 be great. The appetite for new regulation is rising to 0:10:00.360 --> 0:10:02.960 a certain extent in Washington, in d C. But certainly 0:10:03.040 --> 0:10:06.959 in in Europe, where you know, Google is appealing a 0:10:07.040 --> 0:10:10.360 five billion dollar fine. Uh, it's not. The discussion hasn't 0:10:10.360 --> 0:10:12.959 completely connected to the stock price issue, but I mean, 0:10:13.000 --> 0:10:15.360 I do think that the weight in the worry of 0:10:15.440 --> 0:10:18.840 regulation is beginning to kind of impact the growth prospects 0:10:18.840 --> 0:10:29.040 of these companies. Okay, Josh, So calls for regulation of 0:10:29.120 --> 0:10:32.760 big tech are getting louder, But people are calling for 0:10:32.880 --> 0:10:35.160 different things, right, and they fall into a couple of 0:10:35.160 --> 0:10:38.400 different buckets. Yeah. I think the first one's antitrust, and 0:10:38.480 --> 0:10:40.640 that's just the idea that a company that is the 0:10:40.760 --> 0:10:43.880 size of a Google or an Amazon is just going 0:10:43.920 --> 0:10:47.160 to be able to use its market power to um 0:10:47.200 --> 0:10:51.080 to disadvantages competitors in one way or another. One typical 0:10:51.280 --> 0:10:55.240 remedy is breaking up the company's I personally find that 0:10:55.320 --> 0:10:58.600 to be a kind of wildly impractical solution. You know, 0:10:58.679 --> 0:11:01.640 it took it took like two decades for the Microsoft 0:11:01.679 --> 0:11:04.400 antitrust case to wing its way through the courts. I 0:11:04.480 --> 0:11:06.560 think it also took a couple of decades for the 0:11:06.559 --> 0:11:10.320 IBM anti trust case before then, tech moves so quickly 0:11:10.480 --> 0:11:12.560 right now. And I don't know about you, but I 0:11:12.600 --> 0:11:15.960 have not heard a coherent plan for what breaking up 0:11:16.000 --> 0:11:18.600 any of these companies would look like. You know, Donald 0:11:18.600 --> 0:11:20.920 Trump has made some comments about how he thinks that 0:11:21.000 --> 0:11:23.520 Amazon is too big, are Google is too powerful, But 0:11:23.559 --> 0:11:26.720 the Republican Party is generally not one that will take 0:11:26.800 --> 0:11:30.040 such actions. So it would really be Congress or regulators 0:11:30.040 --> 0:11:31.760 that would step in here. And it's hard to see 0:11:31.760 --> 0:11:34.520 the GOP really taking that on as a crusade. So 0:11:34.559 --> 0:11:37.920 the other avenue of antitrust enforcement is merger approval, and 0:11:38.320 --> 0:11:42.240 it's difficult for me to see um, you know, an 0:11:42.400 --> 0:11:46.280 Amazon buying another company like Whole Foods, or or Google 0:11:46.320 --> 0:11:49.960 buying a YouTube or Facebook buying and Instagram without you know, 0:11:50.040 --> 0:11:53.320 some serious scrutiny and maybe even even the federal government 0:11:53.320 --> 0:11:57.319 blocking such an acquisition. Yeah. And I think this could 0:11:57.320 --> 0:12:00.760 be an interesting area because when I talk to people 0:12:00.880 --> 0:12:04.360 about what might be the impacts of a slower market 0:12:04.400 --> 0:12:06.880 for tech, a lot of them said, look, these companies 0:12:06.920 --> 0:12:10.400 have a lot of cash, their current forms of growth 0:12:10.440 --> 0:12:12.880 are slowing, and so on. Logical thing for them to 0:12:12.920 --> 0:12:15.400 do is to try to buy new companies. But as 0:12:15.400 --> 0:12:17.480 they go to do that, as you said, the next 0:12:18.080 --> 0:12:21.000 acquisition that looks kind of like the Instagram acquisition, it 0:12:21.080 --> 0:12:24.600 probably won't sail through quite so easily. So that's the 0:12:24.640 --> 0:12:28.360 potential for antitrust enforcement against the big tech companies. But 0:12:28.400 --> 0:12:31.360 the other big bucket of regulatory enforcement is likely to 0:12:31.400 --> 0:12:35.760 come around privacy, um and data protection. We saw a 0:12:35.800 --> 0:12:38.400 few months ago a major data protection law take effect 0:12:38.400 --> 0:12:41.040 in Europe called g DPR. Tell us a little bit 0:12:41.040 --> 0:12:43.480 about that. Yeah, g DPR tries to come in and 0:12:43.480 --> 0:12:46.760 address the concern that the way that the technology companies 0:12:46.880 --> 0:12:50.000 use private data, mostly to target ads, has just gone 0:12:50.040 --> 0:12:53.120 too far. You saw California actually pass its own privacy 0:12:53.200 --> 0:12:57.360 law in the wake of g DPR passage, and there's 0:12:57.400 --> 0:12:59.840 the general idea that there's going to be more of 0:13:00.040 --> 0:13:02.760 this going ahead in the future. UM. The big tech 0:13:02.800 --> 0:13:06.080 lobby in Washington is actually really prepping up to try 0:13:06.080 --> 0:13:09.680 to pass a national privacy law under the idea that 0:13:09.880 --> 0:13:11.920 UM what it's going to get if it doesn't work 0:13:11.920 --> 0:13:14.240 on this law will be worse. And I think there's 0:13:14.240 --> 0:13:17.680 more tension ahead here. Basically, when you have more privacy, 0:13:17.720 --> 0:13:20.560 these tech companies are going to become less profitable because 0:13:20.600 --> 0:13:24.200 they use your personal data to target ads. And as 0:13:24.240 --> 0:13:27.199 these companies are squeezed, they're really going to find more 0:13:27.280 --> 0:13:31.560 urgency into not allowing some of the more rigorous privacy 0:13:31.559 --> 0:13:34.960 protections to take place. Although Josh, there is an argument, 0:13:35.000 --> 0:13:37.640 and you often hear it from the tech companies themselves, 0:13:37.720 --> 0:13:40.559 that regulation could actually be good for them because it 0:13:40.600 --> 0:13:44.559 would harm smaller players. It would hurt it would hurt competition, UM, 0:13:44.600 --> 0:13:48.120 it would strengthen perhaps even their monopolistic positions. Do you 0:13:48.200 --> 0:13:53.960 buy that. I think that there's something intellectually satisfying about that. 0:13:54.080 --> 0:13:58.200 It does make sense generally that smaller competitors UM would 0:13:58.240 --> 0:14:01.720 face uh more challenge nges and trying to deal with regulations. 0:14:02.120 --> 0:14:06.160 On the other hand, it's just so transparently self serving 0:14:06.520 --> 0:14:14.160 that it's hard to think that that's really their concern here. So, Josh, 0:14:14.240 --> 0:14:17.360 one of the one of the salves for you know, 0:14:17.400 --> 0:14:20.400 some of the regulatory pressure that might slow growth for 0:14:20.480 --> 0:14:23.520 these companies is pushing in the new businesses. So where 0:14:23.560 --> 0:14:26.320 do you see say, Google and Facebook, you know, trying 0:14:26.360 --> 0:14:28.480 to grow their business and make up some of the 0:14:28.880 --> 0:14:31.560 some of the shortfalls in their core areas. Yeah. I 0:14:31.560 --> 0:14:34.320 think the one thing for Google and Facebook that's probably 0:14:35.120 --> 0:14:37.800 a commonality between them is that they've both taken a 0:14:37.880 --> 0:14:40.440 large part of the digital ad market, but there's this 0:14:40.520 --> 0:14:43.360 huge bucket of television advertising that both of them would 0:14:43.400 --> 0:14:45.840 love to get into UM, and that's money that's already 0:14:45.880 --> 0:14:48.400 being spent that they could take away from other advertisers. 0:14:48.440 --> 0:14:51.360 So I think you'll see them look there. For Google, 0:14:51.360 --> 0:14:54.600 there's obviously the moon shots. It really is moving ahead 0:14:54.600 --> 0:14:57.880 on autonomous vehicles, and hopefully we'll be able to do 0:14:58.080 --> 0:15:00.480 UM more with that in the next year or so 0:15:01.400 --> 0:15:04.080 and also move into other markets. As you mentioned, China 0:15:04.200 --> 0:15:06.360 is a problematic one, but clearly it wants to get 0:15:06.400 --> 0:15:09.920 in there. UM. Google CEO soon Dar Pachai, has not 0:15:10.120 --> 0:15:13.240 backed away from UM from China very much, even after 0:15:13.320 --> 0:15:17.080 some pushback from employees. With Facebook, most of its growth 0:15:17.320 --> 0:15:21.640 is already coming from these acquisitions like Instagram and What's 0:15:21.640 --> 0:15:24.360 App that looked like pretty rich at the time but 0:15:24.440 --> 0:15:27.760 have really paid off for the company. Um. Instagram is 0:15:27.760 --> 0:15:29.960 a big place that it's focusing on, and it's looking 0:15:30.000 --> 0:15:32.240 to develop new kinds of ad products that it can 0:15:32.400 --> 0:15:35.080 use not in the timeline but in other places. And 0:15:35.320 --> 0:15:36.960 so I think that's really where it's going to go. 0:15:37.040 --> 0:15:39.320 And Brad, you're the Amazon expert, So why don't you 0:15:39.360 --> 0:15:43.000 tell us about where Amazon might go from here? Yeah, 0:15:43.040 --> 0:15:45.960 I mean, I think, uh, they're all already planning for 0:15:46.040 --> 0:15:48.560 kind of slowing growth in that core business, particularly in 0:15:48.600 --> 0:15:51.040 the US, you know, which is kind of quite saturated. 0:15:51.280 --> 0:15:55.400 Amazon already accounts for I think sixt of online sales 0:15:55.440 --> 0:15:57.640 in the in the US. Um, I think, you know, 0:15:57.680 --> 0:16:00.720 the future is overseas. It's in countries like India and 0:16:00.760 --> 0:16:03.880 Australia and Brazil. Uh, you know, where they have just 0:16:03.920 --> 0:16:06.880 started new businesses and they're really kind of struggling. You know, 0:16:06.920 --> 0:16:10.400 we've heard a lot about Amazon's entrance into the healthcare market. 0:16:10.720 --> 0:16:13.200 You know, that's very new and very long term and 0:16:13.240 --> 0:16:16.120 I think physical stores, you know, the bookstores and the 0:16:16.160 --> 0:16:20.200 Amazon Go grocery stores, the four Star gift stores are 0:16:20.200 --> 0:16:22.760 popping up all over the country. That could be another 0:16:22.800 --> 0:16:25.760 major avenue for growth. And then you know Apple, I 0:16:25.800 --> 0:16:27.960 think we talked a little bit already about the service 0:16:27.960 --> 0:16:30.960 business making up for the shortfall of iPhones. But you know, 0:16:31.080 --> 0:16:33.440 just as like Waymo is the great hope for Google, 0:16:33.600 --> 0:16:36.160 for Alphabet in the long term. I think, you know, 0:16:36.280 --> 0:16:38.880 you can't discount Apple's ambitions and cars. You know, they 0:16:39.000 --> 0:16:42.520 hired an engineer from Tesla named Doug Field, and there 0:16:42.560 --> 0:16:45.080 has long been a rumor that Apple is working on 0:16:45.240 --> 0:16:48.800 kind of autonomous vehicle software who knows, maybe even an 0:16:48.880 --> 0:16:53.640 actual Apple automobile. And so as these companies prepare for 0:16:53.880 --> 0:16:57.440 slowing growth and more regulatory scrutiny, I think they're probably 0:16:57.440 --> 0:16:59.200 pinning at least some of their hopes on some of 0:16:59.240 --> 0:17:05.800 these future, more futuristic businesses. What about kind of their 0:17:05.920 --> 0:17:08.960 role in society. I think one of the big one 0:17:09.000 --> 0:17:12.240 of the big draws to work at these companies, aside 0:17:12.240 --> 0:17:14.359 from the money obviously, in the past, has been that, 0:17:14.480 --> 0:17:16.560 you know, they've really been kind of mission driven companies 0:17:16.560 --> 0:17:19.840 that felt like they were changing the world. Everybody loved them, 0:17:19.880 --> 0:17:22.200 and now they're kind of getting it from all sides. 0:17:22.359 --> 0:17:24.399 How do you think that Silicon Valley is going to 0:17:24.560 --> 0:17:27.520 deal with not being sort of the darling of American 0:17:27.560 --> 0:17:30.359 business going forward. I don't know that Silicon Valley is 0:17:30.400 --> 0:17:32.280 ready to accept that, to be honest. You know, I 0:17:32.320 --> 0:17:35.479 think it's why Amazon works on things like drones, and 0:17:35.520 --> 0:17:38.479 Facebook's working on VR and the apples, you know, building 0:17:38.480 --> 0:17:41.119 a car, and and Google, you know, is trying to 0:17:41.119 --> 0:17:43.920 help people live longer. I mean, they thank the solution 0:17:44.040 --> 0:17:47.600 for all these challenges, these perceptual challenges, is to go 0:17:47.680 --> 0:18:00.560 and like start inventing again. And that's it for this week. Decrypted, 0:18:00.720 --> 0:18:03.080 thanks for listening. We always want to know what you 0:18:03.119 --> 0:18:05.400 think of the show. You can email us at Decrypted 0:18:05.440 --> 0:18:08.040 at Bloomberg dot net or I'm a Twitter at Joshua 0:18:08.080 --> 0:18:11.000 Broosting and I'm at brad Stone. If you're a fan 0:18:11.080 --> 0:18:12.879 of the show, please take a moment to rate and 0:18:12.920 --> 0:18:16.520 review us. It helps new listeners find the show. This 0:18:16.600 --> 0:18:20.240 episode was produced by Pio Gudkari and Magnus Hendrickson. Our 0:18:20.280 --> 0:18:23.680 story editor was Aka Eto. Thanks also to Ann Vandermay, 0:18:24.000 --> 0:18:27.600 Emily Buso, and Liz Smith, Francesco Levi is ahead of 0:18:27.640 --> 0:18:29.800 Bloomberg Podcasts. We'll see you next week.