Welcome back on Sally. Hey everybody.
Welcome to this week's dead cat condo town here from Insider
joined by Katie Benner of New York Times and Eric newcomer of
newcomer, we've got this week, Alex, Heath from The Verge on to
talk about the State of the Union of social media.
He Throat. A PC other week about how Zack
is cracking down on all the lazy fat cat, rest investors at
Facebook. And that piece also came out
around the same time that meta had it sir.
I'm still not good at saying meta forces, Facebook meta had
its earnings, which were not great.
You know, of quarterly decline, q1q, decline in Revenue.
Not a good place to be for supposed growth stock.
And then also, the bigger story was that Instagram was rebuked
by its shadow. Chief product officer, Kylie
Jenner and the whole jenner/kardashian crew also not
great and the FTC is suing them to stop.
Its acquisition of a VR company. So Heath is going to be on to
talk about all of that and then also because Heath is on and
I've just plagued Eric and Katie anytime I had the opportunity to
we should talk about snap, which had like a near-death experience
as one analyst said, but it had shit earnings, its stock is
trading near all-time lows. So that's That's the mess over
there with SNAP. But before wild the highs and
lows of snap, like it's hard to understand how I mean talk about
sort of a critique of the efficient market hypothesis.
I don't, I'm interested understand how it could be as
wild as it's been. I don't think snap knows what to
make of not only like its stock price, but itself like all of it
just seems to be a mystery to the company.
But before we do that, I want to shout out the composer of our
theme music Young Chomsky Great synth music that we have opening
and closing the show from Young chomsky's composer.
He's also a co-producer on another podcast called true and
on and he very generously. Let us use one of his pieces for
a music. So I can't let it go without
without mention because it's been too long.
Okay, Heath, thanks for joining, thanks for having me.
Good to be back. Thank you.
So okay, where should we start with all of this?
Let's just go high level with the with the earnings just
because we are in the midst of earning season and, you know, It
has been you know eating shit over the last six months,
they're down like 50 percent nothing that jolts listeners out
of their seat more than let's talk about earnings.
Yeah. Yeah.
Okay. I mean nothing jolts listeners
worth of learning 50% of their. It's good, it's good.
It's important substance. Eat your carrots.
Let's understand the business with where we just argue about
whatever feed should look like. Yeah, no, tell me what I should
take away from from from zux earnings.
What should you take away? I guess the headline was Had
Revenue declined year over year for the first time ever.
I thought was really interesting about that was though that they
said, if it wouldn't have been for currency conversions, and
headwinds there, which means you know the dollar obviously is
gotten a lot. Stronger relative to other
International currencies, they would have had a four percent
Revenue growth so that like I thought that was a pretty
interesting call out. But yeah, it's it's not doing
great there. There there.
In the during a hard hard period right now.
And this is basically because of I mean there's still the
overhang from Apple's privacy changes that limited their
targeting ability. I mean just the general
recession fears when which is it, it's still Apple it's mostly
recession ad budget right now. I would say it's like 40% apple
on top of that. Uh-huh.
I think it's hard to parse the to out with Facebook in
particular and see exactly how bad just the The macroeconomic
stuff is relative to just the Apple stuff.
They're actually waiting internally for, I think the
first year of the full Apple worked when we're talking about
a, we're talking about the prompt on your iPhone.
That says, do not track me. It cost Facebook, 10 billion
dollars last year, which is the same amount they spent on the
metaverse and they're waiting until a year of that has been
fully out in the world of that prompt being out in the world
before they kind of do it. Full assessment.
So they don't even really know internally.
How Bad Apple has been relative to just what everyone is
experiencing Facebook was a trillion plus dollar company
right now. It's worth four hundred thirty
point six billion like so was I mean what was Zoom?
I mean there were so many companies that were right, these
astronomical valuations that. Yeah.
Everyone's just kind of coming back to Earth and I think met is
no longer. It's no longer a gross talk
anymore. That's really the problem,
right? Is that They're not growing and
they still make a good amount of profit.
So it isn't that your expertise? You were big on when Apple sort
of switch from being a growth stock to Value stock?
Yeah, I mean I think the difference is the apples kind of
got the market used to the idea that it wasn't going to be a
growth stock. Whereas with Facebook, they
continue for reasons that I'm sure.
Alex knows more vis-à-vis, the psychology of the c-suite, the
company itself seems to not be able to reckon With the fact
that it either needs to start talking about itself as a stock,
that's not going to grow, but will throw off value because
it's Communications company because it's as essential, as a
telephone company or whatever new story would want to tell.
And for all these regulatory reasons, this story seemed
somewhat unappealing, or it has to convince the market that is
going to get. And next huge spread of growth,
akin to what happened in the switch to mobile and it will be
just as powerful and I think that's why they're paying so
much on the metaverse but I don't know.
Alex, what do you think, like, why do you think the company
isn't willing to start? Talking about itself in kind of
a new, a new way. Well, I think they were until
about the beginning of this year.
So I've noticed Zuckerberg kind of reorient it back to the
present, whereas, for like the pandemic.
He only wanted to talk about the future and about the gross stuff
and the metaverse stuff and the Rebrand was done really right
before the market went into freefall, like it was really at
the end of this, like two-year bubble.
We were in which is just kind of an interesting was that their
Apex, it was like he was able to evolve into his final form.
Has, he was so ahead of its powers accent.
Yeah, there's like a Cronenberg movie kind of like, yeah, I am
becoming, I am becoming mad and it's like with the stock price.
You can track his public comments shift into like
actually talking about the the current business more and
talking about actual like soap. He didn't want to talk about
like social media for two years like which is the company's
business. Like it was all metaverse.
All the time he let's take your temperature as of proximate for
face. Facebook.
Because last time, we talked to you, you were extremely bullish.
Yeah. About metaverse like, uh, are
you raining that in tactically seen a sort of shift in strategy
from Facebook, or you're still pretty optimistic?
I've so boldly flip-flopping? No, no, I'm still I think the
headsets like what I was saying in the last episode are about to
get really good. I think the problem with metal
versus that no one gets it and no one wants to like think it's
potentially going to be something.
Because like the it sucks right now like Quest is like not a
great experience. It's not something you want to.
It takes 20 minutes. You think the headsets could be
good? Facebook could make a lot of
money off them in the next couple of years.
Yeah, I think if the, I think if the headsets in the interface
and the battery, and the resolution and just being able
to like, actually interact with people gets a lot better in
these things. I do think people will use them,
I think, I think it will become inevitable to a degree for for
certain use cases, not for everything.
I love the way. Real world.
I just think. Yeah, one of them are so
metaverse fight I just yeah. Curious how much they're going
to back away? I think this has like moved the
goalposts farther out where now they're thinking he's being a
little more clear saying this isn't going to really be a thing
for us until the end of the decade was just like, okay, how
long can you acknowledge? Why would you do that?
Unless, like, what sentence was, he getting about its Evolution
that caused him to push it further out?
I don't understand. Like, there hasn't been that
much to change between now, then and now other Its stock price
and like a continuing decline. Like why would you suddenly like
re next time just not being ready they keep thinking that
Apple's been the same way Apple. First up, their first headset
was going to come out like two years ago they all these
companies just are suit so over optimistic about how fast the
tech will progress. And Zack has been pretty clear
that this is like the hardest technical problem that exists
right now is like building a compelling.
Lightweight pair of are glasses. So yeah they're all night.
Can't I get Guess you don't want to be the guy in, you know, the
labs tells us look like, yeah, we're not even close, dude.
I know a couple of months ago, we were kind of telling you that
it's gonna get pretty close. Yeah, we did that.
We ran the numbers again, resolutions bad.
It's not going to be good, man. I mean, I kind of feel for them,
but again, I don't see why this was a new revelation.
There's an element of this where because this is Ox baby and his
pet project. What I've heard is that, you
know, it's like and there's been other reporting on this even at
Apple and other companies is like the demos They get given to
these Executives. Internally are like there is no
other supporters of the paper dummies.
That was it? Yeah.
Or they're just like them away know people?
Yeah, it can be hard to have people tell you how it really is
when you become someone like a Mark Zuckerberg or and also when
you start running the company in such a way that people are
afraid to tell you how. I mean that was one of the
interesting things about the story that you wrote about the
all-hands meeting that, you know, Zuckerberg used to be far
more involved in those meetings. And Are more willing himself to
take harder questions and he's sort of like created a world in
which he's insulated himself from both hard questions and
annoying questions. And so, how do you tell us, how
do you be honest? But somebody who's created that
structure around themselves. Well, it's two sided because I
would say, yes, he has insulated himself as the company gets
bigger, but the questions themselves have also changed
like the in the way that the what is on employees mind and
that's that's really the main reason I wrote this Sorry is
like in the last two years, the employees have really shifted.
It's all about perks and about like, are there going to be
layoffs? And are we gonna have extra
vacation days? Like the stuff that gets
filtered up to him? And all hands is not like
strategy and like big picture. They're activists but for their
own quality of life and well I think it it just goes to show
like we're big Tech is at. I think it's the new Wall
Street. It's the new cushy place where
you can go and get paid a lot to not work that much.
And there's this horse from Never As Good.
Almost. Right.
And at least wash we pretended your came to work super hard.
Like they took away their free lunches.
They totally there but like the perks were not that good, right?
The money was good. The money was good.
But the perks for the expense account Facebook gave you free
bike parts and laundry and dry cleaning and bus rides, Michael.
And they told you all the way they took it all away for like
the promise you could live in Chicago, you know, it's all over
Facebook. So I can I read a quick section
for beer. It really gets to the core of
it. And also, I, your article pissed
me off, not like, the way you reported or the writing, but I
was a little angry about the way Zach.
Handled himself throughout all of this.
All right, all right. So here's a two graphs.
This is a question from one of the people at the All Hands.
Hi there. The first pre-recorded employee
question, started. I'm Gary, and I'm located in
Chicago, his question would met a days.
Extra days off introduced during the pandemic, continue in 2023
Zuckerberg appeared visibly, Frustrated.
All right. He stammered.
He just explained that he thought the economy was headed
for one of the worst downturn that we've seen in recent
history. He'd already Frozen hiring in
many areas, Tick-Tock was eating their lunch and would take over
a year and a half for they had line of sight to overtaking it.
So this is, like, what said, suck up to like his.
I don't know, like Wolf of Wall Street, like tirade against his
employees, for being lazy. Okay.
Before we get into my opinion here, like it's tell me.
Tell me, it was this the first time anyone ever asked Jacques
about a perk. I thought these all They're
famous for people asking about, like why did you take away the
MMS in like the lunch room that we're like, previously stalked,
you know, 20 years ago? Here's what happened.
So this was, this was an incredibly unusual.
All hands like like a Zuckerberg doesn't do them all the time
anymore. So whenever he does them, it's
kind of notable anymore. They're usually very scripted.
Very like he just walks through like what they announced
externally like in the previous week and says he's excited about
it. It's really like become so
buttoned up because I mean people like me, we could all the
time and then Then what happened this week was he showed up?
And I really don't think they knew he was going to go into the
kind of rant that he went into where he spent the first 15. 20
minutes, basically saying like real.
Yeah, realistically, there's a bunch of people who shouldn't be
working here and I'm going to make you said that make it sing
thing, everybody? Yeah.
The quiet part out loud. And realistically, I'm going to
and he was saying, like, look, I'm not going to do layoffs
necessarily I'm not going to roll them out, but I'm just
going to make it to where you self-select out and that's okay
with me like, you Gary Even worse than just gonna squeeze
you so hard that you don't want to be riding at turn up the
heat. Going to be a lot of dead frogs
in this, in this pot of water. Yeah.
So so and then I could because I saw the recording of This and
like, even like the internal comms person who's like the
person who transitions the meeting into the different
sections as like visibly. Like you could tell, they did
not know he was going to like go into this mode, right?
Put the fear of God into him, you've got a surprise people and
then they have this pre-recorded thing teed up.
These Our highly produced like, right, graphics on screen like
again, how can you be honest with anybody at the executive
level when this is your like point of communication with the
employees? Anyway continue?
Yeah. And well, I'm just saying it was
it kind of threw poor Gary under the bus because you know, it was
pre-recorded, he's a recruit, he's a recruiter.
So he, you know, this is actually, we know Gary is real,
do we know Gary is a real Gary is real.
He was a meme internally. There were like poles internally
about like, Gary for CEO. They should We fire this guy
like, you know, and like ever exactly Tim Armstrong did white
one, is it Mary Poppins where they take the guy's hat and they
turn it inside out or whatever? They were like Shirley Jackson.
Yeah, exactly, exactly. Now, there is like, just a
cinder somewhere like in, you know, North River Chicago.
Where Gary used to be? Because it's like trying to pull
his like Darth Vader Force like maneuver on him.
Yeah. And then he asks about he has
this pre-recorded thing about the vacation days and stock is
just like flabbergasted that. Hey, this This was asked but be
that his team probably had this cute up and didn't like adjust
on the Fly. He wants just to be clear.
The employee wants to have like the extra vacation days they got
because of the pandemic being terrible RuPaul so they weren't
they worked in Gary worked in recruiting.
So so it was like he's selling like talk to people about,
right? This is like the Practical
question, it's not just self-oriented.
I see. It's like, oh yeah, so what
should I tell very unfortunate timing and then suck is like,
you know, based on my tone you can see how I'll probably
Respond to this and then he proceeds to say that meta days
are cancelled. Right?
Wow. And he's welcome to hell, you
know, tell them is not going to be a good place to work anymore.
Like keep in mind like just last year.
You know, Facebook's HR team produced a video similar to the
Virgin America video about. You know, like fááá is flight
preparedness. All about their health care
plans where they did like wraps and songs about like, how their
health care plan was changing. So yeah, the pendulum is fucking
swung lady widest point. Certainly of all this is that
this meeting ended with a video of an executive surfing, so like
he goes on this and it was it was pre-recorded and it was
already like set up but he does this like huge you know talk
about we got to buckle up for intense times and then they they
throw to this video of an executive which is that can.
Why how long was it like two hours long you have to why?
Like I know everyone is just strapped to their chair was like
a mini videos, like just it was like an exact profile but like
following her surfing, Amazing. That's so good.
Gary, you don't get any more fucking time off.
All right, well, I'm like the antenna days is Lancel.
Here's my airport. I'll give him mine.
Zuckerberg is working from Hawaii to like how Shaggy yeah
like employees. Want like a meta day so they can
leave their like one bedroom apartments in Chicago and go sit
by the lake for 20 minutes but suck is like working from his
Lanai. Oh well that's yeah that's the
duality of this is like there's a shit Posting group inside
Facebook internally called shitposting at meta.
And they're literally, there are memes of like Zuckerberg, you
know, hydrofoil along with the American flag and people being
like, look at this coaster and brutal.
See ya. Cuz there was a note that went
out that really pissed. People off after that, where
this executive at the company. This engineering executive, he
posted it in a manager's only group and it was like identify
coasters. Put them in a list by 5 p.m.
Monday. We can't have like Ours at meta,
very blunt. Very like, not how you should,
you know, communicate something like this in written form and it
leaks someone in the managers group leaked it on.
Oh my why? I think it leaked to the
information, love it. People are very unhappy at this
company. Executive later is like it was a
draft. I didn't mean to publish it as
yet voters, Fat Cats, well, meme.
This becomes a mean and thoroughly.
And, and there's like, you know, Because there's this new mantra
inside the company called Meta, Meta mates.
Me, it's this new, like, what would you value called?
Is this what, man? It's like, primates or meta
mates, like, like meta mates? Like like em, you know, how
bundlers Google employees? Our googlers.
Yeah, if you work at metal, you're a meta mate.
And then of me, this is what that's really, what everyone
like this was after the Rebrand he did this big company value
reset. I didn't screw Thread about it.
And it was, it was absolute was absurd because like, you know,
they had moved Ask that other company values.
He's like we're going to go through and change some of these
and a new one was Meta Meta mates me so it's like about it's
meant to be like like we're all in it together.
I guess is the vibe of the Mantra but now people were doing
coasters coasters meet coasters. Posting me I'm making like
coasters like mock-ups of actual coasters.
Right. And that's what I was going to
say. If I were selling anything, it
would be coasters. Coasters.
Yeah. So yeah, there's just, there's
still a very strong even with all the Crackdown they've done
internally on like can employee communication.
I was very pleased and Reporting.
This story to see that there's still a strong shitposting
Community. I am amazed, how much open
descent. There is like Bloomberg never
had, like, employees me mean about, like how terrible, the, I
mean, and I, there's no way babe, it is when, when Mike,
when Mike was mayor of New York City though and he was album
veto, right? A lot was going on in The
Flipper, Jeffrey mayor. And the public was an employee
at Facebook. Another stat in Story.
Is that 42 percent of employees have confidence in leadership.
So this was an employee survey that went out right God.
No wonder, you're getting people leaky.
You so much shit. They fucking hate this, man.
And they never, they never understand.
This is the best company in the world to cover right now.
They never understanding stuff. I mean, even like, when we were
talking to a meal last week and he was talking about, like,
there were so many leaks happening at Uber at the time
and it's like, yeah, dude, that's what happens.
When people are really unhappy at your company, right?
These leaks track to the stock price more than anything.
I mean, Absolutely. We've all we've all experienced
this, like, in common. These companies when the stock
is down because peep for people who don't work in Tech, which
I'm sure is like no one listening to this.
Show why job and tanker I can hang up the podcast right now.
Yeah, you get compensated heavily based on the stock price
and you know, people are looking.
They hired an entire company's worth of people like they
started. They went into the pandemic with
40-ish thousand, they hired that amount in about 2 years.
So they like more than doubled and they were all working in
this remote environment when the stock is All-time highs.
And now they're seeing their compensation cut by like more
than 50% and they have no confidence or low confidence
record, low confidence and Leadership so it's just a bad
combination of like Duck saying, you're all a bunch of like
grifters. And then everyone's saying, hey,
we don't really like you either. So it's really interesting that
you say this because like this is a little bit of a reap what
you sow situation to like I remember in 2010 basically all
of corporate America tried to Recreate, the, the sort of like
Tech Perk Tech lifestyle phenomenon, because it's having
so much trouble recruiting people out of college, because
they were like, when we give them less, we give people
literally free shit, like hand over fist, and give them free
food and free, espresso bars and all this complete bullshit.
We will never hire anybody out of a top 50 school again and the
tech industry to a company. But especially at Facebook, they
just talked about how great this was in terms of, you know,
getting the best work out of people.
They were never willing to concede, it was just going to
create an incredibly entitled Workforce.
And so it's kind of and there's something very poetic but saying
that incredibly title entitled Workforce come and bite Facebook
in the ass. Like you're just like, you know
what, you made this monster, right?
If me if you want us to work for something other than free.
Shit, good luck, you created, the culture of Brooklyn for free
shipping and and let's also talk about what's going on here.
Which was that during the pandemic, the momentum swung.
Sharply towards employees because there was, you know,
difficulty in hiring and recruiting and attrition and all
the issues that these companies were facing.
Suddenly they had a huge amount of Leverage because you could
work for a huge number of companies wherever you were
living and, you know, yeah, companies.
Wherever you're living in the country and this couldn't stand
this, you know, this aggression could not stand when it came to,
you know, the executives. And so I think they see the
recession as the ability to do like a little bit of a reset on
their part and say, You know that meta mates, or sorry, you
know, the metadata things that we rolled out and your ability
to live in fucking Chicago, Gary that whole thing.
Yeah, we're not doing that anymore.
And the reason is that, it's your fault and and this is what
pissed me off about about suck single.
You kind of jump me to it is that the employees are unhappy
too. And how much is suck himself
taking responsibility for the fact that he only has 41 percent
approval ratings within his gun. Salute, 42, I'm sorry.
Yeah, it's important to be exact here Tom.
No. Oh yeah.
That one percent is not a coaster.
Sure, sure it's a good question. I don't know the answer.
I don't know what's inside his mind.
I think he does think they hired they over hired and they hired a
lot of he needs missionaries right now and they hired a lot
of non missionaries and I think that's how I seize it.
And, you know, when you used to be able to just go to Google or
vice versa for an extra 20, 30 percent pay bump like with no
effort, which was the reality of life for these Tech workers for
the last few years, especially it was, you had to hire like,
Had to lower your bar a little bit because like people have a
lot of options and now people don't have as many options.
Google's not hiring, you know, their competitors aren't hiring
either. So the it's you're right, the
pendulum is swinging back to the management and not the employees
and I think that's what this meeting really represented.
And this duck is unique in that he's the you know, God king of
Facebook and can say whatever he wants.
And say the quiet part out loud and is not really like I think a
lot of these CEOs are probably thinking similar thoughts, but
they for whatever Other reasons, you know, there may be like
negotiating their next comp package with their board or
whatever, they feel like they can't, you know, tussle the, you
know, tells all things up too much, but Zuckerberg doesn't
really care. I mean, he can, he can do
whatever he wants at the company.
So I think he was just ready to just say the quiet part out
loud, but he's also not an inspirational guy.
I mean, I think he's also kind of uniquely week in this period
because he's not the guy that can go out there and give like
the Don Draper speech and everybody, rallied to work on
weekends and shit, right? He's the uh, Weird person who I
don't know what his face looked like when he was angry, but I'm
sure, you know, it wasn't red. Very red maybe.
Yeah, we got red mark. He was better than everybody
else has been wrong. I mean, that's the thing.
Yeah, always had he didn't get cycle, privacy, but never told
me. I was an idiot when we did this.
I mean, it's sort of transitioning to our next topic.
I mean, like nobody thought feet, like users didn't like
feed, you know, it's sort of like, and that's clear is
coming. I can't think of one, I can
think of not one CEO. Who's always been right?
Yeah. And you can argue that The
problems is consistently always right problems there in right
now, is because they didn't get a couple key things.
Right? Which Tom you mentioned, they
didn't see the Apple changes, hurting them as badly as they
did. They had plenty of opportunity
to see that they were kind of like in denial for a while and
they also didn't see the tick tock threat, right until it was
arguably too late. So yeah, he does see around
corners and certain key moments, but I think they're in the
position, they're in right now because for whatever reason,
maybe because he's really a dog's back from Hawaii.
This is the new rallying Cry. He's asleep at the wheel.
Come back as like a bird in California.
I think it's no I think it's a matter of focus.
He's definitely not asleep at the wheel.
Like he's been super dialed in based on everything I hear to
like a kind of like stressful degree for people who are
working on projects, he's interested in but the problem
is, is like the projects. He's been interested in are not
making the company money and they're not they're not going to
save it from the current environment that they're in.
It's all like very few cleaning stuff, which is why I find it,
really frustrating for him to be chastising coaster fat, cat
employees for not pulling their weight.
Wait when you know he missed the Apple privacy changes.
He didn't anticipate Tick-Tock the Instagram thing was a
fiasco, what? You got to one second and he's
trying to get people inspired about this completely vague
metaverse thing that it's not clear anyone really wants.
So I just I find it. It's a little Rich for me suck.
It's a little Rich for me so I am taking your buyout offer.
I'm not saying it's Tom's out, I'm gone.
You could, you could see me
walking along Michigan Avenue right now.
Me and Gary, just hand in hand. But you didn't heck talking
about meta days the metadata. If you're okay talking, let's
talk about Instagram because that was a really funny story.
Why don't you actually lay out what happened?
Because I was actually out all of last week so it really was
just the bits and few times that I sadly turned on Twitter.
So I need about him. Yeah, tell ya.
Instagram has been testing this redesign that looks and works
like Tick-Tock and people are starting to get the get in the
ABC group. You know?
For the test, they were planning to originally make it available
for everyone in October. It's Fullscreen, right?
Isn't that? I have full screen swipeable
video, you know, and just a huge departure, the whole not just
real correct and people obviously didn't like it.
And the other reason beyond the interface is that part of this
redesign is a lot of what Facebook calls unconnected
content, which is just content, that's not from people, you
follow. So a lot of that is getting put
in which is also Tick Tock, right?
That's Tick-Tock you know, tick-tocks for you page is like
you know hardly what you follow. If at all Kylie Jenner who you
know, Leveled snap with a Tweet back in the day.
Tom and I remember this, well, when she hated the snap
redesign, she wiped like over a billion off their market cap.
She came out and said was writing analyst having to put
out notes following the Kylie Jenner announcement.
Yeah, she was like, bring back the old Instagram, you know, it
became this like me and there was a there was a, like a
petition, you know, all it reminded me of the snap redesign
blowback which didn't didn't she say something about it being for
family or something, which she's talking.
I want to see photos from my friend.
Which is like shit, like, come on.
Really like that. Was you?
I think she's the second most followed Instagram right now.
She has like, over 300 million followers.
Come on II, don't like. So, dumb brands are our friends,
Eric, you as a millennial should know this.
I mean, if you're a celebrity, I understand you built a lot of
time and money into getting a huge follower base of people to
see your stuff. And all of a sudden, the company
is deciding that they want to show people other things.
And that's going to hurt your reach.
So I can see why celebrities would be mad about this.
But she Add and then what was happening simultaneously is
internally. This test was just performing
horribly, it was just tanking engagement metrics ad revenue
and so they paused it and Adam moceri.
The head of Instagram did an interview with Casey Newton on
his wonderful newsletter. Platformer and was like, we are,
you know, the test of not been good and we are going to
re-evaluate this and what's not changing as the unconnected
content part. So you're still going to be
seeing a lot more posts from people.
You don't follow and Instagram and Facebook.
Look, but the redesign that makes it look and work like Tick
Tock with swipeable video, that's that's been put on ice.
So he made your L major. It sucker Berg posted a photo of
himself with weekend on the lake.
I just think it's odd on Instagram.
That Zack is posting a photo. Isn't he supposed to be posting
videos right now? Oh my God.
What a fucking coaster? Yeah I mean I don't care.
I say a couple things on this. Go, please, you know, stories,
have shifted everyone to stories away from sort of the permanent
photos and I get that. Facebook is a company that rides
different Trends and they see people having sort of better,
internet connections, and better phones with the capacity to
record video. And so they're like, okay, we
need to have video everywhere. But as a consumer part of what I
like about the history of Instagram is just that the feed
of photos is. Very like clean and high-end and
part of the reason people are posting less is because there
are so thoughtful about the quality of photos that they put
in the feet versus the stories, write stories are for sort of
quickfire and feed is for highly curated content.
And so then, that's what you're incentivizing people to create
and then they're mixing that feed with absolute garbage.
And to me, that's part of the issue here.
It's like, yes people are engaging with the core of
Instagram less, but that's because they wanted to Be really
premium and you're taking this Premium app and just like
filling it with a bunch of random shit.
Do you think that's a fair articulation?
Well what sort of going on here? I think you're getting at it.
I think what's really happening here?
Is that the grand experiment of organizing human communication
at scale around the feed has not worked.
It hasn't worked on for rocket and it hasn't worked on
Instagram. And what they've observed is
that posting into feed whether it's Instagram or Facebook has
just been on the decline for a long time.
So what they have is an inventory problem.
So when when your follower list is no longer posting in the
feed, which matters because feed is how they make the most money,
so they need to feed to have good content in it.
Well, guess what, when your friends are no longer posting in
there, they need to show you something.
So they're going to try to figure it out.
The problem is that they're way behind on a, i that makes that
something interesting. Whereas Tick-Tock has shown them
that like, oh my God, this is so good.
Yeah. But at it and because Facebook
invented, the idea of ranking based on, you know, your
follower list, this was the original news feed Insight that
Twitter and everyone else has since copied Tick-Tock took that
idea step further and said we don't even need to know like who
you're following? Your dog is amazing.
I feel like you aren't on it. Do not understand how good it
is. It's serving you.
What? So Facebook is internally meta
is reorganizing around this new, a I push and it's next to the
metaverse, the most, you know, the highwomen.
Highest like priority. Most money being spent is on how
to build AI that no longer relies on who you follow but
this is an extremely naive thing to say and I know sort of the
answer but as a user, why can't you build a new tic toc
Facebook? Why do you need to cannibalize
the app we liked if it's slowly dies.
Don't worry about us. You have stopped.
You remember last? So Eric do you remember?
I know it doesn't work. That's the answer our paper.
They were paper. They're basically going to
murder the thing we like when also they can't acquire a new
App either exactly. They just tried that and it
didn't work and was even a nap. Yeah, they can't acquire and
they need to put it where the user activity is, you know, this
is if they're good. The problem is it's like people
are leaving the app, they're not engaging the most with it
because of tick-tock and they need to bring Instagram.
The problem with all, this is like, they've lost the identity
of what these apps were, right? Instagram is about
entertainment. They when they tout the video, I
find it so fascinating when they're bragging about like
video. Metrics on Facebook and
Instagram like over 50% or something of time spent in
Facebook is just watching video which is just not what Facebook
was originally about. A Facebook was an active,
participatory thing and Instagram was also that I mean
there was definitely an element of like passive lean back with
Instagram. Obviously, there always has
been, but they've lost the participant.
Yeah, the participatory element of this and it's because all
this behavior is shifting into private groups chat.
DMS more content is shared into GM's and a shared.
In this story's more content is started shared into stories that
are shared in to feed. So it's kind of like, finding
Jim hierarchy. So everything is funneling.
Yeah. So everything is funneling down
into DM's and it's because I think they've, they've created
an environment in the feed that is just not conducive to like,
human communication, which was there a grand experiment for the
last 12 years and it worked briefly for a moment in time.
And then I don't know, I'm Do you guys know have you guys
heard of this idea called context collapse?
This ring a bell for anyone? Yeah, I mean, it's just, it's
this idea in social networks where you let the graph, which
is your follower list, just expand and expand and expand and
you lose a sense of who you're talking to anymore, because the
purpose of the app has just become too vague.
There's too many people on it. These apps tend to Decay when
they lose their original like framework of what their what
they are for people. And so be real I think is taking
off, right? Because be real has identified
that the close friend graph, which is what Facebook used to
be in its earliest days. What?
Instagram was also in its earliest days.
No one's doing that anymore. Everyone has let their lists
expand and expand and expand and people don't know who to talk to
anymore. They don't feel comfortable
posting because if you have hundreds and hundreds of
followers, you're not going to post your what you would post on
be real. And you're also not going to do
the highly curated thing, maybe even anymore.
And this is so ironic because if you guys remember the last major
ranking change that Did was called meaningful social
interactions. This is actually a thing that
Francis Haugen called out in the all the leaks documents it was a
big deal in 2018 and what they were trying to do is there was a
bunch of passive shallow engagement happening because
they were optimizing for time spent.
So people were just watching dumb videos that's what was
getting up. Voted the most in the feed they
were like we're going to reorient it around.
Two things that your followers comment on.
So what do they do? They created this like flame War
environment, right? Where the and you know I've
talked to But the company who admit that this ranking change
caused a lot of unintended consequences where they're
actually trying to solve for an Integrity problem, which is that
like the engagement was super shallow, people weren't having
meaningful experiences in the feed and in doing.
So they actually just hyper-charged the emotions of
everyone because they're optimizing for comments and
reshares from from your friends. And guess what, what guess and
we see this in Twitter and retweets what gets the most
engagement at stuff that's either going to piss you off or
you know, like that kind of stuff.
And so now they're just like screw it.
Uh, kit like the feed is now just going to be like videos.
Yeah, I think what's so ironic and hilarious about this
argument is that it is being, you know, the argument against
Instagrams redesign is being made by the person who is
responsible for Content collapse.
Because Kylie Jenner and that whole group of influencers, turn
the app from something that could have been.
These are my vacation photos, you know, some kind of iteration
of the thing that be real is going after into we are all
celebrity at Hawkers that are trying to make a business of
Cells because our lives are so interesting but we should it's
not their fault. This is the company.
I just did an episode a podcast episode about the history of
Instagram and kind of how they woud, celebrities onto the
platform. The country had teams of
Executives today, specifically just went and trained
celebrities. Yes, and attracted them.
We interviewed the executive who ran this program, it was a
concerted like intentional effort to get celebrities
posting on the platform. It wasn't how the app just
organically happened. They literally had to go
convince the Uber and the supermodels to like post and it
was, it was super intense oils. Yeah.
So like I think it's the fault is not of users.
It's the company is the one who decides how these networks
works, and how they want the context to continue in the
network. And if they want to expand it,
or if they want to shorten it. And and that's that's been the
problem is that like Facebook and its quest for engagement and
revenue as just widen and widen and widen the aperture of what
Instagram is to where it's now this weird shopping mall Meats,
like video meets. Times meet stories and now no
one knows what it's for anymore. That's, that's super interesting
because now, like, I feel like the mood on my Tick Tock is very
much like, celebrities aren't like, you and me, like, it's
almost a cuz the people can get famous on Tick.
Tock aren't these like big celebrities, but just
interesting creators like, maybe a Majors, right?
I saw one sort of charting out, you know, like the Ellen, you
know, that Ellen selfie, that was a one point of the epitome
of like culture and it helped like that was sort of Of and now
a tick tock is like so hostile to that, you know?
I mean yeah no argument to that is like the the depth trial or
whatever, but until they get famous right and then they can
build a business off of. Well, I don't know that that's
even happened to that extent. I'm like that's the funny thing.
Like it was it Charlie d'amelio, she got her reality show so you
would think she would have been made the leap into like bigger
celebrity. But the reality show was
basically about how much he hated being sold a pretty good,
right? I mean like, because very few
human beings are emotionally. Mentally equipped for the
pressures of people staring at them all the time is totally
fucked up. Like, you can't leave the house.
Heath, I ask you this question because it's my wishful thinking
are there. Also, it feels like the
especially because of the pandemic, their cultural
headwinds to working, against what social media has always
been this, like highly curated. Look at people's lives like and
I wonder how much of the departure is in addition to
context, collapse people just thinking is it really worth my
while to pretend like Like, my life is great right now.
I would say that Tick-Tock is less fake than Instagram was.
Oh, I guess that's what I mean, about Instagram.
Yeah, yeah. And and that's what Instagram is
trying to get to and it's kind of there's an optimist angle to
it. That I've heard where, you know,
maybe humans are the problem here.
And when you're braking based on how humans like interact, and
what they kind of like Ops towards, which is usually like,
you know, bad My opinion, like, in terms of like how social
media has been organized, like, people just, it can make people
horrible to each other, maybe if you're optimizing for just this
like, AI driven approach, where it's just content that this AI
thinks, like could be interesting for people, maybe it
will actually incentivize like a healthier posting.
I do think it would be good for America, to, obviously, have a
tick, tock competitor. I mean, that would be the
strongest defensive Facebook. Oh, you're like a monster trout
here on what media You're Gonna Go.
The Nationalist route here on Is getting detailed psychological
profiles on all of us. What are they going to do with
that information? Like that we are already doing
with to ourselves? Let's go here and even even
forgetting the Nationalist thing.
Even forgetting the Nationalist thing, it would be good for
there to be competition. I think Tick.
Tock is going to be huge, like, it's only beginning, I mean,
it's huge already, but it's going to just the beginning, I
know. But like, I feel like TV is not
run by Tick-Tock yet. You know, it's still getting
there. Until there is evidence that
there has been a coordinated intentional.
A I like a i induced like campaign from China to like
influence what Tick-Tock recommends to people.
I don't buy this argument. That Tick-Tock is like a
national authorized thinking to do with that information.
You know, below looks like Olivia Rodrigo's kind of
meaningful to a lot of people in America these days.
There's some people don't even say, like suicide on Tick-Tock.
There are lots of speech controls on Tick-Tock.
I think that the bigger thing with tick-tock Has that we
actually don't know how other people see.
So, Their audience outside of the United States.
We're seeing very pro-russia videos on Tick-Tock at the very
same time that in America. We were seeing very pro-ukraine
messaging on Tick-Tock at the start of the war against, you
know, Ukraine. So like I think that is the
bigger thing is a, we'd have less visibility into who sees
what? And obviously, what happens on
Tick Tock is extremely influential when it comes to
public opinion. And so, I think that that's why.
It's not, it's less like a Chinese Best large mind control
game, and just that another government may have the ability
to really influence public opinion in countries outside of
their own. So, in a country where the
government is willing to influence their companies very
direct but even in our country where I don't think we have to
worry about see the, you know, the CCP like influencing General
Motors. But I think that we saw with the
Johnny Depp and Amber Heard trial that an algorithm was able
to very much influence how people thought of those two.
Human beings outside of the merits of the legal case, and
then had real implications for, for example, you know, domestic
abuse survivors all over who dared, talk about what happened
to them with little, you know, with little consideration of how
much a single company was able to influence public opinion.
And I think that's like the bigger issue, you know, is that
what you really want happening with no Insight or controls?
But this is the same argument of any algorithm and that would be
a problem if the company were can to it.
Just that Regulators would have more ability to dig in and ask
questions like have an oversight hearing for example, blah, blah,
blah. Well, yeah, I mean, don't forget
like, Taylor Ren's had. That story about how I gen sake,
whoever we're like meeting with Tick-Tock influencers, so they
could get people hyped about the American assistance in the
right, like at the very same time that like, you know,
intelligence Community people were like, wait, what the fuck
is going on? Over Tick-Tock?
It was really cool. It's really weird.
Katie, you're speaking to this unease that I I think is only
going to become like a more pronounced saying, we're talking
about in the next couple of years because like every app,
Facebook, Instagram, Twitter is leaning into recommendations,
every app is going into recommendations and feed like
heavy. And so when we're already
concerned about, I mean, are you guys kind of?
I'm kind of shocked that Facebook given all the scrutiny.
It's already had is just like fuck it.
Like we're going to just dictate everything or Tech is going to
just dictate everything. You see, it's not even because
they're fallback for years. Was well, at the end of the day,
you pick who Follow and yeah. We met like do recommendations
like on the edges but this is there.
Like I would hear time and time again.
I'm right blame it on his like maybe they're doing that they're
still saying that. People are engaging with video
more. Well that argument is not going
to hold water. When like over half of your feet
is like, AI recommendation is based recommendations and so
yeah like we're already talking about like man could the CCP
influenced Tick-Tock to be like turning the dial up on this or
whatever. I don't think that has happened.
Yeah. But it very well like support
Ukraine versus support Russia. Yeah and we already have that
unease. We already like we are in our
bones. We think these systems can be
manipulated and controlled this way and like it's just a concern
people have this is like this is going to be Facebook like in a
year. Like this is going to be the
exact same thing so I don't think they fully have grappled
with the scrutiny that they're about to walk into and I hope
what it does is actually clarifies the role that
regulation could play on this because I think for a while
we've been Dancing around. What is really the Crux of like
the power. These companies have, which is
recommendations and now that they're really leaning into
recommendations as like their business strategy.
I hope that maybe we get a little more sense of like where
the power actually sits with these companies and I think
that's kind of the core of it whenever we want to talk about
snap because it's time favorite company ever and it feels and
value I wondering like when you look at all these company's
earnings Facebook snap and you see you know, usage, Drop.
But do you see any signs that people are just kind of turning
away from social media all together?
No, actually, what was interesting is that Facebook
users grew a little bit after they declined for the first
time, a couple quarters and that's being a tested to time
spent on video actually. So I think the the dumb videos
are working from an engagement perspective in the short term,
but I don't know if it will in the long term, the thing is with
like even snap. It's still growing like the user
Ace is snap, is a business is one thing.
Like the user base is still growing.
They have more users than Twitter and yeah and like
they're these companies are growing their users.
It's mostly like outside of the US and Western Europe but it's
more of a business story than it is like a user growth story.
Yeah. And so snap is also an
interesting case here going back to like earlier in our
conversation we're talking about like this hierarchy of DMS to
post stories or whatever. I mean snap is an excellent DM
tool, right? That's that's that's main usage
for a lot of people is that it's a very, very good message.
Judging app, that's not a very good business and it's also,
it's also a company that is done.
I think a good job relative to everyone else with the problem
of context collapse, because if we remember what the redesigned
did was separate media from friends.
And that was intentional, because snaps been, I think
fairly intentional and trying to keep your your friends on snap
as your actual friends. Not have a bunch of like people
you don't know or like, you know, people from high school
that you don't keep in touch with anymore, they actually try
to encourage you to like Keep that graph clean.
And so I think that's why they've, they've kind of had
consistent growth. Honestly it's that's a that's a
differentiated approach honestly in the market these days.
But yeah, the business is not there, it still remains to be
seen whether they're the next Twitter and that they languish
forever trying to figure out how to have a scale dad business or
they are something different. They haven't proven that they
can be beyond the next Twitter from a business perspective and
I think we saw that last quarter and a pretty big way.
Yeah I mean that I think actually It was last time that
you were on that I brought this up and maybe sounded dumb to a
lot of people but I still don't understand what its business is
like what its ads offering is. And that's also it's a smaller
less, scaled less Advanced version of Facebook, sad
business. It's yeah, wreck staff marketer
just for context is worth 16 billion dollars.
That's worth less than it was as a private company.
I believe, right? Yeah.
Yeah, I think it's last round before it went public was a
brutal teen 15? Yeah.
It's not the lowest it's ever been.
As a public company, I think it was like, dipping below, like,
$5 a share. Yeah, a few years back.
Yeah, back in 2019. Yeah, it's not it's a company
that's public that still acts like a start-up, you know, and
the terms of like how it just lurches from, you know, strategy
to strategy and like, let's the business just tank for a couple
quarters and I think they just they're not running the business
while yet. I think that's the biggest
problem and they're spending way too much on stock-based
compensation. And, you know, if Facebook was
IP out in 2012, Right? And then rode this, the road,
you know, the bull market really well, snap was kind of coming in
later into the bull market but like I like even more Euphoria
where it was like, Evan has if Mark Zuckerberg has just over
fifty percent voting control 11 has 99%.
If, you know, Facebook spent this much on stock comp like
Snap stock, comp is through the roof.
Like what they spend on stock. Calm and guess what?
Like the market used to be okay with that.
As long as you were growing and snap has been growing and other
markets completely changed and is like no I need to see like
bottom-line results and guess what?
Snaps never turned a profit. And it's, that's that's a huge
like issue. Going into this next phase of
the economy. And the reason Facebook I think
is set up fairly well relative to them as they do still print
money. What's so inexcusable about
snap. And I guess Twitter and
Pinterest is that ads are a great fucking business.
These are a high margin business and if you can't structure your
company and and, you know, sell yourself to Wall Street in a way
to build yourself, a sustainable Profitable company that's
totally on you. And I think that the companies,
you know, in Mark Zuckerberg, we spent a lot of time talking
about his leadership. We see, like a similar kind of
problem happening with Evan right now.
I did not listen in on earnings, I don't cover this company
anymore, he wasn't on there. He wasn't on earnings at all.
He didn't answer one question. She was.
So that's the thing, right? He apparently was on earnings
but as an was were asking questions.
He never took an answer. He just kicked it over like
silently to, you know, their Chief Financial Officer and
their head of business. And it got to a point where I
saw Rich Greenfield tweeting at Evan.
He'd be like Evan how are you not taking an answer right now?
Your company's stock is cratering right now.
You guys are down, 82 percent in the last six months.
I was just looking, he didn't say that, but like that is the
that's the context here and Evans response was like, yeah,
I'm here. But um, you know, I thought my
deputies were doing a good job. Your point about Evan, Tom, like
he's younger than Mark Zuckerberg, he's made billions
of dollars. There's a lot of people at snap
who have made hundreds of millions of dollars in the
companies never made a cent in progress and so it's kind of
uber in that way. We're like you need the
incentives of the top to align with the needs of the business.
And I'm just not sure that even necessarily feels, he feels the
pressure and that his employees want to leave when the stock is
low. And he can't like hire and
retain people. But we're also going to this
like recession where it's going to be, people aren't going to
want to jump jobs, really. Anyway because everyone, you
know, all the stocks are down. So I don't know, it's I think
Evan got a lot of credit for, you know, snaps early years
where they really pioneered stories and all these social
formats and they're still growing.
But like, yeah, the business is just his metaverse.
Is these AR lenses that will become shopping ways.
We shop and advertising in and of itself.
That's why snap is like doing this developer platform, where
they're putting their camera and all these other apps is like,
eventually the a our lenses in those apps will be snap ads and
like they'll have their inventory everywhere.
The problem is is like that's just not Not scaling as quickly
as they thought and it's hard to get advertisers to like wrap
their minds around that and advertising is a scale game.
And it just, you know, you've got Amazon Google and meta and,
you know, if they can reach the the entire world for you, why
would you necessarily like, invest a lot in another
platform? This is why a Pinterest and
Twitter and snapping all these companies can't figure it out.
You know, they can't figure out scale, dad plays and the worst
that snap does. The less flexibility or Freedom.
He will have to pursue his interests that are the reasons.
He's But running this company which is building a our glasses,
releasing selfie drones all this shit.
That is part of I mean look if that can turn a profit and their
stock price continues to languish they're going to have
to cut that whole team at some point right there will be there
will be no snap glad you cannot defend a Wall Street, they're
going to be spending however many tens of millions of dollars
a year. It takes to keep this thing up.
That turns out a new pair of glasses, every couple of years,
for no profit in, you know, in perpetuity.
And so yeah, there is a reality to the Business.
We can knock Zuckerberg but he did.
He did, build the second, largest ad business in the world
that throws off billions of years, you know, billions each
year in profits and your can actually that he can that he can
use to actually like he can he can find some stuff right.
Like he has a little bit of a leash to do that whereas like
your right snap, they don't their leashes tightened
completely and I don't know, I just when I'm waiting to see
like the next ACT from snap as a product like I think idealistic
lie like be real. That would have been I could
snap thing right. Bottle is that that to me, feels
like a kind of like stories like conceit in terms of like getting
back to office and authenticity and to see another company do
that. And for SNAP to not be doing,
that is a little worrisome for me because I'm like, I thought
that's what you guys were about. As you're identifying, those
needs that people have. Do you think that snap could
acquire them with that make sense?
Maybe. Maybe because I don't think that
snap is going to be barred by Regulators from making
Acquisitions. In fact, I think Regulators
know, I could be a good idea for me to get bigger.
Love it. I think their investors would
frown on another like stock heavy deal right now when their
stock Compass, like through the roof and then you do like, cut
up in snap right now. Say okay, Eric?
You want to like could they inhale all my Instagram photos
and let me just keep building my Instagram like if I want to get
a snap. No, no, but if it's, because
he's no way for that to work. Somebody wants to build an
Instagram rival, can they suck up with an API?
All my they can't get my. I feel like that's where
Regulators most need to step in. Like I feel You want you want
interoperability know just the reason we I wanted you to let it
go data portability, I just want easy as the reason we had
Cambridge analytic. I find this.
So fascinating, I cheering Cambridge analytic.
I'm perfectly consistent on the no.
No, I'm just saying the reason that that even existed is
because of data portability shit on Cambridge, analytical as a
story to be clear? No.
As a story as what it did, it was, yeah, we should shit on it
but in terms of what happened, like the thing people were
pissed about. That wasn't the Trump stuff.
It was Data portability, right? So the Fact that the EU is like,
we're going to try to mandate data portability, it didn't work
out. Well, the first time like that
was Facebook's entire ethos was we're going to be the social
layer of the web and let you take your friends with you and
your friend data with you wherever you go.
And like we're going to be that the operating system with
Facebook friend graph. But if I want to like yeah
defect and take all my stuff. I mean that would be cool.
Then stab can say. Okay, we're going to rebuild
your main photo memories app for your friends here and you can
take all those things. And well, where would wear this?
Where that ideal actually go is, like, picking your algorithm.
So that's something Twitter's working on.
That's something that I think Facebook will do eventually.
We're basically like, you can say, I want my feed to be no
politics or I want my feed to be like, mostly my friends with
like 20% recommendations. I think an ideal scenario is
like, you getting to like fine. Tune your feed, everyone.
I am very skeptic. Everyone's just going to pick
the AI optimized feet. Yeah.
It's like default rule the day, everybody knows that.
Yeah. Well, the companies like Offer
you the ability to make your own feed.
So you complain, less probably, but I think that's a
distraction. Yeah, yeah.
It's all about making money. That's what I say.
It's all about making money. Okay.
I think we should have Federal bill on social media.
That's not about antitrust. We need Congress to actually
have principles about what could be done.
To make it so other companies could really compete with
Facebook. And so users would have more
like companies. I think be reels of, I mean be
real is a perfect example of like, the fact that this is
something that is relatively fragile.
I open up be real. It's all venture capitalists.
Like it's not my fault, that's because that's who's hard to
build a network. It's really hard to build a new
network, that's because you need more friends in your address.
Yeah. I feel like you found exactly
the amount of real that you're willing to accept.
What is what is Hunter walk doing right now?
Real investors, you know? Yeah.
Like I don't think two things can be true at once.
Here you can't say Facebook is like a monopoly and like social
media is this entrenched thing where no one can compete and you
can't also say like Facebook is like being destroyed by
Tick-Tock and likes like relearning the entire company to
try to compete with Tick-Tock and be real as at the top of the
App Store charts and snap is still growing and Discord is
still growing. Like I just I think social media
is like I don't know what it I mean you're saying you don't
want the bill to be an actress Focus, right?
You I want it to be focused on what I mean if it's not about
trust and also to your point with antitrust, like antitrust
regulation is creating the conditions by which a company
other than Facebook will be incredibly innovated and get to
get big, right? Yeah.
So Eric, what do you mean in
terms of like, what What legislation do you want to see
on social media? He would be great to see
Congress. Think through like the oversight
board type category, like what sorts of decisions should be
outside of companies, and what sorts should be in them, what?
Stability for transparency about their decision.
You know, to give the conservatives about if somebody
is Shadow band or whatever. Do they have a responsibility to
disclose it? You could put a lot of reporting
requirements on these companies and say, you have to be
transparent about XYZ. You have to implement this
process for this, obviously any rules like that then sort of
Advantage the bigger players, you could set some sort of
threshold of market cap, or users or something for who has
to apply it. But I would just like a
principles-based approach, where our society, T actually reckons
with what it wants and social media, and puts that into
legislation, isn't that? That's what government is
supposed to be. We think about our values
collectively and we articulate them through.
I don't think people know what they want.
I don't think people know what they want, me neither, I mean,
I'm not on social media. I think the politicians who talk
about this, don't know what they want and a trade on the lazy way
to do it. Like antitrust is just we hate
it booing. No antitrust is we're going to
make sure there's not a monopoly antitrust is we're putting But
going to position right now where it can't just keep on
buying other companies. So other companies have the
chance to rival Facebook. So then there can be Market
competition. That's not.
We hate Facebook. That is literally, we won't
there be a motivates them is hatred of Facebook.
No, it's literally, we don't want a monopoly.
I mean, I guess you could say that.
I guess you could say that they hated the big railroad
companies. I mean, it's just saying we want
to have competition in this area of growth and we don't want one.
Many to be able to buy all of these smaller companies are used
in competition worrying about antitrust, whatever worried
about Microsoft antitrust, lawsuit that gave us.
Google wouldn't have had Google if there hadn't been in her
chest regulation, imposed on Microsoft like that is the
creation. That is why that is why it's
done so that competition can create new and Innovative
companies that have the chance to become.
Sure large company, I'm not saying I hate antitrust law
overall, but I think antitrust is a cop-out in terms.
Actually regulating Facebook and social media based on a
must-have thing, you care about is whether or not have a
monopoly in which case it is the actual right?
Let me tick tocks. Huge as we've been saying, yeah,
there's like there's I feel like there's the capacity to talk is
not an American company. No, but I hear what Eric saying?
I do think there is a difference between one of the main goals of
antitrust which is that a concern with the monopolies that
they can do price fixing and they could, you know, charge
advertisers, you know, infinite amounts of money to reach people
because they're the The only Outlet to reach people which is
just not the there's not the case with Amazon became a like
Google that I trust and much more supportive like Google
behaves like I'm a not well they own they own the rails and like
what sits on top of it? That's the Google problem,
right? But Katie actually would love to
know what you think about Lena cons.
First, big move as FTC chair trying to get meta to not buy a
tiny VR company. That's what I was referring to
earlier. Yeah, it was really interesting.
Basically, it sounds like she's saying, well, Mark Zuckerberg if
you're telling us that this is really the future, this is where
all the money is going to be, and this is going to be the most
important thing. Well, then I need to let lots of
different companies experiment in this area before you just buy
them all because otherwise. Yeah, all that's happening.
Is you're upping the game. You've called the end, we know
how it's going to, how it's going to turn out and you're
ensuring that nobody else can reap any of the benefits.
But apple is Your competitor in this one.
Oh well, not yet, but they will be.
But Katie like what is the? I would love to know like the
legal argument for. We think this thing might happen
therefore based on antitrust grounds is what is what is this?
I don't know. We think it will.
It's it's like, it's like you the company told.
Uh, yeah. Be the company turn left if the
market is not what it is yet, but the regulation is being done
because it may be become that She mentioned The Clayton Act in
her in the complaint where it was like we basically have to
defend this Under The Clayton Act and my understanding of that
is not I don't really I see how that applies to something like a
tiny VR startup in a market that is is not monopolize door, nor
does it have like significant Powers is not like a power.
I guess the I guess I'm getting my tan again.
Keep in mind, I'm not a lawyer but I think that the piece of
The Clayton Act that she be referring to be the predatory
piece. Probably not that, which is the
purpose of the Instagram and WhatsApp challenges, right?
Right? It's not time to embrace legal
realism at this point, who cares?
Like I mean, watch anything happening.
Our society, like Eric has very interesting, you can't be like I
want there to be. You can't say, I want Congress
to come up with a really rational articulation of what
they want from social media, and then later, say, have you seen
anything that's happening in our society?
Why do we think this is going to happen?
I'm saying that in line with my belief that there's legal, I'm
just saying it's sad that we now live in a society Where we can't
use the legislature to actually, formulate our views on social
media, but we just whine about it all the time.
And similarly, we live in a society where yeah, like the
legal system is not values-based.
I mean to me those those things are related.
I'm not saying antitrust laws, not values.
I'm sitting a lot like the effect of the Microsoft
decision, Microsoft antitrust, prosecution basically failed.
But it's succeeded by just scaring the shit out of
Microsoft and allowed people to compete.
And that a lot of the actual antitrust politics are just
power. Politics.
And so, whenever you're arguing about, how are you allowed to do
that? It's like well, if she can do it
for long enough that they're not able to acquire it, that's what
matters more than sadly vote. Is that values-based or not
value space. I'm saying, its power power
base, and as I value, were announced in sort of some legal
rationale has, and we couldn't you say that every law is that
Eric without that would be sort of like legal rulings.
You say that like anti-discrimination laws and I
hate crimes law that the, you know, the Matthew Shepard James
Byrd anti-hate. A law is simply that screen that
shit out of people say, don't punch people.
I mean, I'm not really sure what I mean.
What do you think a lot does? But the Lena con idea is to
expand antitrust views as much as you can get away with.
Like I just think that's a fair. Well let's be like let's be
clear. She herself leenock on herself
said and one of her first interviews that I'm going to
intentionally make do cases where I know that our odds of
winning are incredibly slim to none but I'm doing them to send
a message. Really right power.
That's what I think. I've heard people say the same
thing. They're like even if the justice
department could never win a case against Trump, they should
indict him to send a message. It is exactly the contrast and
think how Merrick Garland seems to behaving and Lena?
Could you think that there are garlic?
Do you think that the justice department should indict?
Donald Trump, even if they think that they could lose before a
jury of his peers? Even if they think that it's the
right thing to do, and that he did something wrong, do you
think that it apartment should indict Donald Trump?
If they think they could lose in a court of law?
I'm guessing. The answer is, I'm guessing.
The answer is no. Thank you can lose.
It depends on percentages and what the case is.
And yeah. But I do think like, certainly,
you want to think it's more likely than not.
You could convince somebody right II do think that's a
reason. Some people, some people say
that even if they had airtight evidence, very good evidence and
they could indict Donald Trump that they would ultimately lose
because the case we get appealed and it would never pass the
appeals bench in DC or nevertheless, it's really not so
at that point. Should they indict him?
If if the chances are slim to none will ultimately Prevail, I
think with antitrust specifically right now when
we're talking about, you know, citing The Clayton Act in order
to explain the acts of 21st century companies there has
been. I know this is a very, you know,
debated Topic in DC or among like antitrust lawyers, it is
very difficult to find the exact perfect legal precedent in which
you can explain the actions of a lot of these tech companies and
how that falls into the typical umbrella of antitrust, which is
that, this is causing consumers. Because they can be price
gouged, right? That is not the coralina cons
whole paper on Amazon, right? And, and and right, and so, I
think I actually have less issue with her taking a novel, legal
approach to, you know, filing cases against Facebook because
it doesn't necessarily fit within, you know, historical
precedents. But saying look, let's try this
out. Let's, let's see if we can get
these arguments out there in the public and debated in a way,
that maybe the suit doesn't work, but it at least pushes
things and the conversation, the legal conversation in a way that
we can have. An intelligent modernization of
antitrust law. That we all I think would agree
that there is some issue with multi hundred billion dollar
trillion dollar companies having untrammeled power over the way,
they run their business and other small businesses that, you
know, the current system hasn't fixed.
And so I, yeah, Tom. I'm coming around to this
actually in that, I think she will have an easier time,
defining Market, power Monopoly, power with VR, then she will
with social media because Oculus is by far the VR industry.
It is a pretty much just Oculus, so if you want to have like a
narrow market definition to try to argue Monopoly power, she
should be doing it in VR and not social media.
And that's why I think the ftc's already had trouble with its big
complaint. The suit about Instagram and
WhatsApp and Market definitions. They didn't even include
Tick-Tock and their Market definitions for the Instagram.
WhatsApp challenge, which is insane to me.
But yeah, I think the VR side You could argue there a monopoly
and so maybe they should, you know, if you could go back to
like early App Store and make sure that that Apple couldn't
just leverage the App Store to become what it has, which they
most certainly did. There's no question then yeah,
maybe you should do that and if Mark Zuckerberg does think, this
is the next major Computing platform.
I just have a problem with like the like we think this might be
a things. Therefore, we're going to do
this now. Yeah.
You got to like, come up with the fact that this is a monopoly
in the same Market. It could, it could happen.
I mean, I think it's hilarious. That this like government
complaint is like talking about beats a Brr and how you trying
to like Define beat saber as a competitor to Supernatural are
just totally not. And it's just really funny to
see them. Try to stretch this like idea
what you think to like antitrust is in some ways unique, but at
the end of the day, especially around policy.
These things do get changed like our government positions.
And the way that laws operate and the way that things are
regulated through laws are through laws and courts.
Often shift and change because people are willing to bring
novel cases, right? And stretch the law or try to
move the law. So I mean we don't just see an
antitrust, we see it with abortion, for example, we've
seen in a lot of ways so I don't think it's Unique.
I don't think that what Lana Khan wants to do is necessarily
incredibly unique. I mean, it because she did come
out and say it upset a lot of people, but I think that we see
it happening and we'll all sorts of ways around others.
Things, you know people saying like we're going to start
bringing novel cases and states and rest country because we want
to bring a challenge to Roe versus Wade and get it to the
Supreme Court. So finally, can someone can
finally help us figure out in this context the 21st century,
what we really think of this practice, we're going to bring a
bunch of Novel cases so we can get them finally to another
litigate, you know, to another Judiciary, but bold this case
again the Supreme Court we can finally figure out what's what
school should do around their admissions policies and race
around voting rights. Around election issues.
Like it is not that unusual to say, it doesn't matter if we're
going to win or lose. We want to bring the case to
test it, to see what happens and to see where we get like lots
and lots and lots of times this happened.
I just wish like on other issues, the Democratic party,
would lay out like what it wants like what the end state is like,
we think app stores should have these dreams.
You're like, like if they had legislation Republicans Really
Gonna, they're like, we want to get rid of affirmative act,
right with this, is the gold. These are the cases we're gonna
lose exact 25 years and they did lose for 25 years, but they're
gonna win now, like, lay out what you want and legislation,
and then if you feel like, okay, we can't pass this bill, but
this is what we have all come together and said we want.
Use antitrust to get it. I'm like, okay, at least it's a
line with principles, you've articulated, but I think the
inability to articulate in legislation what they want,
reflects, just how dumb and simplistic.
The thinking about social media is and then antitrust is being
wielded. It's not that it's dialed, its
political they don't want to What is the real motivation of
this? Which is that, like, it's hatred
of Facebook. Like it's, you cannot tell me
that out of all the Monopoly antitrust, concerns Apple just
kneecaps. The digital ads online.
Ecosystem unilaterally, right? Prompt more than any regulator
has ever been able to, like change how digital ads work
Apple. Just did it with a prompt.
I know Facebook worked on an antitrust lawsuit.
They were about to file other companies of looked at it this
is pissed. A lot of companies off its He's
destroying small businesses, like I'm working on a story
about this. It's actually fascinating how
like d to C Brands can't advertise effectively anymore
like it's their cost of gone so far through the roof because of
Apple. So we talk about pricing Power
Platform power. There's Google, there's Apple,
there's legitimate like monopolies that exist in the
world. Today, I would love for our
government to be focusing on those and not necessarily.
I do think it's important to look to the future but I think
we have a lot to deal with in the present.
And I think the fact that Lena cons first, big case was about a
Our app that is a meta thing says, a lot about.
Just where the government how the government feels about
Facebook. Yeah.
And it's not with the startup industry one.
I'm sure that the regulator's personally hated Andrew Carnegie
Rockefeller like you're right? There's all kinds the I mean
these these things are often about power and so is there, you
know, animus against some of these companies or people as The
Regulators are dealing with them?
I'm sure if you read like a really great history, Three of
you know us steel you would totally see the biggest personal
hatred of Carnegie motivating a lot.
I'm sure. Anyway, thanks Keith, this was
great. Thanks so much for joining.
We'll see everybody. Yeah everybody back here next
time. Thanks so much.
Bye-bye. Goodbye, goodbye.
Goodbye, goodbye, goodbye, goodbye.
Goodbye. Goodbye, goodbye.
Goodbye, goodbye, goodbye, goodbye.
Goodbye.