Apple’s Secret China Deal, Buzzfeed’s Mild Disaster, and Newspapers Strike Back

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Hi, everyone.

This is Pivot from New York Magazine and the Vox Media Podcast Network.

I'm Kara Swisher.

And I'm Scott Galloway.

How are you doing, Scott?

I'm doing well.

I'm happy to be in New York.

Crazy busy week.

I just came from Dreamforce, where

Mark Benioff came over to me.

Disclosure.

And just gave me shit

in front of this entire Force team.

So, as usual, I'm representing.

I'm bringing home the bacon while you go have get foot robes with AOC or whatever it is you do.

What I do is I have many children.

I was in New York.

I only have a short amount of time, so I couldn't come up for that.

I would have been happy to, I will do the next advertising thing, a partnership thing, but there are new partners.

We're going to do video, Scott.

What do you think about that?

We're going to do video.

Yeah.

No, I love podcasting, except for the people we have to work with, our advertisers, and our listeners.

Otherwise, I'm totally down with what we do.

I think it'll be nice.

People like our little videos.

They like them.

We'll have to dress up more.

I'm not going to speak for you.

I'm not exaggerating.

People meet me and they're like, oh my God, you're Sky Cow.

And they look at me and they're like, oh.

Like, they just assumed I was going to be much better looking or much more charming or something.

So if we work on video.

You sound handsome, in other words, is what you're saying.

Hello.

Hello.

Hello.

Yeah, you actually do sound handsome.

Well, no, you're pretty handsome.

That is something you are not supposed to agree with.

Let me just stop you right there.

You're not supposed to agree with me.

You know what?

In your apartment, there were pictures of your dad.

He was a handsome man.

Your dad, I think that's your dad, right?

Tom Galloway is a handsome man.

Handsome man.

Handsome man.

Got him to a lot of trouble.

Yeah.

Good looks and low character.

Oh,

means you don't have a pot to pissin with five alimony checks and child support.

You sound very comely.

That's what you sound.

Someone told me I sounded tall.

They met me and they're like, what?

You sound tall?

Did you see that picture of me at that lunch in New York?

There's a picture of me with, I look like a hobbit like i'm at least a foot under every like joanna coles in her silver fancy jacket like design sounds tall like someone who wandered in a little tiny thing that wandered in off the street it's crazy i'm telling you the reason they asked me to do this thing with benioff today is not you is when you stand next to benioff it looks like he's about to eat you it looks like he's going to get angry and go all tiger king gone wrong on you

it's like a it's like a dancing bear and a four-year-old like yes like coming to see the dancing bear

he's a big man And then Salesforce Today announces they are no longer in discussions with

Vox.

No, it's already done.

We can say anything we want.

He has a sense of humor, unlike many CEOs.

That's why I enjoy him.

That's a great God.

I'm genuinely like Mark.

He's a funny guy.

Anyway, today, just so you know, we're going to get away from this fall derall about our different ad deals and partnerships.

Today, we're going to unpack Apple's secret deal with China, an interesting lawsuit involving Google and Facebook.

Plus, we'll take a listener question about the layoffs at Better.

That was not done well.

Anyway, first of all, BuzzFeed's NASDAQ launches off to a rocky start.

I thought you might have some thoughts on this.

After its debut on Monday, BuzzFeed shares briefly surged, then quickly fell from the opening price of $10.99.

Investors withdrew about 94% of the money raised by BuzzFeed's SPAC, which is a lot.

At the time, they said they wanted the money for doing things.

At the time, the recording shares were trading below $8.

What do you think of this?

Well, so the good news is they did get public.

That's a victory.

They have a liquid currency to try and go roll up to space, which is Latin for we have no vision for organic growth.

So we're going to go buy companies.

But there is probably room for consolidation.

There probably are a bunch of smaller sub-scale media companies.

Someone told me it's actually the first pure play digital media company to actually go public.

Oh, interesting.

Which I thought was interesting.

But to be blonde, Kara,

this was sort of like a...

a mild disaster because first off if you look at SPAC SPACs raise the money based on the notion that this team is is going to go find, be bankers and find a good company that should be public.

And they'll find something they get a good valuation on, and they'll be a private to public pop.

But as the SPAC market has cooled,

it's gone from when they announce the deal or right before the deal, the investors in the original SPAC can redeem and get their money back.

And that's a signal not only of the market, but what they feel about the prospects of the target and the new deal.

And a lot of people are saying, the market sucks.

You have a gun to your head and have to give us the money back or find a deal.

So you're finding shitty deals.

And the percentage or the average redemption or people who want their money out, don't want to go along for the ride with this new acquisition or this new co has gone from 25% to almost 60%,

meaning that the majority of people who are in SPACs are deciding not to go through with these deals in terms of their own dollars.

This one was 96, meaning that nobody who bought into the SPAC wants to stick around to see what happens.

It's down at 100%.

Wants to be a BuzzFeed shareholder.

And then what they had to do, which is even more damning, but people aren't talking about it, is in order to complete the deal, they had to raise,

they usually do a pipe in equity financing, public, private investment, and public equity.

Terry Quadrow always calls me and corrects me on that.

And then, but what they had to do is a convertible debt offering.

And a convertible debt offering means that if the thing goes bankrupt, they own the assets.

And that's a negative forward-looking indicator that the only money they could raise to get the deal done was in the form of debt.

And the stock's already off 20 or 30 percent.

So, here's what I'm doing.

Just let me give you some figures.

I'm just looking at the stock.

It is market cap is $240.6 million.

Its revenues were almost double that.

That's what's crazy.

It was up as high as $14.

Now it's at $6.56.

That low is $6.43.

Its workers are slamming the company as it went public.

It's a tough, it's a, you know, watching from the seats in Vox, it really does be like, oh, maybe not so much.

Yeah, I'm not sure.

I think that market cap may be, that valuation may be incorrect, but the bottom line is

it doesn't bode well.

The difference is, and I'm talking our own book.

It originally valued it at more, but this is what the, what the, what, what?

Yeah, I had that it was at 1.5 billion on the iPad.

Yeah, it was.

It was after SPAC merger that valued the firm, but it may be worth a lot less now.

But go ahead.

Sorry.

I'll look.

I'll go.

I mean, the bottom line is they're Android.

We're iOS of digital media.

And we're totally conflicted because you and I are both shareholders.

But we have less revenue, but more growth, and we make money.

We're higher marketing.

They're top 10 lists.

Vox is Kara Swisher, getting ZipRecruiter to pay a lot of money because they think powerful people listen to you.

It's one is, you know, one is literally Android, massive, and one, and the other is IOS.

Where are the iOS?

So if Vox does a SPAC or tries to go public, it'll be very interesting to see if we get grouped into the same

corner of the buses.

We'll totally get it.

You think we will?

Yeah.

What's interesting is a lot of these companies, whatever they're worth, used to be worth like $5 billion, billion, whatever.

There were those numbers that they were going to bought by Disney.

Oh, the bloom is off.

The bloom is off the road.

I do still, at the same time, I do admire what Jonah Peretti and Jim Bankoff have done.

Like, you know, I mean, it is, you know, it's been a rough road, but some of the products they make are really terrific.

But nonetheless, nonetheless.

Yeah.

So it's the SPAC, but look what's happening.

I mean, look what's happening at SPAC market.

Remember,

remember Virgin Galactic?

Yeah.

I mean,

when we said that that was going to be a poster trial for SPACs, that's been cut in half since we said that a few months ago.

It's, it's, and you're dealing with a couple hundred

special purpose acquisition courts that haven't de-SPAC, that have a gun to their head.

They're going to start coming up on,

you know, targets where they either have to give the money back or do an acquisition.

So it's a very interesting dynamic.

Yes, there's a lot of SPACs.

I ran into so many women with SPACs at this lunch, and I was like, oh, this isn't good.

This is not good.

What's going on?

Women with SPACs.

SPACs.

And, you know, speaking of SPACs, let's move on to Devin Nunes as leaving Congress to become CEO of Trump's media That just makes a lot of sense.

Yeah, he'll stitch the House at the end of the month.

He was going to be like the head of the House Ways and Means Committee, I think, if the Republicans take back the House.

Cutting his term short by about a year, Nunez has a combative relationship with big tech.

He's previously sued Twitter.

He sued a cow, I believe, or Twitter cow.

He didn't win, I don't believe.

Trump's SPAC deal has already drawn the attention of the SEC.

They're investigating.

What thinks you of this?

This is weird.

He doesn't have any tech experience whatsoever or media experience.

So that always works.

works.

I think it's kind of like borderline ridiculous.

And

if you're looking at the stock right now in the options market and you want to buy calls, in other words, you think it's going to go up at about the strike price that are just like nine days out, you got to pay $5.50.

Whereas

if you want to buy puts,

you got to pay a lot.

a lot more, meaning that essentially everybody thinks this stock is going to go down.

um and so it's and i it's just like i'm a fan of corporate governance i don't think we should have part-time ceos and i don't think we should have ceos whose fathers owned dairy farms and then his kind of professional experience is he's to his credit was one of the youngest members of i think the board of the college of the sequoias and then he won a congressional seat as a very young man he has no business running a business much less a tech company this is

And this company, I think, has about a, I think it has about a billion and a half.

Let me like de-whack.

It has a market cap of $2.3 billion

based on Trump as the anchor and now a CEO.

We don't know who's in his pipe.

It supposedly have a billion dollars.

This is a private investment in public equity.

It was not publicly disclosed.

They don't have a product.

This feels very trumpy to me.

This seems to me.

And True Social missed its November deadline.

It's December.

Maybe they'll launch on January 6th.

That would be a good day to launch for them.

Ew, a little inside the Belway humor.

A A little inside the Belway humor.

It's outside the Belway.

But it's under investigation for

possible, it probably won't go anywhere.

Who they told about what and what they discussed.

I don't even understand it.

That joke makes you sound taller.

That joke makes you sound like 5'10.

It does.

I do.

I'm tall.

I'm tall.

By the way, Gary Gensler is targeting these pipe offerings.

So, you know, and rules are a coming.

And

anyway,

this is a disaster.

There won't won't be a product.

I mean, I hate to say it, but parlor looks fantastic in comparison in terms of technology and the ability to get a product out the door.

Look, there's a cycle to all of this innovation.

SPACs are an innovation.

And typically, whether it's junk bonds, whether it's the internet, or whether it's SPACs, there's excitement, there's mania, there's a huge fallout, but there will be some SPACs that endure.

And I do think special purpose acquisition cores as a financing vehicle will survive.

It's just, it's going to be a lot more discerning in the marketplace.

I mean, when 96% of the people who gave you money based on the idea and then you find a target and it's like, no, we don't, we don't, we want off this train.

Yeah.

It means the SPAC market is reaching way too far into the barrel, so to speak.

You know what Nunion should do?

He should just buy one of those shitty cable competitors and compete with Fox.

That's where they should stick with, because that's not quite as hard to do as create a social network where you got to make, you know, make fetch happen, which I don't think this guy has the ability to make anything happen.

Technology, which can break down, as I can personally attest to.

Speaking of which, internet services have recovered from the massive AWS outage.

That was problematic.

Everybody felt that problems caused disruptions.

Alexa, Ring, Disney Plus, Dropbox I had a problem with.

What happened with you, Scott?

Give us your tale of woe.

So distinctive the fact that the VCs and their flying monkeys claim that everything I predict the opposite happens.

Yes, they do.

Every year I do a public predictions webinar.

Yeah.

And

17,000 people registered.

8,000 people showed up.

And then then come five o'clock, you know, I'm already, I'm stretching, I'm psyching myself up, you know, looking in the mirror and go, I like you.

I deserve to, I deserve to have a good webinar or whatever we call this live stream.

And then my tech guy, he wasn't handling the tech.

It was someone else said, we're having a problem.

They can't figure out how to go live.

I'm like, what do you mean they're having a problem?

And you started yelling right?

You started throwing

the worst in a crisis.

I'm like, who can I yell at and just make everything harder?

Why did I think that was so?

Go ahead.

And I'm like, that's it.

And I fucking pop up.

I shoot.

I literally like down or bullet a Pacifico because I'm like, that's it.

I don't even pretend not to have an alcohol problem.

I'm stressed.

I'm angry.

I'm going to start drinking.

And then freaking 6.20, this is bad news.

At 6.25, I called it.

I just put out a tweet saying, I'm really sorry.

I don't know what happened here.

I take responsibility.

We'll reschedule.

And get this?

Because of the dog.

4,500 people at 5.30 were still on.

And what was supposedly hilarious was all the mockery and memes that went back and forth in the chat function, which was still working, fortunately.

Yeah.

So people could mock me and my technology.

But yeah, anyways, AWS

was not Scott's fault.

Just a few minutes later, we were using some new platform called Hoppin' or something.

Hoppin' it's just new.

It's a very big service.

Anyway, go ahead.

Just because you're six feet doesn't give you the right to like push back on me.

It's one of those promising meetings.

I did get immediately, I don't know if it's a coincident or not, I immediately got a little

handwritten note messenger saying to me, How do you like me now, bitch?

And it was from Zoom.

It was from Zoom.

Get it?

How do you like me now, bitch?

I get that.

I got it.

I got it.

I'm getting it.

I'm shrinking.

Anyway, I'm shrinking.

Anyway, how did it?

And then are you doing it again?

Did you do it?

I'm sorry.

Yeah, no, we gotta re we got a reschedule.

You didn't invite me to that.

I wasted 17,000 people's time for an hour.

I burnt an hour.

I've literally like killed two people.

That's like two lifetimes.

All right.

Well, there's Scott's tale of woe.

There's Scott's Tale of Woe.

Some good predictions.

AWS.

By the way, I nailed it last year.

Did you?

I'm sorry.

Go ahead.

All right.

We'll nail my predictions last year.

All right.

Forget those flying monkeys.

Why do you get so upset by those flying monkeys?

They do like to go after you.

They start to, one started to go after me, but I shut them down

because of you, and I shut them down real fast.

Oh, wait.

You're blaming it on me now.

Now we're going to do it.

It was about you.

They're like, how can you affiliate yourself with that man?

And I said, very nicely.

Fuck you, essentially.

He's got a handsome voice i'm just telling you i'm getting a lot of that late for some reason all the uh internet dudes some of the internet dudes are getting mad at me i got like whack i got palmer lucky mad at me over says i'm a bull no it's only because i can do math and i refer to their portfolios as septic tanks because while they foist their feces from their unicorns on tours to the bullshit zoo they get angry and see it as a crime against humanity when you get in the way of their their ability to maintain their consensual hallucination with the markets.

That's just me, though.

They are on the warpath.

I also got the former editor of the Wall Street Journalist.

That was Palmer Lucky.

I think those are the cigarettes my mom smoked in the 70s.

He created Oculus.

He's a very good entrepreneur.

Palmer, you're an excellent entrepreneur.

Otherwise, please let's stop.

Palmer Lucky.

Palmer Lucky.

That's like a drink you ordered at the polo lounge in the 70s.

In any case,

I'm not even going to...

beef with him at the end of the day.

Hello, ladies.

I drive a 240Z and my name is Palmer Lucky.

I will only talk about the Oculus and how I don't think it's going to be worldwide because it's too big of a different thing.

He invented the Oculus?

He sold it to Facebook.

Was that acquired acquired by Facebook?

Yeah.

Very,

very, very good entrepreneur.

Oh, my God.

Otherwise, we don't get on.

I don't know him very well.

I've interviewed him once or twice.

And he's giving you shit about me.

I should not care.

Why do I care?

No, no, no, no.

He was giving me shit about me.

Apparently, I retweeted Orion.

I don't even understand, but apparently I'm a bully.

I'm a bully to wealthy and men of means.

Well, you're,

I don't know, you're lesbian privilege.

You punch down.

I just is.

I'm sorry I hurt you, Palmer.

That's all I have to say.

Anyway, time for our first big story.

Tim Cook apparently made a secret deal with the Chinese government to the tune of $275 billion, according to the information, in exchange for lighter regulation from the Chinese government.

Apple agreed to invest heavily in China, which it has been over the many years.

It's put money into data centers, wind farms, and directly invested in companies like Didi.

Still, Apple has played by China's rules.

At government request, Apple has pulled apps from its store and altered the way that disputed territories appear in the Apple maps.

Anyone who operates in China, that's an American company, does this, let me be clear.

It was interesting the way it was phrased, this deal.

I think he probably went over there and negotiated as if he was his own country, right?

And obviously, the heat on China is growing and growing.

So Apple's going to be put into the spotlight rather significantly on this issue.

I'm not surprised by this.

I guess I was like, well, of course they do things to bend to the Chinese government.

But

what do you think?

Maybe you have a different take.

No, I mean, I have a bias towards Tim Cook and Apple, but

I think

the greatest

force or the greatest

buffer against what could have been a really terrible conflict is NATO.

I think having

an umbrella of security across Europe where the major conflicts all seem to break out, having a multilateral force with a shit ton of tanks keeping the peace has been a fantastic deterrent.

I think, and this is going to sound geopolitically a little strange, but I think the greatest deterrent to a very serious shooting war is Apple.

Now, what do I mean by that?

No, all right.

I was wondering where you're going.

Natal and all, right?

But go ahead.

Go ahead.

Palmer lucky.

Palmer lucky.

I'll leave him alone.

Don't bully him.

I like that name.

I like that name.

Anyways, countries that trade together are much less likely to go to war.

And I feel like China and the U.S.

are kind of the two superpowers now.

And the thing that helps us is when you understand each other and you make money from each other and you have a mutually vested interest and mutually vested destruction, you're more likely to try and figure out a way to work out problems around Taiwan.

And the most valuable company in the world, if all of a sudden every Chinese youth that has iOS, if their phone got turned off, they would be angry and think the CCP is bad and maybe we need a second party, which is Latin for revolution in China.

So I think the immense amount of trade we do with one another is probably the safest thing in the world.

All right.

All right.

Well, that's one, that's the argument.

That's the main long argument that if we're in there, we're going to change them.

I do not believe that's the case.

I'm not saying we're going to change them, Kara.

I'm saying they're going to think twice before they really get aggressive, as are we.

I mean, the bottom line, we could have 500 million people flow into our borders and we could make all the shit we need.

So we need China.

Apple is one of the probably, I imagine, the biggest employers.

I would guess.

They have definitely gone over.

Obviously, Google pulled out over lots of reasons.

Other companies did.

Some people

talked about forced labor.

That said, a lot of these people just couldn't operate in China.

It's a very complex place to operate.

Facebook's not there.

This is just in tech.

But News Corp's been in there.

There's all kinds of, you know, Disney, they pulled some criticism.

There was a whole controversy over one of its stars saying something against China and then having to pull it.

I think it was, I forget who it was.

Anyway, it happens a lot.

John Sana said that Taiwan wasn't a country.

No, he apologized for saying Taiwan was a country.

Yes, exactly.

But that's, it's one of dozens of times this has happened.

So lots of media companies have already been through the ringer here.

And so, you know, it's not a surprise that Apple is.

I think what the issue is, is that more and more pressure is going to be put on all U.S.

companies around China.

There's a coal, there's coalescing around aggression towards China, whether it's Marco Rubio or Joe Biden or Donald Trump or whoever.

This is a trend of painting them as our big rival.

And

I think it's going to be a dicey time for Apple in terms of how to negotiate and operate because it's so important to its business to be operating in China and making things in China.

Yeah, I just don't know.

The bottom line is they are so pregnant with China.

I mean, the most robust supply chain in the world is run by the most valuable company in the world,

which has more employees in China than it does in

its home sovereign.

So

I think they're very dependent upon us.

I think we're very dependent upon them.

And I think that's a good thing.

I think that just creates cooler heads.

I think everyone has motivation to try and figure this shit out.

It also gives us teeth to do stuff if and when they continue to perform what I'll call you know, genocide light or

putting ethnic groups in re-education camps or what you want to call them.

Because I was even thinking about Biden's call where he talked to Russia and said we're going to clamp down.

You're like, Jesus Christ, we still have sanctions that haven't been issued against them.

So building up economic involvement gives you the ability to untangle them and hurt that other nation.

They could hurt us just as badly at this point, which we're not used to.

I mean, I'll just give you an example.

I think Chinese, as Americans, I think it's good that we're putting pressure on them for human rights.

I think we should continue to do that.

The disappearance of a tennis player is really disturbing.

At the same time, you can put yourself in their shoes and go, what moral authority do you have?

You just, you had a president who just overran the fucking Capitol.

Who are you to lecture us?

Well, yeah, that's the other part of that foreign equation.

But here's the deal.

This is going to be a very difficult time for

them.

I mean, lots of Microsoft's there.

Boeing is there.

There's all kinds of things around this.

It's just, it's going to get worse.

And Apple is now the target.

The reaction has not been good to this deal.

It should be no surprise that there was this deal, but it's going to attract all kinds of issues.

And, you know, the New York Times actually had a big story about,

it was called Inside Apple's Compromises in China, Times Investigation.

So it's just, it's now going to, it's now going to attract all kinds of attention.

It just is.

So that's just the way it's going to be.

But I mean, we, Boeing and Apple,

they raise the issue so they get all of the attention.

But if all of a sudden

Chinese manufacturing, we couldn't have this podcast right now.

40% of the furniture in your room would disappear.

Half of our clothing would go.

I mean, people really don't have a sense.

And something like 92% of toys are manufactured in China.

And I think that's a good thing.

I think comparative advantage is a good thing.

All right, we'll see how it goes.

I don't think it's a good thing for Apple right now.

I think there's going to be increased pressure

going forward.

I apologize because I don't know the story and you know the company better than I do.

What exactly are they accusing them of?

Not accusing them, that they just, they just, you know, they were doing, they were, they would, they would put money into this to help the country grow and that they would,

do things like pulling apps.

Lots of people do these things.

Lots of companies do this when they're in these countries.

And so

altered the way disputed territories appear in Apple Maps there, stuff like that.

The stuff you'd expect,

the stuff you'd expect.

And one of the reasons Google left was because of this stuff.

And Apple is not leaving.

This is what you do if you live, if you operate in China.

And they were willing to do that.

So

I would say it's no surprise.

And yet I think it's going to bring enormous pressure on this company, no matter what.

Anyway, let's go on a quick break.

When we come back, we'll talk about a big lawsuit in the world of digital advertising, Scott's area of expertise, and take a listener mail question.

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Scott, we're back with our second big story.

Newspapers around the country have been quietly filing antitrust lawsuits against Google and Facebook, arguing big tech is monopolizing digital ad revenue.

This is, again, not a new thing.

It's been going on for a while.

You and I both know people at these organizations that have talked about this for a while.

It's happened in Europe.

Lawsuits for more than 200 newspapers were consolidated in the Southern District of New York over the summer.

A lawyer for the publisher said the goal is to, quote, recover past damages to newspapers and to, quote, establish a new system going forward in which newspapers aren't just competitive again, but can thrive.

You know, again, happened in Australia, happened all over the place.

These deals with these companies in Australia, Google and Facebook are paying new news publishers by law.

That might happen here.

It's being worked on in Canada.

So what do you think of all this?

What do you think about this?

Look, and

I'm not,

you know, like most of the things I say, I'm reflecting myself in a very good light, a taller light.

But in my first meeting on the board of the New York Times, I'm like, we should turn off Google.

Our infatuation with being part of the cool club and hanging out with the popular kids has resulted in us debasing our gorgeous content.

They slice it up.

They sell it for 10 cents and give us a quarter of a cent.

And we act that we're excited because we're embracing the future.

And

they basically came in and

turned a lot of content into a sewer and debased our amazing content.

And

I found it very frustrating.

I think Facebook and Google did nothing much more complex than pull up a dump truck to the vault of every newspaper company and take money out.

Now, that's not to say they weren't being unbundled on their own.

It's not to say

they didn't need to innovate.

Which they did.

I get it.

The New York Times did.

The New York Times is, I mean, you work for them.

I think they've actually been very innovative.

Yes, but it's still not enough.

They're tiny.

They're like a little dinghy with ocean liners.

We went and acquired about.com because we wanted to accessorize our analog outfit with digital earrings, and we paid $400 million for it.

It was growing.

It was worth a billion.

And then overnight, we got a message from the CTS saying

about.com's revenue is down 60% today.

Traffic is down 60% because Google did an update.

Google just said, you know what?

Rather than letting you monetize that, we're just going to take all that revenue.

And if you want to talk about rents and duopoly and monopoly, and this is overdue, this lawsuit.

Look what has happened with Amazon.

In 2014, if you were a retailer in the third-party marketplace, between placement fees, between paying for fulfillment, between them twisting your arm and forcing you to spend money on Amazon media groups, which you could come up in higher rankings than what is the second largest search engine, which is Amazon.

You had to pay Amazon an average in 2014 of 19% of your sales.

So if you sold $100 worth of goods as a retailer on the third-party platform, you gave up approximately 19 cents.

Now, it's 34 cents.

The rents these companies are able to extract from corporate America has gone up every year.

And when 60 cents on the dollar go to just two players in the medium that everybody has to play in, it doesn't mean

it's a capitalist point of differentiation.

It's a tax.

And no one company has been able to develop strategic advantage using this medium, similar to what Nike's done with TV or William Sonoma's done with catalogs.

We all have to use it.

And when everyone has to use something and can't establish advantage from it, it's a tax.

It's not a service.

So the monopoly and duopoly power here has just run unfettered.

And I'm happy to see them do it.

I'm happy to see them file these suits.

May I ask, all right, but what can be done?

How can you sort of roll back the, you know, it's like unmixing cream and tea.

It's just done.

Like, that's the thing.

Probably there'll be some payments.

First, we gave it away, then we took some payments.

And then, you know, we've always sort of been lining up to whatever, you know, gruel they hand us.

But what can be actually done?

Like to

this is this is now a secular change that is finished, really.

Well, there's remedies and damages if they say they used unfair pricing or cartel power.

And there's a cartel pricing case in Texas that says that the two that Google, senior executives from Google and Facebook coordinated to keep prices high for advertisers, which actually the interesting thing about that case is there's criminal remedies.

But if you were to force Facebook to spin Instagram and WhatsApp, and maybe force Amazon to spin Amazon, Media Group, whatever it might be, all of a sudden you have more competitors and you have

a distinct

supply, which would lower the rents on the demand side.

So, I mean, the bottom line is when there's one or two providers across millions of

buyers, the one or two providers do really well.

So, we just need more, we need more providers, if you will, or more options.

I mean, I think that you run the danger of there being

legislation.

There's been legislation everywhere, obviously in Australia.

It happened.

There's some here in this country.

It's just digital competition with newspapers, I think, is over.

I think they've won this one.

And the question is, what can happen?

Since 2006, here's a figure.

Newspaper ad revenue has dropped 50%.

Not a surprise.

And it was already dropping because of Walmart and everybody else not advertising.

And then there's classifieds, et cetera, et cetera.

So I'm not so sure

what saving them will mean, except for a few large ones like The Times or The Post, et cetera.

Yeah, I don't, look, I think newspapers, if my suggestion was that every media company, and I suggested this in 2008, and that I wanted to get the Salzbergers, the Murdochs, the Hearst family, the Pearsons, basically every large print media company together and say, we need to be like the Record Labels Association.

We need to bind together and license all of our content or none of it to one or more of these search engines.

And this is back when Microsoft still thought they had a shot.

What did they say?

You know what they said to me?

They said they didn't.

Well,

they thought of like, I mean, the New York Times thought of the Wall Street Journal as their competitor.

I'm like, no, there's their enemy.

I'm like, no, they're our adversary.

Our enemy is in fucking Cupertino.

Wake up, guys.

We're bickering with each other.

And meanwhile, the Panzer tanks are lining up at the border.

Yeah.

And what did they say?

What did they look at you like?

And then the official word back was, we would be committing antitrust.

This is how fucked up the laws were, that if the newspaper companies were...

If the newspaper, well, then the laws need to be changed.

Because if the San Francisco Chronicle and the Miami Herald and the New York Times bind together to try and get some better terms from Google Google is antitrust.

You had 93% of the search market controlled by one company.

It's not antitrust.

We need different laws.

So, look,

these companies,

all media companies, in my mind, outside of Google and Facebook, need to do a better job of pushing back with one voice because the key to winning a war is to atomize your competition.

I even remember us prostrating ourselves to Steve Jobs.

Like, oh, we wanted to be in the app store and give them huge revenue and give them a job.

So did the journal.

I was in meetings like that.

He loved it.

He knew.

Because the CEO of the company loved having drinks with Steve Jobs.

I mean, it's just,

we're so like fascinated hanging out with the cool kids that we entered into ridiculously bad stuff.

You know what Jobs did in one meeting with the journal?

He literally insulted them all, said, like, you suck at tech.

You're never going to beat us.

It was so funny to watch.

Like, you know, and they sort of sat there and took it.

And I was just like, okay, guys, this is who he is.

You know, it was, it was, you know, and they tried everything.

You know, Murdoch tried a whole bunch of things.

You know, they did the day, the daily, it was called, that daily app.

Then before that, they had something else.

I can't even remember all.

I should be remembering all their names, but everybody tried a lot of things for sure.

The question is, did any of it really matter?

It seems like most of it really didn't, like on some level.

They couldn't keep up.

And Jobs was right.

Technically, from a technological perspective, they were toast is essentially what he told all the media companies that I saw him speak to.

Anyhow, let's pivot to a listener question.

Let's go.

You got, you got, I can't believe I'm going to be a mailman.

You, you got mail.

Hey, Karen Scott.

It's Corey from New York.

I had a question about the better mortgage layoff.

Scott, you always mentioned that you can't control the layoffs, but you can protect the people that are being laid off.

Given that this layoff was three weeks prior to Christmas and one of the hardest seasons to be hired in, and that they are only getting four weeks of severance, I'd love to hear your thoughts on the situation.

Thanks, guys.

Love the show.

Bye.

Okay.

This is a really, I haven't really followed this until just recently.

The chief executive in Vetter.com, Vishal Garg, laid off 900 employees over Zoom.

On a networking site blind, he accused the terminated employees of stealing from the company by underworking, saying, you guys know that at least 250 of the people terminated were working an average of two hours a day while clocking in eight hours plus a day in the payroll system.

They were stealing from you and stealing from our customers who pay the bills, that pay our bills, get educated.

He later apologized for failing to show the appropriate amount of respect and appreciation.

So,

any lessons here?

Not good.

Not good.

This didn't make him look good.

Even if he might have been right, possibly, I'd have no idea.

I have no information on this.

But what do you think?

Well, so

I wasn't expecting this question and just disclosure.

You know, I'm an investor and better.

Yeah.

So

take that for what it's worth.

You're a CEO's behavior.

Oh, this is an easy one.

He fucked up.

Compare and contrast this with how Chesky laid off employees.

And by the way, companies that are growing lay off people all the time.

And that's oftentimes it's the right thing to do.

Google, in the midst of its power alley, laid off like a thousand people because they wanted, they felt they were getting fat.

And back to his original notion, what he was referring to is I believe that, you know, we talk a lot about this in management and board meetings.

You know, it's always a difficult decision to lay off people.

And I feel like you need to be fairly shareholder driven or Darwinian about the decision.

But once the decision is made,

you become very generous.

And that is big severance packages.

You try and do it in a way that is dignified because people should be disappointed, but they shouldn't be scared.

They shouldn't be like, oh, fuck, how am I going to pay my mortgage?

Especially if you're a company that is doing well and has cash.

I don't know the specifics.

I think the severance is going to be more than that.

If it's just four weeks before the holidays, that too is a fuck-up on top of a fuck-up.

The strange thing is as soon as I heard the story, I went on

Google and I love tracking the number of news hits.

And this is what's really sad about this.

And this isn't a comment about Better, but a comment about our society.

You know what's going to happen to their business in the next 30 days?

What?

It's going to go up.

Because

we live in a society now where awareness is kind of the key attribute because people are like, oh, they've heard of a company called Better.

Oh, I'm thinking about an online mortgage.

Can I get a lower interest rate?

And now they've heard of this company.

I think it's,

I'm not excusing it in any way, but I think part of the innovator's dilemma here, what's dangerous about our society, is it's more important to be in the news than it is what you're in the news for when you're a tech company.

You're just part of.

the narrative.

But there's just

no getting around it.

I know Vishal.

I like him.

Brilliant product guy.

It's an amazing company.

It's de-spacking with SoftBank.

It's just an incredible company.

He's done an amazing job.

God, did he fuck up?

I mean,

you just, that was so tone deaf.

And around the holidays, the company has the money.

I don't think it's going to be four-week severance.

I'm almost entirely positive it's going to be much more than that.

But compare, contrast it with what Brian Chesky did around his layoffs.

He did.

And they were, people were unhappy anyway.

You know, I got a lot of pushback when I complimented it.

They were like, sta-da-da-da.

He didn't do this.

I was like, boy,

no one's going to be happy with everything.

Yeah, I don't.

I mean,

what are your thoughts on this?

I don't, I think it's a speed bump.

I don't really think it's going to affect the company long term.

That doesn't excuse it.

But there's a lot of lessons here around laying.

I remember when my first company,

we've gone 10 seconds without talking about Scott.

So let's fix that.

But my first company, Profit, we, a brand strategy firm, brought in a CEO, raised some money, and immediately went from 60 to 120 120 people, hired, you know, huge, massive hiring.

Business softens.

I think it was the 2000 and

like the, I forget which recession it was.

And I had to call 40 people into a room and say everybody in this room is being laid off.

Yeah.

And it's just, and these are, these are kids who just got out of business school, who had a lot of opportunity, a lot of options, bought into our vision, moved to

San Francisco.

And 12 weeks later, some guy who lives in Noe Valley is telling, sorry, because I'm an idiot and I approve this plan.

Yeah, I've got to let you go and

And here's I think all you can do is there's no it's like there's no easy way to kill someone We've taken cameras out of war zones because we realize when we get a number back that we've killed half a million Iraqis we like to think that they just floated away into Iraqi heaven and we don't it's it's war is fucking gruesome and the reason one of the reasons and it was a worthwhile reason and I think we should have cameras and ICUs and on every battlefield is that there's just no elegant way to kill someone.

And quite frankly, there's no really elegant, humane way to fire someone.

You know, one of the reasons I'm not CEO of my ed tech company right now?

Because you don't have to do that.

I'm done firing people.

Yep.

I've done only a few, and I didn't like any of them.

One of the best explanations of firing, I would point everyone to one of my favorite movies, Broadcast News, where they're firing people in the...

in the in the the station.

Well, you could die when he says, is there anything I could do for you?

He says, well, you could die.

Well, you could die.

And it was a great line.

Grave.

Great.

Albert Brooks.

Come on.

Yeah.

What a great movie.

Come on.

Holly Hunter.

I love Albert Brunson.

William Heard.

Tall Drinking Lemonade.

It's my favorite movie.

I actually own the movie.

I physically see it.

I can totally see you loving it.

Yeah, Holly Hunter.

Yeah.

Yeah.

In any case, there's a line where he goes,

Jack Nicholson is the anchor for the whole broadcast.

And he comes in only for a minute.

He only has a few short scenes.

And he goes, all this because they couldn't program Tuesday night.

And it was just like, you know, he fucked up.

Best line of the movie.

Best line of the movie.

William Heard says to Albert Brooks, he says, what happens when your reality exceeds your dreams?

And you know what, Albert Brooks?

Keep it to yourself.

Keep it to yourself.

That movie is full of great lines,

James L.

Brooks.

Fantastic.

He loves the newsroom.

James L.

Brooks loves the newsroom.

And loves it.

It's such a good movie.

So it's really, I'll tell you, influenced me a great deal.

Anyway, he fucked up.

But let's just say he fucked up.

And here's an investor telling you that he fucked up.

I also think he fucked up.

All right, Scott, one more quick break.

We'll be back for predictions.

Maybe you can give me one of your fancy predictions that you couldn't get out to the people.

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Okay, Scott, give us this week's predictions.

You must have, you have like a boatload since you didn't get them out to the people in your in your AWS ruined situation that you were working on?

So I have a bevy of them, but I'm going to

be a big one.

I'm going to be a coy little minx here.

Okay, give me one of your bevy.

Just peel off a grape, please.

What I'm going to do, what I'm going to do, and this is almost as much fun, is I'm going to review verbatim my predictions from

December 2020.

This is where we pat ourselves on the back part of the show.

Okay.

Well, I got some wrong, too.

All right, okay.

So

we'll go through them.

I predicted when Bitcoin was at $22,000 that it would hit $50,000.

And so I got that right.

I put that we might work.

I was especially fond of

the

language there, that they would get public.

I think I got that right.

Okay.

I put, and this is when Airbnb was a private company, I put Airbnb was going to hit $200 a share.

They priced at $68,000.

I said it's going to hit $200 a share.

I got that right.

I said CNN was going to go behind a paywall.

I got that right.

Sort of.

I said restoration hardware would hit $1,000 and Sonos would reach $40 because I thought there'd be such a massive dispersion of value and assets that would decentralize from offices to homes.

I got that half right.

So Sonos hit $40.

Resto never hit $1,000, although it's up about 40% for the year.

Okay.

I said, and you've heard this over and over, I predicted that Apple would acquire Peloton.

I got that wrong.

Yeah.

But someday, this is going to be like your Jack Dorsey thing.

We'll see.

We'll see.

Broken clock, right?

Broken clock.

I predicted Roblox stock would double from its offer price within six months i was wrong it's gone up about five-fold um and this one you've i think you've heard this before twitter hit sixty dollars and dorsey is ass ousted hello champagne

though there was somebody wasn't ousted whatever hello he's gone yep and uh oh and i my my i always get political and angry i my prediction was robin hood is the new is the new menace And you can decide if that's right or wrong.

Anyways, last year was one of my better years for predictions.

We'll see.

We'll see.

Very good.

Okay, give me one, give me a, peel off a little grape here.

By the way, Airbnb stock is now in 182.26, but it did hit 206 in November.

Come on, I made the prediction.

Was it 68?

Give a little love to the dog.

Rub his belly.

Rub his belly.

Rub your belly.

Okay.

Rub his belly.

By the way, we just, we just spay Leia, and she has this big incision along her torso.

So we have to wrap her in towels.

She loves to go to the beach, obviously, as does every dog.

And she literally sits, she cries when we don't get her out.

And so we wrapped her in dish towels and diapers to create like a makeshift Spanks bodysuit.

It's a great conversation starter.

It's a great conversation starter.

Is that your prediction?

Get us a prediction.

A great day in Spanks.

No, my prediction is the following, and it could get us canceled off a pivot, but

okay.

This is, and this is just human nature.

I don't know anything.

I don't think it's any accident that Brett Taylor was made co-CEO of Salesforce and chairman of Twitter at the same time.

Okay.

I'm pretty sure, first off, this notion that, oh, it was Jack's idea.

Elliot came in, I'm pretty sure, and said, okay, this is fucking ridiculous.

You're out of here.

We'll make it dignified, but you're leaving.

And I'm pretty sure, I think this guy, Brett, is a really talented manager.

I'm pretty sure Twitter, this is just pure conjecture.

I have absolutely no idea what happened here, but that's my conjecture because I think I understand humans and the way these things play out.

I would bet the Twitter board said, Brett, would you

consider being CEO?

And then Brett went back to Mark and said, hey, Mark, by the way, Twitter wants me to be CEO.

And he's like, hello, Mr.

Co-CEO of Salesforce.

And you can be chairman.

But the prediction is simple.

The prediction is simple.

Salesforce is going to acquire Twitter.

We know Mark Benioff wants it.

We know that

he has wanted it.

And here's the thing: this is why things are different this time, Tara.

When they wanted it in 2016, and supposedly his board threw up on it, Salesforce had about a $70 or $80 billion market cap, and Twitter was at 25, meaning there would be like a 25 or 30% dilution, kind of a bent the ranch.

Now, Salesforce, because of outstanding execution, has a $275 billion market cap, and Twitter has a $38 billion market cap, meaning this is no longer a bet the ranch acquisition.

Meaning that Twitter, by virtue of a percentage of dilution, is now 50 to 70% less expensive.

I thought you were predicting that Jack Dorsey was going to buy it from Square because he's at a similar rate.

That might happen.

It'll be, my prediction is Salesforce or a FinTech company is going to acquire Twitter by the end of 2022.

But I'm now.

I think you said this at a dinner with Mark, didn't you?

And caused the room to be.

Yeah, with Mark.

And everyone everyone just went quiet.

Lovely dinner.

Yo-Yo Ma then played.

I thought it was like prom in 1998.

Okay.

All right.

So glad that you're doing this.

I should have gone to that dinner.

We'll see where it goes.

I think it's interesting to lay it out.

This is not, this is Scott's predictions, people.

So don't like bend my ear of whether he's right or wrong.

This is his analysis.

It's called.

Yeah, lucky palmer lucky.

Go get lucky on your palm or somewhere else.

He did not insult you.

Let me be fair.

He did not insult you.

He insulted him.

You should be nicer to others.

Okay, I'm going to try.

I'm going to try to be nicer to him.

I don't even know him.

I'm just going to remove each other from our consideration.

Anyway, you're so not used to getting attacked.

You are so used to it.

It's just, no, no, you've gone from

too much shit.

You are now a protected class.

No, I am used to being attacked.

It's a whole open season on the 50-something white.

I have my mother.

I'm used to being attacked.

I'm very good at being attacked.

Lucky.

Lucky.

Lucky.

Lucky.

I was made.

I am made for being attacked.

Anyway, yes, she's coming down for Christmas.

That should be, that'll be an interesting time.

Coming down for the holidays.

Oh, yeah.

It's beginning to look a lot like lucky.

Yeah, it is indeed.

Anyway,

we will see your prediction.

I think it's really interesting.

I think I like these creative analysis of these things, and I look forward to when your prediction show is, and then we will do it.

And thank you for going over your predictions.

Those were very interesting.

Anyway, let us read us out and we will be back on Tuesday for more, for Tuesday for more.

Yes, absolutely.

Oh, that's right.

We're coming back, right?

What is our holiday schedule?

Do we need to give the viewers?

Let me look.

We are next Tuesday.

I think there's some episodes coming up of year-end things that we've already taped.

And then we'll be back live again on the 6th.

We'll tape on the 6th of January for the 7th.

So we'll have a little time off.

But we have taped some very lively and saucy shows for you for year-end.

Saucy.

You know what I'm doing on Wednesday?

You know what I'm doing on Wednesday?

What?

I'm taking taking my boys to the chelsea everton match in uh london to see belgian striker romalu lukaku oh my god where are you going

to london you're going to london i'm going to london yeah when over the weekend and then i'm going to thailand oh they didn't tell you oh wait should i give our producers a heads up okay bring in katie kouric so you're not flying in for my birthday it's your birthday well then i'm not going yeah you're not bringing in the jet scrambling the jets for carrotswisher that's right i'm going to see westside story by myself that is my gift to myself by the way.

It got great reviews.

Westside Story.

Steven Spielberg did it.

It's been written, Kushner, who did Angels of America.

And I am so looking forward to it.

I'm going by myself.

My son is going to cook me dinner.

Amanda's going to make dessert, my favorite dinner, which is he makes fresh clam sauce and fresh pasta.

And then I'm going to the movies by myself to see my favorite musical of all time.

And it got stellar reviews.

Stellar reviews.

That's really great.

You're going to London.

I'm going to a Westside Story.

In any case, I will be doing the dinners from now on, Mark Benny off.

I apologize.

I'm so sorry, but

it is what it is, as they say.

It is what it is.

Who produced today's show, you may ask?

Lara Naiman, Evan Engel, and Taylor Griffin.

Thanks also to Drew Burrows and Neil Silverio.

Ernie Entertod engineered this episode.

Make sure you subscribe to the show on Apple Podcasts.

Or if you're an Android user, check us out on Spotify or frankly, wherever you listen to podcasts.

Thanks for listening to Pivot from Box Media.

We'll be back next Tuesday for another breakdown of all things tech and business.

Romalu Lukaku.

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