Facebook's Russia problem (pt.2), Zoom's soaring market cap, and a prediction on Shopify

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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.

Again, Scott, we meet.

This is three times this week.

There you go.

What do you think about this?

There you go.

I know we did our pivots.

Our last pivot schooled was yesterday, and I thought it was really strong.

It was fantastic.

I hated yesterday's session less than I've hated any session in a long time.

Really?

That's such a nice way to talk about a relationship.

What did you like about it?

Why don't you stay in the positivity zone, Scott?

I think

President Frederick, is that his last name?

Howard?

I thought he was inspiring.

You know, a guy who lost his dad at three, from, I believe they were from Trinibad, Tobago, who went on to be a surgeon and then be the president of what is probably the top-ranked historically black college in the world.

He's just an inspiration and he just struck me as incredibly like just the kind of guy you want shepherding an important organization.

I thought

it made me feel nice.

I thought the superintendent from LA Unified School District.

Yeah.

It just, it makes,

made me feel better about America that thoughtful, smart, generous people are running important institutions.

We hear every day about how,

I don't know, just screwed up everything is and how

in related news, Trump says to vote twice.

Yeah, yeah.

And bags of soup, just to be sure.

Bags of soup.

Bags of soup.

Did you hear that one?

God.

I haven't heard bags of soup.

He thinks some protesters throw cans of soup.

And so he says, people bring bags of soup and then they say they're for your family, for your family.

He repeated it.

It was like a demented rant about

the soup thing.

Honestly, it's ugly.

Yeah, you do.

You're right.

You look at today's news, you know, the whole Kenosha thing yesterday, and you look at like they're fighting over whether they're going to fund cities that have anarchist tendencies,

you know, the threat to do that and all this other, you know, fighting.

And then Cuomo stupidly responds that he needs an army.

Like the whole thing is like, please stop.

And then you have

a guy like Frederick and Austin Buehtner who is

justifiably concerned about the fate of these kids who are not getting education K through 12

and trying to come up with all kinds of creative ways.

And of course, it's Los Angeles, so they have access to some celebrities to do reading and things like that.

And it was like at least they're trying something, right?

They're trying fresh things to try to get people

some decent education at least.

And

speaking of upcoming disturbing events,

the the debates.

It's going to be like a squabble breaks out in the dining hall of El Rancho Relaxo senior active learning community.

It's just going to be so depressed.

It's going to be so strange and weird.

I feel like someone's going to take a swing at someone.

I think it's going to be Biden who takes the swing.

I think Biden.

I'm not looking forward to the debate.

I just think it's going to be a ray.

Yeah.

Well, maybe Biden.

I think Biden's just got to really go for Brogue.

You know what I mean?

You are a lying piece of shit, essentially.

Like, I i don't know what else he can do he can't be or like he'd be affable and nice like aren't you all i think the way to go is he sits there and he goes listen this guy this guy aren't you tired of this guy like don't you want to stop

aren't we all exhausted i will bring you calm like you do you remember do you ever see the the movie um primary colors remember the candidate who did that remember yeah and he was winning it turned out you know

and larry hagman's character was that senator or governor from florida and he suddenly surged because he just said, I just want to calm everybody down.

Everybody needs to calm down.

And he started surging.

And I think that's kind of the way to go.

Like, first of all, watch out for all these October surprises.

There's a dozen of them that are on the on the list, including the AG from Kentucky.

Say if they decide that they're not going to prosecute the police for Breonna Taylor, they could do a bunch of things.

Like there's a whole bunch of things that people are floating or

there's lots.

There's lots of things um that would get people like overwhelmed is if you just start to say let's let's stop the chaos i think stop if i were if i were my advice to the biden team don't debate

i think if you i i would just say look first off i i don't think i i think this could be a disaster for joe biden um you know i still i'm you're worried about joe but i'm worried i think everyone's worried i think we're worried and i i think you can't i think the excuse is a valid one.

And it's to say, look,

you can't debate somebody who is not inhibited or in any way constrained by this thing called the truth.

Trump could literally show up and say, I found out last night from the CIA that if Biden is elected, Russia plans to come into Ukraine.

I mean, he could just say anything.

Yeah.

And with the quote unquote full power of the presidency, and he could just

make up so many outrageous lies about the state of the world and that he has access to certain information.

And I'm here to announce it X, Y, and Z.

Like dark shadows.

I just don't think they should debate it.

I think I say, look, we can't show up with one hand tied behind our back called our commitment to the truth and integrity.

We're just not going to do it.

Yeah, I don't know if he could do that.

Do you think people would put up with like the kind of

things that Republicans will say?

He's too scared to come out of the basement, hiding Biden.

That's their, they spell it on.

No, it's a fair point.

I got to be honest, I'm nervous about this.

People give people People give Trump, you know, they give him a, I think he's actually very, I don't know what the term is, good on his feet.

If you think of what's thrown at him and his ability just to look serious and honest and not be embarrassed, I just think he's very good on his feet.

And I don't think Joey is.

Yeah.

So, anyways, I'm worried about it.

But, anyways, bigger, bigger.

Well, bigger issues.

One ugly, exhausting country, if that's something you think.

So, anyway, there's all kinds of things happening.

All right, but let's get on to big stories.

Yes.

So, Facebook and Twitter both say they found interference from the same Russian group that meddled with the 2016 election.

Big surprise.

Why wouldn't you try again if it worked the first time?

Both companies say that disinformation from fake accounts have been proliferated on social media platforms.

The Kremlin-backed group called the Internet Agency has been using fake accounts to push voters away from the Democratic Biden-Harris ticket.

U.S.

intelligence agencies have been warning Russian election interference for months, although the Trump administration tried to block that information from coming out and are trying to block telling Congress about anything.

But unlike the last election, this time, the Kremlin has hired U.S.

writers, young U.S.

writers, to proliferate the content.

And then Facebook decided the week before the election to limit all kinds of information,

political information, political ads.

I don't know how much that will help.

What do you think of the situation?

I think that Kellyanne Conway should announce she's starting a SPAC and has acquired the internet agency and is taking it public.

I don't, I think we're literally kind of one batshit, crazy move away from someone saying the internet agency isn't, isn't a covert actor on behalf of governments looking to hurt us.

They're not our adversaries.

They're simply a communications firm.

Yes, exactly.

That they have some of the biggest clients in the world.

I mean, Palantir is about two steps away from the internet agency.

Palantir is saying, you want to talk about a room full of, I don't know what to call it, contradictions.

so kara have you seen the information that palantir filed sent to their investors regarding their direct listing no i have not yet oh my god

who am i kidding you have a life only those of us who don't have a life so basically they start out by saying our government agencies have let us down and most will collapse and others will be challenged so imagine it's tantamount to accenture in their ipo filing announcing that their growth strategy was to bank on just how stupid corporate america and their clients are they go on to say that the the non-Silicon Valley, Silicon Valley firm, and that Silicon Valley has taken a wrong term and is molesting the data of consumers.

And it's like, well, isn't your founder the first money into Facebook?

Yeah.

And then irony is not dead.

Irony, the whole thing is a

miracle of hypocrisy.

And you know what's most interesting, I find, is that all of a sudden, all of a sudden, right?

Peter Thiel, who spoke at the RNC convention last time, has decided about the time it looked like Biden was more likely to take the White House, has all of a sudden decided to distance himself from Trump.

Because here's the thing about being an oligarch where you leverage your proximity to power for corrupt means.

You can't get too close because if that person that you're leveraging that proximity to gets kicked out of office, things could get very ugly for you very fast.

And then the guy, Alex Karp, has all of a sudden decided he's a socialist.

I mean, it's just this whole thing reads.

They're awful.

Among all the awful people in Silicon Valley, I find them to to be the most awful i would have to say it's just weird like we're libertarian but not if we can surveil your data we hate big government unless they're buying our products and by the way this company spent a one and a quarter billion made 750 million lost 500 million or lost like 60 cents on the dollar the u.s government last year granted spent a trillion more than it took in but that's about 30 cents on the dollar it feels to me like uncle sam should be advising palantir on how to run a business yeah it's just you read this thing it's like the rudy giuliani of tech companies nothing they say

nothing they say makes any sense.

Just wait 60 seconds and they'll contradict.

I'll do that one.

That's a good one.

They'll contradict what they said before.

And their strategy is just to muddy the waters and make you feel bad.

And you're like, okay, I just give up.

It's Palantir.

It's technology.

It's that crazy guy, Peter Teal.

You know what we need to do?

What do we need to do?

We need to we work this puppy.

We need to we work this puppy, Scott.

Let's do it.

They'll kill us.

This group will kill us, of course, but they can't figure this shit out.

The three of their clients, 30% of the data, they were funded by the central intelligence agency such that they could turn around and say the government is a bunch of idiots.

They spent $500 million on marketing.

They overpay themselves like there's no tomorrow, but claim they're socialists.

I'm just, I don't know where to start on this.

Let's make this one of our narratives.

I feel like we should.

Let's make the investors aware of the situation.

Okay, at the same time, at the same time.

They clearly have a couple of very interesting products that help stream together and glean insights from unstructured data sets.

I do like the fact that they're calling out these companies for their bullshit around.

We're going to do a virtual walkout because we don't like the fact that we're working for the government.

Well,

the U.S.

government, in my view, regardless of we have a bad king or not, is the most noble client in the world.

And if you want to have a virtual walkout, if you want to be Cesar Chavez, if Cesar Chavez were a total bitch, then fine.

But I like the fact that Palantir is saying, look,

the government is a great client and we're proud to be a part of it, but not brought to you by a bunch of libertarians.

I just,

yeah, what is going on here?

I don't know.

You're very exercised, by the way.

Cesar Chavez was never a bitch.

Let's just say, no, that's what I'm saying.

Cesar Chavez is a hero.

Cesar Chavez was people who actually wanted to make change.

They actually said, I'm going to put my physical person, my financial future.

I'm going to walk across this bridge and potentially get my head bashed in, not do a virtual walkout from coding up Facebook.

Here's what I'm going to ask you: what are we going to do about this?

We're going to we work this thing.

I'm telling you, we need to call attention.

We should do dramatic readings over the next few weeks of the Palantir.

when are they going pale that'd be hilarious um i don't know

the thing is the thing is about palantir that freaks me out is because it's a tech company yeah because and by the way they use i love i've did the world cloud word cloud they use the term peter thiel or alex carp 131 times which is second only to the number of times a ceo is mentioned in s1 to you guessed at the 2019 jesus christ of our generation adam newman most ceos are mentioned an average of 30 times in their s1 filings these guys i just but the problem is palantir could go out and it could go out and get a big bump because everyone's so horny for anything that's tech right now.

Yes, that's true.

That is true.

That is true.

We work, WeWork was literally like, it screamed like it was the most fraudulent non-fraud company in the world.

It was flying to Bombardier.

What is this one?

It was flying to Bombardier Global 5000s into a mountain every week.

It was losing $100 million a week such that they could rent desks.

It just made, I mean, that really was like crazy town.

This is a company with interesting products.

Yeah.

But it's been around a while and it can't figure out a way to make money

so i don't i i'm just this thing kind of it's haunting me kara it's haunting me it's haunting the dog let's put that to use let's use your weird obsession with things and your your your despair your overwhelming despair to something good let's do that let's work that but we got off topic on the facebook embers of depression burn bright kara they burn bright i say we're going to use

power they're literally my fuel unfortunately they're noxious old economy fuels and they have huge emissions and externalities on the dog.

It's not easy being depressed in anger.

I'm enjoying our little therapy session, but I'd like to get back to Facebook.

As I noted, the freelance writers were working for the Russians.

What do you think of this effort to hire U.S.

people to do this?

It's just content is where they listen.

Everyone who's listening right now, Facebook banning political ads will not matter.

It's the content that matters.

It does not matter.

These ads don't matter.

They don't matter.

So, what do we, what, how

Facebook.

You made a big deal about that yesterday, about them giving away money.

Well, this is, I mean, talk about again, the mother of all inconsistencies.

Mark Zuckerberg has given $300 million

away to

try and stave off election interference, which is like Jeffrey Epstein donating money for young gymnasts programs.

know what, I don't know where I got it.

I'm going to let that sit there.

I'm going to just live it right there.

Go ahead.

Keep going.

Here's what it is.

Okay.

I'm going to give one third of 1% of my wealth to try and pretend that the company responsible for the other 99.7 isn't one of the worst things to ever happen to America, such that I can make more and more.

It's just such a ridiculous,

it's such a lie.

It's such a lie.

It's like a non-geredodatus must seriously be like tearing all that wonderful hair out when you see Mark Zuckerberg gives $300 million to try and fight election interference.

It's tantamount to being a woman who is so grossly negligent, your platform is weaponized by someone who becomes an illegitimate president who goes on to put people on the Supreme Court that consistently erode a woman's rights.

And then you write a book about gender balance.

It is so

hypocritical.

It is so obnoxious and gross, but there it is, $300 million to stop election interference.

And it won't matter because, listen, the Homeland Security Department blocked warnings of Russian campaign against Biden.

They declined to publish memos about it.

And so he put people in power that are now

to get them to unblock it is how you would do this.

So we know what's happening.

I mean, it's just giving money now is really.

It's simple.

It's simple.

And I do think there's a learning here.

Thanks, Mark.

Adam Brandenberger, who is one of the top game theorists in the world and a colleague at Mohn.

Game theory,

when you're trying to incentivize behavior or disincentivize behavior,

you need to make the possibility times the fine greater than the likely upside.

And that's where we have screwed up as a citizenry and as a public because

if you're Robin Hood and you sell your deal flow and you don't disclose it to investors and you're selling it to people who will pay more for your deal flow because your investors are young people who don't know what they're doing and you don't disclose that to the SEC, which you were supposed to disclose, the SEC says, that's it.

We're angry.

We're going to find you $10 million.

But when you're raising money at $11 billion market capitalization and you don't want to do anything including comply with the law that gets in the way of your growth, that is a calculation that says, okay, we should absolutely continue to break the law.

And when you continue to pervert our democracy and the potential fine is just not there, it's $5 billion fine from the FTC on a $700 billion company.

The game theorist at the government has totally forgotten his advocacy.

And all we are doing is incenting.

We're saying to these companies, please break the law.

It's the smart business strategy.

So what do you do?

It's simple.

You say, for every instance of a bad act, we executed the Rosenbergs.

We took a mother and a father with young children.

We lined them up against a wall.

We put hoods on their fucking faces and we shot them in the head when they

conspired with a foreign enemy.

And here, here, we take 0.3, 0.01%

now of someone who is effectively complicit in conspiring with a foreign nation.

It's very simple.

Make the find such that the calculus and the game theory goes, okay, shit just got real.

And we got to pay.

We've got to stop.

We've got to figure out who is standing.

Why would this administration do that?

They're doing the exact opposite.

They're pushing Russia.

So,

you know, it's all perfect for them.

It really is.

It is, it's, it's, it's,

it's so, so, the astonishing inability to block the Russians is treasonous at this point.

It really is.

It's really quite, it's, it's, it's an amazing thing that this government doesn't want to stop the Russians and they aren't passing the correct election security and that anybody advantages themselves.

Let's call Facebook, don't ban political ads, ban political content from that you are aware of from Russia.

You know what I mean?

Ban that and that that might be something you could do and ban it now actually.

Ban it yesterday.

Until one of them does a perp walk, this isn't going to stop.

They've overrun Washington.

They've overrun.

They have more money than any fine we can come up with.

Somebody has to do a perp walk here.

All right.

Probably will be us in that way.

Anyway, we're going to take a quick break.

I like that we're going all like

that.

I will definitely do that deal for you with Netflix.

All right.

Okay.

Oh, yeah.

We would be good in prison.

I wouldn't be listening to you.

Harry and Megan just did a deal with Netflix.

You saw that?

Yes.

Yeah, I did.

We'll talk about it.

Who gives a fuck?

Move to LA, buy a Porsche.

Yeah, join the Soho House next.

We don't care.

We'll get invited to everything.

We don't care.

They will get invited to everything.

Anyway, we're going to take a quick break.

We're going to talk about Zoom's soaring market cap and a listener question from Australia.

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Okay, the revolutionary.

Che Guevara and I are back right now.

Zoom shares rose 40% after reporting their second quarter earnings this week.

The company's revenue quadrupled since the last year.

Not a surprise.

The market cap now stands at 120.

It's still not that much, the revenue FYI, but it's the market cap stands at 129 billion.

Zoom averaged 148.4 million monthly active users in the quarter up from 4,700% over a year ago and is now a bigger company than IBM.

Scott, that makes sense.

What?

That makes sense.

What?

That makes sense.

Please explain it for the people.

Look, there is,

I generally believe, going back to Robin Hood, that it is young men who are very prone to those

sensors being tickled around gambling.

And when you start to think in a market like this, it just goes up.

You actually begin to believe that you're good at this.

I fall victim to this.

Whenever I buy a stock and it goes up, I think, wow, I immediately credit my own intellect and my own skills with the stocks that go up.

And then I blame the market when they go down.

And when you start, when your stocks start doing well, you start thinking, well, maybe what's this thing called margin?

And what's this thing called options?

And with this stimulus, stimulus, which is trillions that has come into people's hands.

And by the way, the savings rate has never been higher, which means that we didn't need to put the stimulus in the hands of the 90% of people who haven't lost their jobs.

Anyways, anyways, so what do they do?

They lever it up on Robin Hood.

And all of a sudden, there's this marginal or incremental flow into the big name stocks that everyone says is the future.

People think are going to come out of this pandemic even stronger in the right.

And we're seeing a

total disarticulation from valuations and numbers.

And as I keep saying, my colleague Aswatamotor and calls them story stocks.

And Zoom, it's hard.

If you're an individual and you have a thousand.

Story stocks.

I like that.

If you have a thousand, two thousand, five thousand bucks to go and buy a stock, you're like, well, okay, what's the thing in my life I need to be mindful of?

Okay, a global pandemic.

What is the one company that I can relate to that I know was doing well in a pandemic?

Zoom.

I mean, it's just literally ground zero, but the numbers here have gone so bad shit, crazy.

And the thing is, you don't want to bet against it because it can just skyrocket.

But here's what is likely happening at Zoom, and it's likely happening at Shopify.

And that is every investment bank that calls Zoom right now and says, I have an idea, gets their call return.

Because if you are sitting on currency

this inflated, you go shopping.

You got to go shopping.

You got to like, so build it in, build the value in.

If you're AOL, if you're Steve Case and you're like, okay, I'm sitting on a pile of shit right now at AOL, or let me put it, the world is moving away from me, but people seem to think my firm is worth $150 billion.

I'll go buy this boring shit called book publishing and cable companies that actually spend up real cash.

Yeah.

You know, steal in the ground, if you will.

If you're Shopify or Zoom, I can't imagine you are looking.

What do they buy?

What do they buy?

That's a really interesting one.

I'll put it back to you.

What will make them,

I don't know, Roku?

I don't know.

What?

What?

Like all of them.

I think it would be very interesting or, okay, Zoom.

How do they get into the home?

I mean, I'm almost saying everyone.

Roku, right?

Roku is the one you always.

Yeah, but that's entertainment.

This is about communication.

This is about.

This is an interesting one.

What if they bought?

What if they bought a small telco?

What if they bought Sprint?

I mean, what if they bought, this is a $120 billion company.

What if they bought it?

Explain Sprint to me because like you want to, you would be explain that to me.

Yeah, I'm just saying, okay, so you have, how do they buy it?

If I were them, I'd buy a telco.

And I don't know what their next biggest market is outside the U.S., but they're about communication, right?

So it's not entertainment.

I don't see it.

I don't see how they buy, you know, I was thinking, oh, Spotify.

I'm like, well, that doesn't really make sense.

They're in the world, they're in the world of connecting people via new means or new modes of communication.

And so I'm trying to think, like, who's the number three player?

Like, how much is T-Mobile?

Again, T-Mobile merges Sprint, which is SoftBank.

It's probably too complicated.

But I wonder if Zoom has, I don't know what Zoom's presence is like in Europe, but they would make a big splash if they started acquiring some of these small

and then do what with the telco to provide all communication services.

Basically take on Skype, WebEx, try and be the next major communications platform globally.

I mean, I'm literally, this is me touring

about Slack.

What about Slack?

That is really interesting, Carol.

Really?

We should have an investment bank.

But but the problem revolutionary investment the problem is you know it's like uh

diet soda and diet soda doesn't make doesn't make

it

soda and soda doesn't make doesn't make a gin and soda or a vodka soda it just makes more mixer they need to go buy what i would call i don't call an old economy company but a company that has ebita

because at some point the music is going to stop here right so when does the music stop when do you see a year from now year from now we have a vaccine we have president whoever.

What happens to Zoom?

People don't use it as much.

Now, there is these trends towards working from home, but I think people want out and go back to the office.

I think people are like dying to get out of this Zoom situation.

Well, you were going back, but we're not going back to the levels we went to.

The building place of my first job in Morgan Stanley, 1251 Avenue in the Americas, they track how many people in the building.

On an average day, there was 8,500 people in the building.

Now there's 500.

So maybe it goes back to 4,000, maybe 6,000.

It's not going back to 8,500.

No, I know, but I don't don't think we'll be in a constant Zoom.

Yeah, in a Zoom bump.

Yeah, I agree.

So, but who knows about the markets?

About the time everyone is convinced the markets are about to crash, it goes up another 30% for two years.

You know, as it gets to 97, everyone thought 97 was going to be the big crash.

Yeah.

But these guys with their currency, I mean, you absolutely, you want to get out there and be acquiring stuff.

I mean, even

that's what you're seeing with these SPACs.

This feels very.

I mean, here's the thing, Karen.

I don't know if you thought this way.

I'm starting a SPAC with Lindsey Lohan

coming up now.

I just heard of, since I wrote about SPACs last week and everyone's like, what do you mind about SPACs?

I've heard about a dozen more crazy freaking SPACs.

People are like, oh, I'm doing a SPAC.

I'm like, what?

Like everyone has.

I've been contacted by three people.

A media one, right?

A media type.

I'm getting called by education SPACs, people who want to go education.

I don't know if you saw it, but Bill, actually.

They need to hire you for the expertise, right?

That's what a lot of people I know are getting hired for the expertise to help them figure out what to buy.

All they want is credibility badges that signal we know what we're doing.

Or in my case, a crazy badge.

I don't know, but I'm getting calls from folks saying, hey, we want to talk to you about the SPAC we're doing.

I'm like, boss, that ship has sailed.

SPACs typically underperform the market over the long term, but this year they're overperforming, which is, I mean, I don't know if you felt this way in 99, but I thought after I got run over by a truck and then it backed up again and ran me over again in 2000 when the dot-com bubble burst, I thought, all I need is one more bubble and I'll be so much smarter this time.

And we're here again.

And so the question is, the question all of us, I think a lot of us are asking is, okay, what do you do?

Does that mean you sell everything?

Because if you'd sold everything in March, you would have missed 40 to 60%

in your stock.

So it's kind of like, and all of the, all of the literature says you don't ever really want to be fully out of the market, that there's a small number of days that if you miss them, you miss all the returns.

You know what I do?

What do you do?

I do nothing.

You do nothing.

Yeah.

Yeah.

I just sit here and I hope to God that it won't be a mess when I'm 85 or whatever.

Yeah.

That's.

I just don't, I look away.

I have developed a distaste of money.

Like I make a lot, I make a good living, but I literally don't pay any attention to it.

I used to get so in Scotson and I can't really buy and sell stocks.

So I just don't worry about it.

I just stay out of it.

Yeah, I think about people, people

who are wealthy have tell this bullshit lie that they don't think about money anymore and they're not motivated by money.

I think about money.

I'm anxious about it every day.

I don't mean I don't think about it.

I don't think about the stock market.

I can't.

I can't.

No, no, I'm not saying you're right.

I'll never time it.

I'll never time it right.

Huge source of anxiety for me.

I know.

You like them stocks.

Think about it all day.

I never care about stocks.

They always end up going up.

And if they don't, I'll wait tables.

I don't know.

I'll figure something out.

I have made some new investments, though.

I'm investing in private companies now because I just can't.

Yeah.

Yeah.

I'm investing in health tech and ed tech.

Good.

I will announce on the program when I've actually, when those investments have closed, is I want to disclose my holdings.

I understand you're going to be teaching for the LA Unified School System.

You and I are going to do a class on podcasting.

All right.

Yes, we are.

Yes.

Yesterday, we promised the superintendent of Los Angeles, Scott, is an alum of the Los Angeles Unified School District.

We're going to teach a class on podcasting.

University High School, for those of you who didn't tune into Pivot School, University High School, my high school that I went to now has the largest proportion of children who are homeless of any public school in Los Angeles.

That affected you greatly.

I saw your face.

You were like, wow, we got to do something.

Don't you feel as if, I feel as if a lot of the kids when i think about i got a good education valley unified not a great one it was good not great but i got it it got me into ucla which was amazing don't you feel like there are millions of kids reaching out to i won't lump you into this but to unremarkable people such as myself who had remarkable opportunities because america loved unremarkable people and screaming help us I mean, just help us for God's sake.

I think these kids are remarkable.

I have to say, I don't like many adults these days, but I love kids.

So that's where we're going to focus.

That's where we're going to going to focus.

I'm going to teach them how to podcast.

There you go.

Hopefully, we'll create a little Joe Rogan.

Never.

No, but the opportunity, I was thinking about this yesterday.

I wrote up a thing for Superintendent Budner.

The real opportunity for jobs is what Rebecca and Erica do.

It's behind the mic.

Everyone wants to be front of the mic, but the opportunity is in sound, producing, editing,

because those skills are much more applicable as opposed to the attention holding.

That is correct.

We will stress that as school teachers.

You and I are going to be school.

You're school marm.

We're going to become school marms.

All right, Scott, we have a listener mail.

Great.

Let's go there, Rebecca.

You've got, you've got.

I can't believe I'm going to be your mailman.

You, you've got mail.

G'day, Scott and Cara.

It's Nick from Australia here.

The Australian government's proposed a law that will force Facebook and Google to share some of their ad revenue with media publishers.

Unsurprisingly, our news industry loves the idea, while Facebook and Google are just about ready to declare war.

Facebook's threatened to block all news content from its platform if this law is enacted.

So my question question is, do you think they're bluffing or do you think they're willing to take a hit to their operations in Australia if it discourages other countries from following our lead?

Thanks.

Good day.

I love an Australian.

I love an Australian.

On the Barbie.

You know what?

I got to tell you, I love an Australian no matter what.

I don't know what it is.

It's very likable.

Wonderful.

Although troubled, troubled country, but also trying different places.

Anyway,

let me...

Have you been to Sydney?

Yes, many times.

Have you been to Melbourne?

Yes, I love Melbourne.

They're wonderful.

I haven't been to Perth.

I haven't been to Perth.

Quick scatter about Perth is important.

The most remote city in the world is identified by a city that has over a million people, and it's distance away from another city with a million people.

Perth is the most remote city in the world.

Which is why I've never been there.

I've never traveled.

They have farms just off the shores.

They love us in Australia.

I went there for a tech event.

We should go together.

It's a wonderful country.

It's kind of.

I like Melbourne more than Sydney.

It's a lot of bullshit.

It has a lot of bullshit.

There's a lot of bullshit there.

Anyway, in any case,

all right.

Listen, Nick from Australia.

Not a surprise that Facebook's trying to play hardball on this issue.

This is an issue that's been a big deal in Europe, a little bit here.

There's not been as much agitation by US publishers, but certainly in Germany and other places, of them basically using the content of other people's sweat of their brow and sucking out their VIG.

And this is something that I think Australian publishers should stick with.

They will, they're not bluffing, they will take it off the platform, and you're going to have to live with it.

That's the, that, you cannot make a deal with this particular devil on these issues.

They are just using your content for their own purposes.

They are never going to help you.

I have, oh, I have been bugged by Facebook executives to put my content on their site.

And I'm like, why?

There's nothing in it for me.

There's nothing in it for me.

So I think this is, you got to stick with it.

They will absolutely remove content.

They should be helping media.

They are not interested in it.

Scott?

Yeah,

the problem is

I actually made the mistake of trying to read some of the legislation.

It's really bad legislation.

It's very much just

pretending to be

legislation.

It's just, it's just, simply put, it's just targeting Facebook and Google and trying to create all these

gymnastics to somehow exonerate everybody else.

Look, and you brought this up around banning TikTok.

And that is banning TikTok, it makes sense.

You look at China, as Professor Wu said, and say, okay, they've banned Air ReTech, American Tech App.

But unless you create thoughtful legislation that applies the reasoning and the consistency across different companies, you end up in

a society where it's just whoever's in charge makes these decisions.

And that's

the point of a liberal democracy, the liberal democracy is we have institutions and laws that are applied across all companies to create consistency and momentum and logic.

And the problem with this legislation is it's similar to this, this notion we're going to ban TikTok.

It's just kind of a one-off that is hard to do.

What would be the legislation?

Is there legislation or what?

Or do publishers just have to get together and just decline and stick to each other and say, we're not going to

do that?

I think there's probably the best way to do it would be some sort of tax on the ad model that every time you have a robot or an algorithm decide to serve an ad, there is a small tax because if A, we have this very unhealthy gestalt in Western democracies, especially in the U.S., where we encourage companies to invest in automation and algorithms versus editors and human workers because we don't have to pay payroll taxes on the algorithm.

So I would do something that one, taxes automation, taxes robots, taxes algorithms, and two, encourages

the algorithmically driven ad model has real externalities for our society because the algorithms immediately realize that it's rage that creates more engagement and more ads.

So I would start taxing that and you'd end up with substantial taxes on things like, you'd end up with taxes on thenewyorktimes.com, but they wouldn't be nearly as substantial as the taxes on Google or Facebook and might get them to look at another business model.

But this is, I think this is a, I think this is a tough one.

Or, or I would just say in Australia, we've decided we've witnessed Facebook and Google and other environments.

And we think as a whole, you're a net negative for our society.

And we're banning you.

Now, again, that is executive action that has no consistency.

But I predicted a couple of years ago that a Northern European or a Latin American nation was going to ban Facebook.

And it hasn't really happened.

Well, I think the only reason they're focusing on Facebook and Google is they're on the only game in town.

Like that sort of

covers the landscape, right?

There's nobody else.

Like, so what's the difference if they focus?

It's not a one-off.

These are the only players that matter.

Well, but

you know, like I said, you know, Vox has algorithmically driven ads being served.

You know,

we're all doing it.

We're just not doing it as well.

There's nothing, there's nothing any of these guys are doing that everyone else isn't doing.

They're just much better at it.

And it freaks us out.

But they're beyond better.

They are the only game.

So what do you do?

I think they, you sort of,

I think it's the media players that can't sort of look for government to fix this problem in this way.

But you will not get media publishers have time and again gone to Facebook and Google and with promises that they will help monetize.

They're not interested in it.

They have no, they, and they will lose every time.

There's never been any of these deals, whether it's instant articles, whatever.

They never work.

They never, and they've done it and they don't care.

We always get fooled again.

We always get fooled.

Fooled again.

Like, it's just stop doing deals with them.

Take your stuff off their, you know, off their site.

You know, the first thing I recommended when I was, when I was a new board member in the New York Times, I said, we got to turn off Google.

And they all laughed at me.

I'm like, we got to turn off Google.

We got to get together with the Murdochs.

We got to get together with the New Houses at Condon App.

We need to get together with the Pearsons at FT.

And we need to take all of our content similar to what record labels do, have one union or one organization representing us, and then we need to license it to the higher bidder.

And Microsoft would have come in and paid us billions of dollars to try and prop up binary.

That was a good idea.

Was still doing it.

It's amazing to me.

One of the biggest errors in the history of media

is the old media company letting the Google, Google crawl their information.

All of it.

All of it it really was i never forget them coming to me with face when they did remember they did the facebook uh live videos and stuff yeah and i thought it was already dangerous i was already worried about the dangers of it and they were like you should put your video i'm like why explain to me like i'm an idiot like what what i get out of it well you'll be better known i said i'm very well known i can

i don't know what that okay that that doesn't that's no money that's no dimes or anything like that i was like where's the money that well over time i was like no yeah i am not until you bring

because i do put a lot of stuff on YouTube.

You do.

You do.

There's certain things I think you should use them, you know, when they work.

Like YouTube, you can actually make money on YouTube, from what I understand.

Like you can actually, if you do it right.

I find just the stuff I do, like the prof G show on YouTube, I find it's top of the funnel to drive, drive traffic to something else you can monetize.

I've never been able to figure out a way to monetize it, but I find it's an incredible way to create awareness for another business.

What about Facebook?

You don't use Facebook as much, do you?

No, I don't.

First off, I was one of the idiots to put my videos on Facebook and I got this reporting back that said you had 3 million views and it ends up, what a shocker, that the reporting was not accurate.

Yeah.

And that, you know, companies took a ton of money and put it on Facebook video thinking that they and then jumped and then jumped.

Yeah.

And what they did is they went, they attracted listeners.

I had a, I had a really interesting dinner once in Las Vegas with this.

creepy old ad guy.

I'll never forget it because he's a very famous creepy old ad guy.

You Vegas, creepy old ad guy.

Those are three things I didn't expect in the same sentence.

And he, after discussing how he put all kinds of wireless stuff in his house, which I was like, I'm going to kill myself at this moment.

He was explaining how he would buy an ad on our show, like our thing, and then it would jump

and then it would or on our website.

And then it would attract the kind of people they wanted to, and then they would go where they go next.

And they'd buy the next and the next one because that was

a quantum level of cheaper.

So we're just using you.

And I was like, what?

Like, and he explained it so perfectly to me that I was like, oh, I'm like the, you know, the honeypot.

And then they go off and buy cheaper sites.

And he goes, yeah, it's really easy.

It's the best thing to do.

And I was like, all right.

But most importantly, where did you have dinner in Vegas?

I don't remember one of the

steakhouses that are just like awful and large giant steaks.

I don't remember.

I love Vegas.

You and I will go back together.

There we go again.

More promises.

More promises.

Just saying.

I am going to do something.

Who was I going to introduce you to in DC?

I forget.

I don't know.

I'm in.

I know.

Someone.

All right.

We're going to do that.

Okay.

The dog.

Anyway.

Socialized.

You'll need anyone.

All right, Scott.

We're going to take a quick break.

Great.

This has been a fascinating discussion today.

What is going on with us?

We're having fascinating discussions.

Anyway, we're going to take one more quick break and we'll be back for your prediction.

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Okay, Scott, font of a lot of wisdom today.

We've really missed your predictions on the podcast this month.

What?

I'm fonted.

Font.

Fonted.

A font.

You're a font.

You're a font.

You're an oracle.

Not Larry Ellison's Oracle, but an oracle.

Anyway, we've missed your predictions in the the podcast last month.

So let's give us something juicy.

And by the way, let me just, before you do that, you are correct.

There still is no deal announced for TikTok, as you said, it's going to be.

Right.

It was supposed to be rumored that it was

the next day.

Yeah, I think the Chinese put a wrench in it.

They're going to put a wrench the size of an aircraft carry in it.

Yeah, I think with their export.

Nobody wants to buy a TikTok without the algorithm.

Nobody wants it.

And it really, I feel as if I have to understand these things.

I went on TikTok and you've always said this.

That algorithm isn't that you just wake up two hours later and you're like, yeah, am I still watching these things?

Tie-dye.

I want to tie-dye suddenly.

Speaking of which, my tie-dye wear, you should have answered my son's question, by the way, because it was a good question.

You talked about how professors teach better online.

You gave them tips, but how do students use the platform better when they have to constantly be in a Zoom meeting?

How do you concentrate?

I didn't say he couldn't concentrate.

You should have answered his question.

You were just obsessed with his hair.

Oh, my God.

By the way,

he got a haircut and he still has more hair than you will ever have.

He's still got a massive haircut and still has a lot of hair.

I literally see him at the NYU dorms right now as we speak saying, ladies, do you want to come over and check out my vintage collection of curling irons?

I heard nothing when I saw that young man's hair.

I am so jealous.

It is so good to be Louis Wisher for a lot of reasons.

He literally got half that hair taken off and he still has a huge curly head of hair.

I was like, it's still long.

It's still beautiful.

All I know is the only thing I know that he not doing at NYU is distancing.

If I had that hair, yes, he is.

He is.

I'm telling you, he is.

He just wanted, like, how do you, how do you study online better than offline?

That was his question.

And you've given tips to teachers.

Let's save that for next week.

Next week, I want you to come up with a thoughtful answer instead of making fun of his beautiful locks, which are stunning.

I told him to send the bag of hair to you.

Anyway, all right.

So, your prediction.

Where's the bag of hair?

Where's my bag of soup?

Anyways,

okay, predictions.

Look, when you have,

I remember going to Hungary in like the early 90s after business school and changing a hundred Deutsche Marks.

And I got a suitcase of money and thinking, oh my gosh, I got to go shopping.

Once I get that McGregor, I got to go shopping.

Then you got the Hungry and you realize there's nothing to buy.

But essentially, Shopify

and Zoom have a bag full of forance, which is the old Hungarian currency, and they need to go shopping.

Forensics.

In a currency, any acquisition, they could literally buy the most, they could buy Peloton and it would be accretive.

They could buy.

It's going to Apple, according to you.

Yeah.

Well, I think Peloton, well, that's from a brand fit, it's the most logical one.

We'll see.

Apple doesn't like to make acquisitions.

But anyways,

Apple's going to be in the connected fitness space.

It's a question of whether they go in personally or if they make an acquisition.

But anyways, the two companies that are going to make really, some really bold, you could see a Shopify acquire FedEx.

That's the kind of currency they have now.

It's just so striking how much these firms are worth.

So Shopify, my prediction is Shopify and or Zoom are going to make just these titanic acquisitions.

FedEx, I like FedEx.

That's interesting.

All right.

You need, you still have not given me, you said, you said a telco for Zoom, but you didn't, there isn't one.

It's hard to imagine.

Yeah.

There's just, it's

available.

So what else have it, if not a telco, what else is there?

It's a really interesting company.

You could say a question.

You'd think, well, could they forward integrate into hardware to try and control the device?

But there's very few, very few things available there.

Right.

It's Apple and Google, right?

They could reverse engineer into content and decide that they're offering things like, I mean, for example, LinkedIn is getting into education and they could go into content.

I don't know.

They're going to afford, obviously, go forward or go backward.

Okay.

I don't know.

Cable company, something.

We'll see.

something in communications or hardware i i all right and then shopify fedex i love but not that fedex is that guy's not going to sell yeah yeah but what about there shopify could do some very interesting things what if shopify what if shopify i mean i i don't think he would sell but what if shopify acquired simon properties what if they acquired there's simon um spun their b and c

yeah

basically they went good bank bad bank there's the the stuff where wealthy people go that's on amazing land.

For distribution, not for retail, for distribution.

Basically say as a service, they're providing tools to small and medium-sized business.

What if they provided 7 million square feet on short-term leases to people?

Say, you want a store for six months?

Yeah.

Just test it.

We're very good at this.

We'll put you in six markets around.

In that vet, that thing, I was just walking down the street in D.C.

and I walked, it was in New York.

So many empty, empty, empty storefronts.

What is going to happen with all of those?

Well, we've been if people ask, is it downtown DC?

Just empty.

Yeah.

So essentially, people are asking the destruction in retail.

We're going to lose, I think, 25,000 stores this year.

Is it structural or is it cyclical?

And the answer is yes.

It's going to come back, but it's not going to return to the levels we were at.

We've been saying for 10 years that.

Sandwich shops.

It's all sandwich shops that stay.

America's overstored.

And it's the regression to the mean is still the most powerful force in the universe.

And we're regressing to the mean in a very, very violent way.

but retail is still going to be i mean we're still going to have it's still we're still going to what what retail is going to be in these and who's going to be in these office space i just was like this is like interesting question like let's think about that next week it's an interesting question because now we've sort of like hollowed out retail and delivery i i was just thinking about my relationship with amazon i order I try to go to stores.

They just don't have the stuff, right?

Like they don't have what I'm looking for.

And Amazon always has a choice, right?

There's like six things to choose.

So I was like, I order far too much stuff from amazon or you know i do other sites but i tend to do amazon because you the return policy is so easy um

i hope other retailers do a better return policy because i bought something from a store that wasn't amazon and it was like onerous to return it because it wasn't quite right amazon is so easy it's printing out something and sending it back via ups calling ups yeah but think of it i i think of it a different way think of it as think of it as they're not stores they're distribution centers or warehouses a really interesting company that hasn't been in the news much.

And I wonder if it ends up, for example, an interesting company for Shopify to purchase would be ProLogis.

Oh, yeah.

The largest, one of the most valuable REITs in the world, run by kind of the biggest brain in the real estate industry, Hamid Mogadam.

But they basically set up warehouses next to every transportation hub or airport in the world.

And they've been a huge beneficiary of all of this, right?

Yep.

Yeah, that's a great idea.

Logistics.

It's got to be be logistics.

One of the best pivots in history, Best Buy, that was supposed to was written off for dead and one of the best performing stocks the last 10 years.

Very, very impressive visionary CEO there said, let's stop thinking about our stores as liabilities.

Let's think of them as assets and distribution centers.

And now if you order a flat screen television in Delray Beach, it's fulfilled out of the book of Rattan store Best Buy faster than if you ordered it from Amazon.

So

I'm actually, I think there's probably, from an investment standpoint, a lot of the retailers that have been so beaten down, or a lot of, I would just say, owners of real estate are actually probably pretty interesting places to look right now.

Anyways, we'll see.

All right.

Okay, good.

These are really good predictions.

Scott, this is a substantive show.

Because, by the way, we're not going to be on on Monday because it's Labor Day.

Labor Day.

And so next Thursday, we're going to read from the Palantir thing.

You're going to come back with some thoughts on what Zoom should buy.

We've got a lot of assignments for the weekend.

Okay.

Homework.

Homework.

What are you doing for Labor Day weekend?

What am I doing for Labor Day?

I'm going, I'm packing up the car and heading back to Florida or hopefully

back in Florida.

You escaped Florida when coronavirus was

never go to Florida.

My son calls things the Florida man.

He's like, he doesn't love Florida.

Something dumb happens, he's like, did it happen in Florida?

And I'm like, in fact, it did.

No, I'm at the beach.

I'm at the beach right now.

Where, where, what beach?

Rehoboth.

Rehoboth.

A friend of mine has a house, an empty house.

Oh, right out of college.

I just go down there and get shitty drinks.

No, it's beautiful.

It's very pretty.

It's very pretty.

I'm here with one of my children and two of my children, excuse me.

And then

we'll go back to work on Monday because my podcast is starting soon.

But I'll tell you about that.

That's right.

What's the official launch date of the New York Times podcast?

It's called Sway.

Just so you know, that was out in New York magazine.

Yes, Nick Kwa wrote about it.

Sway.

The gay club are launching a podcast.

You know what?

You made fun of schooled.

You made fun of the name Pivot.

I did not listen to you on naming.

Okay.

Naming is not, you have a lot of strengths.

Naming is not one of them.

Sway.

Is Pivot working out for you?

I thought about that.

I thought of that one.

I thought of

Pivot Schooled.

I'm going to stick with my Sway.

This was my idea.

Yes.

You'll see.

They're doing amazing marketing around it.

The New York Times is doing it.

It's going to be great.

Sway.

Yeah.

Because I have it.

Look it up.

Look up the word and start to see.

You'll see.

You'll see.

It'll become a thing.

It'll become a thing.

All right.

Yeah.

I'm going to make Fetch happen.

I'm going to make Sway happen.

Anyway,

all right.

So, just so you know, we'll be airing a recording of Pivot Schooled, which cares what you're named, episode, The Sharing Capitalist, featuring an interview with Uber CEO Dara Khosrashahi in place of Tuesday's regular episode.

It's a great episode.

It's really interesting.

Although Scott declined to say that Dara Koser Shahi put lipstick on cancer, I was hoping for that to happen, but it didn't.

It was a really great show.

And so were the rest, and especially last week's, this past week's was really great.

And we hope you'll listen to it.

It's for free and

please listen.

Scott, will you read us out?

Today's show was produced by Rebecca Senanas.

Fernando Finite engineered this episode and Erica Anderson is Pivot's executive producer.

Make sure you're subscribed to the show on Apple Podcasts.

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

If you liked our show, please recommend it to a friend.

Thanks for listening to Pivot from New York Magazine and Vox Media.

We'll be back next week for a breakdown of all things tech and business.

Vintage curling irons.

Come to my room.