Big Technology Podcast - Google Layoffs, Netflix Shakeup, and Davos Recap

Episode Date: January 20, 2023

Ranjan Roy of Margins is back for our weekly discussion of the week's tech news. We cover: 1) Google Layoffs 2) Netflix's prospects and leadership change 3) Davos pros and cons 4) Media layoffs 5) Robinhood's new financial publication. For weekly updates on the show, sign up for the pod newsletter on LinkedIn: https://www.linkedin.com/newsletters/6901970121829801984/

Welcome to Big Technology Podcast Friday edition. I am Alex Cantorwitz live here. As always on Friday with Ron John Roy. For our weekly news show, we stream on LinkedIn, we stream on YouTube. If you're on YouTube, and this is working, that's cool. But I know we're live on LinkedIn, and we bring this to the podcast, feed every single Friday. So we're going to talk about the news. It's going to be a supplement to the weekly Wednesday flagship show.

And we're stoked you're here. Ron John, I'm stoked that you're here. I did not know the big technology theme could go on that long, but I liked where it's going. look as i've said it a couple of times when we've done these live shows it um it's definitely going to take a few tries for me to figure out how to do both the recording on riverside for the podcast and streaming and we'll also take questions and that's a situation where you just end up getting a very very long intro as i'm checking all the settings but hey look that's what music's for and uh and now the game did the job it did the job so our

discussion today is titled i hope it's titled on lincoln but it should be titled google layoffs and davos and we're going to talk all we're going to talk about all those big stories let's start with the big news of the week google layoffs what did you make of the fact that the company is cutting 6% of its workforce down 12,000 people it's it's just one of a number of last we've talked about amazon microsoft meta apple hasn't done anything yet but When you think about where Google's headed, does this tell you anything other than the fact that the company just needed to increase margins? I think from the Google layoffs have a number of really interesting layers to it. I think the 12K layoffs they just announced is likely much more just in line with meta laying off 11,000 people, Microsoft 10,000, just trying to cut costs, trying to.

And we can definitely get into reverse their extrapolations. from their growth during COVID. But I think we touched on this last week, what are the new threats to Google search? Are there from G-Chat-G-PT? There was a piece in the New York Times about Sergey and Larry might be back after all this time just flying around on private islands

and going to Burning Man. So I think Google is definitely a very interesting place right now relative to where they've been over the last decade. Right. And Larry and Sergey are back. Like, that is a thing that's happening now. They're in the office, it's working with them. The thing that I find interesting about Google,

so, of course, their profits were down 27% in the last quarter. Their margin shrank from 32. What are they? They margin shrink from, I just had it right down. Their operating margin was 32%. It shrank to 25% in the third quarter. So they had to do that. And I think in some ways, that's completely different than,

or dissociated from the fact that they're now getting challenged from Microsoft with this chat GPT. thing. In fact, they do have the technology that's better. And it's to me a question of will, of whether they will decide to release this in some way. The New York Times story that broke today said that they have about 20 different applications that they want to use this type of technology to release. And the question is, you know, what were they waiting for? Obviously, there were some safety concerns, but the fact that Open AI is doing this right now does make them look a little facility, and that would be the challenge, I think, for Google is can you used to be the safest place

in technology, right? People would say that you'd go to Google and retire. No employees ever really felt threatened there. And can you now really shift the culture to a point where you feel like a more existential threat? You have to be willing to take more risks and you have to keep people motivated knowing that you're no longer as safe as you used to be. So I wonder if you think that's a net good or a net negative. I think, okay, so, so for at margins, I write with John Dureuk, and he wrote a piece this morning sent out around GPT and its threat to Google. And he touched on, to me, what's one of the most important parts of this entire story,

Monopoly. And I think, I think this is a huge net good. And I think Google has not evolved search, has been building all this technology internally and has not released it because of being protected, because when you have a business that prints money and a monopoly over search, you don't need to actually release this type of technology. So only because OpenAI actually released ChatGPT

and scared them and showed the world that this type of technology is possible to use in this way, and we all started talking about the risks to Google Search, are they under a code red? Otherwise, we would have, I mean, this technology, as far as we know, could have just sat in a back room like, I think was it Kodak that was famous for, you know, creating amazing innovation or Xerox and then it just, you know, lived in a laboratory.

So I think this is a hugely positive thing for just technology overall, for competition, that the only reason Google is rushing and scrambling to answer this is because it's out there and because someone is doing it and they see a threat, which they haven't forever. Right. And with the layoffs, do you think that that impacts their ability at all to run after this? No, no, no. I don't think so either. I think the layoffs are 100% around focus. And I think, I mean, again, at any of these large companies that have been doing everything in the world over the last decade that are now, you know, every movie you watch winning Oscars Monday, Thursday night football. I'm picking on Amazon here. but Google is also doing any number of different initiatives. I think it's time to focus.

If they have the technology, if they're artificial intelligence models, they invented the transformer. If they're for real, it's time to actually put that into action. Yeah, well, I think without a doubt that is going to come into action. Now, the secondary question that we ask here is, how did this company let this happen? Reba Haute was on a few weeks ago talking about how companies really didn't mind about overhiring during the COVID times because even if they over-extended tremendously,

they could just do a layoff like they're doing now, cut 10,000 people get cost back online and have taken their best shot at the market, whereas they would risk losing the market. And I also wrote about this after the conversation in big technology. That being said, do you think that that's actually what happened? Oh, completely. Actually, in your piece, I think it was Roy's quote, it was one of the tragedies of companies is that a risk that may make sense for the company to take may be catastrophic for employees. And that's what happened. They had to take these risks. If your competitors are, if everyone is growing at astronomical rates, 10, 20%, even for a

trillion dollar business, and your competitors are investing in every new field and doubling down on every, all their infrastructure, for you to not pursue that, the investors would have been furious. So I do think everyone is to blame. Clearly, like, the idea that a Sundar might have said in 2020 fall, you know what, we're growing, but I'm going to be prudent about it. Obviously, in hindsight, that would look good. But, I mean, this is the investment community's pressure on the companies, the companies themselves and their own hubris. Every employee taking a job at one of the companies to get, you know, work for the most comfortable, lucrative trillion-dollar big tech giants in the world. I think there's no simple blame that it was just a mistake on the part

of a few people. Right. And one of the companies also going through some change this week is Netflix. Actually, before we get to Netflix, I just want to throw this out there. I'm kind of curious what you think. I think Google is actually, you know, obviously in a vulnerable spot, but I think that The threat from cheap E.T is real, but probably a little overblown. And it's in this position where it's really been hit hard because of an advertising pullback. And that's probably going to be the first thing that comes back when the economy rebounds. So I kind of think Google is a prime candidate for a rebound and is not in as dire straits as some might say. I vehemently disagree out.

Yeah, why? So in the piece this morning from John, he went into recipes. And I'm sure many of our listeners, I cook a good amount, have Googled recipes and are used to that ridiculous format where someone basically gives their entire life history and runs a thousand ads so to get to the recipe. Yes, the most annoying thing on the internet. And that distortion, that is completely driven by economic distortions where Google benefits financially. the publisher who does that will benefit financially, and the only person hurt is the user, but because Google has a monopoly, the user just gets screwed and has to cycle through someone's life story to get to just, you know, some ingredients in a couple of steps.

I think that's where chat GPT shows just how big of a risk, because Google's entire business model has been built around these kind of distorted economic incentives, and the internet grew around that around these distorted incentives and we get these ridiculous recipe websites and I think that's gone that's that's forever going to change especially you take something like a recipe the most simple structured potentially unchanging piece of information that is a simple answer to a simple question you know that's the kind of stuff that is search is going to change and I think Google unless they're going to have to rethink their entire business to answer that threat. Okay, I've already started going to chat GPT for some of these things, even asking,

like throwing in a bunch of different stances and say, now spit out what this person is politically. It's been interesting. Okay, I will recalibrate what I said. Maybe chat GPT is that threat, but it will take a long time to get there. So I think short term, it's probably going to look really good for Google. Long term is where the threat is. Let's see how they respond. All right, now let's talk about Netflix. Netflix to me is like one of the most interesting companies going. It crushed its expectation to add survivors, subscribers adding, that's what happens on Fridays, adding 7.5 million thereabouts, they were expected to add four. So almost double expectations in the fourth quarter of 2022, which they just reported on earnings.

Now, as that happens, Reed Hastings, their co-CEO is going to step down. Ted Sarandos is going to remain co-CEO. They're elevating Greg Peters, who is their chief operating office. or co-cego and read read is going to now go to the executive chairman role it seems like a complete mess they've contracted subscribers last year what it what is happening with netflix i mean how do you read this i okay so i will forever give netflix credit and read hastings credit after do you remember quickster yes all right and not quibby we talked about that last week quickster 2011 uh i i I still think this is one of the most brilliant, like, I'm going to say, courageous CEO moves

where Netflix, he, Hastings recognized, the future is streaming, but we have this very profitable, lucrative, but slowly declining DVD business. So I'm going to take an ill-fated, not fully thought out, move to split our businesses, and the DVD business would then be called Quickster, and then Netflix would remain the Netflix would remain the name of the streaming business. It was not well executed, but to me, the fact that they, they said, we're betting the entire company. I'm going to stake my reputation. They reneged on it and then slowly phased out the DVD business, but, or actually maybe it still exists. I'm not sure. But I think, like, they recognize, and all these questions around transformation, what is Google

going to do if you see your search business is threatened, but it's still highly profitable and lucrative. How do you make a courageous move to actually build for the future? And I think Netflix is clearly right now streaming is in a very interesting place right now where a few years ago, you know, barely any competitors for them. They owned it. Now everyone has been losing billions of dollars, paramount HBO. You know, it's just been, the move has been try to lose and bleed money to just build out content and build subscriber bases. So I think this is going to Streaming is the most interesting place in business right now. And I think Netflix, I wouldn't count them out given what they've done in the past.

They're able to make these kind of moves when needed. Why do you think streaming is the most interesting place in business? Just because the competition? Yeah, because again, competition makes things interesting. Look at Google and chat TPT. So you have, you know, you have the OG Netflix who also, you know, was just, printing money through debt and, you know, like whatever, you know, anyone could get a show on there or an entire series renewed for multiple seasons.

Then HBO Max comes in under with the deep pockets of discovery. Paramount Plus is coming in. Peacock is coming in. Hulu. I think Disney is now trying to buy out the remainder of Hulu because it was originally a joint venture. Everyone is involved investing. And as a consumer, I mean, I'm sure. you might feel it too, even trying to keep track of every streaming service or know where I can

find a specific show or what I want to do on the- Or even which ones I'm paying for is stuff. Yeah, exactly. So this would point to the idea that Netflix has screwed because it was valued and it built based on this idea that it would have a monopoly, not only a monopoly on viewers, but a monopoly potentially on content because if you were going to try to sell to a streaming service, it was the one buyer, no longer the case. yeah but but netflix has been playing this game longer than everyone else and has been gone through you know multiple cycles of this whereas and this is netflix business when disney plus if it starts

continues to bleed money at a certain point bob iroaker might say well you know our theme parts are profitable is is really driving more tickets over there or you know how do we factor this in with our ownership of abc or espn like there there's a million and other discovery is a behemoth right now. So every other company has any number of revenue sources that are competing with its streaming services or at least being held against it versus Netflix, this is your business. So I think I still, you know, who comes out of this, you know, just massacre over the last few years? I think, I still think they could be okay. Right. And one interesting thing is Netflix has shown it can be profitable here or the other.

haven't. Yeah, exactly. This is their business. They, you know, they, they have been bleeding money in order to compete. So who will be the last one standing? I mean, I would still give them more of a chance than the others. By the way, we have a nice number of live viewers here. So thanks to everyone who's tuned in. If you have questions, you can just drop them in the stream and Ranjan and I will get to them as we go. Also, if you're listening and you want to take part we're going to we're going to do this every friday as long as you guys keep listening we'll keep doing this every friday at 11 a m pacific time and 2 p.m eastern time so feel free to come and tune in on lincoln we'll have events they'll be streamed on my page and we'd love to have

you there we'd love to have your questions if you're listening not only can you expect this on the feed but you can expect it live during the day and if you want to stop by catch a bit of it catch it all we're happy to have you we'd love to have you so one more question about Netflix. I just think that the competition, though, is the real issue. Yes, this is their business, but it's almost unfair because Amazon can lose money on prime video and still be happy with the results because of the spillover to retail. Disney can lose money on Disney Plus, but still be happy with the results because of what it will see in the box office potentially, but also what it will see in the theme parks. I just think that it's going to, it's,

there's a reason why Netflix has gone through this tough time. Now I was trying to basically run the company with three people. It's going to be hard to pull off. I will say the weirdest part of this to me was they had co-CEOs and then Reed went up to executive chairman and then they replaced him with the other, I think. How do they make decisions? Well, that's what co-CEOs usually I kind of assume is a temporary thing, not when one person leaves, you actually then replace them with another co-ceo. But again, in terms of the competition,

I think this is a competitive market. That's what makes it exciting. That's what we're so not used to seeing this level of cutthroat competition at this scale over the past decade in most markets that have been concentrated, that have been monopolistic, that I think that's what makes it exciting. And remember, on one hand, having a, cash cow in another part of the business theme parks for disney amazon web services and funneling that money over to prime by the same token the moment one of those businesses exogenously has an issue that can also stream over to the their streaming services feed over to their streaming services so so i think it there's good and bad but it does not stand-alone mean that you have a huge advantage

and i think again netflix this is their business this is what they have done for longer than anybody. I think they, I still, I'm, I'm, I'm pro Netflix here. I'm going to throw one more dart because there is a view out there that this is a mirage. And that's coming from folks who've said that Netflix work with service providers like Verizon to give away Netflix for a year or something like that. And that helped inflate their subscriber with statistics, which is responsible for their stock rocketing up this week.

And the thing that is, the real. interesting part is that they met their revenue expectation, but their subscriber number almost doubled what they were expecting. How do you meet your revenue expectation, but the subscriber number goes up? It does seem like there's some tricks there, doesn't there? I saw that too. I think they were, yeah, they met their exact revenue target and then doubled subscriber number. So the giving away one year free as a Verizon customer, I agree there can definitely be some pretty aggressive promotional behavior to juice those subscriber numbers, but is that really different than Apple trying to just inject me with Apple

music every time I open up any device, even though I'm a loyal Spotify customer? Is that different than Disney, you know, like you subscribe to one thing and suddenly I'm getting marketing for Hulu or ESPN Plus? I think it's a platform play. It's there. when you don't own the entire ecosystem, you have to be creative about your partnerships. I think overall, to me, meeting the revenue target and also for context, this was a messy quarter because they said going forward, they're not going to break out subscriber numbers

because the advertising-based business. And again, for clarification, Netflix now has an ad-supported free tier. Or is it cheaper or is it free? It's cheaper. It's cheaper. It's still pretty expensive. It's still pretty, yeah, like Hulu, yeah. And so because there's all these different, now there will be an entire advertising revenue stream, it overcomplicates what subscribers mean to the company, so they're not going to break it out. So I think maybe this was the last quarter of kind of a messy subscriber number, and that's okay. We'll just look at the revenue. Yeah, and I thought the fact that they would stop breaking out subscriber number was another bad sign.

clearly I'm the devil here and you're the angel and the Netflix story but the reason why I thought it was an issue is because you're you only don't tell people what the numbers are if you don't expect them to be good

that's just sort of my philosophy on this your ad supported tier ostensibly will help juice those numbers because you'll churn less you're not really in the Netflix had to return money to advertisers last quarter according to some reports so you should be focusing

on the subscriber numbers unless you're really concerned yeah it's always time As a universal rule, hiding numbers either means it's something very good or it's very bad. Again, remember, AWS, we never saw forever. And that's because it was so lucrative in basically funding a money-losing e-commerce operation. They didn't want everyone to know that. So, yeah, maybe that is a stretch to say there's a corollary to Netflix right now in subscriber numbers.

But again, I think revenue is all that's going to matter. And we're going to see. I think to fundamentally transform your business from pure subscription to working in advertising, it's not going to be as straight line and smooth sailing. Every media company, even you as a publisher, everyone thinks about that. It's not a simple equation and easy to do. So I think it's not going to be easy. but if I'm betting,

I'm still thinking Netflix is going strong in a few years. Ron Jen Roy is here with us. This is our traditional Friday episode where we talk about the news this week's episode, tech layoffs, tech shakeups, and Davos. So we've done tech layoffs, we've done tech shakeups. Let me do Davos on the other side of this break. Hey, everyone, let me tell you about the Hustle Daily show,

a podcast filled with business, tech news, and original stories to keep you in the loop on what's trending. More than 2 million professionals read The Hustle's daily email for its irreverent and informative takes on business and tech news. Now, they have a daily podcast called The Hustle Daily Show, where their team of writers break down the biggest business headlines in 15 minutes or less and explain why you should care about them. So, search for The Hustle Daily Show and your favorite podcast app, like the one you're using right now. And we're back here on Big Technology Podcast with Ranja and Roy from Margins. We're streaming live on LinkedIn. It's great to see so many people have joined this stream.

Again, if you have questions, feel free to drop them. We'll take them at the end. And now we get into the Davos. So first of all, I feel like there's a remarkable obsession with Davos, and I think it's interesting that all the global elites gather in this one place, and you can kind of run into them in the promenade. I went last year. I wasn't part of the actual confab, but I was doing some live.

podcast off to the side. And I thought it was pretty interesting. And as someone who's never been to Davos, tell me what does that mean promenade con fab? Can you explain that a bit? Because I, I just picture people in big winter coats who are important and powerful. So that's basically what it is. So I'm going to try to pull up the access levels here because I think it's kind of hilarious to describe what actually happens in Davos. But basically inside Davos, it's to call everyone calls it Davos, but it's really a gathering of the World Economic Forum, which started off as a European business group and then started to move more and more towards social causes. And so that's why you end up having world leaders together with business leaders,

and it's a very unique event. Now, not everybody is allowed into the actual conference arena, and you need to be accredited for it. And Ben Smith has done a great job in this semaphore newsletter. by the way ben is going to come on the show in a couple weeks i'm pretty stoked for that so just something for folks to pay attention to maybe if you're not a subscriber and subscribe we're going to get that up uh kind of soon but he's had a great series of dispatches from davos and and so here's the um the access levels so he takes a picture of this sign no access for red badges red striped badges yellow stripe badges affiliate badges affiliate sessions support staff badges and hotel badges and here's what he writes. There are about a dozen, I think this has been writing it, but it's

from his newsletter, so either him or his staff. There are about a dozen types of badges this year. They include a couple of all-access categories, white for participants, and blue for forum staff. There's also a Byzantine hierarchy that ranges from orange, journalists who can access the Congress Center, but not attend sessions, to red drivers, to purple for medical and technical staff, orange purple for production staff, brown for aids to white badges, green for other members of the entourage, light blue for forum contractors, and orange hotel badges that just let you into certain hotels. So it's a very hierarchical structured system where you are able to participate in these meetings with the business leaders and the world leaders.

And the reason why it's interesting. I mean, of course, there's so much controversy around it that this is like kind of the it's viewed by the right wing and left wing as like uh this this cabal that meets to plan and there's this uh saying that's been talked about attributed to clauswab that you will own nothing and be happy and basically people view it as this gathering to ensure that the power structure remains in place in fact there's another there's this great quote from peter goodman that i dropped in in our document here where he talks that talks about he says more than anything, Davos is a prophylactic against change. An elaborate reinforcement of the status quo served up as the pursuit of human progress. And Jill Abramson, the former editor of the New York

Times, she says it was and is a corrupt circle jerk. So that's sort of like the perspective Davos is a progress condom is what we're learning today. Well, so first of all, the hearing those access levels, I think like triggered me more than reading Sam Bank and freed substack. There's a reason people hate this thing. Yeah, yeah. I, well, hold on. To me, starting our conversation today with the tech layoffs and then trying to connect

that because this whole idea of, you know, like around the layoff side of things and look at the technology industry by itself, you know, leadership CEOs Sundar, Mark Zuckerberg, over extrapolating and being overly aggressive and now the everyday workers paying the price for that and that that that distance between the two and then now that's davos actually has that you know ingrained into the actual structure to keep people separated to keep the highest elite and the CEOs or you know like and it's actually so rules based and codified I think uh it it affirms the idea of prophylactic against change I think exactly that that should be the new branding right and there's this there's all this talk about doing good for the world so here's another thing that

happened that everyone they always talk about the climate crisis right there talked this year about the poly crisis and they all fly in on private jets so this is from um i think greenpeace wrote this that talked about how let me just pull it up quickly because i feel like it's important to read let's see last last year's world economic forum that there was and this was a muted one because of of COVID, there was 1,040 private jet flights arrived and departed out of airports serving Davos, and many of them were short haul flights, and they attribute at least 50% to this meeting. So the folks that are going in and talk about saving the planet are taking actions that are not good for the planet.

Full disclosure, I took the train in from Zurich after taking a mass flight. You have done your part. You have done your part. Yeah. We also missed our stop. I missed my stop. This is kind of a funny story. I missed my stop. And it ended up 40 minutes. The next step was 40 minutes down the line. So we had like an hour and a half, our two hours to spend with these two psychedelic entrepreneurs. Oh, we're going at Davos for the psychedelic house. Wait, there was a psychedelic house at Davos? So this is the second part of it. There's this promenade. And the promenade is effectively the street that's next to the place. If you can't get in there. there you can hang out on the promenade and it's nice because it's a small town so you can actually end up seeing people walking back and forth and bump into them and say hi maybe ask them questions

ask them to do business with you i walked into paul ryan one night after uh some event and i was just like usually i'd want to talk to you but i'm just going to go back to my hotel like this has been it was late night had a couple drinks i was like all right this is not a good time to start a discussion here to paul ryan and yeah and so that's that's what the promenade is and and it's and And it's an interesting thing, but yeah, there's definitely, like, you talk about, talk about, like, the values that they put out there and, and, like, the actual world we live in, and there's a real disconnect, I think. Well, I do think, but I think it's important right now because I think it really does represent all these hugely critical issues. again, you know, CEO versus like capital versus labor, management versus workers,

obviously has been a topic over the past number years and has only been growing in importance. Environment or greenwashing around ESG and environmental credibility, obviously is one of the other biggest topics in the world and each one of these things. And that's why I think to me the really interesting part is no actual words or content or ideas that have come out of Davos, at least for, I'm not even sure is the conference over, is it still going? It is done. Yeah, I don't know what happened.

Nothing. I think I saw, wait, did Larry Summers talk about inflation? Fed's got to stay? Maybe. You do know about one big issue, though, which is localization. Oh, yeah, yeah. I did see. This is the kind of stuff. I love. Actually, so, so there was like a, piece on their blog around global and localization and how using technologies like digital twins and autonomous robots you can both be local and still run your supply chains globally i mean they got a workshop those a little bit better i feel right and also what's the point of being local is that you spark the local economy that you have jobs and that the fact that they're pitching autonomous robots as part of this localization thing just seems so ridiculous yeah but but but

But I can feel like, because I was reading something in a piece, it was like around how it's changed and how now it's like questioning its entire purpose after the globalization is following. And it was talking about how in 2013, the theme was resilient dynamism. And it was about trying to bring resilience into dynamism back after the financial crisis in the world had stabilized. And then now you have, and I love that word polycrisis, just because it's the most. it says everything and nothing at the same time. And I feel, I think as someone who has been in content for a long time or thinks about the words they use or has tried to come up with catchy taglines like this, I feel so much of this ends up being just around trying to come up with the next big catchphrase.

And it's just not landing anymore. Exactly. And I mean, there is, it has effectively become, you talk about all these issues that we talk about. it has become this thing that people hold up and say, all right, we don't trust the elite. And these are some of the reasons. I think their communication is definitely part of it. Their actions are definitely part of it. And let's see, we covered, so we covered glocalization, which I'm glad we did, Polly Crisis.

They also talked about this idea of re-globalization, which I think is interesting. I think it's a real thing that's happening where you're going to have the globalization. It's so interesting because re-globalization actually means de-globalization. it basically means countries and coming into trade agreements aligning and coming into trade agreements with other countries that reflect their values. So for instance, moving from China to India

when it comes to supply chain, moving away from Russia to Ukraine. So it's a reshuffling of globalization. Not the move towards localism, but they move towards partnering with countries. But it's actually really, when you think about it, just this split of society. And that's actually, that is Davos.

That is like the perfect embodiment of what I perceive to be Davos in that it's actually de-globalization, but somehow putting a positive spin on it and calling it re-globalization and it's just a realignment. Actually, my favorite word for that, which I kind of, I kind of am not totally against is friend-shoring because you've had near-shoring, off-shoring. Near-shoring is bringing things back onto your own domestic economy, offshoring. we all know friend shoring is the u.s moving or apple moving from china to india things like that so i can kind of work with friend shoring i think french shoring i'll take french shoring i'll take

french shoring i'll take redlobalization which actually means de globalization yeah anyway i'm glad to have missed davos this year although i had a good time last year i'm glad to have seen it even though i didn't actually make my way into the stripe badge type of place it was it was fun to be there. It was a great place to do interviews with people who I might not normally get on the podcast. Nick Clegg came on at Davos. So from that standpoint, it's pretty cool as a journalist. But there's, I think, real reason to be skeptical of the organization and the stuff that they spout out. I'll admit, I wouldn't not go. Right. Yeah, it's good to see. It's still something, but yeah, it's definitely, I remember like 10, 12 years ago I was working in finance and emerging markets and like, I mean, the dream would have been being invited to Davos and speaking at Davos.

And that, that, I feel, is long gone. Yeah, I was going to say after this podcast, I don't know if they're going to have us on stage next year talking about the return of localization. Localization. But who knows? Who knows? You never know. You got to bring all stakeholders in, as they might say. So let's end talking about media, very busy week for the media.

Let's go first to the layoffs at Vox and now VICE is going to be selling. I'll just say this. As someone who runs an ad-supported publishing business, I think that this is all residual from the second half of 2022. I'm saying this because it was extremely difficult to sell ads in the second half of 2022. In fact, there was a moment where I said, look, if this was a scaled business and it wasn't just me and some people that I work with, but not full-time employees,

I'd be looking to lay off. I'd be looking to cut costs because the revenue just wasn't coming in, and advertising had dried up, and I wondered how long it was going to keep going like this, because if it did, it might be real trouble for the business. Now, advertising luckily has come back, I think, in a big way in the beginning of this year. And I'm kind of optimistic about the rest of the year, given the way the first quarter has gone for big technology. So I'm kind of curious what you think here about these layoffs and what the media industry might be in store for now that, you know, it's not just Vox, of course,

like that's what happened today. And for those following at home, they're laying off like something like 7% of the company. But this has been something that's going on across many different publications, Vox, BuzzFeed, of course, is always included in that conversation. Washington Post is having a situation where it might do layoffs. I'm curious what your read is on this, and whether it's going to be a book for media or this is the sign of even worse things to come. I would say, because the names you're listing out, Vice, Vox, BuzzFeed, all the darlings of the mid-2010s startup media, raising hundreds of millions of dollars, getting, getting

valued into the billions, just kind of like eye-popping numbers. I think that world is so long gone that I don't think any of those companies will ever come into what they were supposed to be and still are unfortunately operating at a scale that they, like you said, if you're a scaled business, Q4 last year, even into Q1 this year, you were never supposed to be that big potentially. But on the other hand, you know, the semaphore we brought up. I think there's pretty interesting up-in-coming media startups. But semifor, good point. They said this week they had to raise $25 million and $10 of it came from San Bernard and Free.

So they might have to alter their cost structures a bit. Hopefully they were a bit prudent going into this. But I do, I think I, right now publishing, advertising is going to, not rebound completely the way it was, especially digital advertising, you know, in late 2020, 2020, 2021, the same problem that everyone is facing in anything digital, those started our conversation around tech layoffs. But I think publishing, rethinking the model of what advertising is and how they approach it, a lot of people are getting a lot more creative. And I do think, I think the ones who figure it out, whether it's whatever combination of subscription, affiliate fees and commerce

revenue, display advertising, even though that feels like it's long gone. I think there are people who will figure it out. And let's not forget, you know, Facebook and Apple tracking and what hurt cookie-based advertising publishers have an advantage here that the advertising they run is contextual by definition your publication has a brand and the ads that the like use your pitched advertisers is this isn't some you know like purely data driven cookie based thing that could be cut off by apple tomorrow that was what facebook did and meta depend on you have a different model so i think people are going to figure it out but the the ones again you think about organizationally a vice or a vox that kind of stuff's tough if you're on top of the world and to be brought

down to kind of re-assert yourself that's you know that's like a Harvard business review transformation story versus just figuring out a business model most definitely maybe instead of journalists they'll just all employ chat GPT I know that CNET was working to have chat GPT or some of their AI write its stories and this week it ended up having to post a long correction and because there were some serious inaccuracies so obviously the AI hallucinated itself into the story. And by the way, that's a good moment to plug. On Wednesday, Jan Lacoon is coming on the show. We are going to talk about generative AI. He is a professor NYU and also the chief scientist at Facebook, a chief AI scientists at Facebook. So we talk a lot about AI hallucinating

in particular because Facebook had a program Galactica that hallucinated its way out of existence. But I'm curious what you think about the fact that is this a good news for journalists that CNET tried to have AI write some of the stories. And it ended up just being such a disaster. It had to apologize and probably lost some credibility in the process. The AI went to the psychedelic house at Davos, apparently. That's clearly what happened. That's got to be the episode title, by the way.

So CNET, what they did, to me, is like the exact nightmare scenario around generative AI and publishing. And we started this conversation talking about Google's business model being under threat. And this is exactly an example of that where CNET, one of the things they were doing is essentially rewriting articles or taking like the top section of an article and rewriting it because the benefit you get as a publisher is you republish. It's technically original content.

And from an SEO perspective, it gets juiced up and is considered new content. So they're taking recycling content for SEO value using chat GPT. That sucks. That's like the worst user experience. It's not good for anyone except for them at that moment, but not even their long-term brands, not for the people working there. So I do think this is, people need to watch what they're doing and realize it's probably

happening more and more in different places. And this stuff, this stuff is getting more urgent. I think it's already, it's happening. It's happening. Yeah, the one thing I'll say is I'm glad that it turned out so poorly for CNET because it's otherwise it would have maybe encouraged others to start using AI to write these stories and it's much better in my opinion to have real humans doing it for the sake of all of us from the story that came out I believe it was employees who had leaked this it wasn't like

users were reporting that you know this stuff doesn't make sense this is useless this is bad content because think about as the average user right this happens you just go to the next page or you don't even process it, you come across so much bad content via Google every day. And the publication that's been all over the news, this publication called Futurism, they made a great point, which is that Google hasn't penalized CNET for doing this,

and that is going to be a boon for SEO farmers all over the place, looking for a signal of the way, you know, that using AI-generated content to populated pages is going to turn out. So I think it's pretty interesting. And that comes back to what is the, threat to Google. It's the supply side. It's the idea that the amount of content that's going to bad content that's going to explode is going to existentially threaten these entire search

model that they've built, the business side and the algorithmic side of ranking. So I think this is why I'm bullish Netflix, bearish Google, if we're wrapping up the earlier parts of the conversation. Right. All right. Folks, if you have questions, this is our a real last opportunity to ask them to drop them in to the chat if you have them. Let's just talk about bad content to end, which is the fact that Robin Hood is going

to start a new news subsidiary and ostensibly cover financial news. It's being run by Josh Topolsky who stood up the I think he was one of the VARGE founders. Verge co-founders and he's worked at Bloomberg as the head of digital

and now he's going to go run a blog for news subsidiary. excuse me, for Robin Hood. And what makes it amazing is during the whole GameStop Rebellion, he tweeted literally Robin Hood app just told the world that you can play until someone bigger than you doesn't like the game anymore, brand suicide, and now he's there working for their content arm. So speaking of bullish or bearish,

are you bullish bearish of Robin Hood's new content play? I am internally bearish on anything Robin Hood, But it's tough because I'm the first person to say, and I, you know, a typical Robin Hood user, why not, if they're already going to the app, why not provide them with valuable content to make them stay? It's such a clean thing for a business and it makes so much sense. And especially around financial news, it's theoretically perfect. It's a management consultant could come up with that deck and it would sound so good. however Robin Hood's entire problem to date has been everything around the app was designed to make you trade more because that is how they make more money and you know the leaderboards the ux the and they there's been plenty of backlash around this so the idea that there's going to be a highly you know independent journalistic integrity driven financial news site I don't think makes a ton of sense. But to their credit, Robin Hood, they actually bought market snacks. It was a

newsletter that was up and coming a few years ago. So they made a play in media before. And now the Market Slack's newsletter, it is funny because I think they said there's tens of millions of readers, but everyone who had a Robin Hood account was by default opted into market snacks, or now it's called Robin Hood Snacks. So obviously that's a nice way to. And the podcast is popular too. Yeah, yeah. And again, like you can make pretty good content. But the content, will always heavily, by definition, have to be buy stocks, buy options, buy everything, because that's the way our business is actually going to make money, is that you are actively trading and feeling good about the market,

especially for retail traders. So I think that adds such a weird element of conflict to the entire idea of it, that, I mean, how it grows and who's reading it and what they're doing with that information. I mean, I'm curious to see. Again, Josh Topolski at Bloomberg did some really interesting things. The Verge, obviously, is still around as one of the best tech publications. So it could be interesting. Right.

We do get some questions. Do you have a couple minutes to stick around or you got a roll? Yeah, yeah, yeah. Questions from LinkedIn on a Friday. That's great. We'll take them. Thanks everyone who's dropped them in. So first of all, it's kind of a comment from Grant Walker, but let's take it.

He says generative AI copywriting is great for ideation and your frameworking, the human touch at this point at least gaming the system will pretty much always catch up with you i totally agree with that i think that once you uh if you rely entirely on these chatbots you're gonna just get really subpar writing and i know like the person that plagiarized me using i did a terrible job on their story and i've actually been like i don't really know what how to lead this story off let me ask chat gpt and and i mean haven't been impressed at all about the quality of writing and decided that humans still have a pretty big advantage over these things as far as content creation goes.

Unfortunately, though, Grant try to search for any recipe on the internet, and the internet still remains full of subpar content that still, it has its place in the entire ecosystem. We have another great question from Laura Vestal, who asks, regarding the threats to Google, what is your take on the threat to search from social platforms like TikTok? I think this is going to be the last question we take, but it's a really good one because it shows that Google is kind of under threat in two ways. One is these people asking questions or doing traditional search queries inside TikTok,

and then the chat GPT issue as well. Now, more we talk about it, the more I'm like Google has some significant long-term threats. Yeah, and actually, that's a really good point because we didn't even bring that up, that TikTok on the actual kind of like content and culture search, Amazon's ad business has been exploding. So like e-commerce and product search, you know, there are a number of other places where people start their search on the internet. And I do think it is. It's a testament to Google search has gotten worse and worse and worse. There's a time. I honestly, for most, like anything shopping related, anything trying to get qualitative information, I add Reddit to the end of my Google search

because the goal is actually to end up on Reddit and find some thread that's going to give me the right information I want. So I'm still starting on Google, but little by little, all of these things, you know, they're getting hit from every side. I think Larry and Sergey, they're back. Hopefully they can figure something out. Let's end on this. More vulnerable big tech company, meta or Google? oh that's a good one i think if mark Zuckerberg just tones down the word metaverse if it's just one hint of saying you know what maybe we'll maybe speaking of the quickster thing if he changes it back to facebook and cuts investment down by one billion a year the stock is through the roof i'm buying

everyone and the thing is they're advertising business and we talked about this last week it's you know, at least anecdotally recovering, we'll see in the earnings report, but if all he has to just do is take that one step and say, you know what, I like VR. It was cool, but this is not, we're not going to all be sitting in meetings with helmets on and everyone would be happy. But until then, I still think meta, given the amount of spending on the, what is even the metaverse reality division, I think still. is a bit more of Rone World than Google, which has a monopoly that's a bit under threat,

but Larry and Sergey are back. Well, Ranshan, thank you so much for joining. It's always pleasure speaking with you. I feel like I always learn a ton, and it's fun to go back and forth, and the listeners will hold us accountable here. It was right about Google, who's right about Netflix, was right about chat GPT. It would be fun to keep talking about this week after week. send us your questions on linked in yeah really stoked that we got some great questions this week i love

if anyone's watching send us a question next time thank you so again we'll do these every friday 11 a m pacific 2 p.m eastern 8 p.m. central european european time as long as i'm here so anyway it's been a pleasure thanks for listening we'll be back on wednesday with new episode with yon lacoon until then take care and have have a good weekend all right we'll see you next time a big technology podcast