Pivot - Pivot Schooled #1: Media's Overnight Chaos, with TikTok's Vanessa Pappas and Columbia University's Emily Bell

Episode Date: August 24, 2020

In this audio version of the first episode of our live video series Pivot Schooled, Kara Swisher and Scott Galloway talk about the rapidly changing media industry, President Trump's attempt to force a sale of TikTok's US operations, and what happens when disinformation is coming from inside the (White) House. They also answer questions from viewers and make predictions, alongside special guest predictor Kathy Griffin. Get your tickets for the next Pivot Schooled, "The Big Four," at PivotSchooled.com. Get your Pivot Schooled hats, mugs, shirts and more at PivotSchooled.com/Shop. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Support for Pivot comes from Virgin Atlantic. Too many of us are so focused on getting to our destination that we forgot to embrace the journey. Well, when you fly Virgin Atlantic, that memorable trip begins right from the moment you check in. On board, you'll find everything you need to relax, recharge, or carry on working. Buy flat, private suites, fast Wi-Fi,

hours of entertainment, delicious dining, and warm, welcoming service that's designed around you. Check out virginatlantic.com for your next trip to London and warm, welcoming service that's designed around you. Check out virginatlantic.com for your next trip to London and beyond, and see for yourself how traveling for business can always be a pleasure. Hi, everyone. It's Kara. We're so grateful to the thousands of you who have been joining us for our live video series, Pivot Schooled. Today on the podcast feed, we're going to share an edited version of our first Pivot Schooled show, which we broadcast on Tuesday, August 4th. The theme of the show was media's overnight chaos, and our guests included Emily Bell from Columbia

University and Vanessa Pappas, the general manager of TikTok North America. This show was taped just days after President Trump threatened to ban TikTok in America unless its Chinese parent company, ByteDance, sold its U.S. operations to Microsoft. During the original broadcast, Scott presented a 15-minute slide deck about the media industry, and later in the show, we played a trivia game with Casey Newton and Liz Plank called No Pressure. Both of those are so visual that we've taken them out of this podcast version of the show. If you want to join us live, the next Pivot Schooled show is this Wednesday, August 26th at 10 a.m. Pacific, 1 p.m. Eastern time. The theme is The Big Four,

and you can buy your tickets at pivotschooled.com. If you already got a ticket for any or all of the previous Pivot Schooled episodes, then you're all set and we'll see you on Wednesday. But now let's get Pivot Schooled about media's overnight chaos. Take it away, me. Well, hello, everyone, and welcome to Pivot Schooled. I'm Kara Swisher, obviously. And I

look fantastic, by the way, because I've had makeup. Wait, I thought you were Laura from Ronkonkoma. This isn't my Zoom date. You know what? Wait, what time is it? What time is it? No, it is not a Zoom date. I would never go on a Zoom date with you.

Ever, ever, ever. Let me just say. Come on. No, no. Pay-per-view. We are the HBO podcast. We are Floyd Mayweather. You're Conor McGregor.

I'm definitely Floyd. Fastest hands. If we were HBO, you'd be Miranda from Sex and the City. I'd be Hank. Yeah, I would. Boom. That's the good stuff we're bringing today. All right, Scott.

You're getting a little fuzzy there, and I'm perfect as usual here. But anyway, we're now in session, correct, Scott? You need to read the script. You have to remember we have a script here. This is a professional thing. We have thousands of people watching us. Usually we're dressed in our pajamas and insulting each other, but we really need to follow along with the script. And this is our first of our five Pivot School live events. And today's theme is media's overnight chaos. Chaos, which is what we love. Explain what we're doing here. That's right, it's a special series,

a special series where Karen and I go deep on certain areas of interest to our listeners, special guests, games, predictions, the whole nine yards. This is gonna be awesome, just awesome. Awesome. It's live and parts of the show will be available on the podcast feed in a few weeks, but you get the whole thing here and now.

Exactly. All right. We're going to get into some things. We're going to talk about the media industry later. We're hearing from Vanessa Pappas from TikTok. She's had quite a week. And by the way, let's ask her for a VIG. Let's ask her for a VIG from this deal. Don't you think? I don't know. Well, I think so. A hundred percent. Fredo of digital is asking for one. So we have to have her, she actually is not involved in this ridiculous situation going on. She's going to talk about content and things like that. We booked her before the controversy around TikTok, but we will ask her about it, but she doesn't have anything to say, I'm sure. And Emily Bell from Columbia University's Journalism School. She's going to talk about all kinds of issues around memes. I had her on the Recode Decode podcast recently. And plus, we have a surprise guest. We have a surprise guest to talk about all these

issues with media. Let's welcome Vanessa to Pivot School. Hey, Vanessa. Thank you. So glad to be here. Good. I mean, how are you doing? Have you got your Microsoft ID yet or anything else? No, not yet. Not quite. All right. I know that you have not been involved in it. You have not been involved in running TikTok North America. Is there anything you can say about what's going on and how you are all feeling about, for those who don't know, and I think for some reason, President Trump has gotten very involved in TikTok and it's been pretty attacked, not just by President Trump, by Mark Zuckerberg and others. I know your CEO talked about that. What impact is that having? And do you have any comment whatsoever about what's happening? Sure. Yeah. So I think, you know, politics aside, you know, what I can say is that we're extremely

confident on the long-term success of TikTok. You know, we've said that, you know, we are fully committed to the privacy and safety of our users and this community, which is just flourishing. And, you know, we're excited for the next chapter of TikTok and the growth that we're having. So I think that's as much as I can say. Yeah. I mean, you should be very careful. You might have. Go ahead. Go ahead, Scott. So, Vanessa, just along the line, one of my colleagues at NYU, Jonathan Hyatt, talks about that we have this emerging mental health crisis among our teens. And he points to two sources. One is concierge bulldozer parenting, where as parents, we use so many sanitary wipes on our kids' lives

that they don't develop their own immunities. But the second concern is that social media is not only addictive, but attacks teen self-esteem. Can you speak to any specifics around, well, A, do you believe that social media poses a real threat to our young men and women? And two, what is TikTok doing more than the other firms? How are you going to avoid these problems? What investments are you making to try and address this emerging mental health crisis that social media appears to be a catalyst in? That's a great question. And certainly, we do see those risks, right? I think when you have these social media platforms, there is that challenge where whatever you're presenting out to young users who are influenced by that. But for us, the difference of TikTok is that it is such a positive medium.

And if you come onto the platform, you see people supporting one another when they're talking about body image, a lot of body positivity, when they're going through mental health issues. Right now, we're all experiencing the challenge of COVID and what that's doing in terms of social isolation. And so I think the positive of where social media can play a role, and certainly what we're leaning into, is this idea of providing that connectivity for users. But how do you ensure that? Are you willing to kick people off the

platform? I think that's a great narrative. How do you actually put in place the guardrails to ensure that happens? Yeah, a couple of things. I mean, certainly we have strong community guidelines around any kind of hate harassment, cyberbullying, and we really do enforce those strongly. Second, we try and educate our users. So when we think of these issues that are affecting young users. We're putting out PSAs. We actually do this with our creatives.

So we speak to them in their own language versus this kind of parental approach of what is good behavior online. And we also have tools and controls so that people can limit the amount of screen time that they're using the app. So I think those are all the right steps forward. And we continue to look at that and ways that we can improve more. One of the ways that we do that, because we certainly don't think we can solve all the answers ourselves, is we established a content advisory council where we meet on a quarterly

basis with those from across the industry and really do look at these challenges holistically and understand what's the best path forward to really safeguard our users. All right, Vanessa, I want to switch back to actually about your situation. You came from Google, correct? You were working at Google before this? Yes, YouTube. YouTube. Talk a little bit about that competition, because one of the things that you have attracted a lot of attention, people think you are a counterweight to YouTube and to Facebook and to other, and Instagram specifically. That's what's attracted all this attention to your site by politicians and others. What worries did you have coming to a

site that was owned, a Chinese-owned company, ByteDance? And then how did you, how do you feel, you know, obviously now you're in the crosshairs and there's nothing to be done about it. You're sort of stuck, caught in this political thing. What do you think made you all grow so much? And how do you assess your, you know, here's your chance. How do you assess the Instagrams and YouTubes of the world, having been there and what you guys are doing differently, which unfortunately your success is a problem now, because again, you've attracted attention of President Trump and others. Yeah. And certainly, you know, by grabbing such attention, we are seeing the skepticism that comes along with that. But for me personally, in joining the company, I had no hesitation,

you know, meeting with the leadership team and just knowing how much they're investing from a security and privacy perspective and how much we care about our users and safeguarding that experience. And just not, you know, I've been here for over 18 months. And so that commitment that I see from us is something that, you know, I see as a reason why I'm still here and why I believe so strongly in TikTok as a platform and the community that we're able to provide the platform for. competition's a great thing. And you guys have already talked about that from an antitrust perspective. We believe we are different in terms of just the product itself, right? It is a very mobile first, immersive environment. It's short form video. The discovery mechanism on it is bar none. So I'll challenge you on your statement, Scott, about recommendation algorithms and which are the best. And then the community, right? I mean, you just don't see this type of positive community in any other setting. And so,

you know, one of the things that we've been called is the last sunny spot on the internet, and I truly do believe that. So when you're thinking about that idea of being the last sunny spot on the internet, you know, Snapchat of is also has that sort of reputation in that regard, but it's a communications platform. When you think about, I want you to comment directly on what you think is happening at Instagram. They're going to create reels is about to come out. Zuckerberg's been attacking you using the China, you know, the, you know, it's either the Chinese company or us. How do you push that, push back on that from your perspective? And also around the content of what you're doing, that they're doing a copycat version of you,

which they've done to other companies. Yeah, so let me take the first part, which is the aspect of China, right? And the narrative around that. So first, just to dispel any misinformation around that, TikTok does not operate in China, right? So we are very much market driven. So what that means is for the US market, it's US led operations. So any decisions around the product experience or the content itself, including the moderation, is run by my team.

And we have a really strong leadership team here locally looking at all that. When we think about our data and security, we have a world-class data infrastructure in place that we continue to invest in. We recently brought on our chief security officer who has more than 30 years of Department of Defense experience and others. And, you know, so I think across those, every response that we have is like, we are very much committed to acting responsibly as a product and doing the best by our users. So I, you know, for that aspect, you know, that's how we typically respond. When talking about the creator community, I guess the thing there is we really do see ourselves as a unique platform. The diversity of content and the creators that come onto TikTok just look different to any other platform. And I think you're very well versed in

the creators and the types of content on TikTok. And so these things just don't look the same. And so I think from a competitor perspective, while we're continuing to see challenges on the product side, what we believe in is that we will continue to innovate on our product, creating the best experience out there for our community. So a sunny place on the internet, investing in security protocols. It all sounds like Facebook three or five years ago. What are you going to do differently?

What have you learned from Facebook, whether it was their data of users being weaponized, whether it was a hack of Twitter, it feels like eventually everybody, maybe because they don't have competition, doesn't make the requisite investments to ensure that the data isn't put in bad actors' hands. What have you learned from Facebook specifically?

What are you going to do differently such that people can have the confidence that we're not sitting here in two or three years comparing you to Mark Zuckerberg or Jack Dorsey and thinking, God, we got fooled again? Yeah. So, I mean, the benefit of us being a new player in the space is that we can learn and take cues from what's happened in history and looking at the elections of 2016 as obviously a big indicator. We have a very focused effort around elections integrity and looking at misinformation and how we can be doing a better job there. So we definitely are looking at our peers and what's come to pass. We are a two-year-old company, essentially,

operating as a 10-year-old company. But the things that we do to focus on are a few things. And certainly, we don't accept political ads because of the learnings of the past. But the three things that we really focus on are product. So how do you better detect any of those bad actors at scale and putting the safeguards in place from that? The second is around policies, right? So really ensuring that we have strong policies against any kind of misleading or misinformation on the platform. weekend of Nancy Pelosi and the manipulated clip of her, which we acted on and took off the platform as soon as we discovered it. So, you know, policies that we're actually enforcing. And then we also look at partnerships. So educating our users, we're working with a number of fact checkers, we label content, putting out PSAs. And again, going back to the,

we can't do this alone. So how do we work with third parties and looking at our content advisory council as a way to navigate forward as well? So Venice, I have a final question. Scott may have a final one. You right now, yesterday you put out a TikTok talking about you have 1,000 employees there here in this country. You're going to add 10,000. How are those employees doing right now? You're essentially being called Chinese spies. You're getting all this incoming. You've got the president saying whatever nonsense he's spewing.

What is it like right now, and how do you keep innovation going when that's the case? Because I think it's a really interesting, you know, as I wrote, I have a burner phone for TikTok because I have no reason to be worried, but I am. And yet I do enjoy the product. How do you do that with your employees when this in the middle of this happening? You know, I think that our employees have the benefit of hearing and seeing what we're working on and our commitment to our users. And so we actually don't hear it from the inside. We are attracting amazing talent every day.

We're growing our teams, as you said. We're bringing on new leadership constantly, like in terms of areas of investment across safety and security and content and operations. So, look, I think this really is more on the external side of things than it is on the internal. We have a real strong vision and mission around building this product that inspires creativity and joy.

And the teams are really supportive and just know to focus on the day-to-day. So final question, Vanessa. I have nine and 12-year-old boys. Make the case for why I shouldn't just say no social media until they're 18, that the proven downsides are just much greater than the upsides. What's, what's the argument for letting my boys on social media before 18? Well, for your boys, they're actually under 13, which we have a different experience just for those users, which is to protect them for, you know, any of that type of bad actors and behavior that we see that does happen on

social media. So I would certainly look at that for TikTok. We don't allow things like direct messaging up until 16. And we're really looking at in how do we protect our young users and making sure that we have the right tools and safeguards in place. So the flip side there is if you are an active parent, which I'm sure you are, Scott, you're looking at the behaviors of what your kids are doing on social media, you're setting the controls around their usage and what they're watching and how they're engaging,

then I think it can be a really positive experience. You know, what we've seen again is like at this moment of time where we have such a challenging environment that we're in with the pressures of the media and the elections and living through the pandemic, we are all at this moment where we're looking for that connectivity. And I do think there is a value there in terms of social media. And we are all at this moment where we're looking for that connectivity. And I do think there is a value there in terms of social media. And we are, you know, we're certainly seeing that in terms of the positive outpouring in terms of for our community. Vanessa Pappas, I trust that you are taking pause to it. My gosh, put a pause in your life right now

and think I am at the helm of the bobsled of geopolitics, a company that's about to potentially get sold to the most valuable company in the world for the GDP of Lithuania. I mean, what a moment for you. What a moment. I hope you keep a journal. It is wonderful and exceptional to be Vanessa right now. Congratulations. What an interesting time in your life. to be Vanessa right now. Congratulations. What an interesting time in your life. Vanessa, I do have one thing.

Are you preparing for how it changes? Do you think it'll change if the Microsoft deal does go through from your perspective of what you've been managing? You know, we're so proud of the product that we've built and the community. We're going to do what we can to ensure that stays.

And as we continue to grow too, like, you know, the beauty of TikTok and what it's providing again, as being this place of positivity and joy and just creativity, that's what we're wanting to safeguard in no matter what circumstance as we continue to grow. All right, Vanessa, you've handled yourself rather well here on your, don't get on a bobsled, bobsleds are dangerous. Don't, there's no bobsled happening here. If you just read the Times piece on that. Vanessa, thank you so much for coming on. We really appreciate it.

We know it's very trying time for you and the U.S. staff of this company. It's an awesome time. Thanks so much for having me. It's an awesome time. Thank you. I think it's absolutely amazing. It's an awesome time.

Thank you. Thanks so much, everyone. Bye. Thank you. Hey, it's Kara. We're listening to the first episode of Pivot School, which is broadcast live on Tuesday, August 4th. We're going to take a quick break now, but we'll be back after this. Fox Creative.

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Kara, let's get a different perspective on the future of media. Let's bring in Emily Bell. She's a director of the Toe Center for Digital Journalism at Columbia University. And let's be honest, an outstanding university is just north of NYU. It's called Fordham, but there's also Columbia. There's also Columbia. I went to Columbia. Anyways, that's NYU humor.

I went to Columbia. That's NYU humor. I went there. And I know you only remind me of it. I know you won tons of awards there and have medals. And anyways. All right, let's bring in Professor Bell. All right, we're here with Vanessa Bell.

Hey. Emily Bell. Vanessa Bell, nice to meet you. Emily Bell from Columbia. Nice to meet you. Emily and I have known each other for a very long time. I just, you know, you've been studying the media. We just talked about, you know, bad misinformation, disinformation and what you're doing there. Give us a sort of an overview of where you think media is right now.

And I, again, I did go to Columbia. It was a very different place before. There was no digital in anything. So talk a little bit about the bigger picture from your perspective. Yeah, I would also point out that Cara once told our students that had she put all of her money in Apple stock and not gone to Columbia, she would now be owning an island in the Bahamas. And she's probably right about that, actually, as well. So I haven't prepared my slide with the flaming dumpster. So the overview of the media is I'm afraid to say I have to agree with my esteemed colleague from the second best university in lower Manhattan, which is NYU. So Scott really kind of outlined this thing that has happened, which is complete change of control from the companies that used to control the media, you know, the New York Times, the Time Warners, the news corps, to the new gatekeepers who are the Microsofts, Googles, Facebooks, etc. So that's the kind of big story.

We know that, right? But underneath that, and the bit that I'm concerned about really is, where do we get our information from? You know, how do we train journalists to work in this environment? I teach a course called Information Warfare Reporting, where my poor students have to spend 16 weeks down the rabbit holes of kind of filthy memes on Instagram and Facebook and YouTube. How do we report this? How do we get good information out there?

And how do we kind of support, you know, telling people what's going on in the world right now when it's kind of an approximation of the truth? So all of this was going on beforehand. And then we had this thing called the pandemic, which has totally accelerated all of this was going on beforehand and then we had this thing called the pandemic um which uh has totally accelerated all of the trends that we saw before so scott was saying end of advertising end of advertising supported media um huge shock to the system for what's left of local media particularly in um particularly in the u.s so we're about to go into this election. We know about misinformation, disinformation in ways that we didn't in 2016. But the question about whether or not we've

actually done enough to control it, whether we have the right for want of, I don't think you've got this on your bingo card, for whether we've got the right information ecosystem, it feels like we have a really, we're still in a terrible mess. I just want to throw out a thesis and tell me where I have this wrong. Any step to tyranny, or just because I'm feeling like any step to genocide always involves weaponization of the media as an initial step. And when you have one organization where 60% of Americans now get their news and it basically goes to the highest bidder. Truth basically goes to that. They say they don't want to be the arbiter of our truth, but really they've decided the arbiter of everyone's truth should be whoever has a credit

card. I would argue that Facebook is the most dangerous organization in America. Tell me where I have that wrong. Well, I don't think you have it wrong. I think that, but then we have to ask ourselves, like, why? How did this happen? Is it because Martin Zuckerberg is uniquely evil? I don't actually, despite all the memes on the internet about the poor guy and his sunscreen, I don't think that he set out to do this. But it's been allowed, right? And we've seen this for not just the past kind of, you know, 10 years with Facebook. We've seen it for the 20 years preceding that with News Call and Rupert Murdoch, who, you know, in my world growing up as a media business reporter, I covered News Call for 20 years. And they were absolutely brilliant.

Rupert Murdoch is a genius when it comes to squaring regulations to suit his company. Get rid of the fairness doctrine. You see that kind of, you know, businesses like Fox News take off. So really, you know, whilst you may be right

that Facebook is the most dangerous corporation in America at the moment, maybe it's TikTok, who, you know, time will tell. The answer to that has to be rooted in law and has to be rooted in politics. And so really the kind of, maybe the most dangerous thing is that we don't have the political will to deal with this. We know it's there. You know, we saw the hearings last week. Nobody is really making a case for what we should do about this. So let's talk about a couple of things.

One is I want to give people an idea of how bad it is. Give some examples of some of these filthy memes that are happening, like around COVID, some of the ones which are more dangerous, besides the one put out by the White House. What are some of the things that you've been tracking these things for danger? And then they go wild on a Facebook or a Twitter less so in other places. Right. And actually Instagram as well. We have to say there's an awful lot of health misinformation on Instagram. And again, that predates COVID. That really comes from the anti-vaxxers who love Instagram. Instagram's done a great job actually of sort of clamping down on

some of the anti-vax memes, but they're kind of popping up again. When you say apart from the White House, Cara, that's ruling out the sort of filthy meme in chief. So the weird thing about COVID is that perhaps the most dangerous kind of memes and misinformation have come from official sources. So, you know, the World Health Organization, middle of January, says this is not a virus that is transmissible between people. Then we have the whole, you don't need to wear a mask, just wash your hands. Then we had hydroxychloroquine right yeah yes hydroxychloroquine always know how to say the drugs that you might have to um order so so that came from this repeated sort of uh boosting by trump who i think must be sitting on a pile of hydroxychloroquine in the White House. So some of this, and then

around that, we did see some memes around opening up states, right? So we now know, because, you know, America has had, it's not even a second wave, like what we're having is the first wave. So that's the really terrifying thing. We had the first wave in New York, it's now moved to the rest of the country. How did it move to the rest of the country lots of makes messages about it's okay to go out and do business it's okay to open up we saw a ton of of different memes around you know sort of open up the states um they were kind of combined with this movement which is um known as the boogaloo movement uh which is the sort of the the the second amendment fans people who um say don't be pushed around by politics a lot of there were lots of there's a lot of crossover between open up the states um the second amendment fans um and this kind of like

political pressure and constant discussion within Facebook private groups. So, you know, you have that kind of supplemented by crazy people like David Icke, who's a Brit, who is a very famous conspiracy theorist in the UK that everyone has learned to ignore. But, you know, he makes like a kind of fairly professional looking kind of hour long video to tell us how 5G masks are actually behind the great conspiracy theory, which is spreading coronavirus. And before you know it, people are, you know, because we're in a low information environment. So here's the thing, we don't really know very much at all yet about the pandemic. We don't really know that much about how coronavirus behaves long term. We don't, you that much about how coronavirus behaves long-term.

We don't, you know, we're kind of making it up as we go along. So that's a great place to play these kind of shady conspiracy theories into, you know, we've talked before, Cara, about the pandemic. That was another one, you know, Judy Moskowitz and her very professional, but these are all digital marketing campaigns. I think that's the point. It's that it's being amplified and weaponized in this way. Scott? So if it's, whether it's Kara's mother watching Fox or my family watching Anderson Cooper,

did you know I'm really good friends with Anderson Cooper, Professor? Did you know that, Professor? I did not know, but I see see. He doesn't know it either. I just know we're going to get along famously. Anyways, so but when we're talking, I find that none of these companies, Amazon, Facebook, are doing anything different than media companies haven't done before, as referenced by your comments about Murdoch. But when we're talking about Tucker Carlson or Sean Hannity, we're talking about 1 to 8 million viewers that get potentially misinformation.

When you're talking about people getting misinformation on Facebook, you're talking about a billion people log on every day and 3.5 billion every month. So, aren't we talking about a dumpster fire versus a mushroom cloud of a nuclear detonation isn't it i mean it's not it's not that the problem they're not guilty of the same problems it's just that one one is a scab and and one is full-blown cancer that's metastasized metastasized in every organ isn't it isn't it the scale of the problem yeah i think it is the scale of the problem but um a lot of this actually comes from tucker carlson, like Sinclair Broadcasting. The mushroom cloud is detonated often in the mainstream media.

It's a great point. And if you think about how often do you read a story that doesn't have tweets embedded in it? How often do you see an item that doesn't reference something somebody said or posted on Facebook? Almost never. So, you know, the power is in those kind of platforms. And it's really challenging journalists. So like you used to be able to write a crappy headline for the New York Times. I'm sure nobody writes crappy headlines for the New York Times anymore. However, you used to be able to write a crappy headline for the New York Times and nobody would read it. because the number of people who get to like

page 11 on the New York Times, very few. Nowadays, it can go everywhere. So this idea that there is a mainstream media and then there are new social media platforms and somehow one is, you know, these two are separate.'s not sustainable and we haven't really figured out as journalists what to do about that we haven't really figured out what to do about it as platforms you know we don't have a consistent way of tracking these things the platforms are i mean their biggest sin in my view is not allowing people like my researchers access to the data that they have just to kind of spot these things early or at least kind of theorize about what you might be able to do about them. Everything we know about this has come about because investigative

journalists and academics, God help us, are the thin line between this complete chaos, this mushroom cloud, and actually having some protection against it. But we don't have the tools to do our job. And that's where the tree knocked out Emily's internet and vegetables. Let's jump ahead now to the last two segments of the show, audience Q&A and predictions. We started with a video question that was sent in by Christiana Thomas in California. Let's jump ahead now to the last two segments of the show, audience Q&A and predictions. We started with a video question that was sent in by Christiana Thomas in California. Hi. So my question is about TikTok and security.

As far as I can see, nobody's suggesting that TikTok is currently malware, just that it has the potential to be. Meanwhile, our domestic applications are being misused by foreign agents. There's Russian bots on Twitter. They had a security breach. There's conspiracy theorists from other countries posting to Facebook. The Trump campaign got my Gmail from somewhere and opted me into email that I don't want. With all of these known security concerns, why are we so focused on the potential from TikTok? What am I missing? Thanks. That's a great question from Christiana. Listen, I'm going to start with this. I've been talking and reporting on a lot of this.

There is a difference. People are making the connection between Facebook's abuses or Twitter's or Google's and China. There's a difference between companies in this country and what China's doing. The Chinese government is malevolent in a way that Mark Zuckerberg could only dream of. So I think you can say that Facebook and others attack us, but in this case, even the potential for national security problems is great because Chinese internet hegemony is growing across the globe.

And so there are good reasons to feel nervous. I don't think there's good reasons to feel nervous about TikTok necessarily and the hill that Trump is trying to fight up is not the correct one. It should be, they should be focused on AI, on 5G, on all kinds of things. So I think there's good reason to be concerned, but the focus on this is almost an embarrassment. Scott? Yeah, I think there's real concern, legitimate concern around TikTok. I don't know if similar to the way Huawei is being politicized, the threats are that legitimate.

I think it's not a function of whether or not the Chinese government would weaponize them if they could. I just don't know their potential to be weaponized anymore, as you referenced, more so than the other platforms. I think the bigger threat, quite frankly, of TikTok is the same threat across Facebook, and that is, do we need another addictive platform to send our children down a rat hole of addiction and UI that creates just device addiction? So, yeah, it's a fair point.

This is so rife with irony, though. It's very hard for the Chinese to, you know, kind of what's good for the goose here. The Chinese let American firms into their markets for long enough to steal their IP, then kick them out. And in this instance, we are letting them in long enough to develop real traction and then forcing them to sell. And all the moons have lined up over like the mother of good fortune for Microsoft, which from an antitrust standpoint is really a Sophie's choice. We either eliminate a competitor for big tech or we let the fifth biggest big tech guy or the biggest, depending on how you define it, get stronger and stronger.

This is, I actually think here, I don't know what you think. I think President Trump comes out of this a winner other than he has an incredible ability to snatch the fee from the jaws of victory by asking for a brokerage fee on it. But I think that thrusting this into the hands of an American firm is actually a fairly deft counterpunch.

I don't think so at all. I think it should have gone public. I think they should have been a public company that's a real competitor to Facebook. The way he's inserted himself here, it's so, uh, clottish and stupid. And of course this, you know, he made a mess of it. It was going pretty well. And I think Steve Mnuchin and others were working on it and then he had to insert himself very confusingly. And he's done it again with this, getting a VIG. It's just, it's ridiculous. I, you know, Microsoft had to write a slavish letter to him. And let me just tell you, they do not think the things they wrote in the letter at Microsoft. And so the whole thing is just a ridiculous kabuki theater for this incredibly,

this terrible businessman who doesn't understand. Okay, I agree with most of you. So an American firm is about to end up with the fastest growing social media property and what is kind of an overdue. It should have been a new American company. That's my feeling. Or we're going to disagree on this one. No more videos. So let's ask these questions in real time. So I'm going to read them, Scott. And I'm going to have, oh, this is interesting.

Scott, do you have a GoFundMe? Want to get you a decent webcam? One question. Have you seen me? High def is not a good look for me. So the worse the webcam, the better the dog. Wasn't Twitter's Vine the forerunner of TikTok? Would love to hear Professor G's thought on the missed opportunity.

What might TikTok's strategy need to rebrand itself, be given that Trump et al have branded it with a Chinese and suspicion? Let's talk about what is the next steps for TikTok and Microsoft once it owns it, if this all completes the way? I think Vine is another interesting example of how you're not able to not only innovate around new products, you're not able to seize opportunities when you have a part-time CEO. And I think that's another reason that Jack Dorsey will not make it to the end of the year. Q Cara saying you've predicted that over and over again.

But look, this was a huge missed opportunity. And then in comes TikTok with what is effectively Vine Plus, and it's now worth $50 billion or potentially $100 billion, which by the way, is two to three, two to four X what Twitter's market cap is right now. Twitter is the land of missed opportunities. In terms of rebranding itself, there's a big opportunity. So just as Shopify, if I were TikTok, I would be looking at Shopify. Shopify found this white space, the size of the Amazon by branding itself the non-Amazon Amazon and being a good partner and letting you have the data, letting the merchant have the branding and built a company that is now worth twice as

much as Federal Express. If I were TikTok, I'd be thinking, how can I be the non-Instagram Instagram? Safer, more respect for the Commonwealth, tighter standards, no election, no political advertising, and basically trying to starch their hat white and say to advertisers and parents, we're the good guys. What do you think, Kara? I think it will go away immediately the minute they're owned by Microsoft, and Microsoft will handle this Chinese security issues right away. The positive about a Microsoft

is that they have the money to spend to, one, make it secure, two, do massive marketing if they're really into it, three, protect them. You know what I mean? Be protected from any problems they might have going forward. I don't think an IPO, a TikTok could have gotten up to speed, most people don't, on security that would satisfy the U.S. government. Even though it's sort of a, this is a forced sale and we don't, I'm sorry, we don't do that in this country, especially when there's no proof necessarily of malware yet. Like I'd like to see like the evidence and everything else and I know it's difficult to do so, but this is part of a political calculation on the part of President yet. Like, I'd like to see, like, the evidence and everything else. And I know it's difficult to do so.

But this is part of a political calculation on the part of President Trump solely, even if he's messed it up a number of times. I do think that people will forget they do like the product. It's a popular product. And I do think you see other, some people think that Skype at Microsoft has gotten worse. Other people think Minecraft is doing fine. Most people think LinkedIn. So if they allow it to be run

by the people who have run it and allow it to be innovative, that would work. And I think under Satya Nadella, that will happen. That said, Microsoft is littered with consumer stuff that they've screwed up

over and over and over again. That was under Steve Ballmer. So I think that's the answer. Actually, it was a good phone. It was a very good phone, let's just say. Well, but you forgot the difference between Microsoft and Facebook. You forgot that Microsoft doesn't run by a sociopath.

You left that off. No, although Microsoft was one of- And by the way, I got to revisit this notion. You don't think what China has done to our internet giants isn't twice as bad as us forcing them to sell to an American company and take $50 billion? Why compare the two? This is the problem with Silicon Valley and others like yourself, the reductiveness of it. I have been giving speeches

about the worries of the Chinese internet hegemony for a long time. TikTok is not the hill to die on. 5G is. AI is. Robot, investment in research, investment in innovation, investment in startups, and I'm not allowing these big companies. And what happens, and it happened at the hearing, is Mark Zuckerberg goes up and says, it's she or me. That's not a choice I want. I don't want she, and I don't want him. And so I think, to me, the solution to this is innovation, lots of startups. Okay, let's get to one or two more questions. Get the Chinese condensed deal. Oh, come on. They're doing very well on a lot of things.

It's just easy. I agree. I think China is a huge threat, but not among teenage dance videos. Will the pandemic accelerate the popularity and participation in eSports? Scott, both of us are not sporty type of people, but what do you think? Because you've talked a lot about the Olympics not happening. Yeah. So I think esports have recognized an uptick, but what's recognized a bigger uptick without sports is this notion of masculinity meets gambling meets the markets. And I think that the biggest, unfortunately, I think the biggest beneficiary and the biggest

externality of that switch in behavior is that young men are no longer watching ESPN or they're no longer gambling or young men are no longer going to Las Vegas because all of those things are shut down and they're getting their $1,200 stimulus check and they're levering it up to $10,000 and buying big name stocks on the Robinhood app, which is using some of the same unfortunate features that Instagram and quite frankly, the TikTok deploy to run up the stock market, 93% of which is owned by the top 10% and the wheel spins. So I think the most dangerous thing right now about the absence of sports, in addition to media companies, old media companies kind of being the last nail in their coffin, if you will, or being a dead horse while it's down, is this rise in artificial market prices created by an addiction across bored young men who are no longer watching

sports. And this typically, this story usually does not end well. I'm sorry? This is gambling. You're talking gambling. You're talking about gambling. Yeah, I think so. I think it's tickling the sensors of esports and gambling. And we had Mark Cuban on and he talked about how sports franchises are going to boom because people are going to move to FanDuel and esports gambling. But I wonder if we've moved from markets, which are a place to invest and build economic security, to a place of gambling and kind of like depression and broken dreams among a large cohort of young American men. Your thoughts, Kara? I think that e-sports are going to be huge. I think it is.

I think that, like everything else, everything's going to change dramatically. I do think people will go back to regular sports. But like Mark talked about, the audience will hardly matter. And there'll be all kinds of streams that you'll have for depending on the sport you're interested in. So I think that's really where it's going. And I think you're correct in that sense. So, okay, we're going to finish up. I'm going to have one more last quick question and then predictions. And what's your take on the telcos making media acquisitions? Let's look backwards. How do you think those worked out for Verizon and AT&T so far? I don't think they have. I don't think there's any obvious synergy between AT&T and Time Warner. I think ultimately Time Warner will get spun again.

I just can't. When I see Apple producing its own content, I see the synergy. When I see Amazon producing its own content, I see the synergy. When I see Facebook buying Instagram, I see synergy. AT&T's purchased a Time Warner. I don't understand how AT&T on my iPhone is getting me to consume more HBO or CNN. I haven't seen it yet. So I don't see the synergy. I think they overpaid for what are assets that have a business model that's declining. I think the big winner in that acquisition is Jeff Bukas and Time Warner shareholders who sold it at the top. Verizon and Yahoo AOL, I don't see any synergy

there. Ultimately, these companies are going to generate, the big winners here are the bankers who in three to five years will come in with the same deck they use to convince these companies to acquire those companies, but flipped upside down or they'll present it in reverse order and they'll convince them to divest them and there'll be spins again. What do you think, Karen? All right, that's a very good thinking, which I think you are correct. It's been a disaster. It's been a disaster. I think it hasn't been good. It didn't make any sense to me at the time. It just doesn't make it. It's a lot of bankers. There's a lot of bankers who are very good at this. And it'll be interesting to see who

does buy these companies. And of course, internet companies are sort of the ones you're going to be looking at, a la Jeff Bezos. I think you're going to see a lot more of those for sure. Okay. We have one more thing to do before we wrap up today's show. And of course, it is predictions. We have a surprise guest to make predictions over the weeks. But, and of course, Scott's going to be doing that. So let's go to predictions. So let's go to predictions. Okay. Before you make a prediction, Professor Galley, which is your greatest talent, I think, of your many talents, we have a special guest. That's a low bar.

It is a low bar. Anyway, I was trying to be nice to you. You don't let me. You don't let me hug you, Scott. Like, you know, digitally hug you. Don't let it happen. I'm always ready for the hug. No, you're not getting it now. It's done. Okay. Professor Galley, before you make it. Give me hug you, Scott. Like, you know, digitally hug you. Don't let it happen. I'm always ready for the hug. No, you're not getting it now.

It's done. Okay. Give me a pig's ear. No, I shall not. Oh my God. You know, Stephanie Ruhl had a comment about you giving yourself your own nickname, but you should listen to Pivot today when you were gone. We had a lot of fun, us ladies.

Anyway, let's play the prediction. Well, we're going to have Zoom screens on the inside of our sunglasses. A huge ratings number for the Academy Awards is going to be 138 participants. News organizations are coming back. No, no, trust me on this. Okay, so you know how in, you know, Caveman Times or whatever, I didn't really go to college. Anyway, whatever started local newspapers was probably, you know, a bunch of people. Maybe they didn't have secondaries or tertiaries, but that's going to happen again. And they're going to be kind of ragged at first, but not like this YouTube nonsense or Rush Limbaugh or something. And

most importantly, because of COVID, no one ever has to do a sex scene with Johnny Depp again. She's good. I think we should just call this scene. That was very good. No, I thought she looks good. Is that a hate crime if I say that Kathy Griffin looks good? Is that a hate crime? Does anyone feel triggered? No. She looks good. That was fun.

Whatever you want. She's good. Mr. Chris Matthews. I don't even know how to address that. I don't either. Listen, that was great. That was Kathy Griffin, who I did a great podcast with. And she's amazing.

She's actually really interesting. Sometimes she goes off the reservation. But that was a great prediction. Actually, zoom inside your glasses is a great podcast with, and she's amazing. She's actually really interesting. Sometimes she goes off the reservation, but that was a great prediction. Actually, zoom inside your glasses is a great idea. And the idea of Johnny Depp, I agree with her on that one, although I used to like Johnny Depp a lot more. So, Scott, let's go with your prediction. Let's go with your prediction, and then we will finish this possible debacle. So go ahead.

Tell me your prediction. So anytime you look at a company that's adding tens or hundreds of billions of value, one of the key themes you're seeing is verticalization. And I think that Apple is very disciplined and deliberate. And I think all of their repositioning and doubling down on privacy and if they have control of the rails

of the one and a half billion wealthiest people in the world, I think that it just makes a ton of sense for them to launch a search engine. But here's the prediction. They will announce their search engine, which will be tested, ready to go, clear they've been working on it for a long time. The day that the courts make the decision to break up Google after the antitrust case is filed. In other words, they're just waiting for Google to be broken up before they announce their own search engine, as Google would point to it as a competitor. So Apple's search engine already exists. It's already very good. They're just waiting to launch it the day the courts decide to levy the

decision to break up Google. May I press back on you slightly? What about their mapping? You never do that. They haven't ever been able to catch me. They never caught Google on mapping. You know, Apple Maps is, I took it off my phone. Fair point. Yeah, that's the example where they have it.

Apple Maps where it is out there. What about a subscription? Well, my sense is, but is that the same thing? Is that the same thing? I think search at this point. You don't have to do it to do Viva. But is that the same thing? Is that the same thing? I think search at this point. But you think they're going to really try to compete in an area they've never been good at, services and things like that. Oh, what?

You mean like media or music? That doesn't stop these guys. They have control of the interface. They have the rails to one and a half billion people. Search is $150 billion, 80-point glorious margin. That carcass is too ripe to ignore. They're going to wait till the DOJ decides, either comes in, creates chaos, or decides to break them up, and they will announce a much more competent search engine, and they'll stop taking that $5 billion a year. And they'll double down on privacy. They'll say, okay, maybe we're 90%, 95% as good as Google, but guess what?

We're not going to weaponize you. This is a cleaner, healthier search engine. I think they already have it. I think they're just waiting for the DOJ to weigh in on Google. What about Bing? What about Bing, Bing, Bing? Remember that? They still have market share. Yeah, but Microsoft doesn't control the rails. They control the rails into corporate America, but not into consumers' hearts. They don't have, I mean, essentially Google and Apple. Google has rails. Apple has rails under the billion and a half wealthiest people, and Google owns the rails under the other two or three billion of the world that's willing to have their privacy

molested in exchange for a free phone. And the market is actually, I think, growing bigger for the former. And Apple will take advantage of that and launch a search engine. Interesting. Probably inaccurate, but I like it. I like the concept of it. It's interesting. The key is to be right.

The key is to catalyze the conversation. That's true. That's an interesting question. I think that's a fascinating issue. And I've always thought they will kick Google off the Apple iPhone that I assume. And we'll see what goes or put it down in the bottom somewhere where you can't find it. Anyway, Scott, that's a great prediction. That is a great prediction. And on that note, we wrap up episode one of Pivot Schooled. Thank you so much to everyone who joined us live. And don't forget, if you want to watch Pivot Schooled live, we have

two more episodes coming up. The next one is on Wednesday, August 26th at 10 a.m. Pacific, 1 p.m. Eastern time. Get your tickets now at PivotSchooled.com. You can also buy Pivot Schooled swag at PivotSchooled.com slash shop. Thanks again for listening and see you on Wednesday.