Pivot - Trump is Back on Meta, The DOJ Sues Google, and No More Murdoch Merger

Episode Date: January 27, 2023

Kara and Scott discuss the Bad Blood between the Senate Judiciary Committee and Live Nation, Walmart giving workers a raise, and the cancelled Murdoch merger of Fox and News Corp. Also, will you see more covfefe in your feeds? Trump is back on Facebook and Instagram. Plus, the DOJ is suing Google over its dominance in digital advertising: what took them so long? Send us your questions! Call 855-51-PIVOT or go to nymag.com/pivot. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Just go to Indeed.com slash podcast right now and say you heard about Indeed on this podcast. Indeed.com slash podcast. Terms and conditions apply. Need to hire? You need Indeed. Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher. And I'm Scott Galloway. How you doing today? What's going on? What's happening?

I mean, truth be told, I'm enjoying London, but I'm not loving it. There's a lot of things I miss about America and my life in America, and I'm headed back. I'm going to Miami and New York on Sunday, which I'm really excited about. There's a study every year. they do a study on happiness, and they look at what countries are the happiest. And seven of the 10 happiest countries in the world tend to be in Northern Europe. And you think, well, what is it? It's pretty dark up there. Like, what do they have that we don't have? And it's not what they have, it's what they don't have. And specifically, there's an absence of fear of certain things being taken away from you. And

number one is that because of the social safety net, and I'm not saying it's the right way, but it's their way, and that is if your wife is diagnosed with lung cancer, it doesn't mean you're going bankrupt. And that happens to about a third or half of people who have a long-term serious illness as it puts very serious financial strain on their family, adding to what is otherwise on its own a very bad situation. But something, one of the upsides of the UK, and I hadn't really thought about until I got here, I didn't realize how much the fear of mass shootings had weighed on me. And some of that is because I'm older and I'm a little bit neurotic. But when you have kids and you're

dropping them off every day at school and you're taking them to movies and you're going to very public places and malls, which by the way, my 12-year-old is obsessed with malls. He was looking forward to going to Dubai. When he heard that largest mall in the world, it was like, we've got to go to Dubai. Anyways, you can't help but have these really terrible images and scenarios run through your mind. And guess what? When you move to the UK, you don't have those images. You don't have those fears. You know why? Because it doesn't happen here. Yeah. I mean, they've certainly had shootings, but yes. Very few. Doesn't happen very much. And here it's a regular daily occurrence.

Quick trivia test. The number of gun-related killings as a percentage of all homicides in the US, do you know what percentage of homicides are gun-related in the U.S.? All of them. 79%. Okay, now, do you know what it is in the U.K.? What percentage of homicides involve a gun in the U.K.? Well, they use maces there, right? They use maces.

Maces. I don't know. It's 4%. Yeah, small. Nobody has a gun. 4%. Think about that. Yes, I agree.

I was in California. I was near Half Moon Bay the other day, which is where the last shooting took place. And I know all these places. And it's really, it's sickening how our country expects these. They tolerate them. And we don't do anything to stop them, especially when they have to do with children. And it's really, it's depressing. You're right, 100%. But, you know, it's the way we've decided to live in this country. And it's pathetic, actually. Anyway, today, the Justice Department goes for the jugular against Google.

And Facebook adds at least one new user you might have heard of. Also, we'll hear from a listener who caught her boyfriend in a lie. But first, Rupert Murdoch will not merge Fox and News Corp after all. A statement from News Corp announced that Murdoch determined combining the companies will not be optimal for shareholders. The potential deal had faced substantial investor pushback and would have required approval from a majority of investors. The Murdoch family trust controls about 40 percent of the vote at both companies. I think James Murdoch was not for it also. One of the people in that trust, News Corp is currently in discussion to sell at stake. And Move Inc., the realtor.com operator,

and a deal likely worth more than $3 billion. We had said we did not think this was going to happen. Was it the Dominion lawsuit? Was it that it was only good for Rupert and not investors? What do you think? It was some pushback because this family has a lot of control, especially Rupert, over the company. This is a victory for corporate governance. So while the family controls 40% of the stock, one of the things that was built into the corporate governance and shareholder rights of the non-family shareholders is that any tie-up or acquisition like this requires the approval of the majority of non-family shareholders. Had that not been the case here, I think Rupert would

have had his way and these two would have retied. But basically, shareholders from both entities said, we don't see the logic here. It sounds to me like the logic was more ego or emotionally driven for sentimental reasons. And that is News Corp. So Rupert has always had this enormous affinity and affection for newspapers. And News Corp. has some iconic titles. But what you see generally in corporate America as it relates to the tension between management and shareholders, or one of them, is the following. And that is a CEO likes to conglomerate. They like to put assets together because it does a couple of things. It gives them a bigger empire and it also smooths out the volatility. And that is, okay, newspapers are down, but I can subsidize it because sports or news revenue are up or my digital assets are up here. So CEOs love the predictability and the diversification of a conglomerate. Now, shareholders don't like it because a shareholder doesn't need you to diversify

for her. She can buy stocks in different companies and doesn't need you to diversify for her and wants you, management, accountable and responsible for a very focused company. In addition, it's usually the deconglomeration or the breakup of these types of companies that are good for shareholders, because generally what you have in a conglomerate such as, for example, News Corp, is they look at it, and when there's differing assets of differing value, investors will take the shittiest asset, the newspaper, and assign that multiple to the entire

business, including Move, which is realtor.com, which they could spin out and get a big number for. So it's the deconglomeration of these entities that will actually add shareholder value. And the investors and the shareholders realize that and say, we get a rooper. We realize you'd rather bring your family together, maybe provide the newspapers with more steady cash flows. But this doesn't make any sense. And it's a victory for corporate governance. Yeah, it is. And I think the Dominion lawsuit's hanging over it and everything else. And he's made a mess there. And so, I suspect, you know, it's only good for Rupert. And I think a lot of investors push back, including his own son, James Murdoch, from what I understand.

His kid. Yeah, his son. Yeah, yeah, his son. So, you know, I think he's at the end of his life. He wanted to sort of clean up the way it's going to go. I think it's a question of what happens when he inevitably dies to that company, because the family is not in agreement with each other. I think it's Lachlan versus kind of thing. That's from what I understand. And so, I think he was trying to make it neater, you know, to put it all in one place. But you're right. He likes to have his whole empire. Walmart, by the way, here's some actually good news, will raise its starting wage from $12 to $14 an hour, still too low. The change takes effect next month and will up the company's

average hourly wage to $17.50. Meanwhile, a sign for what's to come for the labor market, though, companies are cutting temp workers in high numbers. Employers eliminated over 110,000 temp workers in the last five months of 2022, including 35,000 in December. The state of temp work is often seen as an indicator of where the labor market is headed. So, you know, you're seeing a tightening up in the higher levels in the tech sector. That said, Walmart's raising rates because there's too many jobs and not enough people. Which way do you go with this? Will suddenly they have plenty of people to work at the Chipotles or the Walmarts or retail places in an area that's been sort of very good for the employee? I mean, if you go really meta, the biggest threat, I think, to mature economies

is there just aren't going to be enough young people to fill all the jobs. And that is it's much more exciting to talk about this dystopic future where technology and AI result in destruction of jobs. But the reality is we still have more jobs than we have people pursuing jobs right now. And the market is taking wages up. But what it also kind of highlights is a minimum wage, at this point, the government is so not serious about it, and it's so ridiculous that minimum wage in the United States is $7.25 an hour that we should just do away with it. I think it's great that Walmart is raising their wage.

I would argue it's not. It's basically supply and demand. They need to respond to the market. But I was on a Zoom call or a presentation this morning with a company I used to be on the board of, and they were talking about unions. And I think one of the easiest ways to solve a lot of the problems in the United States, whether it's depression, obesity, deaths of despair, pump more money into the economy, would simply be raising minimum wage to $25 an hour. A lot of smaller companies would go out of business. And quite frankly, I think that'd be okay. And a lot of bigger companies, it would reduce their market. There's just no getting around. There's no free lunch. A lot of stock prices for companies ranging from McDonald's to Walmart would get hit really hard. A lot of small businesses wouldn't be able to survive

with that. And it would be worth it because we are in historically strong employment. And so core and central to the American brand, I used to think it was dignity. It's not. We've decided it's a winner and loser economy. Okay, fine. But core to our economy is that Americans work. So we just need to make work more attractive. And where I piss off my colleagues on the left is that the primary construct or the vehicle we have outsourced wages to at the lower level have been unions who have been so ineffective, so disorganized, so non-aspirational in terms of their leadership and their messaging that they have done a terrible job representing middle class workers. And I've said this once and and I'll say it again, and I'll shut up here. There needs to be one union, and it should be the federal government. Yes. Well, we'll see about that. I doubt it's going to happen.

By the way, I was on Anderson Cooper last night talking about AI. Did you see me? Yes, I heard. I heard. Did you know anything about it? Or are you good? Was it good? I was actually really intimidated because AI is something I do not... He kicked off the segment by saying this introduction was written by ChatGPT. Oh, they love to do that. And it said, I want to welcome Professor Scott Galloway, an expert in technology and AI. And I'm like, this perfectly summarizes AI. And that is, it's remarkable and it's wrong. Yeah.

I am not an expert in AI. And I just thought it was so ironic. Let me just say, I hate when they do that, when they use chat GPT to do that. It's over. Stop doing it, media. Stop writing about people writing term papers. Everybody does it. Everyone thinks it's so hilarious.

And then it's like, it isn't. It's just terrible writing. It's bad writing. Thank you for the bad writing from the computer. Very much so. Speaking of government ineffectiveness, I don't know if you watched the hearings, the Senate Judiciary Committee with Live Nation and others ticketing companies this week. But they had to make Taylor Swift jokes all over the place. All the senators each had one.

They used lyrics. We get it. We're young. We get it. Oh, you hipsters. But I have to do it myself. The hearings came after Taylor Swift's ticket debacle that we all

know all too well. In a rare moment of camaraderie, both sides of the aisle were united in telling Live Nation representatives we knew you were trouble when you walked in. Senators cited estimates the company controls 70 to 80 percent of the concert venues in the United States. Live Nation claims it's closer to 50 to 60 percent. It's still a lot, Live Nation. Amy Klobuchar called the company controls 70 to 80 percent of the concert venues in the United States. Live Nation claims it's closer to 50 to 60 percent. It's still a lot, Live Nation.

Amy Klobuchar called the company the definition of a monopoly. She's, of course, written the book on that. The Live Nation executives apologized to Taylor Swift and her fans. You have to do that because they will kill you, and said the problem was online bots. And Live Nation said the company believes, quote, ticketing has never been more competitive. Others might disagree. It's a very popular fight, you know, fighting the ticket companies. And I do know it does strike a chord among young people particularly. But is it the right battle on the antitrust fund? People certainly get it. We can't get tickets, can't get Madonna, can't get Taylor Swift, can't get this, pay too much for it. Briefly, what are your thoughts on this?

It's sort of, it's just interesting that the thing that's rallied the public to the concept of the importance of antitrust is Taylor Swift. And one of my, one of the, I think the most insightful people whose newsletter, I don't read a lot of newsletters, but I read his, is a gentleman named Bob Lefsetz. And he runs the, or he writes about the music industry. And he said, look, people have such affinity and love for Taylor Swift, but they don't ever want to hold her accountable. But the reality is, or there's certain dimensions, the act wants all of the tickets to go on sale at the same time so they can make announcements about tickets selling out in a record amount of time. I mean, there's things the artist could do. The artists command a lot of power. And he was basically saying, look, he was basically saying, look, I get it. I get that people, but nobody ever wants to hold the artist accountable. And he was saying that there's,

that everybody's got their hands dirty here, not just Ticketmaster. But like at the end of the day, when you have a market control that controls two-thirds of the market. If it's even 60%. There's going to be abuse. Abuse. Yeah, it doesn't matter. Or they aren't going to do it right, or if there's a gut down. I mean, the problem is, how do you make these things competitive? Because it's kind of a difficult, you've got to know where the tickets are for sale and coordinating them. It lends itself to one company, right? That it makes it easier. And at the same time, that means, you know,

points of failure very quickly. Even if it's bots attacking them, they're subject to that. The one thing in life that has not been improved by the internet is buying tickets. It's still a frigging pain in the ass to buy tickets to anything. And you never get what you want.

You never get the seats you want. And you woefully overpay for the tickets. And then you have to go on these ridiculous, if you really want to go, you have to go buy them and get scalped, essentially. Even if there's now legal ways to scalp, that's what it is. And so, you never feel good about buying tickets, never. You're always like, that was a lot of money. So, it's kind of an interesting, and obviously, you know, it's been gamed by all these ticket brokers and things like that. And so that's the question is, well, can you stop these ticket brokers or people that are just sucking up all the tickets and getting into the hands of

actual fans? And, you know, they know how to game the system. It's good to point out that Taylor Swift has about 500 songs about guys leaving her, but no songs about oral sex. You see where I'm going with this, Kara? No, I don't. You see where I'm going with this? Do not go in the Taylor area. You're going to have the Taylor fans. You think Beyonce, the beehive, gets mad?

You are now dead. That was good. There's no way that's making the final cut. No, it's staying in. Our producers are hairs on fire. Anyway, let's get on to our first big story. Obviously, Scott, it has to be Trump back on Facebook. And I'm curious if you think it's an important story.

I've been thinking hard about this because I've been on TV a lot. Meta will reinstate Donald Trump's Facebook and Instagram accounts. No surprise. We had predicted this. And in fact, that morning, I said said it's probably going to happen today. Meta's Nick Clegg told Axios and a number of people that Trump will be subject to new policies and guardrails, kept using the word guardrails. Facebook has weighed the risk of harm on and off the platform as he evaluates, but they said they're watching him carefully. Does it matter? I would love to

get your thoughts on whether it matters. Everybody, you know, he's obviously doing it to raise money. He needs the platform to do so. It was a big source of fundraising. But influence, I'm not so sure anymore, although fundraising is influence, I guess. What do you think? You mean I've made his decision to put him back on the platform? I mean, nobody's surprised by it. Yeah, look, they're a for-profit company, I mean, nobody's surprised by it. Yeah, look, they're a for-profit company, and they have lost a lot of money. He creates a lot of rage, a lot of misinformation. He has a huge fan base, huge following.

That all adds up to engagement in Nissan ads and shareholder value. So they don't have an obligation to do it. I don't think it has anything to do with free speech. They also don't have an obligation. Well, I would argue that I think if they were more civic-minded, they would say, okay, you organize an insurrection, yeah, it's kind of a lifetime ban. I mean, I just, you know. No, it was a two-year ban. I think they made a mistake in the beginning by doing these weird things. They sort of panicked and did this two-year ban and then tried to kick it to the oversight board who kicked it back to them. And then they were stuck, you know,

Elon Musk, they had a permanent ban at Twitter, but then he just overrode it. He just said, forget that permanent. That was the old ownership. In this case, they set themselves up for two years later that they had to do something about it. But it just comes back to some of the same arguments. I see these individuals, and I won't say their name, getting a ton of attention on TikTok by sheer virtue of the fact that they're just there a lot. And it creates a certain level of veracity around just not only, I mean, okay, controversial ideas are fine, but it just, this shit is stupid. And yet we're like, oh, it's an issue because I

see him everywhere on TikTok talking about the relationship between men and women. And that, anyway, and I'm like, okay, a media company has a responsibility. And I would argue that the stakeholder of the Commonwealth is just well down the list here. And his power is waning, his influence is waning. I don't think it's an existential threat. The biggest outcome I can think of is that Truth Social is going to go sub 10 bucks a share. Devin Nunes is going to go back to walnut farming or run for office again, because what on earth does Truth Social have now if Trump can go back on? I mean, where do you think he's going to spend all his time and attention? Where he has 120 million followers or where there's basically just some kind of

very right-wing people talking, yelling at each other. But what are your thoughts, Kara? I don't have a lot inside here. I don't know. I just, I don't know what they would have done otherwise. I think keeping him off would have attracted far too much attention from the House, especially the House Republicans, would have given him a big headache. What I think is they've been dragged back into this thing, and it feels like it's Groundhog Day for them. They're going to spend a lot of time, he's going to misbehave, he's going to call Mitch McConnell's wife a terrible Asian slur again. He's going to talk about election denial, he's going to do all the things they say

they have guardrails not to do. And so they'll spend all their time playing whack-a-mole with this guy. That's what they're going to do. And when they shouldn't, what they've been trying to do is move away from politics, but instead they've landed themselves right back in it. You know, I think they couldn't have kept him off given how much they've talked about that they're, you know, dedicated to free speech. I think they kind of had to put him on in lots of ways, or they would have had to go and kick off, you know, Iranian leader, Iranian leaders, or others, right? Then they're really down an avenue they don't want to be down. And so, you know, I thought it was a little bit, Nick Clegg's a fancy guy. I thought he was being very fancy. We've put in guard that we have determined it's safe now. Like, I really didn't

elect you, sir. And so I don't really want you to determine whether it's safe. There was no good situation here, except to have done a permanent ban way back when, and then they wouldn't have had to deal with it. But they couldn't make that call because that's how they are. They're very equivocal. And so I don't know if it matters, though. I think he's yesterday's news in a lot of ways. That said, Donald Trump has an astonishing way of getting up. He's like, night of the living dead. This guy keeps getting up, zombie, and then he gets up. And this is just, this helps him raise money. And that's a good thing for him. So, it's a good thing for him.

There's a new Lifetime or Bravo program about an island or this dating program where young men are paired off with their friend's mothers. I think it's called like MILF Island. Oh, no. I mean, it's really like, it's really like, okay, do you really, this, it gets, I know, ooh is exactly, that's the, that's the correct response. I know. Ooh is exactly, that's the correct response. By the way, according to our producers, it's MILF Manor. MILF Island was a joke on 30 Rock.

So it's MILF Manor, just so you know. There you go. That's a thing. Which is probably better than Donald Trump on this. Okay, I want to see the link here. I want to see what link you're making. But go ahead. I'm interested.

Oh, my God. And it's like, okay, you may get attention. But go ahead. I'm interested. anything like this. The hand-wringing, in my view, in terms of everything I've seen about Meta, is like, how can we get them back on the platform as soon as possible so we can sell more ads? Yeah. I don't think that they, you know, the executive committee where they get whatever it's called, the Facebook oversight board, I just don't think these people give a flying fuck about the Commonwealth. I think they will look earnest or concerned. No, they don't. I didn't want to get lectures from a very classy fellow, seems Nick Clegg,

but I don't need lectures from him about society. It's like, just let him on and shut the fuck up. That's all I want to hear. You know what I mean? I mean, I'm sorry, Nick. That's how I feel. Fine, fine. Have at it.

Have at it. Good luck. I don't want to hear your thoughts. I don't want to thought. I just, although I've. Fine. That's how I feel. Fine. Have at it. Have at it. Good luck. I don't want to hear your thoughts. I don't want to thought. I just, although I've asked him to do an interview, although he's, of course, dead in an interview with everybody but me. But nonetheless, it's sort of like we have thought heavily about this. I just don't want them at the center of public discourse like this. But of course they are.

So, I don't know. I say we put Donald Trump into the metaverse. Let's put him in the metaverse. Yeah, that's a good idea. Then he'll disappear forever. You know, I mean, I think it's just a lot of it is getting tiresome. I think you have Twitter putting a must this week, trying to continue to get attention to himself.

He put Nick Fuentes back on. He reinstated the account of he's a prominent white supremacist who'd been banned since 2021. He's the one that had dinner with Trump. He hosted a Twitter space where he denounced Jews and praised Hitler. And then he was banned again shortly after. So, you know, this is just, it's literally like the same thing over and over again, expecting it. Like, it's insanity because you expect a different outcome from things that are obvious.

So, I don't know. Look, a hallmark, and this is their go-to, and there's a lot of truth to this. The hallmark of any robust democracy is that pretty much anyone can say pretty much anything about pretty much anybody. I get it. Free speech is super important. What we don't talk enough about, though, and there's not enough transparency, is that once Trump is back on the platform and starts saying racist, stupid things or starts spreading election misinformation, do the algorithms of Facebook go, oh, this will piss people off? Let's elevate it. Because when we piss people off, they keep coming back and they argue with each other. Well, they say not.

It feels very, very like we've been here before. They've exhausted us, Scott. That's what they've done. They've exhausted us. Do whatever you want. That's what I felt. Don't you feel that way? Yeah, I'm like, do whatever the fuck you want, you losers.

Like, just, I'm going somewhere else. I'm going somewhere else. That's what I felt like. Like, oh, literally. Like, oh, God, go ahead. Help all the dictators you want. That's what you want is your brand and your legacy. I'm going to a taylor swift i'm going to a taylor swift concert because she at least gives me some entertainment um and at the same time you know like something like tesla beat estimates

because it's bringing in more revenue it's a good business it could be it should be focused on that and bringing to bringing evs to the marketplace and creating a really robust and interesting economy at EVs. And he, you know, that did really well. Like, why can't he focus on that? Why can't these people focus on making things that are good for things? I don't know. So, that's an interesting segue. Tesla did report earnings yesterday, and they had, it was a beat on the top line, a beat on the bottom line, record deliveries. The only two kind of concerning numbers is, as expected, their share of the EV market has dropped. And also, I think the most concerning number is their margins have declined.

But the market, I mean, it's really the power of the market is great. Now that they're more EV competitors, they had to cut prices, which probably stimulated demand. But I think in the last 12 months, to Tesla and Musk's credit, and there's no way to describe this company other than remarkable, I think they did more profit in the last 12 months. A company that wasn't profitable until just a few years ago, I think they did register more profits in the last 12 months than General Motors. Doing great. They have better margins than most car companies. They can cut prices a little more, but go ahead. Yeah. But you said something that when you did your show on Musk, you said that in 50 years, they'll just be remembered for EVs. And I think you're right. Maybe SpaceX or maybe Starlink, but Tesla had a blowout quarter yesterday, and the stock is up about 7, I think it's up, gosh, maybe almost 10% today.

It's still dramatically overvalued. I think it's going to come way back, but you got to call it what it is, and that is they had a great quarter. Yeah, they did. I'm just saying, like, focus over there. You know, and they also said they'll invest more than $3 billion to expand a lithium battery plant in Nevada. Great. That sounds great.

Like, I would literally get the fuck off Twitter, stop making, like, a mess over there, take it bankrupt, whatever. I don't care. Stop platforming Nazis and focus on this. It's just you sit there and you're like, ay-yi-yi-yi-yi-yi. Yeah, this has been, I don't know if you're like, ay-yi-yi-yi-yi-yi. Yeah, this has been – I don't know if you saw, but there was new information that said that Twitter's revenue – 70%. And we had said this.

The Twitter's – yeah. We did back of the envelope math and said, well, if your top 50 advertisers have gone to zero, that probably means the other 50 have cut it in half. So we kind of ballparked 70%. And then a week ago, they said it was 40%. And I was like, no, it wasn't. That was year on year, bad data, you know, the same day. But keep in mind, that means his revenues now are just barely covering his interest payments. And now there's word that he's trying to raise money to go buy back some of that debt. And what I love about this story and the mother of all, we think investors are really stupid. They were trying to raise money at the initial valuation that he raised money for back,

way back when at 45 billion. This is the equivalent of buying a used car or buying a car in the height of COVID when car prices just surged. You went out and you bought a Toyota Corolla for $40,000. And then you went and you crashed the thing and then tried to sell it for $40,000 again. He'll get the money. He'll get the money. A hundred percent. The Saudis. It's got to be some shitty dictator somewhere. I'll give him money. You know, he'll get the money, 100%, the Saudis. It's got to be some shitty dictator somewhere.

I'll give him money. You know, he'll get the money. I don't doubt he can find the money. It'll be on what terms. And also, now that his stock is up, I wouldn't be surprised if he sells more stock and tries to buy it back himself. Yeah, yeah, he's got to get rid of that debt.

I was looking at the terms of it. I was reading some more detailed things, and it's pretty bad. It keeps going up. It keeps getting real problematic at that particular tranche he's trying to get rid of. The other is at, I think, 4%, 6%, whatever. But this other one just keeps exploding, essentially. He should buy it back. And so the question is, does he want to put more? You know where he should put his money into? Tesla. You've got a lot of competitors. You got, you know, you're doing some cool shit.

Put your money over in Tesla. All his money should be in Tesla and the rockets. That's where it should stay. But no, no, no. He has to tweet and irritate people and et cetera. Anyway. All right, Scott, let's go on a quick break. When we come back, we'll talk about the DOJ's threat to Google and take a listener question.

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The DOJ is suing Google over its alleged dominance in online advertising tech. The suit claims that Google buys up ad tech companies and keeps out competitors. It also says Google harms publishers by limiting their ability to monetize content. The DOJ wants Google to divest part of its ad business, including its ad server, DoubleClest part of its ad business,

including its ad server, DoubleClick, and its ad exchange, AdX. The suit comes shortly after Jonathan Cantor was cleared to work on Google cases. He's moved pretty quickly. Cantor is the department's assistant AG for antitrust. He was previously blocked from overseeing Google cases while the department removed a complaint from Alphabet. He's also, it was a lawyer before this.

So this is not a surprise. It's definitely a problem for Google to deal with. Google, of course, says that this is not a problem and there's lots of competition, et cetera, et cetera. But it's its business model. It controls 29% of online advertising. Meta has 20, I guess the rest of it's Amazon and some others. But this is on the tools that control the market. And Google really owns the whole stack from soup

to nuts. Everybody has known that. But it is their whole business. It's 80% of their revenue. What thinks you? Yeah, we've been saying this forever. It's just weird to have, you're running the auction, controlling the supply and the demand. There's very little transparency into the price. And at the same time, their defense will be, well, why do you think we've grown so much? People do have options and they continue to choose us. So clearly it's working.

But if you have an economist explain it to you, it's just a perfect example of people shouldn't control both the demand and the supply side of the market and be the market maker. So it feels like ground zero for antitrust and breakup. The question is, are they just outgunned and overwhelmed by lawyers and lobbyists and money? But any economist worth their salt looks at Google around the online ad market and goes, every antitrust law invented was supposed to prevent this. Yeah, I just don't know what took so long. I mean, they control, you know, it's interesting because digital advertising might be on a downward slope. I mean, tracking transparency from Apple has hit it. People not responding to it.

It could be that this is a business that the market is already taking care of, but they still dominate, especially on the entire stack of things, whether it's small businesses that want to buy advertising. The Google Ads Network has an 80% share. This is according to the DOJ. And DoubleClick for Publishers has 90% share. They really do run everything. And what happens if they make them divest DoubleClick and other ad tech, the tools versus just selling advertising? That would be really interesting. Those companies, well, what you would think would happen, at least in theory, those companies

get sold. Google shareholders take a hit. But the cost of online advertising, the cost for advertisers goes slowly but surely goes down because now you have more suppliers competing for ad dollars. Yeah, that's really pretty much it. And what do you think the chances of that happening? This is a long drawn out fight. And it feels like yesterday's fight, this has been going on, they've dominated advertising for years. And the EU has looked into this and has passed laws. And this feels so late.

It feels so late. But maybe it isn't. I think we're just exhausted. And we've heard about it so long. I mean, big tech has just done a great job of delaying obfuscation and exhausting everybody. of delay and obfuscation and exhausting everybody and kind of this Kremlin-style communication of flooding the zone with just all sorts of arguments and information, some of it accurate, some not, hiring very thoughtful, likable people, giving money not only to Republicans but to Democrats. And it's the ultimate deal. It's the best bargain for

an elected official whose reelection is largely based on two things, incumbency and how much money they raise. It's the perfect or an irresistible agreement. I'm going to give you money. We're like-minded. We really support your thoughts, views on the economy in America. And they're like, okay, well, what do I have to do? Let's be honest.

What do I have to do in exchange for you giving me this money? And the answer is nothing. When Senator Klobuchar proposes antitrust, start asking just a lot of very earnest, thoughtful questions about your concerns about could this in fact make the economy less competitive and just let it sit in committee forever. I mean, this feels like ground, it's not even Groundhog Day, it's Groundhog Decade. I feel like I've been talking about this. I found a story I wrote 15 years ago about this, saying Google shouldn't have this dominance and why isn't the FTC or the Justice Department acting? I just, it does feel like the market will eventually take care of it.

Like Apple's getting into it, Amazon, It's all big companies, of course. You don't see a lot of innovation in ad tech. Why would there be? I think that's their argument. Because the argument, at the end of the day, everything everywhere ends. And that's one of their arguments is, oh, these companies too will be disruptive. It's like, yeah, but between now and then, we should have a more robust competitive market, more shareholder value, more jobs. But it is, I like the term, it's groundhog decade.

Very much so. Anyway, let's pivot to a listener question. You've got, you've got, I can't believe I'm gonna be a mailman. You've got mail. Let's listen to it. Hi, Kara and Scott. My name is Annie and I'm a new listener

calling behalf of a longtime listener. My boyfriend, Tyler, has been listening to all things Kara Swisher and Scott Galloway since way before we started dating. I actually used to think he was incredibly informed and well-read until I also started listening to the Pivot podcast and realized he was actually just copying all of his information from the two of you. That being said, it is about to be Tyler's 30th birthday in February. To celebrate his arrival into a new decade, I would love for him to have some insight from his two favorite podcasters.

If you were to turn 30 again, what would you have done the same? What would you have done differently? And what is the habit you would have liked to have started or stopped in your 30th year? And Kara, as a longtime DC resident, I'm very sad to have heard about your Tesla run-in with your Kia.

That being said, it absolutely would have happened in DuPont Circle. All the best to the both of you. Thanks. Wow. That's a question, huh? Huh. Interesting. Happy birthday, Tyler.

What would you do differently or the same at 30? Yeah, happy birthday, Tyler. Yeah, happy birthday. And by the way, it's Evan Engel's birthday, too. So happy birthday, Engel. He's a producer on Pivot. Happy birthday to him, too. Ah, 30.

Huh. I got to say, nothing different. I would have been pregnant again. I would have gotten pregnant again. I love being pregnant. I wish I hadn't been pregnant until I was 38, though. I don't know. What would you have done differently?

I would have been more risk-taking. I'm pretty risk-taking. I would have been even more so. What about you? I would have done like two things, two kind of regrets. I took advantage of a great economy, started businesses, really enjoyed myself, had good relationships with my mom. I had really good relationships, you know, with my mom, uh, with, um, I, I had a, a really, you know, really good relationships with, with, uh, women in my life, a lot of good things, a lot of blessings. The two things, like big things I regret are one is the same as yours. As I get older, I really wish I had a little girl. I wish I'd had a third kid. And that probably

would have meant starting earlier. And as I get older, it's weird. I never wanted kids. And I was the one in the relationship that decided to stop at two. And every time I see a little girl now, I think, God, I would just love to have a little girl. Anyways, I wish I'd had more kids. Specifically, I wish I'd had a daughter. And then the other thing, just on a bigger level, and I wish I'd been kinder. I wasn't a bad person. I wasn't mean, but with just a little bit of effort, I could have made a lot of people's lives much nicer by just being kinder. And I was so caught up in my own shit. I was so ambitious. I was so thinking about every decision was how do I make me more fucking awesome all the time? And I was never mean. I

never went out of my way to be mean to anybody. But with just a little bit more effort with my employees, with strangers, with people in my life, I just could have been kinder. And you realize it doesn't take a lot to really make people's lives nicer. I mean, if you're in a position of economic security or people are impressed by you or people love you, it just doesn't take a lot of effort. Yeah, I would agree. To make their day, right?

I would agree. I think that's- I didn't, you know what the reality is? I didn't do a lot of that. Yeah, yeah. I would agree with you. I would agree. I think that's... I didn't... You know what? The reality is, I didn't do a lot of that. Yeah. Yeah. I would agree with you. I would agree with you.

You just... I'm more with the risk-taking. Besides getting pregnant again, I really wish I had gotten pregnant again. I liked it. It was interesting. I loved it. But I did have more kids. So, I did do that.

And I was happy that I did that. Because at the time, I remember when I... Right after I couldn't anymore, I'm like, oh, shoot, I missed that one. But I didn't, as it turns out. And I'm glad I did that. I have to say, I don't have that many regrets. I don't. I'm trying to think.

Just more risk-taking, even more so. More cowbell, more swisher. That's what I would have done. More like, see you later. More changing jobs, more taking risks, that kind of stuff, I think, probably. Saying yes to a lot more things that I was worried about. But my advice to this kid, this 30-year-old, I mean, look at this. He has a partner calling a show that he obviously likes to try and surprise him to lie to him, right? Yeah. Nice. Take stock of your blessings. Be nice to Annie, Tyler. Be

appreciative. Ask her to marry you. Are you married? Are you married? When you were 30, did you have the presence? I didn't. Did you just realize how fucking blessed you are? Yes. I didn't.

I thought it was all me. I thought everything good that happened to me was a function of just how awesome I was. I never took the time to really stop and think, Jesus Christ, am I lucky. And you get that perspective as you get older. And the younger you get it, I think the more rewarding a life you can lead because it just gives you a sense of satisfaction and reward. I'll give Tyler one more piece of advice that I think worked for me. Think about the fact that you're not going to be here in 100 years. Just really do. It really does put a lot of things in perspective.

100%. Perspective. You know, 30, right now 30. How old? He could go to 70 years, you know, 70 or 30 how old he could go he could go to 70 years you know 70 or more years finite everything's finite so get realize that and realize it every day of your life and then i think that's what you would do um and and don't don't crib off of us and pretend it's your intelligence that's not cool but annie i'm glad you're on to

him that most people do that but otherwise happy birthday Tyler. And Annie, thank you so much about the Kia. It was a tragedy. It was a tragedy. Of course, it was a Tesla that did it. Anyway, if you've got a question of your own that you'd like answered, send it our way. Go to nymag.com slash pivot to submit a question for the show or call 855-51-PIVOT. Wait, one quick question, Scott, before we get to predictions. What would your daughter's name have been? I didn't get to the, we didn't get to the namey thing. No? I don't know. Nothing?

Well, you know, you're in Britain. I don't know. Anne? What are you saying? No. Oh, God, you're in Britain. Like, Drusilla. They have so many good names.

Prunella or something like that. You live in Britain. Yeah, I never got to the namey part. We named our son's very Scottish names. Alec. Yeah, I never got to the NAMI part. We named our sons very Scottish names. Alec, well, Alec is Scottish. Nolan, because Nolan Ryan was my favorite athlete growing up. But the nice part is his mother, I tell this story in my class,

and that is I met my oldest mother at the pool at the Raleigh Hotel. And Kara, I don't know how you and Amanda met, or you guys on Blind Date, but it was the middle of the day at the pool at the Raleigh, in the middle of a Sunday. And I said to myself, I saw her,

and I said, I'm going to speak to her before I leave. And I promised myself I would speak to her. And I sat there for a couple hours. And to open, and that is, you know, to open a conversation with a stranger who's sitting with another woman and another guy wearing nothing by the pool without the assistance of alcohol, that is not easy. What did you do? What'd you say? And I said, I'm not leaving until I spoke to her. What'd you say? I just went up and said, hey, where are you guys from? Anyways, but the good

part is it was at the Raleigh Hotel and my oldest son's middle name is Raleigh. Oh, nice. Oh, nice. What I tell young people is nothing really wonderful will happen to you unless you take an uncomfortable risk. Oh, nice. Well, that's our message. That's our message. You are 100% correct. And by the way, until I had a daughter, I called Louie Louise a lot, and he didn't mind.

Anyway, Scott, one more quick break. We'll be back for predictions. Okay, Scott, let's hear a prediction. Regardless of whether AI, whether the performance matches the promise, and we're already into kind of, I don't want to call it peak hype cycle, but we're into the hype cycle of AI already. Zero to a million users in five days versus 75 for Instagram, 150 for Spotify. But we're going to see the investment that Microsoft made as one of the savviest investments in corporate history. Because even if it doesn't live up to the potential, the market share that Bing is going to get in the 90 days after it launches like a chat GPT inspired or driven product. Because if you think about search, I spent some time on Bing last night. If you think about AI, it's supposed to be a predictions

engine. And Google, at the end of the day, search is supposed to predict what would be the best answer. And what has happened to Google, Google has no shortage the day, search is supposed to predict what would be the best answer. And what has happened to Google, Google has no shortage of AI, but what has happened to Google is that the economic incentives have turned it into sort of a cesspool. And that is it used to take you to the best answer. Now it takes you to the place they can further monetize. And if you type in best resorts in Thailand for families, it'll give you 15 links, some of which that people are paying to be there, and you kind of sort through stuff, and you have to still come up with your own

answer. And Bing, at least from a perception standpoint, should they incorporate ChatGPT, which they will, will say, when you use Bing, we're not going to give you 15 shitty answers, we're going to give you the one right one. And it'll be an answer that'll be something along the lines of the three best travel resorts in Thailand or the three best resorts for families in Thailand are X, Y, and Z. And even if it's not, even if there's no real there there, I think the perception, I think Bing is about to get so much trial. And the idea and the perception that Microsoft could be a new dominant force again in search is going to get so much trial. And the idea and the perception that Microsoft could be a new dominant force again in search is going to take a $1.5 trillion market cap company, if it just takes it up 10%, they've got a 15x return on the $10 billion they put into OpenAI. So in sum,

in six or 12 months, we're going to look back on Microsoft and Satya Nadella. Keep in mind, he put a billion bucks into OpenAI in 2019 when no one was talking about it. We're going to see this as one of the savviest corporate moves in a long, long time. This is a great move by Microsoft. Great. Well, there you have it. I think that's a good one. I think you're right.

But I do think there's some overhyping going on here. We'll see where it goes. I do think there's a lot more going on at the Googles and Amazons and Facebooks of the world than they're letting on. I think, though, that Microsoft's made a smart move here in terms of getting market share and interest and focus on them, sort of first mover advantage. But I don't count Google out of this one. But I agree. I think they've let other people take their market share. It comes back again. You brought up the innovator's dilemma last week, and that is it is just really hard to attack the golden goose. They have this $150 billion cash volcano called search, and unfortunately involves giving you a lot of marginal links to marginal answers. Basically, the promise of a prediction engine, which is what AI promises, is to say, no, we're going to give you one answer and that's it. And it totally flies in the face of their business model.

The whole point, the way Google monetizes search is by giving you a couple hundred links back. It used to be more delightful. This is the answer. It used to be more delightful for some reason and useful. But you're right. You can't. It's not helpful. Despite the technology getting better at Google, Google has no shortage of AI. What Google has is an incentive structure.

No, no, no. They have deep minds. They've got to be creative and figure out creative and delightful ways to use their products. And they're not delightful anymore. And that's why people are responding to chat. It's interesting. And it's interesting. That's all it is. And so I think there's new ways to search. And I remember years ago saying, we'll look back on typing words into a box and think how Neanderthal of us.

Because what a silly way. There should be so many other ways to search that have a lot more to do with us. And I don't know. I just always thought it was not the way it was going to go. Anyway, good prediction, Scott Galloway. That's the show. We'll be back on Tuesday with more Pivot. Scott, read us out. Today's show was produced by Lara Naiman, Evan Engel, and Taylor Griffin. Ernie Indertot engineered this episode. Thanks also to Drew

Burrows and Neil Silverio. Make sure you subscribe to the show wherever you listen to podcasts. Thanks for listening to Pivot from New York Magazine and Vox Media. We'll be back next week for another breakdown of all things tech and business. Recognize the finite nature of life, be kind, and have daughters.