Pivot - Twitter’s Future, Big Tech’s Bad Earnings, and Adidas and Ye

Episode Date: October 28, 2022

Kara and Scott discuss the headwinds Elon Musk and Twitter employees will face, as well as disappointing earnings reports for big tech. Warner Bros. Discovery will pay $1 billion to downsize, and Adidas has terminated its partnership with Ye. Then, a listener question for (specifically) Kara. *Note: This episode was recorded on Thursday morning and reflects the news at that time. You can listen to Kara’s new show, On with Kara Swisher, here. 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. It's Cara. Scott and I recorded this episode Thursday morning. That was before Elon Musk took control of Twitter, reportedly firing CEO Parag Agarwal, Chief Financial Officer Ned Siegel, and Vijay Gowdy, Head of Legal Policy. We'll have more on this developing story in our next episode, but the takes you'll hear in today's episode are still hot. But it's only Friday,

and Elon has all weekend to make trouble. And if he does, like letting Donald Trump back on Twitter or making Kanye West CEO of the company, it could happen. We'll be right back with an emergency episode. Enjoy. Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher, one of the two top media figures followed by CEOs. Hi, Scott. One of the top two? Yeah. Sorkin is the other one. Well, just as Nike says, Kara, you didn't win silver, you lost gold. Does anyone care? Does anyone care who the second most important person to CEOs is? Oh, my God. You're just gels. You're just jelly. I'm totally jelly.

You're just jelly. I kept looking for my name. All our friends are on there. Stephanie Ruhl's on there. Yeah, it's true. Stephanie Ruhl's 10. Yeah, yeah. Yeah. Sarah Eisen.

Yeah, well, she's moved on. She's not as much a business fake person as I am. You know what I mean? She's doing a wider range of political things. Yeah, but she owns Halloween. You've got to give her that. She does own. Oh, my God.

People don't know. Stephanie Ruhl has the craziest Halloween decorations of all time. I mean, it's kind of crazy. Like, how long do you think it takes her to do that? I don't know how Stephanie Ruhle does. I assume Stephanie Ruhle has figured out a deal with the devil and gets about 240 hours every day. Because I get exhausted. I get anxiety just following her on Instagram. I know, it's true. She's always up to something. You know, I can't even put up, like, lights. I bought some lights at, like, CVS, and I can't even get them up. I sort of got one of those blow-up pumpkins, and that's the most I can do.

I haven't even pumpkined. I haven't even done a pumpkin. I've thought a lot about this Halloween. The total douchebag next door last year gave out these king-size Kit Kats, thinking he'd be the baller. So, this year, I'm giving every kid that comes to my house a rack of ribs. That's right. Don't fuck with the dog. Now, wait a second.

Do they have Halloween in London? Yeah, they have Halloween. Yeah. Do they? Yeah. All right. Okay. All right.

All right. Anyway, so things are happening over at Twitter. Did you know the sink is pregnant? Did you? Okay. Help me out with that. That's a joke from Nell Scoville on Twitter today. He carried a sink into Twitter, Elon Musk, and he said, let that sink in.

Let that sink in, yeah. Sink is pregnant. It was right in front of his crotch. I think that was the joke I was trying to make there. Yeah, yeah. No, I get it. I get it. Yeah, yeah.

We have a lot to unpack. It's already, it's done finally. After all this time, after all the months of us milking it for ratings and shows, it is here. It's just going to be sort of a sad, you know, sad little violin of an ending here. Maybe he'll turn it into a big company, take it public, and that will be very exciting. But we'll talk about that in a little bit. We'll also talk about this week's earnings reports, which were not very good. Elon is going into a very gale force winds in terms of economics. Lack of earnings reports, really, for big tech and all the big companies who are very strong are seeing real problems.

Also, Twitter's new owner may inherit a ghost town. We'll find out what that means. We'll hear from a listener who owes us big. But first, Adidas is terminated. It's partnership with Ye, formerly known as Kanye West, due to his anti-Semitic comments. Adidas said it will have a net income loss of about $250 million. That's a lot of money. One analyst valued the entire collaboration at $2 billion.

Now Ye is out of the three-comma club. He's lost his billionaire status, and his net worth has dropped to an estimated $400 million. Gap, Foot Locker, and CAA have also dropped West. What do we think about this? I think Adidas deserves a lot of credit. Okay, because you were ragging on them last week. Well, and I want to take it back because I think I had the same gag reflex everyone did,

and that was, why is it taking you 10 days? And then as it came out, and again, let me pretend to be more important than I am, for them to announce today that they're ending it, to do this in a non-reckless way, you're talking about thousands of employees that need to be notified, you're talking about manufacturers in the supply chain, you're talking about retailers, what do we do? What do we do with the excess inventory? What do we tell investors who will begin calling us tomorrow? So the fact that Adidas canceled this or terminated the relationship 10 days later means they made the decision about 10 minutes after. And this is coming at real cost to them. The temptation to just look around the board table and hear from investors and go, should we just wait a few days to see if it calms down? Must have been immense.

This was. There was no choice here. Come on. This guy keeps doubling down. He never really apologizes. He's sorry you hurt people. Spotify still has him up. Well, you know, that's the problem.

That's the issue. You know, Spotify is an apples of the world and others have cut ties or don't deal with them anymore. I think Adidas, I think they deserve real credit for this. Because this was, they clearly, in order to announce it yesterday, it means they decided almost right away. And I think this stuff matters. I think these signals matter. And there's all sorts of excuses, including I was making them, he's mentally ill, it's really different. It's hate speech with an asterisk around it.

And when you're in a place where the former president and leading musicians are using not only hate speech, but unique hate speech that indicates violence, death con. Before it's too late, the world as expressed through our leaders, and quite frankly, our leaders have been really unfortunately quiet on this, especially on the right. Our leaders in the business community need a swift and crisp response to this. And so I want to take the side, CAA, Adidas, Gap, Balenciaga. I think they deserve credit because this is difficult. You set up huge business operations. You have jobs.

Ari Emanuel wrote a big essay about it. Ari Emanuel. Well, he was one of the first to go after Mel Gibson to say, why are we putting up with this guy? Because remember the excuses we made about Mel Gibson that, oh, he was drunk. He's struggling with alcohol. All he needs to do is go to rehab and he won't be an anti-Semite.

He'll do a 10-step program to make him less bigoted. And Ari Emanuel said that dog won't hunt. I think he's shown a relationship here too as well. Anyways, your thoughts on it? Well, you know,

it's interesting you mentioned Spotify or Apple. Daniel Ek at Spotify said that he called them just awful comment while noting that Spotify won't be removing the rapper's music from the platform. Ek went on to say because of West's statements were not made in songs or podcasts hosted by Spotify. They do not violate the company's hate policy.

It's really his music. His music doesn't violate our policy. It's up to his label. They may want to take action or not. You know, I think I don't know what to say here of Apple. Would you take down, they still have Michael Jackson up, they still have all kinds of... Yeah, it's a tough one, isn't it? You know, I would. I know you had a list, some of which were not correct on the other day. But

I think for these two, I don't know what I would do. If he condemned them, can he take them down? Isn't it up to the label to do that? Again, you could start to go through lots of people. I can just at the top of my head, I thought of those two. But there's lots of problematic, you know, should we take down Harvey Weinstein's movies? It's the right question. You can't. That's really. You don't have to watch him.

I don't listen to Michael Jackson's music anymore, even though I liked it quite a bit. I just can't. I can't. I don't know. Just personally. Yeah. Look, this is I think you're right. I think, where does it stop? And then when people, we find out sometimes that the infraction, where do the infractions stop? And sometimes we look back and find out the infractions weren't what we'd initially thought they were. And so, this

is a really difficult one. And the music platforms, it does feel different. I think when you have a unique relationship to do a co-branded set of shoes, and you can disarticulate that. That's completely, yeah. Yeah. But I agree with you. That's just a tough one. And I guess at the end of the day, I probably side on, I'm empathetic to what Spotify does here, because are they going to set up a committee that just says, okay, we don't like this person's views. Jerry Lee Lewis was a pedophile. Do we get rid of his music now?

I mean, at what point, where's the line? Yeah, yeah. I mean, for the music itself, it's very hard. I think you could make a personal choice not to listen to it. I mean, you could go through artists. You could go over history. What do we think of Picasso? What do we think of this person as more stuff comes to light?

And I think nobody looks, you know, it's really interesting because when I went to the Jefferson Memorial the other day, it's changed so much. The version of Jefferson since I was a kid, version of everybody has changed so much. And I was just thinking about it and I was like, what do I tell my kids precisely about this? And I was just thinking about it, and I was like, what do I tell my kids precisely about this? And, you know, I think I've been to Monticello since they redid the tours, which are much better. So, people still visit, and then they still talk about the slave issue rather significantly there. It changed completely, and it was very controversial, by the way. I don't know why, to just talk about history. But nonetheless, it's hard.

Look, this guy doesn't seem to be sorry. I don't think sorry is going to work anymore. Was there any redemption for him? Yeah, I think I do. I think America loves to forgive. I think if he were to come out in six months and say, I've really struggled with mental illness. I've treated it. I want to apologize. I think you're going to see activity that's totally, you know, I think people love to forgive. But you said something, and I think it's important to create a distinction. I do think there's a danger in our society of what is being termed presenteeism, and that is we apply today's norms and standards to behavior decades and sometimes centuries ago. And I think it's an unproductive exercise. ago. And I think it's an unproductive exercise. Most of the time, I think the Confederate statues need to come down, you know, stuff like that. I think, or go into museums. They should go into museums. That's how I would do them. They don't need to be out in the public space. Right. And I think the local community gets to decide that stuff. I'm very involved with my

alma maters. I give some money. They have talked to me about naming opportunities. I'm like, there's no fucking way I'm putting my name on anything. Don't put your name on it. Something good, though. Because in 20 or 30 years, they're going to come back and they're going to look at this or any of my work, and they're going to decide something I said is absolutely heinous in today's standards of 2050. And my kids are going to have to put up with the shame. Maybe not. I'm not that important.

It's not that much money. But why take the risk? So, yeah, the Scott Galloway Center for Sexual Dysfunction will probably have to rename itself. That's right. That's right. That's what you should get to. For urinary flow. The research of urinary flow. Oh, my God. Don't name anything. It's so ridiculous. They're going to name the gloves they use for prostate exams after me. Oh, that's nice. That's nice. That'll be kind of appropriate. And I think that will stand the test of time.

Anyway, Warner Brothers Discovery will pay over a billion dollars in costs to downsize the company. That's from restructuring. Probably some of it went to Scott Galloway speaking, which has noted in the SEC filing, the big bill comes from restructuring, consolidation, termination costs, which will be split over more than two years. The company will report third quarter earnings on November 3rd. Aye, aye, aye, aye, aye.

They're cutting costs. Obviously, this is exactly what we predicted would happen. And I bet you're in there. Payment to Scott Galloway is probably in there somewhere. You know what? I screwed up. So I love this because back to me. I signed a one-year contract.

They wanted me to sign a two-year. If I'd signed two-year, I'd still be getting paid. Yeah, I know, yeah. Anyways, and I thought, well, I want to see what happens. And maybe I want to go work for the BBC or do Kara television or something. Yeah, Kara television. It's going to be great. Look, this is all, it all, and the Google story and the meta story, they all are circling around the same few things.

And that is the economy looks like it has headwinds. of the same few things. And that is the economy looks like it has headwinds. We have a new player in the ecosystem that is TikTok that is taking money out of the entire ecosystem. It's impacting everybody in my view. And we also have the Apple tracking, which doesn't affect CNN or Time Warner as much. And then you talk about the micro or the specific, the thing specific to Warner Brothers Discovery. They just massively overpaid. And they were in an environment where the market was saying, okay, every subscriber to a streaming service is worth X. Now the market's saying it's worth 0.3X. So he's actually, I think, doing the right thing and trying to cut costs. And they've all basically looked at each other

and sort of met a gentleman's agreement and obviously didn't write this down anywhere. looked at each other and sort of met a gentleman's agreement and obviously didn't write this down anywhere. They said, okay, the war on spending or, you know, the arms race in spending has come to an end. And they're all kind of dialing it back. Yeah. Yeah. I mean, but I think this isn't a particular sketchy situation for them because they got $55 billion in debt. You don't see something coming out of nowhere to make it better for them, right? And I think Netflix has gotten a little bit of recovery. I don't know. I just feel like, oof, this has got to be for sale.

I don't know. We keep saying that. And I keep thinking this is going to be part of Comcast in a very short order. This debt is just too high for the amount of money they need to make. I don't care how good their content is. I don't know what they could make that is so good.

You know, even big movies that they make, like Disney is about to release. They invited me to one of the openings of the new Black Panther. You know, it's just not going to make a difference. That's over at Disney, which is doing better from a financial point of view. But these numbers are just too hard. They can't cut their way to growth, I guess. Isn't that the old expression? This is, I think this Isn't that the old expression?

This is, I think this is a classic activist play being set up, and that is an activist is going to come in and try and break it up and go HBO Warner, which has real synergy, arguably kind of the artisanal high-end streaming network with vertical distribution and access to proprietary content of the Warner universe, which is incredible assets, and then take the bad bank, which will be all the cable assets that are out-supported that are declining, but still very, very profitable. But the gangster movie, this is just the perfect activist play because if this thing goes below 10 bucks, which it will, what they'll do is if they could sell HBO Warner to Apple or Amazon, and I don't know, you'd have to do an antitrust analysis and say what would the likelihood be that it would be blocked or not blocked. Apple or Amazon would pay a lot more for HBO Warner than the company is worth right now. And like I said, it's the only, we've been saying this for a long time, 48 hours ago, or as of today, or as of yesterday, there were two influential media companies that were breakable, so to speak,

that had a single class share of stock. One is gone. Twitter's now off the market, which leaves only one kind of asset that someone could come in and muscle around. Why don't we ever do activist shareholding? You always say that. I've done it. I think we should form a company. I know, but we would have so much that. I've done it. I think we should form a company. I know, but we would have so much fun. It's not that much fun. I know, but people would hate us.

I like the idea that people would hate us. I'm so sick of people. Oh, I've been there. Trust me. It's not as much fun as you'd hoped. But what you find out, though, and this is a lesson for anything, when you come into these situations, you find out, generally speaking, you're not as smart as you thought and they're not as dumb as you'd hoped.

I get it. I get it. I just, like, this seems like a layup for somebody. Okay, fine, Dan Loeb, get in there. Anyway, he's over at Disney, bothering the Disney people. It's gonna happen. Yeah, something like that. It's gonna happen. Okay, anyway, moving on, let's get to our first big story. Earnings reports are in, and big tech is out. The industry posted a ticker of disappointing results. Alphabet's profit is down more than 25% from last year. It's still pretty high, but still it's down. Microsoft sales rose at their slowest rate in five years.

And Meta's net profit, Meta got the worst of it, fell for the fourth quarter in a row. We're still waiting on Apple, but people are anticipating not such great results from the iPhone. Investors are none too pleased with the results and some are calling for change. Brad Gerstner of Altimeter Capital sent an open letter to Meta even before its earnings report. He proposed cutting Metaverse expenses at just $5 billion a year. It's just one third of what Meta currently spends on its moonshot. And also, by the way, smaller companies that are very promising like B-Real aren't getting billion dollar valuations anymore. They did manage to raise money,

but not at the unicorn number, the billion dollars. It's a combination of the fact that Google and Facebook essentially are still in the ad business, and Apple only has the iPhone, really, that's making all the money. And so, you know, in good times, they just sold a lot of stuff in the last couple of years, and now that the party's over, essentially. It's really a kind of a seminal moment in business. And that is for the first time, big tech as it relates to Google and Facebook or the ad-driven part of the market. I mean, look what happened. The canaries in the coal mine were when Snap threw up all over themselves.

Yes, they did. And but now, but it usually was a tale of two cities. There was sort of Snap, Pinterest, and Twitter, but Meta and Google were just the gifts that kept on giving. And when you think about Meta, Meta's revenue was down 4%. Granted, it was up slightly on a currency adjusted basis, but the price per impression fell by 18%.

So obviously that's Apple turning off tracking, but their spending increased by 19%. So when you have your revenue flat and your spending's up 19%, that obviously is going to result in a... Too many people. Well, and their earnings got cut in half. And here's the thing, Kara, you can fix a people problem. You can't fix a mentality problem. And what you have is you have an individual who's kind of gone all in on the metaverse, and he doesn't care. I'm kind of pulling for him now. I never was pulling for him, but I'm like, oh, he's continuing to go. He gave a speech during the earnings. He's like, I think this

is the best way. And I'm like, you go, Mark. I don't know why I thought that as I was listening to it. Well, but here's the thing. You have an individual who already has more money than he'd ever imagined. He's in total control. And now all he has is to prove the world wrong and himself right. Yeah, he loves that. So he doesn't give a shit. I just think it's hilarious that an activist is in there thinking he can do anything.

He can do anything. What can an activist do? Brad. Brad. He can't. He can't do anything. He can howl at the moon. It's about thinking he can do anything. What can an activist do? Brad. Brad. You can't. You can't do anything. You can howl at the moon. It's about all he can do. Why is he doing it then? Think strategically for me, Scott. Well, he thinks that if he puts outside pressure on the company and highlights what they need to do, that, you know, saner minds will prevail. And, but here's the thing,

I've had, I've done activist campaigns with dual-class shareholder companies. It's easy to talk yourself into believing that they're rational and they'll do what you want. And I have not found that to be the case. Yeah, no, they'll do whatever they want. So I don't, you know, and he'll get fame. His name's all over the place right now.

He'll probably raise money off of it. He's right, but we'll see if he's effective. You just got to hope that Mark all of a sudden decides, sobers up and says, okay, let's stop the drunk spending spree here. But the thing is, this company now, think about this, Cara. Facebook or Meta is now worth less than TikTok. ByteDance closed their last private round was, I think, at $300 billion. And I think Meta is now below $300 TikTok. ByteDance closed their last private round was I think at 300 billion

and I think Meta is now below 300 billion. I can look it up. But yes, it's really, it's going down fast. It's really interesting. I mean, and another thing that's happening, by the way, is a change in the iOS app store could further eat into profits. Apple will require apps to use in-app purchases

when users pay to boost posts on networks like Facebook and Instagram. That means Apple will take a chunk, another vig. TikTok and Twitter use in-app purchases to post on their networks and pay Apple a good fee. So, you know, I mean, here we go. I mean, Apple's got control over this stuff. I don't know what to say. Meta's in a bad position unless the government acts, right? Correct? In the Epic trial, they didn't really get a lot of purchase on Apple that much. I mean, Apple is just fearless right now. And that is, they've got their shoulders back.

And they're like, I know. We're going to take an app-like fee on advertising revenue, run through your app. I mean, that is pretty aggressive. It is. They're also building out their own ad network, showing ads in its own apps. I mean, they're obviously like enough of you. Now, whether they do it right or not, if they protect privacy and this and that, they have to certainly be very careful how they do any kind of advertising.

They had been in the advertising business before and then cut back a long time ago, if you remember back when. But I think, nonetheless, it's going to cause pain for Facebook. And they're not a favorite of regulators. On the plus side, the antitrust actions may not be, may be done, I guess, right? It's hard to argue that they're very big when its profits are shrinking, and it's much smaller. Well, yeah, but you've had the FTC and DOJ, and I think this is a bit of a misnomer that antitrust is a function of size. There's actually been very small acquisitions that have been blocked. I think they still could

have FTC action. But what's really, think about this, Cara, the elephant in the room here is TikTok. And I remember from about 2000 to now, every quarter that retailers reported earnings, it was kind of meh to bad to, oh, some signs of hope. No, we were wrong, bad, because all of the oxygen every year was being slowly sucked out of the room by Amazon. And the same thing is now happening to these guys at the hands of TikTok. Think about TikTok, I think, went from $4 billion to $12 billion last year. Say it goes to $24 billion, that's another $12 billion. In addition, layer on top of that, that Hulu, Apple, Disney Plus are all now in the ad business. So that

takes maybe another eight or 10 billion. So advertising as a percentage of the economy has stayed flat for 30 or 40 years. As a gross number, it is a zero-sum game. It doesn't get bigger. So you have an incremental $20 billion that are being taken out of the ad ecosystem. So everyone from CNN to Google to Meta feels that pain. And for the first time, what Facebook or what Meta and Google have been doing to the rest of the ad ecosystem, TikTok is now doing to them. Yeah. So their only hope is to get the government angry at China. That's the only hope. Yeah, at this point.

Although my sense is they're going to get a deal done. But anyways. Yeah, we'll see. Let me ask you the last question. Is this an opportunity to buy tech stocks? The numbers are down. They're not down that much. So someone asked me about Meta's stock and said, should we short it?

And I'm like, I would not short Meta stock at this. I mean, Meta is now trading at a price to earnings multiple. What people forget, yeah, these fever dreams are stupid. They're going to waste tens of billions of dollars. But the core business is still a cash volcano. Yeah, it is. And if you look at the actual multiple on earnings, Meta is now trading at what an old line manufacturing company trades at.

Yeah, it's crazy. It was at, let me just say, $376 in September of last year, 2021. Now is it $101.80. A friend of mine who hates Facebook literally said, if it gets below $100, I'm buying. I'm buying. Yeah, it's hard to imagine it goes down from here. But who knows? So it's worthwhile to buy, in other words, is what you're saying. When was it last at 100?

Let me see. I'm trying to get out of the game of recommending stocks. I try to just be transparent about what I buy and don't buy. Yeah, don't do that. I'm not going to buy Meta because I'm just philosophically against what they do. But I would not tell anyone to go short the stock right here because it's trading at a price-to-earnings ratio that is just, the stock looks cheap on any traditional metric. Yeah, it's really, it's 843, 8.4 PE ratio.

It's crazy given how much profits this thing throws off. And last time it was at 101 was 2015. Yeah. That's crazy. The hard part is you enter in a death spiral. And that is the first thing that, or one of the things you really got to be thoughtful about is they will probably have to issue additional options that are restruct that will create a greater dilution to existing shareholders.

But they really have to focus on ensuring that they don't lose talent. Now, a lot of places are laying off people, so they may not be worried about talent. But what you're worried about is entering into this inextricable downward cycle where your best people start to leave because they're like, you know, I'm not, all my options are struck at 200. I know, yeah. My salary here is good, but it's not great. I was hoping for a big upside in the equity, and that doesn't appear to be happening. And people hate us. People hate us. All the other stocks, you know, if you invested in Google,

you'd be up 3,000%. Apple, 133,000%. Meta is just 160%. It's really something else. Google's really far down. Also, I have to say this is, but not as, they're still way, way up comparative to in their max and so forth. Anyway, it's an interesting time. We'll see what they do in terms of managing the lack of growth. And you can't fight the TikTok. You can't fight that or whoever comes next. It doesn't mean TikTok is going to stay that way. You have to be creative. That is one of the things that's really important. All right, Scott, let's go on a quick break. When we come back, we'll talk about the Twitter exodus, if there is one, and take a listener question about green space in the city.

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Start caring for your home with confidence. Download Thumbtack today. Scott, we're back with our second big story. What, of course, it is. The Twitter deal could close at any moment. The sink is in place. Elon Musk told bankers this week the deal would close by Friday. On Wednesday, he paid a visit to the Twitter offices, and he's expected to address Twitter employees on Friday. There may not be many people there to listen. Over 500 employees have left Twitter in the last 90 days. Many have decamped from Meta or Google, according to LinkedIn data. You talked about this in the last episode,

Scott. Now Musk is saying he won't fire these people? Is he just trying to keep his options open? Someone wrote me that, one, it's not overstaffed in ways that you think it is. Two, that he said he wouldn't cut 75%. But then this person thought, oh, I should have asked if it was 80. You know what I mean? They just don't trust him, essentially. I can't imagine he would lie like that. Like, say it's not 75% and then cut 80% of the people. That seems kind of douchey, but who knows? What do you think? What thinks you? I mean, I'm curious if you heard anything. I got to think it's just chaos there right now. I can't even imagine with all of the macro headwinds they're facing, plus the internal chaos and people

leaving and trying to figure out, all right, who's covering Bob and Lisa's responsibilities now? Who's calling on Ford around that kind of creative ad campaign buy we were trying to figure out? Would you want to spend more money on Twitter right now if you're an advertiser? No. I mean, it's just – and in addition, he closes. All of the media is going to be – as of today, we have a new second-worst acquisition in history. The worst was AOL's acquisition of Time Warner. This thing is down $33 billion as of when it closes. And so he's going to be distracted.

I think it's going to be absolute chaos there. If he's going to do layoffs, I think he needs to do it right away such that the people who survive the layoffs can be focused again. But I think he should immediately appoint a CEO who is seen as what I'll call forceful, but dignified and seen as like has gravitas. Because he's just brought so much chaos and unpredictability that why would you, if you had another opportunity, it might be interesting. It might be an interesting observationally or a social experiment, or you might be thought, you might think, well, I like the cut of his jib. I want to stick around and see what happens. You might think, well, I like the cut of his jib. I want to stick around and see what happens.

But I got to think most people, if they get a decent job offer, are going to go, you know, I'm going to opt for the lack of mania in my life. Yeah, probably. Probably. I mean, Sundar Pichai is not this person, right? Like, you'd rather work for someone like that. You know, I have a lot of friends, not friends, they're not friends, people I know that are there. And I'm urging them to stay, not just to tell me what's going on, but more like, you've

got to watch this. Don't you want to know what he's going to do? I mean, if you could afford it and it doesn't shave money off you, there is a way to stay and sort of see. I wouldn't leave. Would you leave? I wouldn't leave. This is the argument to stay, Kara.

This is the bottom line. Unless you have a great job offer, you stay because if you get laid off, you get three or six or 12 months severance. Yeah. Okay. And also, there's always a chance. Although he's promised certain things about the stock because I think they're going to get cash bonuses in place of stock, something like that. But go ahead. Sorry. I always tell people, unless you're economically secure, which very few of us are, you never leave a job until you have another job. And there's a lot of people looking for jobs right now. And so I would imagine, in addition, anytime there's change and tumult, there's opportunity.

And that is opportunities open up. There's a chance that all this opportunity, your three bosses or the people you reported into, everyone above you leaves and they kind of turn and look around and go, oh, hey, Bob, how would you like to run Twitter Canada? That's how Steve Case got his job at AOL. He was lower down and everyone got fired above him and he became eventually the CEO. But go ahead. Is that right? Yeah. Oh, yeah. It was chaos at the company that was before that. So you're right. You might want to stick around for 90 days and see what happens and see. And all like that, if you get laid off, you get severance. So that's the argument for staying. My argument would be that life's too short. Do you really need to be subject to someone's

blood sugar level every day that does not, in my opinion, acquit themselves with any real empathy or grace around this kind of stuff? But look, I think you can make an argument either way. Yep. I don't know what I would do. I would say, I mean, speaking of which, what about users? Especially most active users aren't tweeting as much. In an internal report, the network's users show a declining interest in world news and liberal politics, a growing interest in other topics, namely cryptocurrency and porn. And let me just tell you, after this week, I've got like attacked by right-wing people. And after the

Fetterman, oh, over the Fed, I had J.D. Vance on my ass, whatever that stupid showed. He's running for Senate and he takes time to tweet against me. That pretty much says it all, J.D. Vance. Thank you, J.D. Vance. Whatever, if you're a senator, you're still a shitty senator. You're sort of in the Ted Cruz level of senatorial classiness. Mommy's been triggered. I'm very irritated more than I was before,

I have to say. I'm like, oh, do I want to stay on this? Even more? That's a lot of irritation. I know, and I like the Twitter, but honestly, I'm like, you people are such cruel twits. Like, I don't feel like talking to you.

Yeah, but here's the thing, and this is why there's going to be a company, there's going to be a startup that directly competes with Twitter. Because here's the bottom line about Twitter. Twitter has been exceptionally damaging to American citizens' mental health. Well, it's not the most one, right? Is it the most one? Oh, it's right the most one, right? Is it the most one? Oh, it's right up there. And let me put it this way. In terms of the damage to people's mental health relative to its market cap and the amount of economic value it's created, it's been exceptionally damaging. And the algorithms, you know, I mean, I really don't

think time is going to be kind to Jack Dorsey here. I really think he did absolutely nothing with his company. He did not improve it. He let it go sideways. And he made the company very ripe for this kind of volatility, this internal distraction with Musk. He's gone very quiet. He left this thing a fucking mess. He left it much weaker than when he showed up. And in terms of mental health, I mean, Twitter, just the algorithm, the sanctioning, the rage, their ability to ignore bots and let people go on and weaponize the platform and attack people whose interests are contrary to theirs, it's just, it's not a healthy platform. You're going to see a competitor emerge. Yeah. Should we start that again? You mean after we take up our Warner Brothers discovery? Question is, what would you go to? People were asking me, I've gotten so many, I was looking at, what's the one that everybody, Mastodon. There's Mastodon, which is interesting,

which is hard to use. I have to say, I was looking at it yesterday. There's obviously True Social. No, we're not going to go to that one. Which one would you go to? Discord? I guess I would move stuff over to Discord. I would go to a new one. I think there needs to be a news-based one with real moderation and enforced identity. And I don't think any of them have that right now. And I wouldn't go to TikTok. TikTok would be my natural thing, but I just don't wanna, I don't know. I have problems. Well, TikTok's exceptionally powerful.

I'm talking about starting. And this kind of goes to my prediction. You're gonna see somebody very talented who will be well-financed, will announce a competitor to Twitter and basically come in through a news angle and a less toxic angle. All the moons are lining up.

I think you're actually going to start to see some fairly high profile people either leave Twitter or just tweet less. I think all of this has taken it kind of taken a toll on the brand. I literally was thinking about leaving this weekend. I was for the first time. I have a million and a half or whatever million, 1.4 million followers. Or just, you know what? You won't leave it. This is what most people do. They'll just start doing it less. They'll be like, do I really need, I had dinner with a close friend last night who is one of the most respected scholars in the world. And this person was saying that Twitter has really taken a toll on their mental health. I have to say, I blocked

so many people this weekend. And then I'm like, why am I doing this? Why am I even blocking people? What do I need to like, do I talk with people I don't like? I never do in real life. Anyway, it's interesting. It's the first time I thought about just shutting it down, being like, ugh. And then I thought, marketing, it's good for marketing. What's it good for? One, I like the news stuff. Two- And reach. Well, no, I don't think it makes us bigger. I think people either listen and pivot, or they don't. I don't think Twitter does it for us. It's been huge for my work.

Yes, okay. I have to give them credit. But marketing. Marketing is the greatest part of it. And then I like the news discovery. Or finding voices that I like. Interesting people. That's another thing. I found a lot of cool people. Great discovery. Of funny people. But otherwise, if it

keeps getting uglier and uglier, it's like, no fucking thank you. Let me give you a couple things. One, if you kept going to a party and you love the party and you were addicted and there were some super interesting people there and you ran into new people, but every time you went to the party, someone in a ski mask came up to you and said something really vile. And you didn't know even who they were or if they were doing it on behalf of somebody else or they even really felt that way, but their job was to upset you

or to have other people hear them go, Kara, you're a liar. Scott, you don't know what you're doing to embarrass you and diminish your credibility. Would you keep going back to that party? That's what I mean. I would agree. It's not just the unknown people,

but it's like, I had Greg Gutfred, whatever that guy, the stupid fox guy, the tiny little man, little tiny man, little sort of three-quarter man, I guess, something like that. He is three-quarters. Oh, my God, I'm triggered. That is both sexist and bigoted. That is awful. I'm just saying, he was three-quarters of the size. He looked like a tall man that had been shrunken down. Anyway, this is a different guy. Anyhow, yes. And attention by attacking people. And let me just give you a quick, let me just dial you into what will help your mental health.

And I figured this out about a year ago. Don't engage. Don't clap back. Don't just, fine, take the slight. I said nothing to Greg. I did not, I did come back at JD Vance. That's what they want. No, I don't think he did. I think he didn't win on that one.

But I didn't for the others. I'm not saying, I'm not saying what's, the algorithm a dog whistle for the for the biggest little dicks in the world. And that is I have an enormously small penis and a large following. And I have no status or success that's credible or substantive. So I'm going to try and gather social status by attacking and diminishing the veracity and credibility of people who have large followings. And the algorithm loves that and says, you keep doing that. Yeah, I get it. You keep insulting people or going after them or finding soft tissue. It really is. Twitter, there's something very, very unhealthy about it. Yeah, and unfortunately, something wonderful, too. That's the problem.

I agree. It's really quite, I mean, the amount of cool people I've met on there has really been a lot, but it's starting to pivot in the other direction for sure. All right, Scott, we'll see what happens. I did just download all my information in case I decide to cut it off. But anyway, Scott, let's pivot to a listener question. You've got, you've got. I can't believe I'm going to be a mailman.

You've got mail. The question came in via email. I'll read it. Hi, Karen Scott. My fiance and I bonded over pivot early in our relationship, and now we're engaged. We're considering getting married in Prospect Park in Brooklyn, and we saw that Kara got married there. Kara, should we get married in Prospect Park?

We're having trouble picking a venue, so we could use your tie-break. Scott doesn't seem to understand Brooklyn. He's a habitual Gowanus basher, so his advice is not needed. We love the show, Jeremy. I'll let you take this one. You know what? There is expensive things in Prospect Park. We got married in something that didn't cost us, what? You know, there is expensive things in Prospect Park. We got

married in something that didn't cost us, I don't know, $25. It's a, oh, I'm blanking on the facility. It's an outdoor sort of like temple kind of thing. One of those temple buildings. And it was, we paid, for some reason, I'm thinking $25 for it. Yes, get married in Prospect. You can't get married now because it's outside because it's cold, but we did it because it was in the middle of the pandemic. We had a beautiful day. We had a very small group of people there. It was outside because it was right at the peak of COVID, right at the beginning. Was this number four or number five? Oh, stop it. It's number two. Anyway, don't even talk to me. You've had two marriages, correct? Correct? Yeah, first one kind of didn't count, though. It does count. What are you talking about? It's a do-over. Anyway, get married in Prospect Park. It's beautiful. It's wonderful. There's also sorts

of free options. There's also expensive ones. There's a boathouse that costs around $6,000 for a Saturday rental. That seems a lot. I think that I had a wonderful wedding there. So, I would say yes. Scott, where did you get married? Where were your two weddings, by the way, since you're... So I would say yes. Scott, where did you get married? Where were your two weddings, by the way, since you're? Oh, God.

My first one was at the San Francisco Mint. Oh, that's nice. Yeah. Really? So you had a party in there. Oh, okay. Oh, yeah. Oh, that's nice.

I've been to many an internet party there. And my second one was at my home in the Hamptons. And my third one will be on Mars, Kara. It'll be on Mars. Well, you and Elon and the sink should probably be happy together. That's right. You know what? I've never wanted to be a sink so badly in my life, that sexy beast. He's so strange.

Turn on my taps. What kind of sink humor can I hear? I have this dream that you two are going to be friends one day. That's my feeling. You think? No. Yeah, I don't think so. Yeah, I don't think so.

I don't think so. Anyway, do you know he and his fiancee bonded over Pivot? I'm just saying. We have created marriages. We're bringing people together. We're bringing people together. Brene Brown said that to us. She and her husband do.

I hear that from people all the time that stop me on the street. And I had a ton of them. That's nice. I was just on a trip recently, and tons of people have given me their stories of meeting and bonding with their partners through it. Anyway, if you've got a question of your own 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. All right, Scott, one more quick break, and we'll be back for your prediction, which you already said what it was. I want you to explain more. As a Fizz member, you can look forward to

free data, big savings on plans, and having your unused data roll over to the following month. Every month at Fizz, you always get more for your money. Terms and conditions for our different programs and policies apply. Details at fizz.ca. Okay, Scott, let's hear a prediction. You're going to see in the next three to six months a direct, credible, new competitor to Twitter. There's just too much opportunity here. It's been so poorly run for so long. There's so many addictive, wonderful qualities to the notion of a microblogging platform. There's just too much opportunity here. And so many users, so many advertisers are just sick of the Dorsey, Elon sideways. So there's so much human capital that's experienced in the sector. So my prediction is you're going to see a competitive emerge.

And I have a second prediction just because I want to trigger you. All right. I believe that Senator Warnock and Mehmet Oz are going to win their Senate races. All right. Okay. And I believe, and this is my long-winded way of saying that we need to focus more on character and competence than ideology. And I think Herschel Walker is literally a village idiot who can't

seem, doesn't, has never met a condom and is now running around the nation trying to urging, urging people to get abortions as he tells women he doesn't know that they can't get abortions. And I'm sorry, and I'll get a lot of pushback on this. You are about to. I don't believe you're wandering into this area, but go ahead. 100%. 100%. I'm economically secure and people have people who love me. So I have a right obligation to speak my mind. John Fetterman is not fit to be a senator.

Why? Oh, come on. 100%. No. Well, thank you, J.D. Vance. Not so. And not only that, even before the forest stroke, lived off his parents until the age of 50. He's a brand with tattoos and a hoodie.

And we have to have a higher bar. He's from Pennsylvania. That's nice. Okay, fair enough. I'm not, you know what's a shame about that race? Is that Conor Lamb would have been a fantastic senator. He might have been. You're correct.

That's correct. I was also very high on him. And this is what we need. So would David McCormick, by the way. Exactly right. He's so much more superior than your friend Oz. David McCormick would have been a good senator, I'll give you that. And this is what we need. We need ranked choice voting and open primaries because we shouldn't have to choose.

You want to talk about candidate quality? So anyways, I'd like to think that- We'll see about that. Let me just say, look look I admire you for sticking by your friend but this guy attacking someone for their stroke

as a doctor is just as someone who had a stroke is so repulsive to me I wish David McCormick had been the candidate because I do think he is a very competent person

Conor Lamb would have been very good I do like John Fetterman I think he's done been a lot of really cool things we'll see what happens in Pennsylvania. You know who would have been a great candidate?

You know what the missed opportunity was? Charles Swisher. Michael Smirkin. Pennsylvania. No, you're too busy running Warner Brothers. That's right. I would have loved to have seen Michael Smirkonish run as an independent. Oh, interesting.

They love him in Pennsylvania. And that was a race that really needed an independent. But it's become so much about ideology that we're willing to send people to Senate that have absolutely no business being in the Senate. Well, hello, so many senators right now. Look at, you know, Tim Ryan is obviously better than J.D. Vance. Give me a break. You know what I mean? And a very compelling politician. Does he have momentum?

I've seen him a lot on. Yeah, yeah. I think J.D. Vance should be running away with this thing, especially with all the Peter Thiel money, and he's not. So even if he wins, it'll be by a sliver. And that should tell you a lot about Tim Ryan, which means this is a red state. It really is. It's not a purple state. Anyway, I think you're wrong about Oz.

I think he's a terrible, feckless hack. But anyway, we'll go from there. We're going to live and let live, Scott, because that's what we do. You and I do. We do that. There we go, baby. There we go. We got to get along if we're going to run Warner Brothers.

Exactly. No, we could fight. Actually, my friend Terry Semel ran Warner Brothers with his partner, his longtime partner, Bob, whatever his name was. Yeah, they ran it together. They did a great job. It was sort of the golden days of that place. Anyway, that's the show.

I have one thing I want to do a shout out to someone who's a very wonderful public servant. Ash Carter died unexpectedly from a heart attack. He was relatively young. He taught at Harvard. He was the defense secretary under Obama. I knew him incredibly well. I was just about to go up to Harvard at Thanksgiving to see him. Just a wonderful public servant, thoughtful in every way, always trying to find solutions, and very sad he died. We'd recently texted. Just the exact kind of public servant you want. I wish there were more of them and fewer of people like J.D. Vance, who's a hack and an opportunist. Anyway. Most of that was really nice.

Sorry, but the contrast is so vast, it makes me depressed. I did not know that about... Ash Carter was amazing. Yeah. Amazing guy. Amazing. How old was he? I don't know, in his 60s?

In his 60s, yeah. He just died of a heart attack. You've got to enjoy it, Kara. Got to enjoy it. Got to enjoy it. Today could be your last. I don't want to say that that way, but you have to think about it. Tell someone you care about that you care about them.

I care about you, Scott. I know you do. I appreciate that, but I still enjoy hearing it. Anyway, we'll be back on Tuesday with more Pivot. Of course, Scott, read us out. Today's show was produced by Lara Naiman, Evan Engel, and Taylor Griffin. Ernie Injotad engineered this episode. Thanks also to Drew Burrows and Emile Silverio.

Make sure you've subscribed to the show wherever you listen to podcasts. Thank you 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. Elon, I'm your fucking dishwasher machine. Rinse me, you wanton bitch!