The Best One Yet - “When you drink here, you’re family” – Olive Garden’s reopening. Google’s news savior. Slack’s crossborder email crusher.

Episode Date: June 26, 2020

Darden Restaurants has reopened 91% of its restaurants like Olive Garden, but the restaurant industry has a takeout booze problem. Google’s new news app will completely change the business model for the news industry. And Slack just whipped up an actual email killer.Talk with us about today’s episode on Listen App today at 2:30 pm PT. ListenApp.co. Use VIP code “tboy”.Learn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. And this is Snacks Daily. It is Friday, June 26. How are we feeling, Jack? Last one of the week, we whipped up a T-Boy today. Straight up the best snacks daily we've ever done so much better than yesterday's. This is the best one yet.

Now, until now, Slack has been like Vermont Route 100. It's great if you need to go from one part of Vermont to another part of Vermont. But Slack just unveiled Slack Connect, which is an I-95 version of Slack. Letting you a message outside the borders of your company. Second Story, Jack? For our second story, the Olive Garden isn't really a restaurant. It's a profit puppy selling red wine for a 4x markup per glass. Jack, that is a beautiful image.

That's why we're concerned about Olive Garden's new business model. Takeaway is B-Y-O-B. For our third and final story, rule number one, when politicians are about to regulate you, beat them to it by regulating yourself. Honey, I think we should talk. I'm breaking up with you. I break up with you first. Google just announced a news app that will pay news publishers beating politicians to the punch.

Now, Snackers, before we jump into all those wonderful stories, we got to talk about Goldman Sachs' new product. Our buddies in Lower Manhattan just came out with a new font, a new corporate font for their corporate logo. That's right. Goldman Sachs has a new font. It's an extremely clean-shaven sans serif font jack. It's actually called Goldman Sons, which means Goldman Without. There is not an ounce of serifon this thing. If you put it on blue background, it really looks like jeopardy letters. It was aggressively made. They actually created the W by brokering an M&A deal between two Vs.

Now, you are free snackers to ditch Times New Roman and Calibri to use Goldman Sons instead on one condition. One condition. You legally cannot say anything bad about Goldman if you type it in Goldman Sachs' font. When Goldman tweeted this out, they said, users may not use our licensed font software to disparage Goldman Sachs. That's the one condition. We couldn't make this up. Goldman Sachs, an investment bank, paid a consultant millions of dollars to create its own Goldman Sachs font. Then it announced that anyone may use their font in a tweet with legal fine print that you cannot use

their font to insult them. How do you think Twitter reacted to this? How do you think Twitter reacted to this? Let's hit our three stories. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way. It snacks about the hair ain't food. It's air candy. They don't reflect the views of the robberhood family. It's all informational just so, you know. We're not recommending any securities. Nope. It's not a research report or investment advice.

Not an offer or sale of a security. Right. Snacks is digestible. Business news for you. Robberhood Financial, LLC, member FINRA slash SIPC. For our first story, Jack, bonjournal, though, the Olive Garden is a very first restaurant chain to announce corona quarterly results for us. And we just realized the Olive Garden has a bit of an alcohol problem.

Now, the Olive Garden is owned by a much bigger company called Darden Restaurants that had a very fascinating poll on page one of their earnings report. They asked a whole bunch of Americans what they are most looking forward to once COVID-19 finally goes away. You know, Susie, you're looking forward to shopping, vacation, travel, friends. Uh-uh, uh-uh. Number one thing people are looking forward to going out to restaurants to have dinner again. Stuff in your face with the triple rigatoni bowl and Yeezy Jack.

So let's slap on a bib and see how Darden Restaurant did in March. March, April, and May, aka their second quarter. All right, Jack, I'm looking what we got in the menu. We got Olive Garden, Longhorn Steakhouse, and Capitol Grill, all owned by Darden Restaurants. Sales plunged 43%. That was thanks to the lasagna lockdown that all the states did to stop the spread of COVID-19.

The result was a $480 million loss last quarter for Darden restaurants. Jack, how does that compare to last year? $208 million profit last year. So profits essentially fell by almost $700 million, thanks to COVID-19. That's the kind of swing you fall off of. You break your arm, Jack. Now, the OG lounge is pulling a McDonald's. They are slimming down and simplifying their complex menu so that workers in the kitchen don't have as much trouble shuffling around while wearing face masks. That means say goodbye to the Tuscan T-bone and maybe like the Sicilian

Blooming Onion, whatever. First of all, everybody is mispronouncing it, the Tucson T-bone. It's Tuscan T-bone, Tuscan Italy. If you know, you know. Now, the sad part about the earnings report, which Nick and I jumped into snack style, Olive Garden is quietly hoping that your neighborhood mom-and-pop Italian joint goes out of business. Way more than usual. Turns out nine out of ten Darden dining rooms are actually open right now. And that's because Darden Corporation had a bunch of money and they could survive the lockdown for like two and a half months and then finally reopen. Simultaneously, we're seeing a disturbing report from Yelp showing what's going on with the red sauce place around the corner.

Since March 1st, 27,000 restaurants in the United States closed their shop according to their Yelp page. And 53% of them say they're going to stay permanently closed. That's right. 53% designated, we are permanently closed on Yelp, which is probably a reflection of the reality. Meanwhile, the carb-focused crew over at Darden restaurants think sales are going to return to 70% of normal this quarter. This quarter. And that'll be easier for the restaurant because there's less competition because so many

restaurants went out of business. Honestly, we're thinking of it. It's kind of like the Woody Allen, quote, 90% of life is just showing up. So, Jack, what's the takeaway for our? our breadstick buddies over at the Olive Garden. The biggest issue for restaurants right now isn't the food. It's their profit puppy, which is alcohol. Snackers, it is absurdly hard to make money in a mom and pop or quick service restaurant anytime. The restaurant has to pay the staff. They have to pay insurance. They have to pay for food. They have to pay for chefs. They have to pay for rent. Rent. Rent. And then

there's the rent and the rent and the rent. And you and I, we get to spend a majority of the meal eating. But those restaurants, they're making 30% of their revenue on what you're drinking. And an even bigger percent of restaurants, profits come from the beverages. A burger and fries, that might sell for like $12. That's going to cost the restaurant like, you know, $10. They're not making that much money off your burger and fries. Okay, so they're making 10% profit margin on the burger and fries. But a bottle of Kianti, that's selling for $40, even though it only costs the restaurant 13.

A glass of Coke, that's like a 90% profit margin for these guys. Diners may come back to a restaurant to pick up a Capolini Pomodoro and bring it home during this takeout awkward COVID-19. But they're not going to be shelling out three times the price of a bottle of Brunello when it costs a third of the price back at home. Takeout only restaurants, which is pretty much what Darden and everyone else is right now, they'll likely be missing their profit puppy. Booze. This is Jack. I used to work at the Olive Garden, and I was three times wine salesman of the month.

Not a Darden shareholder. Not a Darden shareholder. I got paid in breadsticks. For our second story, we just noticed that Google is putting its money where its mouth is. Google, which is own. by alphabet will start sharing ad revenue with news publishers. It's sticking its money in the news publishers' mouths. I think it's a mama bird situation. Now Snackers, when we're talking about Google, you just got to keep one thing in mind. Google is an ads business. It generates like 90% of its

revenue through online ads and does a bunch of different things with that money, but the ads is where the money comes from. And if you have to ask about the other 10%, just forget about it. It's just If you have to ask, we'll have to kill you. After 15 years of decimation, Google will stop taking ad revenue from newspapers. Rewind to 2005, Mark Zuckerberg grew his first buds of facial hair. Little Z, remember him well. And ad revenue since then for the news industry has dropped by 78% according to Pew Research. Let that sink in.

Now, advertisers directed what they used to spend on newspapers to Facebook and Google, and that's why that number dropped. Facebook and Google includes Instagram and YouTube, which are owned by Facebook and Google. Then we entered this new phase of desperation where news agencies started posting on Facebook hoping to win back new subscribers. Guess what? That didn't work. No, it didn't. Which brings us to the newest, biggest move from Google. It's going to start giving the news industry money instead.

The news industry is sitting there like, hey, Nana, I love the sweaters you've given me every year for my birthday. I'll also take a check, though. We just want cold hard cash. For the first time, a big tech company will pay publishers for the traffic that their post-generate. Google is launching a new app. It's going to be a news app, and its name is probably going to be Google News. TBD on the name and TBD on the timing, but according to Axios, this is going to come out this year. News organizations will start syndicating high-quality news and start getting a percentage of the ad revenue that typically would just go to Google.

Think about the last time you scrolled through your news feed. There was a New York Times story that probably got a million views in there. And then there was probably some Rando Meal Kit startup company that paid for an ad right there beside the New York Times article. That ad got millions of views too because it was right next to that New York Times article. So instead of keeping all the ad money that that meal kit company generated for Google, Google's going to share that with the New York Times. Hey New York Times, thank you for that article about the war in Afghanistan. Love what you're doing. You want to go 50-50 on the ad revenue we got because of it?

pat on the back. So Jack, what's the takeaway for our buddies over at Google? This new Google news aims to solve two existential problems that have crushed the news industry. Snackers, the news industries like Rocky Bow, Bo, in the middle of the second round versus Draga. It is beaten, it is bloody, it is bruised, it's against the ropes. I'm against the road. I want to go back in, let me back in there, coach. If I could change, and you can change, everyone can change. Huge layoffs, drops in the amount of news and drops in quality. It's all here. hit news hard. Existential problem number one for news, you and I have been trained for years not to pay for news because you can always find it free on Facebook and Twitter. Boom, now that

problem solved because this Google News app will be free for you. Existential problem number two, tech does advertising better than news publishers do. Boom, instead of losing ad revenue to Google, news publishers can now share in it. Quick shout out to our buddy Mark Zuckerberg. Maybe you should suck this idea because it could really work at Facebook too. For our third and final story, Slack's new product launch is its most important ever. Slack now has the power to kill email. Finally. Finally.

Now, almost a year ago, Snackers, Slackers went public and said it wanted to kill email. Literally. Slack picked the ticker symbol that we all thought WeWork was going to get, which is W-O-R-K, work. Which, as one Snacker pointed out, meant if WeWork had IPOed, they could have gone with the ticker symbol, Slack. That would have been an epic response by WeWork, but that's a longer story we're not going to get into. In the meantime, 12 million workers have been sent in group messages, side slacks, collaborating on decks, and like getting a linda to sign off on budget all via Slack. The one big flaw for inter-office communication Slack, you could only Slack within your company.

A huge flaw for Slack. Slack salespeople have been going around to companies asking a false question. Would you like your company to be an email company? or a Slack company. But the truth is, even if you ended up using Slack, your company still needed email to communicate with the outside world. Slack companies could only use Slack for internal messages, and they needed to resort to email to message somebody outside of your work. Which brings us to the moment today, Slack just launched a fascinating feature that could truly kill email. Slack Connect, again, terrible name. They've got to work on this stuff. Slack Connect lets you chat across companies with Slack for up to 20 companies that you could select as like

within your circle. That means you can be slack in a way for internal messages and external messages as long as they've got Slack too and your Slack connecting. That means email isn't the only cross-border professional communication platform anymore. Now instead of emailing your buddy Timmy over at whatever company, you can call them, email them or Slack them. In a nifty little piece of marketing buzz here, Slack decided to show, not tell how Slack Connect works. Took a page straight out of their third grade English teacher's book right now. Slack just issued an $800 million bond in a superfinancy transaction. But get this, Snackers, they connected the law firm, the consultancy, the investment bank, and a PR firm all on Slack and managed

this entire finance deal with old school companies with Slack Connect. When the Slack CFO was setting up like the final walk-through meeting for this bond issuance, he could see all of the calendars of all of those different organizations through Slack Connect. Including at like a law firm and a bank that were probably 200 years old. So the stock jumped 2% yesterday on this announcement because people hope that more companies can now sign up for Slack because it's more versatile.

So Jack, what's the takeaway for our buddies over at Slack? Slack's next frontier is consumer messaging. Snacker Slack right now is 100% focused on business communication. Business, business, business, business. But Slack's biggest rival is Microsoft Teams. True. And they just launched a version of teams for your personal life. We're looking at Slack and at its core, it simply organizes your communication.

It just happens to be focused on business. They could apply that technology to your quarterly sales update or to organizing your brunch with your buddies. Microsoft's moves show that consumers are the next frontier for messaging like this. And Slack Connect just armored Slack up for that battle. Jack Kenyon, whip up the takeaways for it. before the weekend. The Olive Garden will benefit from less competition from mom and pop restaurants. Sadly, though, they'll be missing out on sales of alcohol and restaurants are basically alcohol companies. For our second story, Google is launching a new Google News app that will share ad revenue with news.

And you know, politicians were probably going to force them to do this anyway, so they're doing it voluntarily instead. I break up with you first. It always works. For our third and final story, Slack is letting you Slack Beyond your office with Slack Connect. The next frontier for office messenger is personal messages. Now, time for our snack fact of the day. This one's sent in by Vipul Batya in York, Pennsylvania. Not the old one, not the new one. Just straight up classic York.

Keep it simple. There are only two countries in the world where drug companies can market their products directly to you, the consumer. One is the United States. The other is New Zealand. New Zealand didn't see this coming. Not to see New Zealand. They let drug companies take out ads on TV,

billboards, newspapers, wherever. Spending on drug ads, by the way, has more than doubled in the last five years. You're not seeing a Cialis, Mike Dicca throwing a football through a tire ad in France. Jack, I thought he sits in the bathtub and then he throws the football. Doesn't it make more sense for the doctor

to decide the drug for you, not you to tell the doctor? Where all these baby burwers getting all these bathtubs, Jack? I don't even know. Happy birthday to ever. a new Robin hoodie who's been snacking on snacks with Tommy, another Robin hoodie. The couple that snacks together and works together. Finally, Nick and I are going to be hanging out with Snackers on a new app called Listen App.

We thought it was the best thing to do before the weekend and we'd love to see you guys there. Listen app is a community style podcast app where each episode has a room where Nick and me the host and you, the listeners, and Snackers can all chat together. Everyone's talking. It's a lot of fun. So if you want to chat with us, we'll be hanging out on Listen app about today's Snacks daily episode. We're going to be trying this thing out today at 2.30 p.m. Pacific time in the chat room for this episode. You download the Listen app and then you input the VIP code T-B-O-Y, T-Boy, and boom, we're chatting together. It's a lot of fun. We've also got a link and more details in the description

of this pod. Jack, what are you going to be wearing? Are you going with the V-neck? Please tell me you're going with slam and Santa. Happy weekend, everybody. Ask your buddies for us, H-Y-H-H-Y-S-D. Have you had your snacks daily? We'll see you on Monday. Can't wait if you know, you know. The Robin Hood Snack podcast you just heard reflects the opinions of only the hosts who are associated persons of Robin Hood Financial LLC and does not reflect the views of Robin Hood Markets, Inc, or any of its subsidiaries or affiliates. The podcast is for informational purposes only, is not intended to serve as a recommendation to buy or sell any security, and is not an offer or sale of a security. The podcast is also not a research report and is not intended to serve as the basis of any investment decision. Robin Hood Financial LLC

member FINRA SIPC.