So in our world, there are folks that don't need any introduction. That really include Scott Galloway, author of many books, The for the Algebra of Happiness, most recently Post Corona. He's Professor of Marketing at n y U Stern School of Business. He has founded several companies, and he's host of the upcoming The prop g Show right here on Bloomberg Quicktake. Delighted to have him back with us. Scott Galloway on the phone in Florida. How are you, um, great?
Thanks for setting out him. Possibly no pressure there, Mr Galloway, I'm not worried, so so listen, we want to hit you on a couple of things. First of all, um, the Facebook news today, It kind of I think we thought there was going to be a solution of Trump on or not the platform, and he's banned, but the company still has to make a decision down the road about ultimately long term. Why do you make of this news and how should social be treating people like Donald
Trump and others? Well, they should be. Anyone who is responsible for us sort of misinformation around a specific domain, in this case election interference should be banned from the platform. So you know this is this is Facebook's attempt to abdicate responsibility. This oversight board. I think it's got the charm of the legal of Nations, with the effectiveness of the United Nations. I think it's a total abdication of responsibility. And what they said was we're going to hurry up
and do nothing. We're going to make them. It's kind of the mother of all non decisions. I'm glad he's not back on the platform. But it's typical, It's typical Facebook. It's it's kind of just more delay an obfuscation. Well, how how has it been so easy for Twitter and Snap to make their decisions about President Trump, but it's been so tortured for Facebook and for Google's YouTube. You know,
That's that's a really interesting question. I think I think Google and uh, Facebook, to a certain extent, are still trying to hold onto this myth that they're just a platform. I think that they are. They aren't niche kinds. What's interesting is that there's definitely sort of a purity trade.
And what do I mean by that? If you look at pinterestome Snap, they've outperformed their peer group and they're largely seen as having less noxious, toxic content, and Twitter since kicking Trump off the platform had sort of the strongest run in several years. So it appears there's sort
of an immunity trade or a purity trade. I think Facebook and Google still want to try and cling to the notion that we want all content, all the time, anyone, regardless of the damage it does, and they're still kind of holding to that kind of zeitgeist there. Um, they don't see themselves as niche players. I think they're they're more, they're they're less less focused on pleasing anyone audience just don't want to just they'll be mildly upsetting to everybody,
you know. Sarah Fryar Bloomberg News putting out a story saying that maybe Facebook has to provide more options for Donald Trump types, saying that there should be a way for Donald Trump, his thoughts and other Trump figures to exist on social media without kind of all the amplification that many of these platforms provided. These are sours words to be fair, Um, do you agree with that that there needs to be another option if we believe in
freedom of speech? And I understand your point about misinformation, but how do we treat this? Scott? Yeah, that's a tough problem. But I think we can inflate freedom of speech with freedom of reach, and that is the conversation around anti vac is a worth while conversation we should have. There are people who want to have a conversation around
white supremacy, and those conversations should be had. The question is whether for profit entities should have algorithms that purposely seek out that type of controversial, very upsetting content and elevate it exponentially beyond what it would get organically because it is so noxious, because it is so heinous, it creates enragement. An enragement equals engagement, which equals more Nissan ads,
which means that Facebook gets wealthier. So the question is should we have this miss models that purposely linked profits to the enragement, division and polarization of our society. Should there be some sort of tax? But there's notions somehow that everybody deserves voice, These firms have, these individuals have
massive voice. The question is should we the most profitable companies in the world be engaged in a business model with the end up being handmates This edition or where a capital police officer is bludgeon to death with a fire extinguisher because these algorithms are amplifying the most controversial content. So in our world there are folks that don't need any introduction. That really includes Scott Galloway, author of many books, the for the Algebra of Happiness, most recently Post Corona.
He's Professor of Marketing at n y U s during School of Business. He has founded several companies, and he's host of the upcoming The prop g Show. Right here on Bloomberg Quicktake. Delighted to have him back with us. Scott Galloway on the phone in Florida. Scott Galloway, Um, is Apple taking too much? Does Does Epic have a point here? Because at the end of the day, you know, Apple's argument is, hey, we are giving you access to the customers, and we're making this a safe place for
our customers to to access your apps. Yeah. I think that's the argument. That they've made a staggering investment to ensure safety, and they've made a huge investment in laying down the rails, and they should be able to charge what they want to access those rails. The question is if you start seeing everything that's being transported on those rails and you see that certain goods are going to
a certain area and you decide wow, based on that. Inside, we'd like to start a competitive business Apple Music, and we're going to tax our competitor and maybe promote our own products. Are you, in fact in a monopoly position? The app store really is the regulatory achilles heel. I think they're gonna lose on this one. I would have gone further than this, but this is it's very difficult to argue that they're not imposing or not taking advantage of the fact they own the rails to compete with
the with the other products that access those rails. So it's in fact there's monopoly power here at scale, and an argument that they need to have one player and that size is good for everybody. Then they're a utility and their prices should be regulated. I think they're all wet on this one, all right, playing a little bit of Devil's Advocate, And maybe it's not apples to Apple, Scott, But what about a Walmart that you know how it squeezes its suppliers or an Amazon where it gets a
piece of everything that's sold on its platform. Um, I know it's not, like I said, maybe an equal comparison but is it that much different? Yeah, I think it is, Carrol, because I think Walmart is about eight or nine percent of retail and the app store on iOS is about of all dollar volume that goes through apps. So if you want to be a player in the app economy, there really is only one place. An iOS is where the majority of people go to actually spend money on apps.
So if Walmart gets market share of all retail, then it's apples to apples, all right, So listen, one thing you know. I wanted to ask you. Tim and I both wanted to We were thinking about coming off of Warren Buffett and Brickshire Hathaway's annual meeting this past weekend, and Warren Buffett put up a slide. It was the top twenty market cap global companies in nine. It was named like Toyota, General Motors x on, IBM, six U
S companies fourteen from other countries. He pointed out Scott that none of the twenty are on today's list of the top twenty market cap companies, and he says it's a reminder of extraordinary things that happen in nine. Not the Dark Age is not a backward time. So I'm curious, how do you think about today's top ME market cap companies, whether it's Apple, Google, Amazon, you wrote about them in the four Should we think in twenty years from now or I don't know, ten years, they're not going to
be the juggernauts that they are. Well, look, a basic truism is that everything everywhere eventually ends, and at some point these companies will be de thrilled. The question is what kind of damage do they do between here and now by not returning to our proud legacy of anti trust. And that is a T and T eventually would have been unseated, but we went in and broke it up into seven companies and we on unleash treme disinnovation, cell data, Fiber.
Each of those seven companies ended up being worth more than the original within ten years. So my argument is sure, at some point everyone is dethroned. But between now and then, is there an opportunity to oxygen a the economy, to increase job growth, increased taxation, increase M and A by doing what we have always done, and that is when a company becomes an invasive species, we go in and
we break it up. It's overdue. Anti trust is absolutely overdue here which companies need to be broken up right now? The answer is yes, but like I mean, well, except for Apple. Apple would be hard to break up because elegant anti trust means you unlock value. It's not a punishment, it's a liberation for all stakeholders. All stakeholders except the CEO who wants to sit on the iron throne of Olive Estro. It's not just the king of the North. Apple would be tough because who would get rights to
the brand? So Apple ends up You regulate the app store. But Amazon gets broken up, as does Facebook and Google. Wow. And by the way, yeah, I owned shares and all those companies except Facebook, and we're all going to make money on the day of their breakups. Talk about that though, Is it because you know a w S by itself is worth more than a w S as part of Amazon? That's that's exactly the correct question. In two the most
valuable company in the world will be an AWS. It was fun prophylactically, the fastest growing, largest player and the most profitable, most fastest growing sector in history. The cloud will be the stock that every hedge fund manager, every girl who gets her bombits that gets as a gift. Everyone will own a w S stock. Most valuable company in the world in four years is AWS. It'll be an n f T though right it's not going to
be an actual certificate. We're back at it, Carroll. I know, I know, well, you know you wrote about these four companies. I mean, who are the companies who are there? What's the technologies that you think are going to be kind of the replacement for the Apples and Google? Today you talked about the cloud. I get that. Are there other things on your radar that you're thinking Listen, we're just not talking about it enough. But these are the ones that are going to be the big market gap companies
of the future. There's a lot of incredible companies. The incredible technology is. The unfortunate thing is it's usually the same players that we're The biggest unlock coming out of the pandemic is we might have an opportunity. Virtual visits to doctors went from less than one percent. There's an incredible opportunity to start pushing out primary healthcare to hundreds of millions Americans and take healthcare from the disease driven,
defensive industry to a defensive, health driven industry. That's a good news, it's going to create trillions of dollars in value. The bad news, the company that will be the fastest growing healthcare company in the world will be Amazon. The voice is the most exciting technology. Who dominates that? Amazon? The cloud? Who dominates that? Microsoft? Amazon? And oh y a Google. So there's some incredible companies just off the list. The shopifies the rope, who's the salesforces the Ali baba.
But these companies continue to outpace all the rest. A lot of big numbers doesn't seem to apply to these guys. I don't know if we've watched Apple's earning of fifty plus percent of the revenues I phone up sixty plus percent sales in China, when they increase their margins and their services revenue, it's just it's just staggering. Hey, Scott, I want to end just with a personal question to you. So I know it's something that you think about a lot.
After I read the Algebra Happiness. You talked about it with Jacqueline Novograts on your podcast The Prop Show a couple of weeks ago, um about what it means to be a good parent. You asked her that question, and I know it's something you think a lot about. But as I'm raising my young son, talk to me about what you've learned raising a couple of kids. And we have about asked you and you got, oh gosh, we're
gonna need a bigger bout. So first off, if you if you drove by my house and you heard the screaming, you might not want to ask you that question. Look, I think what I've the takeaway I've got coming out of this pandemic as a dad is that my I always saw my role is to discipline and to teach and to backup mom and to set boundaries. And what I've come to the conclusion of is that what I need to do more of is just be someone who loves them and demonstrates and cements that every day we're
going to leave it on that. That's a great, great way to finish up. Hey, Scott, thank you so much, take care of yourself and and look forward to uh talking to you again. And I always appreciate all the time you give us. Scott Galloway, Professor of Marketing, ny uster In School of Business, author of many books check them all out, and uh he's doing things in education too with his Section four companies so highly recommend you Google that as well.