Bloomberg Audio Studios, podcasts, radio news from the heart of where innovation, money and power collide in Silicon Valley and beyond. This is Bloomberg Technology with Caroline Hyde and Ed.
Ludlow, married from New York and San Francisco.
This is Bloombag Technology coming up. President Trump, he floats potentially in eighty percent tariff on China ahead of negotiations due to begin Saturday. This has I urged Beijing to do more to open up their markets to US goods.
Plus, Apple's working on youtuip for future devices including smart glasses, Powerful max and AI servers, and lift shares.
Jumping this morning, it's biggest interday rise in November, so after the Right and Company reported strong gross bookings in their first quarter. But first we check in on these markets and we're actually relatively calm.
We headed towards the weekend when we actually see a.
Little bit of a draw down on the last past five training days. After two phenomenal weeks of gains on the NASAQ one hundred, we just trimmed by two tenths of a percent. Ed, it's all about tariff's It's all about negotiations with China, whether there's any sort of ice breaking.
Yeah, and that's why I'm looking at Tesla right. I don't see a catalyst or a headline driver on the terminal this morning, but Tesla is headed for its third straight weekly gain. It's the biggest run of gains on a weekly basis September. The logic in the last twenty four hours has been if the tariff narrative with China improves, names like Tesla will see a bit of a reprieve. Tesla exports some vehicles from Shanghai. The mix of vehicles when more of them come out of Shanghai is higher
margin for Tesla. Is that the logic that the market's applying. What we're trying to do is extrapolate from what the President said yesterday about what might happen in the context of tariffs, and then he takes the truth Social and says some.
More he does.
Let's bring up that truth Social post from President Trump earlier this morning saying that having eighty percent tariffs on China seems about right, and then leaving it up to Treasury Secretary Scott Besson. Let's get you the inside track with blumbg's Michael Shepherd. Mike look, eighty percent, is that a positive or negative for the market.
Well, you know, if the market, we're looking for a big concession on this. They got in absolute terms of significant cut from the current one hundred and forty five percent tariff level. But keep in mind, Carro, that eighty percent tariffs on goods coming in from China is still pretty eye watering. It's at a level that would discourage
most trade. And we've seen companies, including Apple for instance, trying to shift their supply chains and supply lines when it comes to China to reduce their exposure to China when it comes to goods exported to the US. And it's interesting that the President is also framing this as a challenge to China to open its markets, even as he is maintaining what would be a historically high barrier there.
Mike, the President, indeed, the British Ambassador to the US, Peter Manerlson, kind of framed this as a great deal, the ten level tariff UK to US. But what everyone kept asking in the Q and A is is this the template for your other negotiations? And I think the President basically said ten percent's a great deal. It won't be like that for other countries.
Well, that's right, ed, and that really is the question on the minds of trading partners and companies around the world. They want to know, how do we negotiate with this administration that has come in really elbows out on trade from the start. And what we heard from Howard Lutnik last night was that, look, this may not be a template per se, but it is a roadmac It gives a sort of frame two other countries to trading partners about what sorts of concessions.
The Trump administration might be looking for.
When it comes to the UK, they came in with some offers that were quite appealing to Donald Trump.
Won the UK agreed to buy.
Thirteen billion dollars worth of Boeing aircraft, very much music to his ears as he tries to stoke the manufacturing base here in the US, and also some agricultural concessions too, with promises to increase purchases of American beef. So between beef and airplanes, the UK found a way to get that reciprocal tariff lowered all the way to ten percent.
That may not be the case with other countries, and certainly negotiations with South Korea and Japan, which have a heavy tech exposure and interest, will face a much tougher and more complicated road.
How link indicated yesterday ed boom both.
Michael Shepherd in Washington, d C. Thank you.
In other news, China's top chip maker, Semiconductor Manufacturing International, plunged Friday after it worn sales could fall as much as six percent this quarter because.
Of production disruptions.
The company's co CEO unspecified issues with production lines and warned of a likely shipment correction in the smartphone market over the summer.
Carrot more on smartphones.
Let's turn to Apple, but actually the tech giant is said to be designing new chips to be used in future devices, smart glasses, more powerful max AI servers.
Let's get to Mark German.
Who's been breaking all of this news, and finally, well, those meta ray bands are going to have some competition, but it'll take a couple of years.
That's the big news here.
The meta smart glasses will have some competition from Apple. Apple has been working on glasses projects for some time, including classes without augmented reality like the metas, and glasses with augmented reality. Those are coming further down the road. But you need a product to hold you over till then. They've seen the metas are popular. They've seen that artificial intelligence is going to be a big part of hardware.
So they're going down this road. And as they've done with other new product categories, they're developing a custom chip for these glasses. And this chip is based on the Apple Watch processor.
Right.
It has special components in there too to increase power efficiency, decrease power draw, and control multiple cameras that would be on the exterior of these glasses, and they would work like metas where you can look at items and ask it for context using Siri mark.
Generally speaking, this is consistent with apple strategy on custom silicon. Right, many of the processes across the range of devices are Apple's own and I believe made by TSMC, fabricated by TSMC. Just explain Apple's footprint in that sense.
Yeah, the Apple for footprint is that they have their own custom processors and basically every device they sell. They moved away from Intel in twenty twenty. For the Mac, the Mac now has these high end M series processors, the Vision Pro and the iPad of the M series processors. At this point, the iPhone and the lower and iPads
have the A series processors. They make their own chips for AirPods for Apple watches, and so of course they're going to do it for the glasses as well as a significant product category within that vision brand in our likelihood, and they used here and C like you said, for that final manufacturing. But much of the design is done in house from Apple in their labs across Europe, across the United States, and they do have a license with ARM and they use fundamental underlying technologies from ARM.
Yeah, many people talk to me about Apple in the context of it being a fabulous chip designer in its own right, which is a fascinating move. Bloomberg, Mark German, thank you very much. Now coming up, we're going to speak with the Lift CEO, David risher Is. The company posts better than expected gross bookings for the first quarter.
This is Bloomberg Technology.
Time now for talking tech.
And first up, as you see shares a crowd strike lower today, US prosecutors regulators, they are proving senior executors over what may have been known by them about it's thirty two million dollar deal with Carasoft into the IRS. Now that's a quarter to sources. Investigators are looking into other transactions made by CrowdStrike and said to have.
Questioned former employees.
Plus TSMC rising today is the company posted a revenue jump of forty eight percent in April. This has companies increased purchases of essential components ahead of global tariffs. TSMC says that they see continued resilient demand from ai but recent surgeons in Taiwan's dollar that compression of the company's margins going forward, and Panasonic is cutting ten thousand jobs and an effort to boost profitability, shifting focus into growth
areas now. The four percent workforce reduction can see five thousand employees in Japan and five thousand overseas.
Personnel if they let go in the fiscal year.
Panasonic expects about eight hundred and ninety five million dollars in restructuring charges this year.
ED Let's Go Back to Technology earning shares of LIFT up around twenty percent so far today, on track for their biggest jumps since November, company posting a better than expected gross bookings of four point one six billion dollars, and Little Sweetener announced an expanded share by Back program.
LIFT CEO Dave joins us for more. Good morning, David.
There's something really interesting in your kind of forward looking strategy commentary on the cool Uber talks about something the same. There are parts of this country, America where ride share is less pervasive, people don't use as much, probably they drive their own car.
You want to go after that market? Why and how so?
The answer is, we've gotten really good at obsessing over our customers and we want to take it bigger and go bigger. I mean, look, this is our sixteenth consecutive.
Quarter of growth. You know, we're a profitable.
Company, We're you know, generating nine hundred million dollars of cash, and yet yet the rideshare market are still tiny. One hundred and sixty billion rides in the United States every year and we only do a couple three billion between the two of us. So there's so much opportunity. It really is better to be in the back of the car having someone else drive you, and we want to do it in places like Indianapolis and others where you know, the opportunities even bigger cash.
When last year on which was just a few weeks ago, we were talk talking about M and A in Europe, and with respect, it was a modest deal. The buy back is clearly well received by your investors. Yeah, but that would indicate that you have some ability to do m and a going forward you know, do you see that in your capital plans? And if you did buy something, what would it be.
So, so, first, thanks for acknowledging it's true. I mean, this is a business that is now generating nearly a billion of dollars of cash in the trailing twelve months.
So that's a wonderful place to be.
Again, huge thanks to the incredible team that has been working so dang hard to make this business not only great for customers, but great for shareholders as well.
So now the question is, right, what are other opportunities?
I would say our near term focus is making the cash that we've got, you know, putting it to work. As you say, we just acquired free Now, which will allow us to expand internationally.
You know, nothing more.
Obviously to announce right now, aside from the buyback, of course, but it's great to be in a strong position. We've got a strong balance sheet and a strong income statement, so it feels that's a good place to be and.
It's a strong position that you manage to defend off engine capital, David, in terms of they were a pushy investor wanting changes potentially a board level, but they've withdrawn that because of what you've given to the investor base in terms of buybacks, David.
Is that a cyber relief?
I mean, you know, we talk to investors all the time.
I would say maybe not so much the cyber relief as much as just it absolutely allows us to continue to focus on our riders and our drivers.
That's sort of the big thing.
But it's great that investors are responding so well to what it is that we're doing. Again, share buy back is great. You know, profitable growth, you know, quarter after quarter, that's great.
And this is what I've always said, it's.
Customer obsession that drives profitable growth, and we're sort of seeing that play out now.
And that customer obsession drives innovation, drives autonomous vehicles. I know you're looking at Atlanta, You've got a partnership there. How much are you're going to see driverless vehicles automatically you're going to have safety drivers in the car.
What is that going to look like as a pilot.
Yeah, so this is a pilot that we're doing with main Mobility set back. Autonomous vehicles are going to come. Right they're here in San Francisco, you see them everywhere. They're obviously in La and Austin and other places as well.
They'll come.
It'll be many, many years before they're a big deal, but as they come, it's such a great opportunity for ride share and for a lyft because it allows us to you know, provide better service, you know, using different technologies.
As you say, we'll be.
Starting in Lantam in a couple of months, middle of the summer. We will start with a sort of a confidence driver, someone else in the car to kind of help make sure that people feel comfortable.
With what's going on there.
It'll be a fairly small scale pilot, but this is something it'll grow into Texas next year with a partnership with mobil I and others, and then we'll.
Just keep building and building and building.
To the point where drivers are driving millions of people and autonomous vehicles are driving millions of people as well.
David, you're a technology CEO, and as such you must field questions on economics and the state of trade and travel.
It's our favorite thing to do.
Squ Uber reflected on the idea of cross border travel Canada into the US, the inbound travel into the US being soft business travel. People arrive at airports, are they or are they not doing ride share? What are you seeing through the consumer about the state of this economy.
I don't say we're seeing strength. And I know a lot of people are trying to look granula where why?
So I'll give you a couple of examples. Let's actually go back literally to earlier this week Sinkle demyle, right, that's not a holiday, that's necessarily a huge thing. But at the same time we saw one of our biggest sink of demios ever, it's a very very strong day.
Let's go back to the end of March.
Last week in March was actually our strongest week ever in terms of ride value. I think what we're seeing here is ride share has become a very sort of base staple part of so many people's lives that I don't really expect a sort of consumer sentiment fluctuates around to see that much difference. I'll talk about airports for just a second, because you asked airports basically quarter to
quarter are flat. It is true, consumer, excuse me, the commute is going up faster, so if you look at it that way, consumer's growing a little bit faster.
Excuse me, commute, I keep saying that.
But you know, again, even when you look at airports, gosh, it's only one in five people use rightdchhair to get to reports in the first place. That means eighty percent is still out there for sort of the you know, the picking. So I think our big focus is trying to expand the market. I don't think that the macro stuff is a big deal right now for us.
You're growing in Canada, David.
And it's interesting I've asked this time and time again a start of IBM asked, a vouba ask of a view. Is there any impact from being an American brand going into a country such as Canada right now?
Because we are hearing of pushback thirty seconds you know, it's.
So interesting, No, is the real answer.
In fact, we've just got authorization to open in Quebec, in the province of Quebec, which which we might have wondered whether it was going to happen given everything going on. So no, we've actually seen acceptance. Actually, Toronto's a big city for.
Us, going super well, David Risher, so great to catch up with you Thinbous some the numbers.
We appreciate it.
Lift to see it is a pleasure, Thanks you guys.
Pinterest ches up after the company reported second quarter revenue guidance that beat expectations and told analysts the platform was leveraging AI to attract advertisers. CEO Bill Ready spoke to Bloomberg.
Earlier, pintresses where gen Z goes to shop.
Gen Z is now our largest fastest growing demographic, over forty percent of our users. And you know they're coming here to shop. We're giving them a great shopping destination. But you know that has allowed us to deliver great performance for our advertisers. We've delivered a performance advertising platform where advertisers can get clicks and conversions and great performance. We're giving them AI enabled tools, so it's easier than ever for them to go create campaigns on Pinterest and
see really great returns on that. So that's the other side of the business is that we've made Pinterest a shopping destination. Eighty five percent of our users come to us directly, and then we connect them with advertisers to make it really easy for advertisers to connect with those users. In this moment where they're in market looking for something to buy but haven't decided what to buy. That's a great moment for those two to meet, and we see
that continue to accelerate. We're all time highs on users and all time highs on depth of engagement per user, really driven by AI and the personalization there and then how we're connecting shoppers and sellers.
So, is that keeping the likes of Timu and Sin who a lot of those gen zs are going to buy on your platform?
Is that sticking around because many had worried.
Because of the towers, because of the difficulty accessing the US and consumer in terms of price point, what we'd see retrenchment in terms of ads from those companies.
Yeah, Well, we're a global platform. You know, we're overre you know, five hundred and seventy million users. Eighty percent of those are outside the US, and so we noted as others that for Asian cross border sellers, you know, that has slowed down coming into the US, as others have noted as well. But we're seeing those sellers sell more globally and we're helping them to connect to other markets around the world. Here in the US consumers are resilient.
You know, there's lots of public spending information that says that consumers are still shopping. We went through a major supply chain destruction just a few years ago during the pandemic, and you know, we all saw, you know, things are out of stock and consumers found other ways to buy, other things to buy.
And we see that happening on our platform.
That while you have things like budget conscious searches like you know, budget friendly recipes or you know budget you know, party decorations, budget party favors, and those kinds of things up two hundred percent plus here on here. People find substitute products, they find other ways to go sort of bring delight into their life, and we're a great place to help them do that, in a great place for advertisers to see these shifting consumer trends.
Bill Ready speaking to us earlier, and let's just stick with earnings, with the consumer sentiment as well. Let's go to buy now, pay later company. A firm look shares our trading lower, but they actually increase guidance.
A firm CEO, Max Livtin is.
Here with US analysts calling this a knee jerk reaction and ultimately maybe some lofty expectations. But are you, like Bill, are you still seeing the consumer spending right now?
We are, We really are, He's He's exactly at A couldn't agree more. US consumer has been resilient. They found new things to buy, new things to be excited about. We're seeing really strong growth, which is posted three six percent GMB growth and that's a third quarter in a row acceleration. So the rumors of US consumer decline are somewhat exaggerated, it seems.
And maybe it's lofty expectations.
I'm sure you're going to tell me you don't check in on the shares very much, but when you do see sentiment like this on the back of your numbers, what.
Do you think investors are shying away from? Is it competition?
You know?
Hard for me to tell. I try not to check too often. I primarily care about it from the point of view of the team feeling that their hard work is actually understood by the market.
And I think it.
Took our consumers and our merchant partners about a decade to fully grasp just how different and how a creative we are to their sales, and just how powerful this whole new idea is and then it just happened. And so you know they say slowly at first, then all at once. That's my that's my hope for the market.
Max. Hello, let's talk about Costco.
You have this arrangement with Costco to allow a Costco costumer to pay over time. I am a Costco member and have a City credit card, and the benefit of the card is that it gives me five percent cash back on gas or four percent on groceries. Right, so I'm incentivized there. You and I've talked about this a lot, right, the sort of academic approach to whether you should put
something or credit or not. Just explain how you think you're going to be competitive against Costco members like I with this offer.
You know, I'm not sure I'm going to be competitive.
I think Costco card, like everything offered a Costco, is a great value. And you know it's certainly not a thing we are trying to talk you out of if you are truly committed to it. We speak to a younger demo than a typical credit card consumer who is very miles towards et cetera.
Conscious.
They choose to borrow with a firm because they have a point of view on They don't like credit card debt. They want to know exactly the true cost of the thing they're buying. They want to know when they're out of debt and fully paid out. And they're less interested in rewards, much more interested in just transparency of pricing. And I think Costco understands that as they try to attract younger buyers, and that's why they partner with us.
I am no longer in the younger demographic.
And they're still you're still in a very young demographic.
Max.
You know the performance, you know, the top end of the guide was above consensus. Just where were the specific elements of strength for you? Is there anything you're doing on the technology side that's giving you a real advantage.
No, it's very fashionable to flash your AI credentials, but we have built a really, really meaningful business entirely on the strength of AI and machine learning all these years underwriting consumers with alternative data, completely different approach to modeling, while of course remaining fully compliant with all the applicable laws.
So we are a technology first company with real depth of approvals, while maintaining our core values to just no laid fees, no compounding, interest, no deferred interest, all the things that you sort of people love to complain about when they talk about credit cards. And that's given us real strength with the younger consumer gen Z. Just like Bill said, you know, we have a huge penetration into millennial demographic gen Zy demographic.
That's what retailers come to us for.
They want to attract this younger buyer who really does differentiate between Hey, I don't want to revolve.
I don't want to.
Think of this as a buy now, pay forever, which is you know what much much credit cards are?
Yeah?
Is that younger demographic? Is any of your demographic starting to use you more? Because the economic uncertainty is that what you actually anticipate going forward?
It doesn't appear to be that way.
I don't think we are gaining share because of economic uncertainty.
You know, TVD.
We're living in volatile moments, so who knows what's going to happen next. But right now our consumer comes to us more than anything for the clarity and the transparency.
But most importantly, I think we are.
Seeing increased growth right now because of all a zero percent offers that we're seeing that the work we're putting into the market right.
Now a firm CEO, Max left Chin. Great to have you back with us. Thank you very much.
Welcome back to Blue Meg Technology. I'm Caroline Hide in New York and.
I met Ludlow in San Francisco. Let's look at the markets on the week and technology in particular, and as that one hundred as it stands very modestly in decline over the course of five days. Tariffs have been what's driving things. I just want to look at alphabet paran of Google right the doj antitrust remedy trial is one
factor search considerations. Rivals coming out like Apple and saying this is what we plan to do in the search market is really impacted their stock on Wednesday, one hundred and forty seven billion dollars in market shed alone on aggregate, heading to about one hundred and twenty billion dollars a market cap decline. Later in the program, we'll get into it, and in terms of specific movers, we're going to go
to the earnings context very shortly. But think about the strength that we're seeing in streaming Cara in particular, and then not just here in America, but we've got some interesting us from around the world.
We did, and it's your world of gaming end.
Because let's turn our attention to Nintendo projecting actually weaker than expected initial sales for the Switch too, despite overwhelming pre orders and market expectations that it would be the fastest selling console in history.
Jason Schards joining us on what is this? You know? Off by three percent?
They've got trade and tariff's to be thinking about. But Jason, why the slower than anticipated sales?
Tariffs are the big one.
Nobody knows what's going to happen.
Nintendo included, they make the majority of switch tos that are sold in the US. They make in Vietnam, which is one of those tariffs that is still unpaused for ninety days according to President Trump. So I guess we'll see what happens there. The other factor is supply shortage. That's always a question surrounding the release of these new consoles. How many can they actually manufacture and get to US shores, whether or without tariffs.
There's definitely a technology conversation had with the Switch to right inside of it is a high performance and video processor that takes the Switch to from being a kind of lower fidelity, lower performance console to being more on par with PlayStation and Xbox. You know what is going to be different this time around for the Switch, Like culturally, how do you think people will approach what it can do and the types of games you can play on it.
It's interesting this issue comes out of a really fascinating time for the video game industry in that graphical Fideli has not really gotten that much more impressive over the last four or five years. So Nintendo is pretty well positioned even with technology that is a few years old at this point, even technology that is five six years old, it is in a good position to still sell games and compete with the other two consoles. I mean, the other big factor is that people buy Nintendo consoles for
Nintendo games. They want Mario, they want Zelda. Mario Kart World, which is launching alongside the Switch too, is expected to sell a kajillion copies of the last one sold over seventy million units alone. So we're talking about a customer base that is built in and doesn't care quite as much about graphics, about the highest end GTA level games as much as they do about these franchises that are really always consistently good bluebags.
Jason Schreyer, who leads our video games industry coverage.
Great to have you on the show. Thank you very much.
Let's stick with earning shares of Trade Desk for flirting with the best day in more than two years, getting a boost from better than expected q ON results and upbeat forecasts. The best performer on the Nasdaq one hundred in terms of percentage gain. Laura Martin, Media, Senior Entertainment Analyst, joint US. Now, now let me do this. What is trade desk?
What does it do and does it do it well?
What an excellent question.
Okay, So Trade Desk is a demand side platform, a DSP, and so when you load a web page of a news article you're watching, Trade Desk delivers an AD in real time in milliseconds, and that ad has actually gone to auction in those milliseconds because they know who you are, and they know how much money you make, and they know that you're in the financial industry. So your AD units that are getting served to you in milliseconds are very valuable, much more valuable than like, you know, my kids,
who earns no money and lives at home. So Trade Desk delivers those in milliseconds, having bought them at auction and they represent the largest two hundred advertisers. I think technically they have, you know, four thousand ad buyers, but they only represent ad buyers typically top of funnel without a performance metric associated with it.
They're doing strategy, got grades Kokai, they say, is giving them more power than ever. It's interesting, Lad, They're obviously delivering on a technology front, but there's got to be a resilient desire to be advertising this moment. We've seen that from Meta, We've just seen it from Pinterest as well. From your perspective, is the advertisers, the marketerstre willing to spend in this environment.
So every company has now reported earnings on every call they've gotten. Asked since April second, terraffs, have you seen downdraft? And with a couple exceptions, everybody else has said no. Trade desk said no. To date, it's been five weeks since April second, they have not seen downdraft other than in areas like autos or home appliances is down like forty percent with one company I talked to since April second, and you guys probably saw like the ports are empty.
They've turned around these container ship carriers and they're going back home rather than try to empty in the ports and pay the tariffs. So I think this might be a gathering storm. But so far Trade Desk has not seen impact.
Of Terras Laura.
This week in Europe we had the semi final of the Champions League, which makes me think about Paramount. You know, just as a case study, they showed some streaming strength, but on aggregate, what have you learned about the streaming landscape this far and particularly consumer attitudes to all of the platforms available to them?
Right, so we can talk about dizz Disney, Warner Brothers, Discovery and Paramount like all together big streamers, which is the source of question. But from a stock point of view, first, I just want to make a distinction because Paramount revenue felt ten percent, Warner Brothers fell six percent, and both of them were projecting negative four percent revenue growth this year and flat next year, which begs the question why do you need to be in these now because they're
still not growing. Disney, by contrast, revenue up seven percent. We're showing revenue up four percent this year and four percent next year. A lot of that is driven by streaming, so that's where I get to the answer to your question. A lot of that is driven by you know, not only does Disney have better have more diversity of assets, of course, but it also has better films, which helps.
Although films less than fifteen percent of the business at Walt Disney these days, but streaming is what's really driving that outperformance compared to Paramount, compared to Warner Brothers, Paramount has the overhang of can it's deal get done? That's a big that's a big like cloud on Paramount. But
the fundamentals of streaming are a bright spot. But if you can't make good films or you can't sell good TV, it's you have a big linear TV business, which both Paramount does and Warner Brothers Discovery does.
Like it's a problem, right because it's a shrinking to guests.
I mean, also, what's the problem is if you're suddenly going to have massive costs on your movies going well anywhere, being able to make content abroad, being able to bring foreign made produced content into the United States that has been proposed by the administration seems to be hurting the very industry that they're trying to protect. Right now, what is the impact on paramount. What is the impact on Disney if this does go into full.
Force, right, No, it's an excellent point because he is trying to help the industry. But as you know, films take three years to make, so the tariffs immediately would hurt a film that started three years ago before this policy existed, before the companies could react. So every film trying to come back to America that's been made offshore, whether it's tax advantage or not.
You watch Mission Impossible.
They are going for the tax breaks, right, They're going for these really exotic locations, and they don't like money.
Isn't the reason they're off shore. They're off sure for the art of it, like for where, like.
The plot line. So now those films are coming back over the next two years, and they're all going to be taxed at one hundred percent Like that is not helpful for the industry.
I mentioned it at the top of the block about alphabet and Google. Right, it's been an astonishing week frankly about revelation in the antitrust context.
You focus on YouTube historically.
When we talk about the streamers, but just in that antitrust context, have you sort of recalculated remodeled. The future you see for Alphabet and its various properties largely search.
Yeah, like our policies.
You know, we do evaluation of YouTube as a standalone entity every single quarter this company.
My opinion is Google is worth more.
On Alphabet is worth more in pieces than it is together because it's my opinion that people within the Alphabet holding company framework get subsidized by search, so they are not required to make money as if they're a general manager of their P and L. I think the best thing that could happen for ad Tech is for them to be forced at the September hearing to spin off the ad server and the SSP their supply side, which is the marriage piece to prade desperate cert. If they
got that would be really great for ATIK. It would also be good for not the Google perimeter that stayed behind, but the Google asset. The managers that happen to have to to compete for the first time and not get the benefit of being tied to search data and YouTube data, which is best in class like consumer data. So and I think the more Alphabet gets smaller, the more they can focus on what matters, which is solving the search problem.
Now that AI is here and making sure YouTube remains the number one streamer on Earth.
Laura Martin, It's always great to catch up with you. Happy weekend speech.
You see. We hope of Needham appreciate it.
Meanwhile, coming up, more earnings, more CEOs, Draftking CEO Jason Robbins joins us discuss the company and will slightly cut to its guide as a Bluebote technology.
Draftking shares rising, with investors shrugging off the company's reduced full year guidance after a customer friendly March Madness weight on sales. Draftking CEO Jason Robbins delighted, say joins us. There has been some, let's say, back of the Napkin math and people look at the revenue forecast being lowered by about two hundred million dollars. Right, Bear with me, Jason, Is that exactly how much Draft Kings lost on March Madness, the two.
Hundred million dollar figure.
No, we actually put out the numbers.
We have a bridge in our earnings materials.
It was a little bit less, but overall it's not too far off.
Okay, talk to us a little bit about what's too far off as well? What else is driving perhaps an expected downgrade in full year guidance. Analysts seem to be taking as well on the chin as our investors, but the regulatory environment as well.
How much you haven't in you once for that?
Well, what we we put this out there. We had about one hundred and seventy million from sport outcomes and then thirty million came from jack Pocket being caused to not be operating anymore in Texas. But then the overall fundamentals of the business were actually very strong. We saw increased to structural hold rate, our promotional efficiency increase, so some of those things offset as well. So really the fundamentals of the business are about as healthy as can be.
And I think the real question is will all these sport outcomes turn around in two quarters in a row now? But obviously that happens, and that's part of the greatness of the product is that customers can win and they can go on winning streaks like this, and it makes it a lot of fun obviously, and you know, we'll see it was the first time and I think second time ever there were all four number one seeds in
the final four. Only the first time ever that that happened with also all twos in one three seed in the Elite eight, So you never know, maybe there will be another year like that, but probably not.
It was more likely an anomaly.
And you know NBA playoffs already have had a bunch of upsets, so it tends to kind of swing.
Around the other way over time.
Ah, too much consistency.
But what also is consistent, Jason, is what a massive jump in your monthly active uses when you talk about the Jackpot in particular, and I'm interested in how jackpocket is transferring to other sports, casino games and the likes or are people sticking to that lottery application.
Well, the jackpocket is still very early in its growth, it's still quite nascent, so we believe there's a ton of upside for that business and we're excited about it. We haven't fully integrated it into the DraftKings app yet, we haven't put it on our platform yet, which should dramatically increase both the conversion metrics and also the cross sellability and marketing ability. And the cross sells already well above our expectations, so we think there's even more upside there,
so we're pretty excited about it. We think there's a lot of growth potential, but it's still small, so the overall impact on the business isn't great yet, but hopefully that changes as Jackpocket continues to grow.
Jason, in your industry, there are big almost legacy names Las Vegas Sands, for example, that are pulling out of bids for land based casinos, and I wonder how much you can assess their nervousness that online gambling just cannibalizes demand for land base and how that impacts you.
Well, it's certainly a perception that we have to fight because it's out there. I do think that the facts are very mixed on that. While there's certainly some examples you can point to where there's been you know, diminishing markets where they've had online gaming, it's also you know often where there have been declines going into that, and then you see the complete opposite story in states like New Jersey where they grew and really reversed a declining
trend for years after legalizing online gaming. And it's also a different property to property. I do understand though, why if you're a company that has no ie gaming play right now, doesn't have an app, doesn't have a way to make money off of it, that this wouldn't be seen as any upside for you, and so naturally, you know, if there's no upside there, there can only be downside.
And I do understand that.
But I think the amount of cannibalization and the downside has been greatly exaggerated and we need to do a good job, or a better job, I should say, educate on that, because the numbers don't necessarily support that story.
Jason Robbins, Draftking CEO, thanks so much for joining us today.
I appreciate it. Thank you foring wow, we're going.
To look with Sticking with sports, we also just caught up with David Beckham's former teammate Gary Neville. After the two partner up, they recommitted to buying Saltford City Football Club alongside global advisor and investment platform can Seller Group and a whole host of other business executives. Now, Neville spoke about the importance of content as well as pitch performance to take it all the way to the Championship League in the next five years.
Take a listen you.
Refer to Obviously Wrexham THEYD done a great job there over the last few years. But we've been in Salford now for ten years. We had a documentary nine years ago, I think the very first fly on the Wall documentary of a football club that was on the BBC and used to get millions of people watching it. We definitely want to revisit that type of model and grow commercial revenues, but doing it in such a way whereby football is always deemed as a priority, and you know, there is
great excitement on the ground here. It's a new injection of life into Salford City.
On Bloomberg dot com ed, the.
Federal Trade Commission has spent the past month presenting evidence to show the social media giant Meta should be broken up, and testimony from more big names.
Is expected in the coming weeks.
Bloombo's Riley Griffin is out on the East Coast in DC tracking what's going on.
What is the latest?
You know, there are so many headlines that come out over the course of the process based on people's testimony. It's hard to say where, like net we stand right now.
Well, we are at the midpoint of the trial. We expect potentially next week or the week thereafter, Meta to begin in earnest its defense. But what we saw just yesterday was Instagram chief Adam musserri defending Meta against the FTC, which is making the claim that Meta has dominated the friends and family market that means social media that is
focused on connecting with your friends. It's a tough case ahead because, as Adam Asseri said, TikTok has emerged as a primary competitor and they are more focused on entertainment.
Ronnie, there's evidence that was shown at this trial that you're not always being recommended to connect with your friends or your family, and groomers have been presented as being actually shown and recommended children to connect with. This is an a document that Meta itself had done an investigation.
With Yes in twenty nineteen.
Meta internal documents identified groomers, a term that they were using to define child predators were being served miners as suggested follows on Instagram. They found that seven percent twenty seven percent of the follow suggestions made to this cohort of potential child predators were foreign miners.
And this came up from the.
FTC, which was trying to and straight that Meta's acquisition of Instagram had actually degraded the quality of the app.
Now, it must be said that twenty nineteen is several years ago, and now in twenty twenty five. They have made a lot of steps in terms of child protection and teen safety, but fully into it for you to bring us that story, Riley Griffin, thank you and.
All things meta.
But let's turn to the case that's been gripping the tech world too. And it's the final day of the arguments in a trial to determine how or if to break up Google search monopoly. Jos Cisco joins us now and just wrap it up for us in terms of where you think the balance lies now. Have they managed to show to the court that search is being so disrupted at this moment that perhaps they don't need to unwind some of their payments that they put to Apple for example.
I think the judge is fairly skeptical of Google's argument so far. Whether he wants to go so far as to break up the company and force them to sell off off Chrome, I think that's sort of up in the air. But this idea of cutting off the money flow, I mean, he found in his ruling last year that the payments were anti competitive, so it's hard to imagine that he wouldn't want to stop sort of cut off that money flow. At the very minimum.
A lot of the headlines been driven by partners and competitors testimony. What has been for you the biggest headline about how some of those witnesses have described the market and how they think this should be resolved.
So there's all.
The trial has been very forward looking because the Justice Department wants to sort of prevent Google from getting a monopoly in the next iteration, the next generation of search, which is generative AI, and so there's been a lot of testimony from companies like open Ai and Perplexity, and even at Apple as well about how they want to incorporate those types of products into the search, into their
browsers and their search engines. And Apple was sort of which benefits immensely from Google's payments to something like twenty billion dollars a year or more. They were sort of it was very interesting to see them kind of downplay the importance of Google's like current search product, their core product, and play up the future of search being AI, which I don't think.
Is wrong, but they also have a lot to.
Lose if they if those payments are cut off, so they don't want they want to make Google's current products seem less important, so the judge will leave.
It alone alphabet on course to shed one hundred and thirty billion dollars in market cap this week alone. Bloomba's justisco, thank you very much. That does it for this edition A balloon bag technology character, it does.
What a week?
What a week of turbulence around tariffs. We have much anticipated going into the Chinese negotiations, but look at what's happened to Bitcoin ed over the last five training days, up more than seven percent.
We clipsed that one hundred one thousand dollars mark as well. It's risk on there. Don't forget to check out our podcast. This is Brumo Technology