From Marhart where Innovation, Money and Power Collie in Silicon.
Valley, NBN.
This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
I'm Caroline Hyde at Bloomberg's world headquarters in New York, and.
I'm Ed Ludlow in San Francisco. This is Bloomberg Technology.
Coming up Snap plunges and fat by the most in the year after earning's disappointed in the company sites a challenging operating environment for the full year. We've got all the coverage ahead.
Plus Tesla staff bracing for layoffs as managers are asked binary questions on whether their employees' roles are critical.
Details ahead and.
Uber earnings, well, that's showing robust demand for rides and delivery as gross bookings and pass estimates. I'm going to be sitting down with the Uber CEO, Darakos or Shaheb.
A story are reported this morning with Bloomberg's DNA hole. Tesla has canceled or postponed performance reviews this week, and it's said to managers, look at everyone that works under you and tell us who is critical.
And now there's a big worry.
I'm told from sources internally that big layoffs are coming, and when we broke the story, there was a.
Big spike hire in pre market.
You can see we've kind of traded choppy throughout the session, but broadly that's positive to investors. Write Tesla's talked about looking at costs. They've done this before, using performance reviews as a way of pulling back in certain areas. We'll bring you the full data and details with done a hole later in the show. Back to the earning side of this story and their mixed fortunes depending on who you are. Uber's like slightly hired two ten to one
percent strong earnings, strong outlook. It's a story about an app that is more diverse than its peers. New products are helping on the mobility side, and as you know, we're going to talk to the CEO, Dara Kostrashahi later in the program. Snap is the opposite, down thirty four percent, biggest drop since October twenty twenty two. Top line growth of five percent missed estimates. But on the bottom line, what was with all those job cuts and cost savings.
If you're still on an adjusted EBIT.
Basis saying you're losing fifty five to ninety five million dollars. There was growth in core Western markets, but those emerging markets that Snap's been so focused on, the growth is nowhere to be seen. So let's dive in deeper into Snap's earnings with Jasminemberg, Principal analysts and Insider Intelligence, where she leads coverage of social media and the creator economy. Your reaction to this Snap.
Print look, investors are obviously unhappy, They're frustrated, they're losing confidence, and that makes sense, especially in the context of Metas blowout earnings.
Just last week.
But if you take out that context, it really wasn't all that terrible of a quarter for Snap by its standards. It's Q four revenue growth did come in at the higher end of its internal guidance, and its revenue growth for the full year was just about flat and what
we were pretty much expecting here at Insider Intelligence. The problem for Snap, though, is that context is key, and investors are inevitably going to compare it to Meta, and what Snap is showing is that it just can't keep up pace with the big tech titans.
Meta, Amazon as well showing such ad improvements. Is enough being done by Evanspiegel to turn around the ads in particular and basically prove themselves.
Look, one of the things that's really working against Snap and all of this is its lack of scale in comparison to its rivals. Now, of course, Evan Spiegel said he is going to continue to try and grow the user base, but because of its small size, it is currently a less essential player for advertisers, which of course impacts ad demand, but it also makes it more challenging for it to be able to revamp its systems. It has less data and less signal to be able to work with in order to do this.
When you basically have daily active users of four hundred and fourteen million, monthly active eight hundred million, do you just have to recategorize what Snap is and just be like, this is a nice, healthy company that's going to be boosting overall. It's its earnings and its revenue, but just not at a pace in any way comparison with the major players.
Yeah.
Look, we're in this environment where we're seeing the bigger players get bigger and the smaller players like Snap continue to struggle. Snap is never going to be a Facebook, it's never going to be an Instagram. But with that many users, there are a lot of people who really love the platform. I think one of the big problems, and we've talked about it here on the show before,
is that its primary use case is still messaging. Now we heard again, of course that there is growth and more of its public facing social media like features, but really most people who are using it on a regular basis are doing so to message. One of the things that you know is really interesting is that all of this is also coming at a time where Snap is
repositioning itself as this anti social media platform. And that makes sense in terms of all of the problems with social media, especially considering the testimony in Congress last week. But it's not really going to help its business.
But like everyone else, Jasmine Real Quick, they're saying that the conflict in the Middle East is impacting their ad business.
What do you make of that?
It certainly was a headwind for Snap's ad business. I do think though, that that's emblematic of some of the large, larger, long standing fundamental challenges that Snap has. Its direct response ad platform, of course, is not as sophisticated. It's still making improvements on that, and brand advertisers that are spending really heavily, especially in Q four on Snap brands, of
course are more risk averse. They're more likely to pull or pause their spend spending in times of conflict or crises, and without that direct response ad advertising platform and AD dollars to make up for that, it's probably more noticeable in snaps earnings. And then again there's the small size when advertisers are thinking about where to you know, cut spending, it's the smaller players that are going to go to first, Jasmine and Berg.
It's always great to have your analysis across the show. Principal analyst and insider intelligence.
Uber out with the results, reporting gross bookings that beat estimates, showing strong global demand for rides and food delivery during the holiday period.
Joining us now Bloomberg's Emily.
Chang and ubercio Dara Kasha Shahi for more on the strong numbers.
M Ed, thank you, Dara, thank you as always for joining us. Look, it was a beat across the board, but the stock is down this morning, you know. Now the times are good. We saw trip growth really accelerated. Will that keep up?
And how well? Our trip growth was super strong? Right?
We grew trips twenty four percent on a year. On your basis on a base of two point six billion trips, so you know, as you get larger, it gets tougher to have that kind of growth. But if you look at our gross bookings guidance going forward, it's between eighteen
and twenty three percent. So we do expect to continue to grow at very very strong rates while at the same time continuing to increase profitability and margins, which is the best of both worlds, which is what investors expect of us, and frankly it's what we know Uber can deliver well.
Shares just turn positive, so investors are liking what you're saying. Let's talk about the other half of the business, and that is delivery. You had to raise some fees in some markets, you added multi store ordering. What more can you do in delivery to keep this up?
Well, there's a ton going on in delivery. There's obviously the core online food delivery business. Overall, delivery grew seventeen percent on a year on your basis, and it's actually accelerating emily, right, So it's accelerating versus Q two versus Q three, and it is about getting the basics right.
The first thing is customers want choice.
We now have almost a million restaurants on our site on a global basis, up about ten percent.
But they also want reliability.
So when we measure the number of orders that we get wrong, the number of orders we get wrong are down twenty five percent on a year on your basis, So the business is reliable. You get what you expect as well. And what that's resulting in is our audience is growing. Frequency is growing as well, and then as eaters order more and more in a basket, actually basket size is growing. So the growth that we see in eats is.
Very, very broad.
We're adding to it grocery, which is a segment that we're very excited about. You know, the grocery business is actually bigger than the online food business than the food business in terms of total size. Our grocery business is still pretty young. It's about seven billion dollars now run rate growing over forty percent, and we're very excited to introduce the grocery experience to all of our eaters out there.
Caroline just pointed out your stock just hit a new record high. I got to talk about the Super Bowl commercials. I'm obsessed. You've got Ross and Rachel, You've got the Beckhams.
These big stars cost money.
Though, and you had a lot of celebrities last year too, So is this marketing spend paying off? And are you sure because next year I'm expecting Taylor Swift.
Well, you see it by the results.
You know, these big stars they cost a lot, but they deliver a lot, right, And who's better than the Beckhams and Jennifer Aniston as well. You know, the amazing thing about these stars is you know, they're not afraid of making a little fun of themselves and having a sense of humor, but they also use their own social platforms to amplify the message out there. So it's not just about the commercial. It's about people talking about the commercials.
It's about the stars using their Instagram accounts to amplify the platform, et cetera. That's why it's working out for us, and we think it's worth investment and then.
More and Dara, many times, these are global celebrities you and a global company, even if the super Bowl is a little bit more US focused. How much you see in growth, particularly Latin America Asia standout. Are there any areas that you're worried about?
Well, right now, fortunately, we're seeing growth across the globe for US in mobility, Latin America and Asia Pacific have really been standouts. The Latin business is growing, the base business is growing, but now a lat of time, what you're seeing is more two wheelers. Actually, it's a product we call Ubermoto. It's lower costs than much more affordable and so if you want a low cost ride in Brazil or Mexico, we're seeing more and more users take
two wheelers. And in Asia, we're very, very excited about the Indian market. The Indian market has been one that has always held a lot of promise, but we're seeing that promise come to fruition now there it's not just four wheelers, but it's three wheelers. And the growth rates that we're seeing in India are substantial and we think that you know that business can continue to grow over the next.
Five to ten years.
So there's a lot of growth and excitement ahead in many of the markets out there.
A global conversation with our global TV and radio audience, we are of course speaking with Uber CEO Dara Kosashahi and Dara I hate to be the Debbie downer that focuses on the one area of perhaps lackluss and performance, but freight tell us a little bit about it was in line with where the market wanted to see it, but it is still a bit of a drag. When'd you see the turnaround?
Well, the freight business is a cyclical business, and what we are seeing is at least a stabilization of the overall freight industry. There was too much supply out there, demand wasn't growing. We're seeing a stabilization and rates. We're seeing spot rates improve as well, so I think that's an early signal that the freight marketplace is going to improve. And what's really cool about Uber Freight is that we are using our marketplace technology, matching, pricing, etc. And bringing
it to the freight industry. So we're very confident that a turn is coming. We don't know what when, but we're definitely seeing signal of that turn, and we can bring our technology, prowess and the service levels that other players who are just offline really we believe can't match. So we're quite optimistic about freight, but it's a little bit of a waiting game to see that cycle turn, and we're hoping to see that cycle turn this year.
Dara, good morning, I think we kind of learned a lot about Uber the technology company in the court have just gone new products and just more diverse offering on mobility. But there are lots of questions about, well, what is the new product pipeline going forward? You know, how can you keep adding functionality to the platform that is new, opens new addressable markets. Car rental is interesting, right, because that's an Industryalen's suffering some pain.
Yeah, well, I think it's car rentals is one area that we're pretty excited about. And what we try to do with Uber is we don't want to just build the same thing that others have built, but let's say a little bit better. We really try to reinvent how you think about a particular product. So one product that we're pretty excited about with car rentals is actually what we call Uber Valet. And with this product, you know, you push a button, you get to pick your car, but then an Uber.
Driver will come and drop off.
That car for you in front of your house or wherever you want that car dropped off. So we want to bring that little Uber delight in whatever experiences that we build so that we're heads and shoulders above our competition.
So to speak.
Now we do it in partnership with car rental companies, so it's good business for them. But it's the magic of Uber that we want to introduce in every single out there, and we think there's plenty of innovation ahead for us.
Yeah, I'm somebody that takes right share. There are other right share platforms available to work every morning. But there seems to be some evidence that that corporate ridership is coming back. Where do you see that most.
Yeah, corporate has actually been a great signal for us early this year, last year if you looked at corporate and we have a very significant corporate presence and what we call Uber for business and it allows companies instead of you know, black cars, et cetera, they can use Uber. It's connected into the corporate expense systems, et cetera. There's an area of safety, which is you know exactly where your employees are.
So it's been a very very popular offering for us.
And last year, you know, as corporates were more careful in terms of their spending travel, et cetera, the spending with you for B was muted. We are now seeing, especially in Q four and so far in the first quarter companies are starting to leaning in again. They're starting to invest, they're getting their employees out to go out to meet customers face to face, and that absolutely is helping our you for B business that's starting to accelerate.
It's high margin business. Usually with you for B you.
Know, you take a comfort car or black car, so it's high margin businesses as well. And we're very very happy with the signal that we're seeing, and that signal is pretty broad. It's not just the US phenomenon. We're seeing companies around the globe starting to invest again, which we think is a great sign.
I want to talk.
About evs because there's you know, reports, consumer demand is following. You're seeing big automakers pulling back, your own rental partner hurts also putting back, pulling back. How much is this hurting your partnership. You're pushed to zero emissions and everything you're doing to try to incentivize drivers to switch over.
Well, Emily, we're continuing to push on the EV space. No one said this was going to be easy. And listen, with every technology, there's this initial excitement and everyone gets on board and maybe maybe people overestimate the potential of a business or how it is going to be. You know, we've been around a uber for a while and we actually love solving tough problems, so we continue to lean in with evs. We now have over one hundred and
twenty thousand drivers driving evs all over the world. Over the past years, we completed more than three hundred million trips in terms of evs, So we continue to lean in. I think a real concern is with charging infrastructure and making sure that that charging infrastructure is available and ready, especially where our drivers need. It may not be in the center of the city, but it may be in the towns that.
They live, et cetera.
So if the charging infrastructure comes comes in, we think we have the partnerships in place. We're putting real money nine hundred million dollars behind our push to evs, including subsidizing rides so drivers actually make more on an EV trip. So we're determined and we think we're going to keep pushing the momentum in this space.
You're shutting down Drizzly, you're laying off one hundred and fifty people.
What happened there?
Did alcohol sales just decline post pandemic?
Don't you know?
There's a super Bowl coming.
Up, so it's you know, listen.
It was a tough decision there, and what we have observed is that the Uber Eats platform.
We talk about the power of the platform, which is, you.
Know, you ride on Uber, you eat on Uber, you get growceries on Uber, you order your alcohol on Uber eats. The power of that platform is really significant. And you know, things have changed where companies have to be more disciplined
in their investments. And when we look at a marketing investment, should we put the next marketing dollar behind Uber eats ie a super Bowl commercial, or should we put that next marketing dollar to introduce the Drizzly brand and to consumers, it didn't make sense to keep investing in Drizzly, So we've taken a lot of what we've learned from Drizzly, many of the merchant relationships, et cetera. But essentially that business is shutting down in terms of that organic Drizzly business,
and we are building on alcohol within Uber eats. We think that's the next best investment going forward for.
Us as a company cost discipline.
Uber CEO Darakrososhahi, I joyed to have you on the show. Thank you, and of course are thanks to you. Emily Chang now coming up. The head of Byte dances China operations stepping down.
More news coming out of China.
More broadly, this is a blue meg technology time now for talking tech. First up t SMC, the world's biggest chip contract manufacturer and supplier to the likes of Apple and Nvidio. Just January, sales rise after strong demand for AI chips, and it helped off set the continued weakness and consumer electronics products. Now revenue rose almost eight percent last month six point nine billion dollars. The growth is the later sign that a sector rebound could be on
the horizon. Meanwhile, the head of Byte Dancer's China operations is stepping down, just a week after the CEO, Liang Rubo said that the company needs to avoid complacency and
make up lost ground in the AI race. According to sources, Byte Dance will not seek to appoint a successor and Zang will shift her focus to the video editing app cap cut and then Ali Baba reported lower than expected sales wellied down by a weaker performance and its core domestic e commerce business from the company also approved, though an increase of twenty five billion dollars to its share re purchase program, and of course this is desperately trying
to add sort of build up investor confidence when they can't do it with the proof of the pudding of revenue increases that the market wanted to see. They therefore have some of the big executive's buying shares and also a being buy back to announce.
Yeah.
I always think about Ali Barber as the nearest thing to Amazon in China.
Right.
It has a similar story e commerce and cloud. The cloud's not growing, and they're doing all they can to kind of sweeten things for investors the divvy or whatever, buybacks, whatever, and the prospect of spinning off other units. But it just comes back to the core business in China's economy.
And isn't it just what you're hearing from byte Edance trying to not have complacency focusing in on particularly AI as well. That's exactly where Ali Barba perhaps has been falling behind. They've had issues, of course getting in video products as well.
And this while they're also.
Trying to fend off deep competition abroad and internally of e commerce. I mean, they don't look like they're going to sackfice profitability though, that's one key analyst takeaway.
Yeah, and one of the cool things about ADRs or US listed shares is it gives different market exposures to that name, which is kind of interesting. Much more to talk about quit check in on the markets and earnings is kind of the big story. But as that one hundred at the index level higher a percentage point, I look at Tesla, it's now continuing to push higher. Later in the show, Bloomberg's Dan a Hole on set to
explain the story. Were reported this morning that managers are being asked to look at their staff and tell the company who is critical and who is not. The idea layoffs might be coming. Roadblocks moving to the upside eight percent astonishing record revenue in the quarter, And what they said is that every single day in the quarter gone, seventy one point five million people logged on to play through Roadblocks, which is a pretty astonishing performance for that platform.
It is one of the big video games movers in the moment right now. And then the other name is kind of Kindrel that we're looking at. I always find Kindrell very interesting. Remember we kind of introduced this name to you at the time of its listing at the end of last year, we're up two percent, most biggest gain in around three months, at one point in the session when it was up six point two percent.
It's a sales beat.
And there is look at the performance gone and the outlook carrow and the street likes what it.
Sees it does.
And we can speak to Kendril CEO. Now Martin schrote about how after you've spun offrom My IBM in twenty twenty one, the focus has been on getting rid of zero margin or low profitability deals, re anchoring the way the business is going. And yeah, it means revenue might be lower for a bit, but we've still got a loss. But this seems to be progressed. Talk us through whether it's turning around at the pace you want.
Yeah, thank you, Thank you for the opportunity to talk a little bit about our quarter. Look, we had another great quarter which continues now our string of strong execution as we execute as you said well, Caro, and this plan to remove content that really had no or even
negative margins in many instances. So while we're engineering the decline in revenues, at the same time we are focused on growth and in the quarter, again, we saw good growth in our kindrel consult business, which was up fourteen percent in the quarter and now fourteen percent for the year as well. And we continue to see great growth in our signings and our revenue that.
We're delivering with our Hyperscaler partners.
So where we're focused on growth, it's going well, and where we're focused on engineering the decline, we'll be through most of that at the end of this fiscal year, which for us ends in March.
So it is moving at a very fast pace.
And the reason it moves so fast is because our customers really do rely on us for the help they need in the secular trends that either represent opportunities or represent risks to them, and that's where we sit in the heart of their mission critical workloads.
You just announce that you're, of course building that partnership with Hyperscale is like Google Cloud, and I'm interested is to ultimately where your clients want the most handholding. At the moment, you've said in the past there's no recession in cybersecurity. Evidently, with macro headwinds as they are, how much our company is willing to purchase your expertise when it comes to AI.
For example, Yeah, it's a great question.
And look, remember where we sit in what we do for our client We sit at the heart of mission critical. So much of our consulting is also around mission critical. And so while our customers are looking for help in the newer things like jen AI, and we're certainly getting a lot of a lot of activity with our customer base to help them architect their data and to help them think through resiliency as they move into that AI world.
At the same time, you know, there are some really basic security things that our customers need help with, and so our consulting business is really driven by the same the nature of the same nature of the work that we do in mission critical. And obviously AI and JENAI represent a really good long term secular trend as they start to as they start to try to figure out how do they reach their customers. But this work is
not is not again solely in these new areas. The work is still primarily in the mission the mission critical nature of what we do for them on a run basis.
Martin, Let's think about that in the text of a case study that you outlined on your call partnership with an unnamed global automaker, and you basically, I'm paraphrasing you basically said, this isn't just about it. We're helping this particular company in the manufacturing context. So I just wondered if you'd explain how that works in practice.
Sure.
Sure, So when you think about the complexity that every auto manufacturer is dealing with across their supply chain and how you bring all of that together, you can imagine the complexity of the IT infrastructure that has to bring that together, including where is the data?
Is it secure? Can these systems.
Run at the level of resiliency, because once you introduce new complexity, obviously that has an impact or could have an impact on it their resiliency and these lines can't shut down. So the coordination of their very complex supply chains have to run on highly resilient, highly secure infrastructure.
And as they go look as auto manufacturers and all of our customers go look for new innovations to help them do what they do, that just makes the whole infrastructure even more complex and so they need.
Kindrel Martin, you spend a lot of time on the call talking about cost savings, discipline, the work you've done. You know, we I reflect back to the conversation we've had before that in March of last year, you trimmed a small percentage of a really big workforce ninety thousand people at that time.
How do you see that playing out this year?
Caroline and I have been covering, unfortunately layoffs across the technology sector on an almost daily basis at the moment.
Yeah, look for us, you know, we were born with eighty plus thousand employees over two years ago. We did peek up a little bit, and when last we spoke, it was about ninety and.
We're still in the eighties.
And the reason we're still in the eighties is because our focus on delivery and what we call our advanced delivery efforts has led to tremendous quality improvements for our customers.
They're seeing it. But at the same time, it.
Allows us to free up people and move them into these new areas, so that we are actively reskilling our employees and moving them into being cloud experts, for instance, moving them into being cybersecurity experts, etc. So when we were born a little bit over two years ago, we had fewer than a thousand credentialed people across the entire employee base fewer than a thousand who were certified and credentialed on a Hyperscaler. We now have over thirty five thousand,
and that's what's driving the growth. For instance, whether our Hyperscaler partners, that's what's driving the growth with our consult business as well. We have the people, the best engineering talent who know these customers so well well.
So our customers are.
Delighted that yes, they're getting better quality because we're using our AI through our platforms, but they're also getting back the same people they trust and have known for years to help them in these new areas. It's a really terrific model for us.
Kindrell CEO Martin Schrotzer. Great to catch up here on Bloomberg Technology. Thanks for your time.
Coming up on the show.
Could Tesla be the next company to undergo a way of layoffs? We have Bloomberg's Dana Hole here in studio, an important report that.
We put out this morning. That's next. This is Bloomberg Technology.
Tesla staff are bracing for potential job cuts after managers were asked to affirm whether each of their employees that worked under them is in a position that is critical. I want to bring in Bloomberg's Danna Hole, who reported this with me this morning. So what we kind of heard from sources is it's performance review week and managers are saying or being asked to look at everyone that works or reports into them and decide, I guess who stays and who goes.
Well, that's the fear. I mean, we don't know that for sure, but what we've heard, I mean, I think you and I have heard from different people, is that performance evaluations happened, and then what I heard was that they were reopened and there was one new question, is this employee's role critical? And that's like basically you need to just and then the managers need to justify that job. So that is definitely worrying. You know, Tesla so far
has avoided the layoffs out of Rock Silicon Valley. We don't know whether this is sort of a culling based on performance or whether widespread layoffs or in the offering.
What I would reflect on is that this is kind of normal, both in the sense that Tesla's looking for cost savings everywhere, but it's kind of played out in the past. And I know that I've heard from sources, like, for example, when we reported on the Autopilot trims last year that headcount was moved elsewhere.
To like batteries for example. What is the aim here for me Elon Musk and co.
Do you think, well, I think that Tesla's still aggressively hiring in a lot of areas. If you look at their website, they have tons of openings for optimists, for Dojo, for megapack, for you know, payment systems. I mean, there's a lot of job openings at Tesla. So they are still aggressively hiring. So this could be an effort to just kind of reduce headcount in some places where they feel like it's no longer necessary so that they can afford to hire elsewhere.
And Danna, like say a Goldman Sachs, they're trying to put forward the idea that you'll constantly be reviewed. If you're underperforming, you might well be let go. And I guess this is a way of ascertaining whether you are or not. And I just wonder how it speaks though, to the fact that we are seeing such pressure on Tesla from an evy demand perspective, Will it automatically be in the manufacturing areas that you think these jobs ultimately have to be sacrificed.
It's hard to say where the cuts, if they happen, would be. I mean, but I think that you're right. Like Tesla regularly, you know, they go through a performance review cycle every six months, and you know in Silicon Valley it's called stack ranking or ranking yank to be coarse about it, and I think that this just really keeps everybody on their toes. You always want to be a higher performer. There's always concern if you're needing to
justify staff. I mean, I think that Tesla has grown dramatically since twenty twenty during the pandemic.
They now have over one.
Hundred and forty thousand employees globally, and they will continue to hire in the areas of the company that Elon Musk really wants to sort of staff up.
But like any company, you.
Know, when you're kind of facing a down year in terms of growth, you start cutting and salaries as the way.
To do that, and must talk it's about the rate environment.
Again, when we played our ownings Bingo, which I thoroughly enjoyed, that I always find that astonishing one hundred and forty thousand people. If there's a big bright spot it's probably the energy business because what they said was it will just outpace the car business in terms of growth.
What else do we know about what's going on with energy?
Yeah, So Tesla has this big factory in Laythrop, which is here in California. It's sort of a little bit outside of the Bay Area and what we call the Central Valley, and that is where they are building the Megapax. We also have heard that they are expanding megapac production in Shanghai. And these are the big batteries that Tesla sells to utility is like PG and E and it
is a huge growth driver for the energy business. Like forget about the solar roof, Megapak is the big driver of the growth there.
Danaha, always a joy, great reporting from you both on this key story. We thank you so much. But let's for a moment now turn to another one of Musk companies x Now. This is after Tucker Carlson has announced on the social media platform then he has interviewed Russia's
leader Vladimir Putin. He also gave a shout out to Elon Musk, who he says is going to allow the full interview to be published on x Let's bring in Bilimos Kurt Wagner, for one, on this, the context being that he is the first US journalist to do a significant sit down since war erupted back in twenty twenty two, and notably, Putin has fought back against critical journalism in particular, and in fact has a key Wall Street Journal reporter
incarcerated at the moment. Now, give us the context of what this makes advertisers feel like.
Yeah, well, obviously there are a lot of advertisers who would be very reluctant to see their brand show up anywhere near this interview right. But I also think that a lot of advertisers who are uncomfortable with that are probably no longer on X. I think a lot of the people who are still spending money on X have pretty thick skin when it comes to what they expect or imagine that their marketing is going to appear next to right.
And so I'm not sure that we're necessarily going to.
See a new wave of people rushing in the other direction, mostly because a lot of those people are already.
On And this speaks, of course to the ultimate aim that we've always been told from Musk about X is for freedom of speech. In all its entireties. So tell us a little bit about how ultimately the deals with the likes of Tucker Carlson are going getting on very people who tracked a big crowd to come and ultimately have shows on the platform.
Yeah, you know, I was really interested in this about a month ago, right after CEES, when X announced that they were going to be doing, you know, these new shows. Don Lemon of course, was another one who they were going to bring on, and you know, I spoke to four media agencies, you know, after the announcement was made, and all of them basically said the same thing that
these shows aren't really going to move the needle. Now, if you're a big brand looking to spend money on X, it might be nice to have sort of a something that at least is professionally produced that you can you know, run your video ad next to.
But until X gets you know, a.
Much larger collection of these types of shows with much more and less controversial hosts. Quite frankly, I'm not sure that this is the kind of thing that's going to draw advertisers back. And again, I don't think they're running the other way because those folks are already gone. But I don't think this is necessarily big enough that it's going to you know, lure people back who have been reluctant to spend money on X.
To begin with, there's a lot happening in the social media space in real time, Kurt. You reported that Jack Dorsey's Blue Sky, the decentralized social media platform, is now opened up to everyone.
Why is that significant?
Well, blue Sky, as you both probably know, has emerged as sort of one of the main alternatives to X ever since Elon Musk took over, and you know, there's a bunch of technical reasons that people are excited about it. You know, this decentralized element is idealistic, I think, But for the most part, this is simply a place where people who used to love Twitter but no longer feel
you know, comfortable using X have been going. And so the fact that they're sort of opening this up to everybody, you know, perhaps that will kind of expedite the growth of Blue Sky. But you know, again, we're looking at threads,
we're looking at Blue Sky. You might even remember massed on These were you know, essentially ex alternatives, and so it's just always interesting to keep tabs on what they're doing, and whether or not they're still growing and capturing people who are running away from X.
Your your book on X is imminent or your book on Twitter? I mean.
With you, so much has changed in real time. We were teasing Jason Stride other day about how you to rewrite the last graph of his book based on what happened with Blizzard. But something you just said, blue Sky is the alternative to X. Where do you think X sits in the landscape right now? Meta, Facebook, Snap, Instagram reels, things like that.
Sure, you know, I still feel like it's a good place to go for certain types of news.
Right I'm a big sports fan.
I still think that X is probably the best place to go when you want to figure out, Hey, what's going on with my favorite team, what's going on in the NFL playoffs. But there's a bunch of other categories of news that I think that X used to sort of be the go to place for where it's no longer that or it's certainly not as reliable as it
used to be. And I think there's a bunch of reasons for that, the most notable probably being the change in verification right and sort of eliminating this ability to quickly identify who legitimate journalists are versus folks who might you know, not be doing that professionally.
And to me, I think that's the company when it comes to news.
But obviously Elon would disagree, And you know, for that reason, I feel like Ex's sort of fallen out of the position that it had over news, over you know, Instagram, Facebook and others a few years ago.
All right, Bloombers, Kot Wagner and everything on the social media beat, we thank you very much.
Ral Leo Messi is in seemingly the hot seat after taking part in a football match or soccer as we call it in Japan, just days after not appearing in a match in Hong Kong now Hong Kong. Sports rulemaker Kenneth Fox comments accused Messi I'm the US club into Miami of disrespecting fans, and that was trending on wabo, along with another popular topic partly entitled Messi's mess ed.
It's an astonishing situation, Messi finds himself and let's stick with sports and bring in US media and list for Bloomberg intelligent Geita Ang and Nathan to unpack what was an interesting deal last night ESPN, Fox and Warner Brothers join forces and they're going to launch what is a sports focused streaming service.
What do you make of that? GETA? I mean that is that's a move.
It definitely is a bold move I think aired by these big media companies to kind of really in many ways, you know, control their own future, right, kind of control their own destiny as we kind of move to the streaming world. Because you know, we always know that they've been in charge of content production, but this kind of really gives them a hold of content distribution as well as more and more people cut the cord.
What's so interesting, particularly for Disney, is they say, look, we're still going to go along with our own ESPN offering an app, whether that's camealization or not. They just want to be there as much as they can. Also, ahead of Nelson Peltz's own white paper where he wanted basically ESPN to be sold off or a partnered with a Netflix. Who loses through this? Is it Netflix? Amazon?
Is it?
Well, the legacy ones aren't involved.
I don't think necessarily in Netflix and Amazon will lose, So this I think it's really more a defensive move by the big media companies to make sure that they're actually at the table. We know that big tech has been really, really aggressive and it comes to bidding for all of these sports. Right you look at Amazon with Thursday Night Football, You look at Netflix with that big five billion dollar WWE deal. You know Apple kind of
doing things with MLS MLB. So you know, obviously big media knows that there are going to be a lot of these sports rights that come up for renewal. And we know that NBA and some of these leagues are looking for huge increases, I mean triple the fees in some of the cases. So they definitely want to shore up their resources and kind of be at the table. So I very much look at this as a defensive move. I don't think necessarily that anybody else loses out, at least the big tech companies.
This is the battle for those that can't remember their passwords.
Right, it's already hard.
I got a paramount plus for Champions League football, I got Peacock for Premier League. I'm watching the FA Cup on ESPN. Look, there are too many platforms, Skeeter, it's hard. I don't remember how.
To log in.
You're absolutely right, ed. I mean that we do need a comprehensive bundle, and I mean this is going to We're coming full circle here. I think we are going to go back to some form of, you know, a bundle. I think this is the first step in that, having kind of the skinny sports bundle. Of course, you're right, we don't have paramount content, we don't have NBC content, we don't have so many of the other regional sports.
Networks, so we will need all of that.
But I think this is definitely a good first step.
Get the guy a one pass, get the guy a last pass.
That's the way.
Who you remember a pass? Whereas we thank you so much. US media analyst Bloomberg Intelligence keth Ranganavan, always great to get her expertise defensive rather than offensive at the moment. We look ahead, of course, to Disney's earnings a little bit later this week. But that does it for this addition of Bloomberg technology ed.
By the way, shout out two stage encryption authentication. You know, I can log in, say see places Mega Show recapital on the podcast we're posting to all the places you'd expect. Apple's spot of iHeart and of course on the Bloomberg platforms as well, and we really appreciate all the feedback that Karen I've been getting about those of you that are taken on the show and the podcast. My goodness, we're three days in. Are we to what's been an incredible week? From New York City with Carrol and San
Francisco with me? This is Bloomberg Technology