Prof G Markets: Meta’s AI Promise, Microsoft’s Disappointing Beat & Why Google Should Spin Youtube
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Russia has find google for blocking its news channels on youtube. The sexual predator or racist and a russian spy walk can do a bar. Ed, the bartender says, what can I get to the president trump?

But a little election humor we can have. Election will count some boats. James caron, D, L, M, that is that guy I like him. Do you like? Do you like to m carvel?

I think I prefer your, your impression of him. I think that sort of my highlight .

so for appreciate that I must be bonuses and someone's someone's kissing someone's that help pluck up little a little podcasts. O O speach. Today we're discussed earnings from google, microsoft and meta, but first hear with the news is property analyst at l and at what is a good word how are you i'm .

doing very well. Um I didn't know twenty to silly and was a number but I looked into IT. It's twenty trillion times a trillion, times a billion and the global GDP is one hundred trillion. So actually put that into perspective, just shows you the russians have their heads screw on straight.

I'll say about that. That's actually what I, producer clare, requested as a bonus for managing Young, irresponsible broadcasters. We can't quite get there. This is a profitable business. But now I had never heard the term to syrian either.

Where are you at? You're in new york.

I'm in new york. As always. Pass halloy and I need more Better.

Pretend i'm in your life. What do you do in for thankful ving? I haven't thankful ving.

I know what that's like. It's okay. Things will get Better.

I could I go back to london, but it's kind of weird to celebrate .

thankful ving in london.

It's not really. Yeah, they don't have thanksgiving.

We left them. exactly. What do you? london? I back london yesterday. Two weeks. I had to new york speaking, dig and to lost cables for bahaa summer.

Or i'm speaking and talking about vertical farming and doing much from chocolate at night and listening to some D. J, who is specially is hot. And then I got a vagus, or I got L. A. From the rider room because I don't know if you're heard them working on original script to netflix.

So what do you do in the writers room? Do you kind of like sort of short over them and sort of things are doing wrong? Or how does that work?

Uh, no, it's the guy, the show runner and the lead writer will say what he thinks got and i'll say, no, they would never say that even though i'm not listening. I just I pretend that what your saying is unrealistic because .

i'm kind of on the right track.

I'm supposed to be the person that puts you in the room that makes IT feel authentic. And i'm supposedly the person that understands these people, which is which is kind of comical. But it's fun. That sounds very fun.

You don't actually have to do the right. And you just kind of like a pine on what's happening and sounds.

you know me, I don't like to actually work. There's no where work involved in this whole property enterprise for for the property. It's actually a lot of fun. I get to envision scenes in and working with this really talking guide me, scope burns and media rs. And are these super talented people, so many so far, so far on honeymoon sounds .

like the best job ever?

Enough that should add, stop the line.

Get to the news. Well, before we get start to just a quick reminder, subscribe to profit markets on its dedicated feed type and profit markets wherever you get your podcast hit. Follow and tuning to our interview with Anthony scarren ti on thursday. That interview will only be available on the dedicated feed. And now let's start with a week, the review of market vitals.

S, S, B, five hundred declined, the dollar fell, bitcoin rose, and the yield on ten treasuries increased. Shifts in to the headlines. U. S, G, D P grew two point eight percent in the third quarter. That was slightly slow than the previous quarter and just below expectations.

Whoever economists were largely encouraged by the growth driven by strong consumer spending on goods read IT time to profit for the first time ever, with revenue reaching almost three hundred fifty million dollars in the third course, so that's up sixty eight percent from a year earlier. The company also reached nearly a hundred million daily users, and those strong earnings sent shares up more than forty percent. Shares and drug maker eli lilly fell more than six percent after its third quarter profit and revenue missed analyst expectations.

The company also reported disappointing sales of its weight loss and diabetes drug s. And finally, elon musk, artificial intelligence startup x ai isn't talks for a funding round that would value the company at forty billion dollars, has nearly double evaluation from its previous round. Your thoughts, starting with this national economic data, G, D, P growth in america, two point eight percent in q three.

A GDP number doesn't mean a lot unless IT has a benchmark. So just a benchmark. There are japan annual GDP growth was up point three percent.

So we're growing nine times faster than japan. France at one point one percent in canada, at one point three. Mean, this is just the economy here is is really striking to listen to this kind of person on the street.

Interviews about how people feel about the economy is so obvious. There is kind of a vive session, is kind of scamming called IT. Or people, again, have this habit of crediting their character in their ripe for the racist and blaming everyone else or blaming the government for whatever Price hikes there are. But our growth is impressive, and two point eight percent may not similar up. But what that means is about every twenty five or twenty seven years, the size of the american economy would double.

In addition, we have this new inflation data that just came out. It's down to two point one percent. In other words, inflation has officially been dealt wired.

Meanwhile, you look at other develop nations that has struggled with not only higher inflation than we had but also longer inflation. So it's sort of makes the case or not sort of IT does make the case for carma Harris. A few believe that coma haris, just a continuation of the current administration.

And if you care about the economy, and this is a big reason to vote for cma Harris. But if you've made this point before, he should be making a way stronger argument about how he is sort of the economy vote. If you care about the economy, you should be voting for cma.

Harris IT hasn't really resonated. But for those of us, they care about statistics, they care about data, what the data is actually telling us. And when you look at the U.

S. Compared to other nations that has struggled with problems way worse than hours, you know, the answer is is pretty close, statistically speaking. Common house should be .

answer I so badly want to be head of comes through like eleven days for the hero campaign. I thought people .

saying you should be, by the way.

I just think you should have in a back pocket every time someone starts complaining about the economy, in the economy, saying, okay, sean heaney, there's one hundred ninety seven and nations, you are intelligent guy, what economic globally is stronger than us right now? What name IT? Instead, they always go to this democratic self hate of, I know things are tough out there and we have worked to good IT should be bitch we are on fucking fire gets your head out your ass anyways okay, read IT.

Why don't I listen? My own advice, I bought some stock here, but not enough. I believe the stock is now about triple where IT Prices in its I P O.

About two months ago. Can I ask how much you bought? You can ask.

May you answer? I think I bought about .

three million dollars with the stock, but I pared some of IT, so I don't know nearly as much as I hope, but i've done very well. But IT pops so big the first day. I trim some of my holdings, and I just didn't listen myself.

I knew this thing. I still think he has more room. Iran anyways, its revenue of sixty eight percent year on year daily users is up forty seven percent.

They're going global. They're being really smart. They're translated their post, the A, I and a french, spanish, portuguese, german. And its international daily active unique visitors increased forty four percent.

which was huge. And it's just such a simple innovation is such a great use case for A I just simply translating a the the language of your content. But it's so, so effective that essentially just ten x is your total addressable market.

Not is what we are doing. At least we are trying to do IT. We are using A I to translate this podcast into.

But I think this is something that everyone in content should be looking at. How can we figure out away to just overnight, flip a switch and make this all available to the eight billion people across the entire globe? It's just a really quick and nice way to skyrocket your total addressable market.

So that would be the first thing that I would I would commend read IT on the second key driver of their growth actually was not intentional, but it's very interesting and that is google recently changed the way IT ranks search results. So they they made this update called the hidden jams update. And what they've done with the algorithm is they are now referencing what they call authentic content, which is the content that is generated by users, content you find on forum and on chat rooms.

And so as a result, you will find that redit is showing up more and more when you search things on google. It's also appearing higher in your rankings. And here's a great start read.

IT is now the sixth most google word in the us. So it's this great combination of you know this intentional play with A I, but also the market dynamics are shifting to read its benefit. And it's just it's just translated to this explosion in the business and in the dark. So incredible quarter for redit.

But when you are talking about flipping a switch and accessing a global market using A I ah and again, the Operative term will flip the switch and go global. You sound like me and our our hands like last week where at that point, uh, the person who runs the company gathon doing a bitch. You translate this should into far cy and try trying to find the equivalent of zipper cooter and iran to advertise. And it's not quite flipping a switch is what the push back egga.

It's flipping a million switches.

Yeah it's in and someone actually has to build the switch and manage IT while I I just you know the park is say play the switch and let's go global this .

is strategy Operations yeah this .

is a difference between being front front house and backhouse, right? So exactly. I interviewed the CEO at the annual advertising event, and they have big they have big advertisers in the room.

I saw the C. M. Of mars. We have the biggest media agencies there. IT feels to me a little bit like, can, I don't know, matter pentre or snap in the early days, one of the reasons i'm going to kish, he asked to see a that he seems like a nice man, is I bet my prediction is there are going about amazing party. I can the next one or two years they are going to sad.

We need to be, you know, stroking the hair of people who we are putting out a business and, uh, get bring them to some great party and get do a lipa or or bad bunny or somebody. Anyway, we're going, we're going to the red of beach party. That's what I take away from all of this.

I can't wait. I'm waiting for my invite. Let's move on to eli lilly. As many of all this is probably no eli lilly cells, zap bound and major which of these G L P one drugs. They are the alternatives to olympic and rogov e, and it's not selling as much as people had thought or at least that wall street had thought.

And the obvious question is, of course, why what is going wrong now is interesting as that the ceos answered to that question was that there isn't a problem with demand, but there is a problem with supply. So supposedly, the suppliers of the inventory for these drugs, those suppliers cut down on their stock and IT affected, Ellie, is ability to get the drugs out. But as a bulky analysts pointed out, if that's true, that could only have accounted for around twenty percent of that drop off in revenue.

In other words, there must be something else a foot here. Something else is going wrong in the eli lily G L. P. One drug story. And IT can't just be this sort of chokehold on on inventory and and certainly wall street doesn't believe that story either. So I I have a few thoughts of my owners to what might be going on, but I will throw back to you, what do you think could be the problem at I, lily, that the city a did a bad job of explaining, or at least won't tell us.

I wonder if we keep hearing about all these compounded geophones CER being able to sell and if you go off market, but there's a bit of a glitch and matrix or a looper where if a product is sold out, you can build almost like a generic version of IT, the cost much less. I got to think that, that's denting demand a little bit.

And I would think that in only that, you have a lot of these kind of upstart to sort of scrappy, maybe don't take a institutional approach for a great marketers and understand new mediums. So I wonder if it's some of the new guys. So these compounded geoeye producers maybe slow their growth. What what are your thoughts?

I was thinking that too. And if you look at hms, which we have discussed before, they have been getting into the glp one game, yes, the compounded version, their revenue increased fifty two percent north quarter, and a large part of that was their weight loss drug business. And there are several other companies that are offering these compound alternatives.

It's sort of becoming a growing space. And I think IT is possible that this do open that we've seen on semi blue tie that has been owned by another notice and by eli lilly. IT could be a little more fragile than we think.

The other thing I think is worth mentioning which one of our team members, just a lang pointed out, and it's a simple but important point, is when you think of G, L, P ones, maja zp bound do not come to mind the two names that come to mind oroetes c and or gov. e. And so I could be just a simple brand recognition problem that these products just aren't present in the public discourse enough.

If you've been watching the world series recently, you will likely have seen this ugo vy ad over and over this new wag vy jingle. There is probably stuck in a lot of people's heads right now. So I think the other explanation here could be a very simple issue is just a marketing problem and a brand awareness problem. We know what's that bound majora is because we study this stuff for living. But for the average american, you just think olympic and will go you and you probably don't even know what G L, P, one is either.

It's interesting. I I agree with you. I usually don't like the idea of typically when I walk up to a brand and they say there, they want to show me a brand campaign are going to end advertising. I usually say, well, if you're spending a lot of money on advertising, usually you have somebody who wants to hang out with really cool, interesting people, which our agency people are, or you're out of ideas because the companies of the best products don't need a lot of brand marketing.

In this case, I think an awareness campaign exactly around you said around bound a maj, if I came back and in my next life is an M A fighter and to called so I think that's a bad as name. It's a really cool name on jo. So anyway, I agree with you. I think they .

need fire up the add budget and IT gets .

some awareness that so much money on the line here. Um also suppose if there's a lack of scarcity, uh, that finally there's enough production here to meet demand, I wonder what's going to happen. I want to reach into the markets that should be in. I'm just such a huge fan of this technology speaking, which will bring us back to me. Ad, i'm doing this N A D treatment.

Have you heard of this? Only from you mentioning IT last week.

dad.

that say i'm fine, i'll leave.

No, this silver dollar bonus for you.

i'll make my way out.

Just Clair is getting a dillion dollars anyways. This d stuff is really, really powerful. But I wonder if he has a similar compound as G, L, P.

one. Because I have noticed i'm losing my taste for the says, and I don't. I'm gna fit right in a bah.

Some, I tell about sum last year. They all take drugs, but they don't drink. I would bed going back to you.

I really, ipod isn't all over the place. This fuck and native is supposed to get me focus. Maybe IT doesn't working. I think this is probably a buying opportunity.

I think anyone in this market with two great brands or one grade brand, man joo and zp bound, that's a terrible. You're bound for sap. Is that bound? That sounds awful. That's like some rock climate started on some bad ropes company or something. I think other than the CEO making lamb excuses, I say this one can buy the debt.

Our final headline is X A I uh which elon this is elon's A I company ah which he is supposedly trying to raise around at a forty billion dollar evaluation, is a reminder of what this company is. So people may remember the premise of this company was to create a competitor or to ChatGPT that was, quote, more truth seeking so for a wild illam was calling that kind of jokingly truth GPT.

Um he saw how successful ChatGPT had become, and he wanted to make a competitor that was also less woke, pretty much. So I say I did build that product and the product is called rock. Many people may have heard of IT, and it's available to all paid users of the x platform, formally known as twitter.

I've used IT. It's fine. There was a period where try to be anti woken funny and IT felt like a not very funny guy who's trying to just crack jokes at every second. That wasn't a .

great product is the tony hinch Cliff ellam.

It's exactly right and they fall flat. So i'll get your reactions to X A I in this funding round. There are a few more details we can go into, but what are your thoughts on this round?

So I think this is my next opportunity to turn three billion dollars into ten. My sense is this is now a distant forth or fifth in the LLM market. And he did some slide a hand trying to give tiki right to the data, I think, of twitter, and spent out X, A, I.

And he got a dislocation amount of the firm. I would have gone aph IT crazy if I was a shareholder. twitter.

But ill greg right now is a distant fourth, fifty or six trying to trade at the same valuation as anthropic. And that's the analogue here. And I would imagine an anthropic has dramatically more traffic.

Revenue is Better. Technology is sea and what they keep leaking as a jen hong gue did say that it's easily the fastest supercomputer on the planet. X A. I has built its own data center, but i'm not sure. If that ends up being much very competitive with me and age anyways.

I think that's an important point. Is, is that a competitive advantage? And when I look at X A I, it's like there are three main differences that make IT different from other A I companies.

The first is that elon musk is leading, so that's a big deal. IT means you can raise a bunch of money. Uh, the second is, as you said, they're building their own data centres and that's what sets them apart from open a eye. Open a eye does not own any data centres. Instead, they essentially rent their compute from microsoft, and that's why they have that partnership.

And then the third big difference is that X A I is building its own frontier models, and that's where it's similar to OpenAI, but not similar to a company like complexity, which is building models on top of the models that are built by other companies like OpenAI. So in other words, that sort of strategic differentiation is they want to own everything that they create. They want to be a truly independent eye company, which is a little rare these days because it's developing into this massive supply chain where you have the chip manufacturers selling to the data centres and the data centers selling the computer to the model makers, and the model makers selling their models to the apt makers is a big supply chain. And X A I has decided we just going to own all of IT ourselves.

I just don't know if X A, I is going to have the capital. They're starting from less than zero versus everybody else. And they want to raise at the same valuation as the number two with the number three player and throops. So I have a bias because i'm not a found a mask, but on just the stray valuation standpoint, this feels me like a bad deal.

Yeah, I mean, that sounds like the elon musk premium, but it's why why he still deserves a premium like this to me is beyond me the fact that he's joyed eighty percent of the market value of twitter. That was his lost venture. I mean, it's it's crazy as local.

He's gone moon gentle on us.

We write back off the break with a look at big tech. If you're enjoying the show so far, be sure to give property markets to follow wherever you get your pot gusts.

Candidate trump, as you've likely heard, jimmied the over ten window up a few inches at a rally in medicine square garden on sunday with racist, sexist VGA wasn't even a particularly good joke and its seta commentary from speakers. But did you hear the really weird part, the speaker of the house, mike Johnson, part a nice looking guy? I just had a little beautiful face with a glasses.

Get a little. Yeah, that was also weird. But that's not actually what i'm talking about. Just a little later to turn to speaker Johnson, and he said this, we can take the senate pretty easily.

And I think with our little secret, we're going to do really well with the power, right? Our little secret is having a big impact. And I have a secret.

We'll tell you what IT is when the races is over. That comment is making people nervous because trump does have a plan for if he loses this election. A reporter did some digin into IT. We're going to talk to him today, explained little secrets every weekday, wherever and whenever you get your podcasts.

Ever wonder why we like being scared? I would read a Stephen king novel or watch a slash movie, and then feel compelled to sleep with the lights for several nights and found myself asking, but the hill l what's going on when people voluntarily seek out things that fighting them? This week, on on, explaining a boot why fear can be fun.

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We're back with property markets most of the magnificent seven reported earnings last week, bringing A I demand and spending into sharp focus. Google, microsoft both reported cloud revenue growth above thirty percent of beating expectations. But while google stock rose, microsoft fell as the company advised its overall revenue growth would slow in the current quarter.

Meanwhile, matters stock also fell after the company missed expectations on user growth and warned that its A I expenditure would continue to increase in twenty twenty five. So I think let's just start here. A lot of tech earnings um telling slightly different stories.

I just start with what wall street thought about these earning. So for google, all street was very happy. Revenue grew fifteen percent. Cloud revenue skyrockets and the stock rose four percent.

I think the main story with google is there was nothing that you could really fault the company for in that earnings report. Everything was going well. Microsoft and meta.

On the other hand, wall street was not so happy with. And it's a very similar story that we've seen before in tech, which is the top and bottom lines were very strong. They beat expectations at both companies, but there was just one tiny little pimple on the earnings report for both of them.

And for microsoft, IT was that their guidance was a little bit soft, not as strong as ball street wanted. And for matter, the user growth was slightly weaker than expected, three point to nine billion active users verses three point three one billion expected, I should remind us daily active users. So it's still pretty incredible.

As a result, microdot stock fell four percent and meta stock fell three percent. So I think the summary with these earnings here is that is very strong over, but again, incredibly high expectations for these companies. That just start with your headline reactions to the tech earnings that have come in this week.

What you said was really prevent and insightful a few months ago, and that is the expectations are now that you're going to blow away expectations. So matter. Actually, the revenue earnings beat expectations increasing one thousand and thirty five percent, respectively, but investors were disappointed by weaker than expected daily active user growth.

And also, I think to think that freak everybody out as when zarchy burg wasn't threatening to spend tens of billion dollars and mixed ality had said he was promising and he did IT and he and he kept spending well beyond any evidence that this was working. And when soccer berg says, no, we're going. We're going in on A I and get ready, folks sold on your heads a kind of spooked. I think it's ambassage a little bit just because, uh, you know, relative to the earnings in the revenue beat, the the revenue earnings were were amazing here. And at the same time, let's go to the other end of the spectrum, everyone sort of waiting and anticipating snap to start a death rattle.

And even though they their sales jumped fifteen percent, not as much as the other guys, they you know their stock was up ten percent because the expectation people are sort of when people listen to a medical, they're waiting to see just how fuck and amazing IT is when people listen to a snapp burnings called they're kind of a little nervous like exist the quarter that snap anounced, the meta is just putting a matter business. And the expectations here have gotten so crazy. And I know i'm jumping around a lot, but let's talk a little bit about microsoft.

They also beat revenue earnings expectations. The stock was off four percent and after hours trading on weaker guidance, good CEO sandbag guidance. They you always want, in my opinion, under promise and over deliver.

And when you start getting desperate or you're worried about losing your job, you start over promising and under delivering. There are total revenue increase that this at sixteen percent of a huge number. That means that they have they found another eight or ten billion dollars per quarter and incremental revenue.

And also the revenue mix is getting more solid because they're cloud offering asure revenues, rop thirty three percent. And that is a business with incredible margins. Uh, and twill points of growth came from A I services. So in sum, this was just I just, this was just striking. And the only thing that the only wrinkle here, the thing I would offer that I noticed when we talking about this a lot, is that if I were to ask you what is what comes to mind when I think of when I ask you what who is the leader in, uh, the streaming market who comes to mind?

Well, you know you know my real answer. But I think the average person would say netflix.

that's right. And yeah but but IT IT isn't right. It's youtube. And youtube combined ad and subscription revenue the past four quarters, this your past fifty billion dollars. So net lix is at thirty seven billion over the same period over the last four quarter or so. So youtube is a bigger streaming network, bigger revenue.

And be curious what the growth rate is there? How much should they break IT out? But if you applied the same multiple to youtube, you'd have a half a trillion dollar market cap company. And I wonder if there is opportunity for alphabet to cut a deal, the D, O, G, among other things, in their remedy trials.

They look what if we spend youtube but across all of these folks, you know whether was read IT, which looks like it's becoming a truly big tech company um meta, all of them snapped showing that we're still here snap like, hey, don't forget us. We're still here. We're still growing. We're still doing really well. And the other guys, the big guys, the alphabets, the matters of the world are just, you know, still on fire.

Yeah, a lot, a lot. That will start with youtube. I just want to reemphasize that number. You said fifty billion dollars in revenue in the past four quarters compared to netflix at thirty seven billion with the same multiple, youtube would be a half a trillion dollar company in market capital. Probably be higher given the margins and you given the growth rate.

But if IT were broken up into its own company, which you have just suggested, so want to point out that would be one of the top twenty most valuable companies in the world. IT would be more valuable than oracle. IT would be more valuable than moster cod.

IT would be more valuable than Johnson Johnson. And yes, of course, I would be more valuable than netflix. So I I mean, we've discussed why we believe youtube was basically the most underrated asset in the market right now.

I think this should really drive at home for people is something that people don't seem to talk about that much. And I think, to your point, it's a little bit of the kingdoms MMA attacks sort of gets lost in the noise because of all of the other things that google is doing. But this is just a jugan ot in the entertainment space.

I am just fascinated by this business of youtube, and they continue to crush IT. One of the other things he points out out there is the idea that matter, you know, they spent, they spent really big on the man of us and IT freak everyone out. And now they're spending really big on A I.

And so the numbers are matter is raising its capex forecasts for twenty four to between thirty eight and forty billion dollars, and that is slightly freaking the market out. They don't love how much that expense line is going to grow. Having said that though, all the other tech companies are doing IT.

So over a google, their capex rose sixty two percent from a year to thirteen billion dollars. Microsoft is doing IT too. Microsoft cotex doubled from last year to twenty billion dollars. And this is just for the quarter.

A the ultimate business strategy has become capital as a weapon, mark sucker goes. We have access to cheap cap also. I'm gonna spend you I mean, there's kind of therefore, no one can no one can keep up with these guys except each other. Ah the biggest companies in the world that aren't big tech can make these types of investments any larger. They're spending more money on know on G P U, an x on spent on oil exploration at the peak.

I mean, so just some days are here. Microsoft, meta alphabet will spend more than one hundred and fifty billion dollars on capex until thousand and twenty four. And more importantly, microsoft matter, alphabet and amazon account for roughly forty percent of invidious sales.

So what was seeing here is a dynamic where, you know, in video is pretty much propping up the stockmarket. K, we've all kind of identified that an in videos, the entire top line is being probed up by the capex spend of microsoft matter, alphabet and the amazon. So in a way, that capex number is the most important number in the in the entire global stock market right now. We should all care a lot about how much they're spending. But as you mentioned, the the competitive aspects to this, the idea that they're all ramping up spending, I wonder to what extent this is becoming a little bit of a big dick contest where if you if you're mox october and you're seeing you know, you're seeing thunder per chi, invest billions and billions into the space and you've decided to getting to the space too.

I wanted to what extent they're just onna start output each other, not because IT necessarily makes sense for the business, but because they don't want to be count out and they don't want to look to the world like the loser or like the cold who wasn't to double down on A I and you know, maybe i'm not giving them enough credit, but I could certainly see if I were in that position how I could get caught in that dynamic. Google doing IT, my self is doing IT. So we Better do IT too well.

I think correctly, in high insight, IT looks like the stimulus plan during covet that the fed and the White house overdid IT. They spent more money than was needed. And Janet Ellen, when faced with that question that did you overdo IT SHE said we decided he said, yeah, we probably did.

But at the time the analysis was its much risky to undergo IT and overdo IT. And I think that's how these guys are approaching A I and that is if they overdo IT, they spend too much. That's not the same risk is being the company, one of the big tech companies to had all of the assets, all of the IP, all the customer face, but got vested and saw their stock lag.

Everyone else is because they underinvestment in what appears to be the most seminal technology trend to the last twenty years. So I gotten, imagine that, okay, we need ten billion, the range of requisite copecks to mere plants, the summer between I A twenty and thirty billion. You got a thing to see. You says with a stock at an all time high with access to cheap capital, i'm not going to be the CEO that missed on A I. You say twenty to thirty billion, here's thirty two.

We'll be right back. And if you enjoy the show so far, kit, follow and leave us a review on property markets.

We're back with property markets. So metz revenue jumped nineteen percent to forty point six billion dollars. Its that's its record revenue staggers number. You mentioned earlier about revenue mix.

You know the point that microsoft is on a really good job of diversifying its revenue, which makes IT that revenue a little bit more stable. They're able to weather a storm. It's a great it's a great reason to diverse fire revenue.

So one point out, there's one thought about matter, ninety six percent of their revenue still comes from advertising, so they're not in a very strong position from a longevity perspective. But IT sort of highlights just want to juggle this advertising businesses. The fact that this company is one of the top term most valuable companies in the world, and it's all just from all of that advertising.

You talked about how we've been getting into A I, which has been massively increasing their ability to accumulate users and also monetize these users. And just amazed that meta is worth this much and making this much money. And it's still just a pure play add business. I just thought that was quite fascinating.

I mean, these companies is combined probably have ad driven revenue growth of summer between, I don't know, twenty and forty billion dollars in incremental growth. And I had dinner the other a week ago with this iconic broadcast anker. And this is someone who likely, I don't know what this person mics, but I imagine it's tens of millions of dollars, household name outstanding of what they do. You have to tell us now I can, I can, in a sense, because we're good, good friends, and I don't like to prostitute my relationships.

I'm imagining its underside, Cooper and just let you .

not go but I will say is I wasn't a understand oops, I have a second friend. I A second friend now on the media system .

anyways toka coulson .

got me and toki yeah we faced each other and we were screaming out um the ghost of rick anton um I know got that name um I to new match that's an image anyway uh and he said that every contract were all is coming up across the biggest sankers, the biggest stars and broadcast television. The conversations are going something like this. As you know, it's a stress ecosystem.

We know you are making ten million year, uh, now we're going to pay three and a half, and it's directly correlated to these earnings because the economy is growing three percent a year and all of these companies are grown eighteen percent. Ad spending is not a 1 percent。 This has become a bit of a zero some game and that is say at spending is up because it's a strong economy, say, okay, fine, it's up five percent at spending is in up fifteen.

So that incremental ten percent is coming from somewhere else. And I can tell you where it's coming from. It's coming from, generally speaking and supported media that isn't one of these guys.

And so we're as if you hosted yeah the ultimate morning show program, right? Ah and you were they were printing money they could pay how uh you know seven or ten million year and not like hold we love you. But revenues down thirty percent. Profits are down sixty percent. We're going to pay a timman and is like, fuck that i'll just go drink White wine all day you know IT also just more generally speaking, I have spoken to two individuals, you know, like I I like to think i'm trying to be good about my word on coaching Young men. I've heard i've had two men reach out to me and asked to speak to me.

And they both men, men who are my age, who are both very successful in the media market and theyve either quit or been laid off and they have no idea what to do right now because the the motion picture and television market in los Angeles and generally speaking, the media market is really strained if you're not working for one of a handful of companies that are that are just killing IT and IT strikes me that these focus haven't connected the dots. There is real pain on the other side of these revenue numbers. And that is that is a terrible time to be A C, B, S. Or N, M, T V.

Does anyone remember what M, T V is? Or newspapers spiers revenge of eighty percent in the last thirty years. Billboards drive time. If IT wasn't for the election, local news stations would be just gone. Yeah.

that's a great point. And you think about the other beneficiaries of that revenue growth, where is that advertising going? Is going to the people who are creating content on instagram and on tiktok and on youtube. Those are the beneficiaries.

Granted, they're not getting multi million dollar contracts, but the reason you're seeing those millions getting shaved off of the Anderson Coopers of the world is because, Frankly, it's going to the scot galleries of the world. And people a lot less famous than you. People are creating content on instagram, who are making videos, who are commentating on things in the news.

There are thousands, probably millions of these people out there who are making a living and who are making real money by creating on the digital platforms. And when I just can't rop my head around is how those people continue to not be taken seriously by the main street media. It's been almost main street media just sort covers their eyes and pretends like they're still in their hay day. Well, what's happening is we're seeing the social media companies having this this explosion and growth. And meanwhile, legacy media is completely daring up.

Well, it's really so election night and i'm bragging right now, but I was I was asked to appear on a variety of cable networks, right? They want to bring in. They go for twelve ve hour strike. They ve ve a lot of time to fill.

So like, oh, bringing the guy and Young man just tell not to tell dk jokes, right? So almost every network called and said, do you want to come on an election night? And the one I chose, i'm going on amazon with brian Williams and that's kind of telling, right? IT used to be egle sana fox or cbs or A B C, because those are the hypervisor.

I'm like, no, i'm going the new guy. And today on pivot, we interviewed mark brennan, who I just think is so talented and sober. And as I was listening to market, I thought she's going to get hired by youtube, amazon, and she's going to be positioned with the right technology in the right format in one of these mediums, and she's going to drive so much more economic value for the parent company. Enter herself and even our little podcast, we just started posting our videos on youtube. We're now making forty or fifty thousand dollars a month incremental ads from youtube just by putting our stuff on youtube.

not to mention all this stuff on that happening on instagram, where you'll post an instagram real and it'll go viral and then you'll get speaking engagement requests. I mean, the fly wheel is run in a dia. One of the .

things i've learned over the last ten years, we're an attention based economy, full stop. If you can command attention, you can get revenue. Othe wise, the person running the firm should be let go.

And what you want to find is companies where the there's a delta between the two. So newspapers used to get thirty percent of the advertising, and they were getting ten percent of the attention. You knew they were in trouble, and the web was getting thirty percent of time and had eight percent advertising.

You knew those two we're going to chew up right now. The greatest delta in terms of attention to revenues is podcasting. Total consumption is up fifteen or twenty percent, and revenues are solid and growing, but they're nowhere near the attention.

And in addition, I think if you collapse that with the following, and that is there are very few ways, or increasingly fewer ways, for an advertiser to reach you. You're a great White right now for advertisers. That is, at the age of twenty six, your, your would, I would effectually refer to a stupid, and that is you in your mating year.

So you'll spend one hundred and fifty box on that stupid crew net shirt you're wearing. You'll join SOHO house. You'll spend seven dollars on coffee. On other hand, would of things are much more down to earth. I'm much more to, by the way, that I tried about the global express.

I flew backer from miami anyways, the i'm not nearly superficial as you IT anyways, but advertisers love Young people because they're stupid and they're y're mating years. So they will spend a ton of money on high margin products trying to attract a mate. They are the ultimate target.

And the problem is M S N B C average viewer is aged seventy. Empty v is like fifty two or fifty four. And you or and your cohort is listening to podcast.

So we not only have growth and attention, but you have growth, uh, in attention across the group that is increasingly difficult for advertisers to reach. So I I think you're going to see I in one of my predictions were doing predictions. I think the as revenue is going to grow faster than every digital platforms reviews, maybe with the exception of tiktok who rely, claimed the numbers are lower. But I think you're going to see next year revenues ad revenues growth twenty five percent plus and twenty twenty five is going to be there. A podcast busted open by this these election or candidate interviews, attention and advertisers are figuring out the media landscape is dramatically shifting under our feet.

And take look at the week at we will see the fed interest rate decision for november, will also see earnings from palencia, nova, autism b and paramount. I doubt we will care about any of that because we'll have bigger fish to fry tomorrow. Scott.

your predictions will like at the election, and i'm predicting that vice present hers is going to win the election. The gambling markets say that it's two to one in favor of trump. You correctly pointed out that, that might be rescued because of these markets over index.

Young man who are much more biased wards trump. A lot of people think these markets are being manipulated to send a signal of confidence from the trump campaign. I also want to recognize I have huge confirmation bias here.

I'm very emotionally caught openness I could not get over. I was happy to get back to london. I don't know if you've noticed IT and maybe don't notice IT when you're boiling water, but I cannot get over how tense things are.

I wonder, and again, confirmation bias here that people are just fucking exhausted and think, how can I take some of this temperature down and distinct of policies, distinct of weather, you know, perfect is not on the many who there. I think a lot of people, you know, I just rather not go back to that shit yeah. So anyway, my prediction, simply put, is that it's not only going to be hair swing, but I think it's I think it's gonna A. Of when and all of the odds and all of the data say that that's unlikely. But anyways, in some, i'm predicting that in january of twenty twenty five inauguration, ice president Harris.

people forget how much is sucked, not from a policy perspective, but from just a day to day discourse perspective. Having that guy passed over the news, people freaking out about him, twenty four, seven. Every single conversation is about politics and about how the U. S. Is in decline and whether or not you believe any of that is true.

Are you really down for that to just dominate your life all day, every day for the next four years? That, to me, is just, that was the big nightmare of of the trump of the trump presidency, is how I just, we could never escape him. We had four, nine years of some kind of borrowing politics, and I really hope that we can have four more of them.

My favorite about senator bennet, he, I did a fundraiser, my place for him, and he said, they said, what would you be like as president? Someone asked, like, i'm going to be the president you never hear about and I thought she's this Price would not be refreshing.

I absolutely loved that.

He said, I want to, I want to be the president you don't think about. I'm going to do the job. I'm not going to send, send everything.

I'm not as charismatic as some of these other people. I'm just going to be the guy that gets the job done anyway. I hope that the guy that gets the job done is a SHE.

And I I really hope that when I move back to the us, IT feels less tense, less sanctis, that we keep this economy going, that Young man recognize that their Operating system should be want to protection, and that I I genuinely do believe that women are under threat here and that men don't recognize how much this could affect us. So i'm hoping, i'm hoping, interesting that some of these things enter people's brains as they enter the bath. And i'd also just like to highlight, I acknowledge that a lot of people don't come to this podcasts.

politics. I endorse, harass my newsletter, numerous mouse. We have the greatest number of unsubscribed we've ever received. And as i've said before, there's no point in having economic security and people who love you unconditionally if you can't speak your mind and also all the people on subscribe, I just want to tell you a full refund coming your way. Much is out the ever said .

was produced by clare Miller and engineer by a Benjamin penser associated produced resulting vice. Miss varia is our research lead, Jessica ying is our research sociate troops is our technical director and Catherine Dylan is our executive producer. Thank you for listen to property markets from the vox media podcast network. Join us on thursday from unpack on the election with Anthony scaroons. I only on the profit markets fee.