Small Bizz Leans on Layoffs & Netflix Investors Wary of Warner Bros. Discovery

Summary

Morning Brew Daily — December 5, 2025

Episode: Small Bizz Leans on Layoffs & Netflix Investors Wary of Warner Bros. Discovery
Hosts: Neal Freyman (B), Toby Howell (C)

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Episode Overview

In this episode, Neal and Toby cut through a whirlwind of business, economic, and entertainment headlines:

• The current turbulence in the US jobs market with a focus on small business layoffs
• The global spectacle and logistical chaos surrounding the upcoming FIFA World Cup
• Winners in the “denim wars” and how ad campaigns are sparking real sales
• The brewing mega-deal between Netflix and Warner Bros. Discovery, and why investors are nervous
• Meta’s pivot from the Metaverse to AI as it slashes Reality Labs spending
• Google’s Year in Search and a wild story about prediction market shenanigans

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1. The US Jobs Market's Mixed Signals

[02:47 - 07:09]

Key Points:

• Major Layoff Numbers:
  • ADP reported a net loss of 32,000 private sector jobs in November, steered heavily by small business layoffs (120,000 jobs lost).
  • Layoff announcements are the highest since the pandemic (1.1 million this year, 54% more than last year).
• Small Business Struggles:
  • Firms with fewer than 50 employees lost 88,000 jobs over three months, while firms over 500 employees saw gains.
  • Small businesses have less flexibility to withstand headwinds like tariffs than retail giants.

    "It seems like a case of Wall Street doing pretty well while small businesses... are just left to fend for themselves." — Neal ([04:45])

• Confounding Data:
  • Unemployment claims dropped to their lowest in over three years (191,000 weekly claims).
  • Caveat: Holiday seasonality can skew the data.
• Federal Reserve in a Bind:
  • The Fed’s next meeting (Dec 9–10) looms without the delayed official jobs report.
  • Markets are pricing in a 90% chance of a rate cut.

  • "The Fed is looking at all of this and saying, okay, what the heck are we going to do next meeting..." — Neal ([06:02])

Notable Quotes:

• "If I just had to sum it all up... ADP showed outright job losses driven by small businesses. Layoff announcements remain elevated. We also have a delayed jobs report... and then unemployment claims actually collapsed to a three-year low." — Toby ([06:40])

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2. The 2026 FIFA World Cup: Bigger, Pricier, and More Complicated

[07:09 - 10:19]

Key Points:

• "Biggest Ever": First World Cup spread across three countries (US, Mexico, Canada); 48 teams.
• Trump’s Involvement: Event moved to the Kennedy Center due to Trump’s influence. He’ll be present at the draw.
• Cost Explosion:
  • Tickets up to $6,730; hospitality packages as high as $73,200.
  • FIFA charging $75–$175 per parking spot, higher than some match tickets from previous decades.
  • Just hosting is expected to create nearly 200,000 jobs and generate $25 billion.
• Logistical Headaches:
  • All US venues are NFL stadiums with limited public transit, notably MetLife hosting finals.
  • Massive influx of fans expected (1.2 million to the US).

• "FIFA is selling parking spots near these World Cup stadiums... that is more than the price of some actual match tickets at previous World Cups." — Neal ([09:11])

Memorable Moments:

• Neal’s list of unlikely World Cup guests: "Tom Brady, Heidi Klum, Wayne Gretzky, the Village People and President Trump..." ([07:09])
• Toby: "Big is the word to describe this World Cup... If Trump's relationship with Infantino is any indication, maybe [the US will] get an easy group." ([08:23])

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3. Stock of the Week: American Eagle and the Denim Revival

[10:19 - 13:44]

Key Points:

• American Eagle’s Success:
  • Sydney Sweeney ad campaign translated into record sales, especially signature jeans selling out "within like two days" (CEO Jay Schottenstein quoted by Toby).
  • Collaborations with Travis Kelce, more than 44 billion impressions generated.
  • AE stock up 41% in a month; denim is in a global upswing.
• Industry-Wide Denim Boom:
  • Brands investing in diverse styles—there’s no longer “one jean to rule them all”.
  • Gen Z drives the market but prizes price over brand loyalty.

• "Denim in general is hotter than wearing jeans on a beach." — Toby ([10:56]) "The global jeans market is up to $101 billion. That's up 30% since 2020." — Neal ([11:46])

Memorable Exchange:

• Toby: "Are you wearing jeans?"
• Neal: "I wear jeans every single day." ([13:14] - [13:18])
• Toby: "I don't know if skinny jeans are fully back. You said that all the cuts are in right now, but I feel like wide is where we're at..."

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4. Dog of the Week: Netflix Investors Wary of Warner Bros. Discovery Bid

[15:35 - 19:59]

Key Points:

• Netflix Shares Tumble:

  • Netflix’s all-cash bid for Warner Bros. Discovery caused a >5% stock drop.
  • Investors fear the merger offers little upside—Netflix subscribers already overlap with HBO Max.
  • Bank of America: Netflix would be "the undisputed global powerhouse of Hollywood," but antitrust and regulatory headaches loom.

  • "...if Netflix acquires Warner Bros. Wrote Bank of America analysts, Netflix would become the undisputed global powerhouse of Hollywood beyond even its currently lofty position." — Neal ([15:52])

• Bidding War Landscape:

  • Bidders are Netflix, Comcast, and Paramount.
  • Paramount seen as regulatory favorite due to ties to the White House and partnership with Middle Eastern sovereign funds—raising its own scrutiny, especially with news assets like CNN.
  • Paramount has already questioned the fairness of the bidding process, alleging favoritism for Netflix.

  • "This is a once in a generation reshuffling of the entire entertainment landscape." — Toby ([19:22])

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5. Big Tech Pivot: Meta Slashes Reality Labs, Doubles Down on AI

[20:20 - 22:54]

Key Points:

• Meta’s Metaverse Retreat:
  • Zuckerberg to cut Reality Labs’ budget by as much as 30% after $70+ billion in losses since 2021.
  • Markets cheered, sending Meta shares up 4% as AI becomes the new focus.
  • Hardware isn’t dead—Ray-Ban Metas seen as a next-gen interface for AI.

  • "Reality Labs has lost over $70 billion since 2021. So in terms of like, the greatest money incinerating machines in corporate America right now, Reality Labs is absolutely up there." — Toby ([21:01])

• Meta Sticking to Its Name:
  • Neal speculates Meta won’t rename again, seeing the rebrand as part of distancing from Facebook's baggage, not just a bet on the Metaverse.

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6. Google’s Year in Search & Prediction Market Controversy

[22:54 - 25:50]

Key Points:

• D4VD Tops Search Growth Charts:
  • The musician was the fastest-growing search thanks to both his career and a viral true crime connection.
• Changing Search Habits:
  • Users increasingly look for AI-style overviews over old-school hyperlink lists.
  • “Tell me about...” and “How do I...” searches reached new highs: open-ended, big-picture, generative AI-inspired queries.

  • "...people are starting to use Google search with the expectation that they will get an AI overview in response. They aren't looking for blue hyperlinks anymore." — Neal ([23:47])

• Prediction Market Intrigue:
  • One trader earned $1.2 million by correctly wagering D4VD would be the most-searched person, fueling speculation about market manipulation and inside info.

  • "...brought a lot of scrutiny to prediction markets saying this clearly looks like a case of manipulation. How would they ever know... if they did not have insider information." — Toby ([24:46])

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Notable Quotes & Moments

• Neal, on small business layoffs:

  "It seems like a case of Wall Street doing pretty well while small businesses... are just left to fend for themselves in the face of headwinds..." ([04:45])

• Toby, on denim's comeback:

  "Denim in general is hotter than wearing jeans on a beach." ([10:56])

• Neal, on Meta's losses:

  "So in terms of like, the greatest money incinerating machines in corporate America right now, Reality Labs is absolutely up there." ([21:01])

• Toby, on Netflix’s strategy:

  "If you are not making your streaming division more valuable than what's the point of shelling out on all this content for someone like maybe a Comcast... but when you're already the king... maybe you don't need to actually go and spend on this legacy stuff." ([16:56])

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Timestamps for Major Segments

• US Jobs Market & Small Biz: [02:47 - 07:09]
• World Cup Spectacle: [07:09 - 10:19]
• Stock & Dog of the Week (AE & Netflix): [10:19 - 19:59]
• Meta's AI Pivot: [20:20 - 22:54]
• Google Search Trends & Prediction Markets: [22:54 - 25:50]

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Tone & Style:
Conversational, witty, data-driven, and sharp—Neal and Toby blend insightful business coverage with pop culture banter and good-humored jabs at each other.

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Summary prepared in the spirit and language of Morning Brew Daily. If you missed the episode, this guide covers the whirlwind of big business, tech pivots, and the blue jeans boom you need to start your day.

Transcript

[A]

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[B]

More at applecard.com Good Morning Brew Daily Show. I'm Neal Freyman.

[C]

And I'm Toby Howell.

[B]

Today, the eyes of the globe will be on Washington D.C. with the world cup draw.

[C]

Ben, remember American Eagles ad with Sydney Sweeney? It totally paid off. It's Friday, December 5th. Let's ride.

[B]

Good morning and Happy Friday. Just a heads up, we recorded the show yesterday afternoon ahead of our live show Thursday night. So you're getting our PM energy rather than our AM energy for a change. If you detect a difference, please do let us know. Also, I'm not sure how to say this. Louvre Louver. Seems no one does. The Paris Art Museum that was the scene of a daring crime was among the most mispronounced words in the US this year. This list comes from language learning company Babbel and the captioning group who teamed up to find the words that public figures like news anchors and politicians struggled with the most this year. The Louvre was up there. Nailed it. Along with New York City Mayor elect Zoran Mamdani Manjaro, the weight loss drug and acetaminophen, the active ingredient in Tylenol.

[C]

You nailed all of those, Neil. So hats off to you. If I had to make one of these lists for Morning Brew Daily, it would be long and humbling. But some contenders are doring, which is a Neil Freyman special, as is gasoline, which is an inexplicable injection of some South Jersey into your speech. I am certainly not off the hook though. Turning known into known is a Toby special. That is not a compound word. As is mispronouncing chipotle, which I got no one else to blame but myself for that one. How do I not know how to say Chipotle yet? Now a word from our sponsor, LinkedIn Ads. All right, smart guy. I answered yesterday. What's the best return on spend you've ever gotten?

[B]

So there's absolutely no reason to make fun of me whatsoever.

[C]

Hard disagree.

[B]

But I bought a little device that can open any jar. I have an extremely weak grip.

[C]

Wow, that is something. Anyway, for the highest B2B return on ad spend of all online ad Networks. Look to LinkedIn ads. They have a network of over 1 billion professionals and 130 million decision makers.

[B]

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[C]

Spend $250 on your first campaign on LinkedIn ads and get a free $250 credit for the next one. Just go to LinkedIn.com MBD that's LinkedIn.com/MBD terms and conditions may apply. The jobs market is looking like Bambi on ice, showing signs that it's weak in the knees once more after a strong September. The first sign things are not hunky dory in labor land was an ADP report on Wednesday which showed the US private sector shed 32,000 jobs in November, a surprising loss after a positive September. The losses, led by small businesses who cut a whopping 120,000 jobs last month, represented the largest private headcount dip since early 2023. Then on Thursday, a separate report from Challenger Gray in Christmas said that layoff announcements crossed 1.1 million this year, the most since the pandemic. Companies announced 71,000 cuts last month, pushing the total to 54% higher than the same 11 month period a year ago. Where did all the jobs go? The most cited reason for cuts were plain old restructuring, but market and economic conditions and tariffs were close behind. Sifting through all this data is the Fed, which is looking for signs on whether to pull the trigger on another 25 point cut or go bigger or hold their fire entirely. The final piece of the puzzle is still hidden between the couch cushions though, as the government's official November jobs report, originally due this Friday, was delayed until the 16 due to the shutdown. Neal, it's a messy puzzle for sure.

[B]

The big story here, I think, is the decline in jobs in small businesses. Small companies of companies that employ Fewer than 50 workers do employ almost half of all US workers in the economy and things have been going in the wrong direction, not just last month, but over the summer as well. For the three month period ending in October, companies with 50 or fewer employees had a net loss of 88,000 jobs. Now, firms with more than 500 employees, the ones we mostly talk about on this show that are publicly traded, are much bigger than the small businesses. They gained 151,000 jobs. So it seems like a case of Wall street doing pretty well while small businesses not doing as well and they are just left to defend for themselves in the face of headwinds like tariffs, much more in a much more weakened position than someone like a Costco or Walmart that has scale to diversify suppliers or tinker with things. They just have a little more, a lot more wiggle room than these small companies and they're starting to start hurting.

[C]

Now. One confounding data point to all the data that I just expressed is the fact that unemployment claims actually fell to their lowest level in three plus years. That was another report that dropped on Thursday. So initial unemployment claims fell to just 191,000 in the week ending November 29th. That is below every estimate in Bloomberg's Economist survey. Now, the caveat to that caveat is that around the holidays these reports get a little bit wonky as lots of things are going on in the labor market in terms of the seasonal employment. So take it with a grain of salt. But that is one data point that shows, okay, maybe things aren't as bad if they seem, if technically less people are applying for unemployment, which means less people are out of a job.

[B]

So the Fed is looking at all of this and saying, okay, what the heck are we going to do next meeting, which is next week, December 9th and 10th. Stocks did get a bump this week even after all of these kind of weak job reports that came in, you know, smattering here Wednesday and Thursday. And they're likely to. And stocks rose because it seems like the Fed is pretty much a lock to cut interest rates by another 25 percentage points at this meeting on Wednesday. It's about 90% probability at this point. So stocks are getting a boost from the fact that the Fed is growing, convinced that the labor market is weak enough where they have to cut rates to boost the economy.

[C]

If I just had to sum it all up, which is difficult. ADP showed outright job losses driven by small businesses. Layoff announcements remain elevated. We had the highest November in three years. We also have a delayed jobs report. So we don't get, you know, the official look into the entire labor market until after the Fed has to meet. And then in the middle of that, unemployment claims actually collapsed to a three year low. So you make what you will of all of that, but that's all the data points that we are working with right now to sum up what the state of the labor market is.

[B]

What could possibly bring Tom Brady, Heidi Klum, Wayne Gretzky, the Village People and President Trump all together later today, the World cup draw. That's what. This afternoon the Kennedy center in Washington, D.C. will host the grand spectacle of drawing balls to Determine which countries play in which groups, kickstarting the sprint to the globe's most lucrative sporting event next summer. Everything about this World cup is bigger and more logistically complex than any in years past. For one, it's being held across three countries for the first time. The U.S. mexico, and Canada. It's also the first with an expanded field. Whereas the 2022 World cup in Qatar had 32 teams, this one will have 48, meaning more games, more venues, and more money. It will also have a very Trump flair. If today's ceremony is any indication. The draw was originally supposed to be held in Las Vegas, but Trump convinced his friend, FIFA president Gianni Infantino, to move it to the Kennedy center, the storied venue Trump took over earlier this year. Trump will be present at the event alongside sports figures he's friendly with, like Brady and Gretzky. The Village People will also sing ymca, one of the President's favorite tunes, in another gesture by Infantino to get in his good graces to over. The entire, entire world is going to be watching to see whether their team ends up in a friendly group or the group of death.

[C]

I really hope the US Gets an easy group, and if Trump's, you know, relationship with Infantino is any indication, maybe we will. You never know. Read between the lines there, but I think you summed it up perfectly. Big is the word to describe this World cup, because not only are we having the expanded field, everything is just going to be so expensive. This year, FIFA is selling tickets for up to 6,730 bucks for a single ticket. Hospitality package, if you want to go big, can run you $73,200. If you go back to 1994, which is the last time the World cup was in the United States, you could pay 25 bucks for parking and get a hospitality package for $475. Obviously, inflation has something to do with that, but it just goes to show how much of a moneymaker this event is expected to be for the United States and FIFA as well.

[B]

There are a lot of questions around the logistics of this, too, because all US World cup game. World cup venues are NFL stadiums. And if you've ever been to an NFL stadium, there's not a lot of public transit options, especially for MetLife Stadium here in our backyard in New Jersey, which is hosting the semifinals and the finals. Getting there by train is a little difficult. It's possible. But there are going. There is going to be a lot of parking, and that does seem to be another facet of what I'M going to call a money grab by FIFA. FIFA is selling parking spots near these World cup Stadiums, these NFL stadiums that go for minimum $75 and maximum $175 per spot and per game day. That is more than the price of some actual match tickets at previous World Cups. FIFA is saying that for all of this, US And Canada and Mexico, you're going to get a huge economic boost. We're saying FIFA, we're saying this World cup is going to generate $25 billion for the economy, create almost 200,000 temporary jobs. There's going to be 1.2 million people entering the country to see these games. It's just going to be larger than life. It's going to be more expensive than life, and it's all anybody's going to be talking about in June and July.

[C]

Let's head to our stock of the week, Dog of the Week, this segment where we pick one stock that got the full range of motion on their one rep squat max and one that stopped above parallel. I won the pre show game of limbo and my stock of the week is American Eagle. Because all the hullabaloo over its Sydney Sweeney ad campaign translated into actual financial results. The simple formula of putting Sydney sweeting in its clothes drove Q3 sales that came in comfortably ahead of Wall street estimates. It also forecasted a boost in same store sales going forward, having previously said they'd come in flat on the year. CEO Jay Schottenstein called out the ad campaign, saying, the jeans that we had made specifically for Sydney Sweeney, they sold out within like two days. The company has also partnered with Travis Kelce on a merch collaboration with their creative director, saying that the Kelsey and Sweeney partnerships alone garnered more than 44 billion impressions. Zooming out Denim in general is hotter than wearing jeans on a beach. American Eagle Stock is up 41% in the last month. Levi's is up 15% over the same time, while Gap, who also ran a successful marketing campaign that featured the girls group katseye, is up 20%. Neal, time to dig out your pair of skinny jeans from the closet.

[B]

So there's this big question about who would win the denim wars of 2020. Was it American Eagle was seeing the Sweeney, Gap with cat's eye, Levi's with Beyonce. And I think the answer is everyone. Everyone was a winner. Brands aired nearly 70% more denim TV spots this year compared to the last year as they just leaned into this growing market and it is a rapidly growing market. The global jeans market is up to $101 billion. That's up 30% since 2020. So everyone's wearing jeans these days. And they say the reason is, is because in the past, there's been one type of jean that everyone wears, and that is the style for that particular year or era, whether it's skinny jeans or bell bottoms. But now everyone is wearing all types of jeans and not just on their legs, but on their arms and their torsos as well. Everyone's just denim head to toe. And all of these companies are doing really well because of it.

[C]

Some people attributed the rise in denim to coming out of the pandemic. Pandemic era was definitely a time for sweatpants and just wearing whatever you wore in your house everywhere because you couldn't really go outside. When Covid kind of started waning off, said, bust out the jeans again. Like, let's go outside. I'm going to put on my skinny jeans. I'm going to put on my wide flare jeans. So that is one driving force. The one thing I would be wary of if I was one of these brands that are fighting over consumers is a lot of Gen Z has been indicating that they value price above anything rather than actual loyalty to a specific brand. So, yes, you can do these massive marketing campaigns, but if you are out, if you are pricing your jeans above what your core audience wants, then they're going to shift to American Eagle if they were a fan of Levi's and vice versa if the prices switch.

[B]

Are you wearing jeans?

[C]

Not right now. I got some. Neil's got some jeans.

[B]

Showed the YouTube audience what I'm wearing. I wear jeans every single day.

[C]

They're so not skinny, though. I don't know if skinny jeans are fully back. You said that all the cuts are in right now, but I feel like wide is where we're at right now. I don't have any wide jeans, so someone send me a rack. I feel like they, like, look bad on me, but maybe I just got to, you know, buck up and put on a pair in the mirror. All right, we're going to take a quick break and come back with our dog of the week.

Neil, would you rather have surgery performed by a junior resident or a department head?

[B]

Is that even a question? Give me the doctor with the most practiced hands, please.

[C]

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[B]

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[C]

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[B]

With something as complex and significant as AI, you're probably going to want to have a seasoned pro in the room with you. Head to quest.com/brew to get started. That's quest.com/brew Toby, have you ever gotten ads for products that are totally unrelated to you?

[C]

Absolutely. There was a solid week where I got ads for 55 + senior living communities in the Midwest.

[B]

What a waste of ad dollars. To avoid unproductive spend, B2B marketers can turn to LinkedIn ads to reach the right audiences.

[C]

LinkedIn has over 1 billion professionals on the plat platform in 130 million decision makers, and it allows marketers to target all of those pros by job title, industry, company, you name it.

[B]

With that level of precision, it's no wonder LinkedIn Ads generates the highest B2B return on ad spend of all online ad networks.

[C]

Start targeting the right professionals with LinkedIn ads. Spend $250 on your first campaign and get a free $250 credit for the next one.

[B]

Just go to LinkedIn.com mbd that's LinkedIn.com mbd Terms and conditions apply only on LinkedIn ads.

My dog of the week is Netflix, because investors don't really want it to adopt Harry Potter Shares fell more than 5% after Netflix submitted a mostly cash bid for Warner Bros. Discovery, the film and TV giant whose IP includes DC Comics, Friends, Harry Potter and everything hbo. A few months ago, Warner Bros. Went up for sale, sparking a titanic bidding war that now includes Netflix, Comcast and Paramount. The winner will take possession of an entertain colossus that's developed some of the most lucrative stories and characters for over a century. Whoever nabs Warner Bros. Will instantly become king of Hollywood. But as Netflix is falling stock shows, many shareholders think Netflix would be better off on the sidelines. For one, they don't see huge upside in Netflix gaining control of smaller streaming rival HBO Max, primarily because most people who are subscribed to HBO Max are already subscribed to Netflix. They also see a tough regulatory road ahead if Netflix acquires Warner Bros. Wrote bank of America analysts, Netflix would become the undisputed global powerhouse of Hollywood beyond even its currently lofty position. A proposed takeover has already generated congressional scrutiny and antitrust regulators would take a long hard look at how Netflix Warner Brothers combination would mean for consumers. Toby, at first many thought that Netflix just submitted a bid to drive the price higher for its competitors, but it looks like it's absolutely serious about making a play.

[C]

Yeah, an all cash bid is not a symbolic bid because that is not, you know, a stock tie up or anything like that. That is showing, hey, we have money and we want to spend it on you. So that a little bit surprising I think caught some shareholders off guard. The fact that Warner Brothers is getting this attention is interesting because on the one hand it's got 100 plus years of really, really valuable IP. I mean these names are the gold standard across all of Hollywood. Harry Potter, Lord of the Rings, everything that you mentioned. So why wouldn't everyone want it? But then you look at this, the stock reaction here and as you said, if you are not making your streaming division more valuable than what's the point of shelling out on all this content for someone like maybe a Comcast whose peacock streaming Service only has 40 million subscribers? Yes, it makes sense to try to combine that with HBO and start taking on Netflix. But when you're already the king of streaming like Netflix, do you really need all this extra ip? You've done pretty well developing your own in the last decade or so. So maybe you don't need to actually go and spend on this legacy stuff.

[B]

Let's talk about the leader in the clubhouse in this bidding war because it's not Netflix and it's not Comcast, it's Paramount. Paramount is now run by David Ellison, who is the son of Larry Ellison, the CEO, founder of, of Oracle. And they are very close with Trump. So when it comes to a regulatory process and what is a regulatory review to get this deal across the finish line, Paramount, because of its coziness to the White House is seen as a much smoother process than certainly Netflix and maybe even Comcast. Paramount has submitted an all cash bid alongside three Middle Eastern sovereign wealth runs from Qatar, Saudi Arabia and uae. Wonder whether that will spark any regulatory scrutiny because you would have maybe foreign interests now owning a cnn which is one of the globe's largest, largest news corporations. So a lot of different moving pieces here. Paramount is seen as the leader, but they just wrote a letter actually to Warner Brothers Discovery that was just reported on Thursday by CNBC saying that they are questioning the fairness and adequacy of the process. They say they're citing news reports that say that Warner Brothers Discovery is favoring Netflix pretty explicitly, that they want to tie up with Netflix. And they say this is not a fair process to us at all. So they're already sending strongly word letters to lawyers.

[C]

I mean, it makes sense. This is a once in a generation reshuffling of the entire entertainment landscape. So it's not going to be a smooth process. But fascinating to see the different stock reactions as these rumors come out. It's a very confusing, you know, entertainment landscape out there right now where everyone seems to have the ability to license everyone else's content when it comes to theme parks, when it comes to their actual studio business. So I don't know how this is all going to shake out. You said Paramount's leader in the clubhouse. I'm just going to put my hat on Netflix. I mean, the biggest usually wins in situations like this or just in life in general. So I'm just going to pick Netflix.

[B]

And we'll find out mid December. So right now, Warner Brothers Discovery, their board is, you know, they're probably going to spend their weekend looking at huge stacks of paperwork, talking amongst themselves, saying, which do we want to go with? Whether it's a fair process or it's not a fair process, who are we going to get by regulators with easier. There's a lot of different variables. And we will be on this story for the next few weeks as they announce it, perhaps mid December.

[C]

I'm going to watch some Harry Potter to brush up, you know.

[B]

Okay, let's turn to the finish with some final headlines. Remember the Metaverse? No. Well, even the company that renamed itself Metta is looking to move on. CEO Mark Zuckerberg is expected to significantly slash resources to his Metaverse group. Bloomberg reported cutting its budget as much as 30% for the next year. Those cuts will fall heavily on Meta's virtual reality group, which belongs to a Metaverse business unit that's lost more than $70 billion since the start of 2021. Investors were thrilled that less money would be set on fire, sending Meta stock up more than 4% on the report. Toby Zuck is full steam ahead on AI and cutting some of the baggage of the Metaverse. Time to change the name again.

[C]

I mean, Reality Labs has lost over $70 billion since 2021. So in terms of like, the greatest money incinerating machines in corporate America right now, Reality Labs is absolutely up there. So any cuts was just the market saying, finally, like, you're seeing the light here. Apparently, internally, Zuckerberg is still bullish on the vision that people are going to hang out and work in virtual worlds. But he is also realizing that if we're spending all this money on AI, we got to find that money somewhere. So the logical place is Reality Labs. That doesn't mean they're ditching hardware in general because they are very bullish on hardware like meta Ray Bans, which are the use case that they see in the physical world for AI. So it's not that they're just ditching physical things in general. They're just reshifting some of those resources towards what they think people actually use in the age of AI, which are, you know, sunglasses and other on body displays.

[B]

Are we ready to declare a metaverse a flop?

[C]

I mean, I think that ship actually already passed. A lot of people said that what would they. It would be so funny if they renamed the company again meta.

[B]

I think all they needed to do and I think this was smart was I'm watching the Wire now too, and he's taking a business class and he's talking about the fact that his product, and you can imagine what his product on the Wire is, is lower quality. And he's talking with the business professor. He says, well, just change the name. This is what WorldCom did in the past. This is what many companies do when their brand has been tarnished in some, in some way. So I think Zuck was thinking at the time, back in 2021, 2022, and they were making the name change, I need to change this thing from Facebook, which is, has a bad reputation at this point. He chose Metta. He could have chose, he could have chose any other thing. And therefore I don't think, I think they're just going to stick with Metta and not change, not change it to anything else. But it's pretty clear that this massive bet on the metaver everyone was so convinced about at the time, at least in Silicon Valley, has not turned out the way expected.

[C]

Moving on. Do you know who the singer David is, the one who spells his name D4V D? If it's not ringing a bell, you are not alone because he was Google's most searched person of the year. According to its year end report. Google's year in search dropped on Thursday, showing the topics that have seen searches spike from last year. So no, David was not the most Googled person. By sheer volume, that was probably Neil Freyman. But he did see the biggest bump. David's popularity stems from his music career, but also a viral murder case involving a teen girl, which he remains an active suspect in other trending searches, including Charlie Kirk assassination in the news category, Mikey Madison for actors and hot honey in the food and drink section in a real life version of the spider man pointing meme, Google's own chatbot Gemini was the most Googled term of the year. Neil, what else stood out to you about the year in search?

[B]

What stood out to me is that people it appears to me that people are starting to use Google search with the expectation that they will get an AI overview in response. They aren't looking for blue hyperlinks anymore, a list of just links that they can click on. They're looking for full paragraph answers which they've come to expect from Google search now. So what's the deal with phrases like what's the deal with As a start of search were more were recorded more than ever by Google searches for tell me about that we're up 70% year over year queries starting with how do I reach an all time high with a 20% increase from last year. So these more open ended big picture questions stood out to me as an also as a searcher myself I may be doing this implicitly or subconsciously because I do want to read an AI overview that is very similar to a Gemini response or a chat CBT response instead of the traditional hyperlink and it shows how Google search is changing with.

[C]

The times and yeah just evolving into the age of AI. The other thing that stood out a lot about this report was that there was this polymarket user that showed a suspicious level of understanding of what people were going to use the search engine for. He opened or he or she opened a series of position on Polymark's number one search person on Google this year market and made $1.2 million by betting $10,000 on yes that David would end up being the most searched person of the year. That netted them $200,000. And then they also coordinate coordinated that with no positions across all the other candidates like Donald Trump, like Pope Leo, like Bianca Sensory who was actually in the running for a long time as well. So all of those profited very substantially and also brought a lot of scrutiny to prediction markets saying this clearly looks like a case of manipulation. How would they ever know that David would which most people had never heard of before this was going to top the list if they did not have insider information. So that's just another subcontext this year in search report. How is it going to vibe in the age of prediction markets?

[B]

That is all the time we have. Thanks so much for starting your morning with us. Have a wonderful Friday and an even better weekend if you want to get in touch. You can send a note to Morning Brew daily at Morning Broadcom or DM us on Instagram at. And Daily Show. Let's roll the credits. Emily Milian is our executive producer. Raymond Lu is our producer. Our associate producers are Olivia Graham and Olivia Lake. I never mispronounce hair and makeup. Devin Emery is our president, and a show is a production of Morning Brew.

[C]

Great show today, Neil. I wish you all well.

And Doug.

[D]

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[D]

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[C]

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[C]

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