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- [00:01]
Scott Galloway
Support for the show comes from Smartsheet. Have you ever wondered about the incremental steps it takes to launch a rocket ship or maybe get a race car around a track or perform a life changing surgery? These feats of human ingenuity are executed by many people, taking many steps that lead up to one big goal, making the seemingly impossible possible. Whether you're organizing a team, scaling a business or sending a rover across the solar system, smartsheet is a work management platform that helps all those details turn into one big leap. Smartsheet, the place where work flows. Learn more at smartsheet.com Vox.
- [00:37]
Kara Swisher
Support for this show comes from HubSpot. Growing a business can feel impossible, but HubSpot's customer platform can help. It's powered by Breeze, their suite of AI tools so you can generate more leads, close more deals and scale your service fast. With Breeze agents handling the busy work, customers are cutting sales cycles in half and saving hours on work each week. Best of all, you see the results in days, not months. Visit HubSpot.comai to learn more.
- [01:07]
Scott Galloway
Support for the show comes from Trinet. Trinet can help empower your small and medium sized business with industry leading HR solutions. From payroll to compliance to access to benefits. You can join innovative and purpose driven companies including Zap, Surgical, Good Culture and more who trust Trinet to provide industry leading HR solutions so your team can stay focused on what matters most. Learn how@trinet.com Vox to see what's possible for your business. That's T-R-I-N-E-T.com Vox to get started, path their purpose.
- [01:42]
Kara Swisher
They'll put ads anywhere. We'll put ads on Mark Zuckberg's ass if it would work for them. Hi everyone, this is Pivot from New York Magazine and the Vox Media podcast network. I'm Kara Swisher.
- [01:55]
Scott Galloway
And I'm Scott Galloway.
- [01:56]
Kara Swisher
Well, welcome live from our podcast in France in Cannes.
- [02:00]
Scott Galloway
Francis, you can con Kara Sleicher. It's Cannes. I realize you took French for the eighth time in the 11th grade, but it's Cannes all right.
- [02:11]
Kara Swisher
In any case, we're here taping and we're here in front of a live audience. So welcome everyone. Thanks for coming. So we have a lot to get to today, but I want to first, how's it going for you? How's your. I'm not going to even say the word can con.
- [02:28]
Scott Galloway
Look, I absolutely love it here. I'm sincere, I think it's wonderful. I love the French, I love France.
- [02:33]
Kara Swisher
But I heard you disliked you're like the anger pillow for the ad. Ad business.
- [02:37]
Scott Galloway
Oh, so this is how I make money here. They basically have me show up to some event and then they say to me, we've heard you believe that brand is dead and I do my thing. So seriously, the economy, about 1 1/2% of the economy every year, GDP goes to marketing. And as we've seen over the last 20 or 30 years, more and more of that one and a half percent is going to, for lack of a better term, digital platforms. Right? Pretty soon Meta's beach is going to be Saint Tropez and Dentsu and WPP are going to be in some bad pub seven miles inland. So we know what's happening. But brand still matters. I'm just like, it's being built differently. If you're banking your career on trying to get a big brand that spent a bunch of money on media, which is advertising, which in my opinion is nothing but a tax inflicted on the poor and the technologically illiterate, your industry, you're in trouble. And then they have someone very articulate, this guy, Rory Sutherland, this like really handsome, charming British guy, weighs in about the power of brand and the whole audience goes crazy and it's like, thank God, maybe we'll get invited back next year. And this is literally like an awards ceremony for the Pepsi commercial. Nobody is watching. Back to you, Kara.
- [03:47]
Kara Swisher
Okay, I can see that happening. So you're like the bad villain here.
- [03:50]
Scott Galloway
I'm the anger pillow here.
- [03:51]
Kara Swisher
No, but you're like wrestling. You're like the villain. You're the villain. And then they come in and try.
- [03:56]
Scott Galloway
To stop, and I tell jokes that offend people and they're like, oh, my God, I hate him. Look him for next year.
- [04:00]
Kara Swisher
Yeah.
- [04:01]
Scott Galloway
Anyways, in any case, good to see.
- [04:03]
Kara Swisher
You, but it's been a good time. You've had a good time. You came here in your Zodiac.
- [04:06]
Scott Galloway
I've been here 10 years in a row.
- [04:07]
Kara Swisher
Yeah.
- [04:08]
Scott Galloway
Take a moment.
- [04:08]
Kara Swisher
First off, if it's dying, why do you keep showing up?
- [04:12]
Scott Galloway
Because they keep paying me.
- [04:14]
Kara Swisher
Okay?
- [04:15]
Scott Galloway
You could be the Yellow Pages. If I can cash your check, I'll talk about the Yellow Pages. Anyways, I'm a whore. I'm an expensive whore. But be clear, I'm a whore. Daddy's a whore. I absolutely. If you're in this room, it means you're likely in the top 5% of income earners globally. It means you have rights, it means you have access, most likely to family planning. It means you can marry anybody you want and you have the opportunity to hang out in one of the most beautiful places in the world and be carefree. You probably have a great job, although it may not seem like a great job. And you live in a democracy in an age where there's less measles and rubella for the time being, unless these shit up their head, up their ass, people take over or continue to take over. Our HHS don't know how I got there, but I like to take a moment as I zoom in on a Zodiac over the fucking Cote d' Azur and recognize just how fucking lucky we are. Anyways, back to you.
- [05:07]
Kara Swisher
All right. So you get a sense of how this marriage goes. I'm totally thinking of something else while he's talking. Just, I'm like, really need ham at the house when I get back to my house.
- [05:20]
Scott Galloway
I had two lattes. Not a good idea.
- [05:22]
Kara Swisher
Okay, I can see that we have a lot to talk about. I mean, there's so much going on and we've got. But I do have to give two things a shout out. I can't believe I'm fucking saying this to Tucker Carlson. Taking down Ted Cruz was delightful. I would recommend you watch it. It was about. I don't agree with Tucker Carlson on Iran, by the way, but the way he showed how incompetent and ignorant Ted Cruz is was spectacular, I have to say. So I'm gonna give him a call out. And the second thing I wanna just say is today I was just having lunch with Emma, who runs the Wall Street Journal, and she's amaz. Linda Yaccarino of Twitter said that their story was untrue. This is not true. This is not factual, what they're saying. And I would like today to just say the Wall Street Journal did an amazing job on that story about X suing advertisers. I've talked to dozens of advertisers. Absolutely happening. And I want to say, team Wall Street Journal. So great job by Emma. And she did a great job. And it's truly a heinous thing to. To do a provable lie. I just don't understand it and it's ridiculous. And so you either do well by making great products, but you don't sue people into marketing. I just. I didn't understand that anyway, just to say that. But anyway, let's get back to France. We have a lot to go through today. We'll start with something light. Activists in Venice have begun protesting the upcoming wedding of Jeff Bezos and Lauren Sanchez. The wedding cost is estimated to be as high as $21.5 million. Over 200 guests are expected, reportedly including Katy Perry, Gayle King and Oprah Winfrey. Not. Not on the list, Kara Swisher and Scott Galloway. Scott, if you had to give a toast there, what would the toast be? There you are.
- [07:09]
Scott Galloway
I've given four toasted weddings, which is a humble brag of saying, I'm in a lot of wedding parties. I'm being serious. I give three pieces of advice to the groom. I say, one biggest unlock in relationships is don't keep score. Decide the kind of father, husband, friend you want to be and hold yourself to that standard because you'll always inflate your own contributions and minimize theirs. And if you keep score, as I did as a younger man, you end up with fewer friends and fewer healthy relationships than you should. You weren't expecting a serious one?
- [07:38]
Kara Swisher
I know I wasn't. I was waiting for the good job on the hgh, but go ahead.
- [07:42]
Scott Galloway
Two, always express affection and physical desire. I think women want to be wanted. I think that sex and affection say, I choose you. I think it's really, really important to maintain that. Just out of control fire in a relationship.
- [07:57]
Kara Swisher
Yeah, he's got that one. That's happening.
- [07:59]
Scott Galloway
It's the difference between friends.
- [08:00]
Kara Swisher
A little awkwardly.
- [08:02]
Scott Galloway
It's bonding. Regardless of what the Atlantic or the New York Times will tell you, we are sexual beings and we want to be wanted. And three, never ever let your wife be cold or hungry.
- [08:13]
Kara Swisher
Oprah's about to kill you at this point in their toes, but go ahead.
- [08:16]
Scott Galloway
I would love to go to that wedding.
- [08:18]
Kara Swisher
Would you?
- [08:18]
Scott Galloway
I'm here for his midlife crisis. I think it'd be Che if he just got a canary yellow Corvette T top and crashed it into a hair plugs clinic. That would be a lot. I think it's going to be amazing. Wedding.
- [08:30]
Kara Swisher
Oh, I think it's going to be mass. I think it's going to be. Come on. Summer in Venice with. Oh, it's just disastrous. It's going to be disastrous.
- [08:38]
Scott Galloway
We would so go in a heartbeat.
- [08:39]
Kara Swisher
We would so go in a heartbeat.
- [08:41]
Scott Galloway
We would so.
- [08:43]
Kara Swisher
We would so go. We would take pictures. We would steal things.
- [08:46]
Scott Galloway
It's like the cool party before promoting. You didn't get invited to. Well, I didn't want to go. I didn't want to go. Wait, he tagged me on Instagram. I'm sorry. Go ahead.
- [08:55]
Kara Swisher
Yeah, we should have been invited anyway. That's a nice show, Scott. I thought you'd say something much different, but here we go. All right. Speaking of Your boyfriend, Macron, he says he will ban social media for children under 15 if progress is not made at the EU level. France is already making efforts to force social media sites like X and Reddit to have age verification systems by classifying them as pornographic sites. Macron's escalation comes after the country had a fatal school stabbing in the suburbs of Paris and says age verification we impose on sites selling knives online. Greece, France and Spain are pushing the EU to limit the amount of time teenagers can spend online. Scott, shall we move to France? We're for this. We are absolutely for this idea of age verification, even though it's not popular among the tech set.
- [09:37]
Scott Galloway
Yeah, we've said a bunch of times I meet a lot of people with kids. And if your kids are below the age of 10, that's great. If your kids are over the age of 22 and got through this mess, great. It's the people, unfortunately, I'm one of those people who has kids who are 14 and 17 that had to grow up in an unregulated environment where we had very charming people holding book parties on the beach as they were figuring out business models to encourage young girls to cut more self cut. Teen suicide is up 62% in the last decade. 62%. And some of that is bulldozer parenting. We as parents do clear out all the obstacles for our kids, such that they show up to NYU and they've never gotten their heart broken. They've never had no, they've never gotten a C. And they literally freak out. Some of it is my son got.
- [10:23]
Kara Swisher
A D, but go ahead.
- [10:24]
Scott Galloway
As parents, some of it is bulldozer concierge parenting. But there's no doubt about it, when kids express frustration or bullying online, the algorithms pick up on it and will literally start sending them message. That is like suicidal ideation. And until someone goes to jail, this is going to continue. I think the most consequential academic in the world right now is my colleague Jonathan Haidt. I think he's played a huge role in this movement. But Greece, Spain, New Zealand are all putting in wonderful age limits.
- [10:57]
Kara Swisher
Do you imagine the US would do it?
- [10:59]
Scott Galloway
I think it's coming already. Eleven states, I think it's happening. Europe's leading the way on this. But think about it. We age, gate, alcohol, the military, pornography, driving, but we're letting a 14 year old go on social media and get bullied. And the algorithms pick up on it and love it because it creates more Nissan ads. And it's especially rough on young girls because again, I'm a sexist. I believe typically 95% of people born as male or female are more prone to certain behaviors than the other gender. That doesn't mean there should be any less rights or any less opportun. But till we lean into these wonderful attributes that most of us have an easier time leaning into and some negative attributes, I don't think we're going to make real progress. And here's one of those attributes. Boys bully physically and verbally, girls bully relationally and we've put fucking nuclear weapons in our hands of 14 year old girls. Have you checked out your go on? There's some really good apps where you can go on. I believe in a police state you can't get your kid off of social media because unfortunately unless it's a collective action, they become isolated and more depressed. But I go on and I look at my 14 year old social media and the really crazy shit is amongst the girls because it's tactical and it's smart and it's cutting. The guys are just like fuck you jerk or da da d, you know, whatever and then it's over. But the girls are really, we are going to look back on this age and we're going to think okay, income inequality was out of control. A slow burn to fascism from the greatest experiment in history. America was out of control. But I'm confident we're going to repel that. We're going to really regret, I think the coarsening of our discourse. But the thing we'll really regret, the thing we'll look back on this age and think how did we let this happen? Because I think we're going to look back and think how did we let this happen to our kids?
- [12:55]
Kara Swisher
One of the things that is hard to do is regulate yourself when you yourself are addicted. I think the problem is adults are addicted and can't look down and doom scroll or, or whatever. They don't, they don't regulate themselves and manage to get themselves into whatever hole they're in. And so it's not unusual that kids would. Although I would say, I think one thing that you're not saying is a lot of kids are rejecting it like are not, are taking things off. They're, you know, I've told you the story. My son said he took a whole bunch of them off because he felt bad.
- [13:23]
Scott Galloway
Mine does that and then he goes back. Does your goes not at all.
- [13:26]
Kara Swisher
No, he's.
- [13:27]
Scott Galloway
6% of teens are clinically addicted to alcohol or drugs. 24% are addicted to social media.
- [13:34]
Kara Swisher
Absolutely. I mean it's an issue. Well, it'd be interesting to see what happens. I think the first step is the school stuff is getting them out of schools, getting these. And that's happening everywhere now. An interesting wrinkle, which I was a little bit more nervous about, was they're putting cameras in schools and using AI to watch behaviors and bullying and things like that. And then also monitoring some of the phone chats like you were talking about. I find that to be a little bit disturbing. The idea of monitoring behavior in that way and using AI to help it, I find that, like, a step too far. I think parents should be doing this, teachers should be doing this, and we shouldn't leave it to teachers to do it, by the way. It should be the parents themselves. But it's often impossible because parents themselves, again, are addicted. But these kind of rules, I don't see it passing in the US because I think the tech companies, I mean, I was surprised it happened. They're too powerful and they like to pretend that they're all really good for us. And that's what they say. They try to like this idea that it's all going to be better and.
- [14:28]
Scott Galloway
Up to states are taking action. They are.
- [14:30]
Kara Swisher
But look, what was in the thing. Thing. I mean, again, I'm agreeing with Marjorie Taylor Greene, the fact that states can't.
- [14:35]
Scott Galloway
I mean, today Marsha Blackburn's been a leader on this.
- [14:38]
Kara Swisher
God, I'm on Tulsi Gabbard's side today, too. Like, what in the fuck? But commonality, trying to bring people together. Civility. Civility. I hate that word, by the way. I'm sorry. Only straight white men can think civility is our biggest problem. But I'll move along. Okay. Anyway, we hope it gets passed. We're very. We love Macron and we think he's very sexy. Both of us, Scott, more than I. Okay.
- [15:04]
Scott Galloway
That guy's a tall drink of lemonade, right? Hello, Daddy. At this point, a few beers. I'm so there.
- [15:12]
Kara Swisher
Did you see the guy online who's putting Trump's words into a gay guy? He's a gay guy.
- [15:16]
Scott Galloway
It's the best with the chain.
- [15:17]
Kara Swisher
It's the best with the chain. And he sounds like. Well, of course, as I've said, Elon and Trump breaking up is the first breakup of Pride. Anyway, let's go on a quick break. When we come back, Meta makes some big money and not everyone is happy. What a surprise. Support for this show comes from NPR's Planet Money Tariff. Meme coins, Girl Scout cookies. At first glance, they have nothing in common. But dig deeper and the connection becomes clear. Money economics aren't just about numbers and markets. It's the invisible engine behind our choices, behaviors and everyday lives, and often shows up in ways we don't even notice. If you love smart, surprising stories that reveal the human side of how money moves the world, check out Planet Money from npr. Each week, the team unpacks the economy with curiosity, clarity, and always a little fun. The Planet Money team lives to tell a good story, and they do it all in around 30 minutes. And the Planet Money hosts go to great lengths to help explain the economy. In fact, here are a few things they've done in the past. Shot a satellite into space, become a record label, made a comic book, and shorted the entire stock market and all of it to help you better understand the world around you. If you're curious about something new and exciting about economics every week, then listen to Planet Money podcast on npr. I love listening to NPR and I hate all the attacks on it. I think it's provided astonishing news over the many years. Tune into Planet Money every week for entertaining stories and insights about how money shapes our world, stories that can't be found anywhere else. Listen now to Planet Money from npr.
- [16:52]
Scott Galloway
Support for the show comes from Square Nothing but love for our small businesses out there. Quirky coffee shops, high end boutiques and mom and pop taco trucks make the world go round. For me, it's a bevy of small coffee shops in Marylebone. There's a good chance that your favorite neighborhood spot runs on Square. And if you run a small business, there's an even better chance that you need your sales platform to do more than basic transactions. Enter Square. What started as a little white card reader can help any small business do big business. Square provides straightforward point of sales processes for customers and vendors while also offering behind the scenes growth opportunities including customer loyalty programs, finance management support, and coverage for cash flow gaps. Business owners get tools that track sales, stay on top of inventory and give you a better understanding of your customers and customers. Get a quick checkout experience that supports all major credit cards and payment methods including contactless options including Apple Pay and Google Pay. No matter what business you're in, Square can help you knock out today's to DOS and unlock tomorrow's what ifs. Go to square.com, go pivot to learn more. That's S Q U-A-R-E.com go pivot square. Meet you there. Support for Pivot comes from Upwork. Scaling your business requires the right expertise at the right time. With upwork you can find specialized freelancers in marketing, development, design and more experts who are ready to help you take your business to the next level. With more than two decades of experience, upwork has a simple and ambitious to pioneer a better way of working. Companies at every stage turn to upwork to get things done and find more flexibility in the way they staff key projects and initiatives. And they can access a global marketplace filled with top talent in it, web dev, AI, design, admin support, marketing and more. Plus, posting a job on upwork is easy with no cost to join, you can register, browse freelancer profiles, get help drafting a job post, or even book a consultation. From there you connect with freelancers that get you and can easily hire them to take your business the next level. Upwork makes the entire process easier, simpler and more affordable with industry low fees. Post a job today and hire tomorrow with Upwork. Visit Upwork.com right now and post your job for free. That is Upwork.com to post your job for free and connect with top talent ready to help your business grow. That's upwrk.com upwork.com.
- [19:12]
Kara Swisher
Scott we're back live from Con. Meta just announced that it's putting ads on WhatsApp for the first time. This is something they talked about and one of the founders of WhatsApp said over my dead body, so I guess he's not living anymore. The ads will appear in the updates tab of the app, which is visited by 1.5 billion people a day. Meta says there are no plans to put ads in chats or personal messages. I'm sure yet is in there and silently and all conversations still say encrypted. Metashares rose 2.5% on the announcement. I think the question is are they confident about the outcome of the antitrust trial? Meta just did $14 billion deal to acquire also a 49% stake in Scale AI, a startup that supplies training data for AI models. Google is Scale AI's largest customer and not happy about the metadeal. It's reportedly cutting ties with Scale. Microsoft and Xai are also pulling back. I have heard from federal regulators who feel like this deal isn't going to go through at all, even though Microsoft did a similar thing when it bought Inflection.
- [20:18]
Scott Galloway
The deal with Scale AI.
- [20:20]
Kara Swisher
Yes, it's like that. It's one of those deals where it's sort of an acquihire kind of situation. They're getting the 49%, not control of it. It's an acquisition period and I think the government's, even this government is not going to allow this to happen. So talk a little bit about these ads in the app. Of course they'll put ads anywhere. They'll put ads on Mark Zuckerberg's ass if it would work for them. But go ahead, what do you think? It wouldn't work for them.
- [20:44]
Scott Galloway
I'm surprised it took so long.
- [20:46]
Kara Swisher
Yeah, me too.
- [20:47]
Scott Galloway
It won't be the revenue generated, it'll be incremental growth. It'll add 1 or 2 percentage points to their growth each year, which will, which is great. But if you look at, if you look at ads, meta's ability to monetize a consumer in the US they get about 75 bucks a year in ads. If you're on meta platforms in the US Their average, I think across their whole network is more like 12 or 14 because the market's actually the strongest in with WhatsApp are the lowest. It is very hard to monetize attention in India right now because a couple hundred million people in India are not consumers, meaning they don't have any excess income for stuff. So it won't be the revenue boost. I think that analysts think it'll be what I think it is and no one's talking about it is. I think it's sort of an at&t and Verizon killer because it'll give them, you know, my sense is WhatsApp is slowly becoming just the best telco and it's free. For the first time I thought, wow, I have AT&T and somehow they have figured out a way through taxes and me ignoring the bill and not calling and complaining. I pay 400 to 600 bucks a month for AT&T. And a couple times recently I thought I'll call back on WhatsApp because it's better. And if they can figure out a way to make more investments in technology and outpace the technology investments of AT&T or Verizon and offer free service to everyone globally and it becomes a self expressive benefit where it feels cooler to be on WhatsApp now.
- [22:09]
Kara Swisher
Yeah, yeah. I just think I get a lot of WhatsApp. You know, it's interesting they could go back to that terrible phone they did. Do you remember many years ago they had a phone, it was like home or whatever it was called.
- [22:20]
Scott Galloway
Who had a phone?
- [22:21]
Kara Swisher
Facebook had the phone and then they got out of it. It was, you know, who was run by Chamath. Palihapitiya ran that division.
- [22:26]
Scott Galloway
Oh really?
- [22:27]
Kara Swisher
It was a huge fail. I know. Ha. Exactly. Speaking of hgh, I mean, could they do that? Could they. Because they had a phone, it failed. Microsoft had a phone, Amazon had a phone. They all had phones. And that was. Their move, was to sort of go into that business. But AT&T, Verizon sort of sewed it up along with Google and Apple.
- [22:50]
Scott Galloway
I saw this as I thought it was good news for Meta, probably the two.
- [22:56]
Kara Swisher
So they don't need a phone is what you're saying. They just need the WhatsApp phone service.
- [22:59]
Scott Galloway
I think there are just so many amazing hardware manufacturers now. They're better off just being the operating system that garners money and advertising. I don't think they're in that business anymore. But I think I saw, I read this as worse news for AT&T and Verizon than it was an increase in revenues for SO ads.
- [23:16]
Kara Swisher
Not a big deal. Ads, not just the thing.
- [23:18]
Scott Galloway
Well, I mean, four out of five people are on a meta platform, I think, every 48 hours outside of China. So my sense is that I think the ads will be fairly unobtrusive. I think they'll get more and more targeted. They'll have more and more data to put into their flywheel. But it's where WhatsApp is strongest, is where they have the lowest monetization. So I think it'll be a longer road to the revenue.
- [23:43]
Kara Swisher
You're very bullish on Meta right now. And also this scale AI deal is his. They've been sucking wind in the AI area. He thinks so, and I think he's right. And so he's making a big move, which is very typical of Zuckerberg. Like when he bought Instagram, when he did all kinds of things, he always makes the big aggressive pivot for himself.
- [24:01]
Scott Galloway
I think this one was a rare misstep. He's arguably the best acquirer in history. Instagram bought for a billion. Later, Marissa Mayer made the worst acquisition in tech history. She bought Tumblr for 1.1 billion. And I think seven years later, it was sold for 3 million. And meanwhile, Instagram is probably objectively worth 2 to $300 billion if it was an independent company. And then everyone thought he was crazy for spending 19 billion on WhatsApp that had no revenue. And that's ended up now, he arguably bought the largest telco globally for $19 billion. That looks like a genius acquisition. This one's a little bit different because they were trying to be cute. When you buy 49% of a company, you're not triggering what's called a change of control, meaning that the SEC looks at it differently. And technically the FTC and the DOJ have a different set of rules to apply to a minority investment. Yes, there was 49 for a reason. They technically, they're not in control. But this is what happens when you take 49% of a company. You're on top, you're in charge.
- [24:59]
Kara Swisher
They also made its founder the head of their AI. Now essentially he's head of the AI lab or whatever that they're making, but.
- [25:04]
Scott Galloway
They'Re effectively in charge now. Meta. And they thought that. And scale AI is going now back to all of their other. So scale AI is essentially an attempt to optimize content for generative AI. Remember the SEO world? Remember how there used to be companies and people here 10 years ago who had businesses that optimize you for search? These guys are now in the business of optimizing for generative AI. It's a great company, super smart people. By the way, it's going to go the same way of SEO, I think in 10 years. That whole industry is gone. But Meta saw a reason to bring these very smart people in to help optimize content for generative AI discovery. They thought they'd be cute and only buy 49% of it.
- [25:45]
Kara Swisher
And Microsoft got away with it, essentially.
- [25:48]
Scott Galloway
Well, right. But what their clients now, scale AI have said, that's fine, but a dog we don't like has peed on you and we are just not getting near you. We're done.
- [25:59]
Kara Swisher
So Google's out.
- [26:02]
Scott Galloway
I think he overpaid for this acquisition. I think this was a rare misstep. But we'll see.
- [26:08]
Kara Swisher
We'll see what happens with him and it'll be interesting. But I do, like I have to say, the one thing Zuckerberg compared to a lot of people is his management style is very. He's a very strong manager in that he makes those.
- [26:19]
Scott Galloway
He's a brilliant businessman. He's also a sociopath and has done more damage to young people while making more money than anyone else in history. Well done, Mark.
- [26:26]
Kara Swisher
Well done. But we like your management style anyway.
- [26:29]
Scott Galloway
Brilliant.
- [26:29]
Kara Swisher
Yeah. Next up, a chatbot revolution is killing news publishers as a replaces Google searches. News sites aren't getting as much needed referral traffic. We've talked about this. Organic search traffic to HuffPost and Washington Post is reportedly down 50% over the last three years. Google search volume on Apple's Safari browser just fell for the first time in 20 years. TV news is feeling the pinch, with social media reportedly now surpassing TV as American's top news source. And over at Amazon, Danny Jassy told employees that AI would come for their jobs. What a nice memo to get from your CEO. You suck. I'm going to fire you. Amazon is the second largest private employer in the us. It's a huge company. A million people, whatever the number is, enorm this thing. Everyone should have seen coming here in advertising. Every publisher that didn't see what they were going to do coming at first, they stole your content and got in the catbird seat and pushed stuff to you so you were beholden to them. And now they're just taking your shit and putting it up. And I have to say, it's very effective because that's the first thing. I don't go any further than the first AI thing because it's gotten increasingly better. I mean, what's the point of going? Except then I then go organically to people's sites like the New York Times or the Wall Street Journal or whatever. But it's a real killer for the clickbait websites. It's a death sentence for them. Much like what happened to Demand Media many years ago when Google did the. When they did that redo of whatever Panda or whatever the fuck they called it.
- [27:55]
Scott Galloway
Yeah, so I mentioned this probably once a month on the podcast because I'm desperate for your affirmation. But I was on. I was on the board of the New York Times from 08 to 2010.
- [28:05]
Kara Swisher
They didn't like you, I heard.
- [28:08]
Scott Galloway
Not true. They kicked me off after 24 months. Sulzburgers. Really, really talented, thoughtful people. Seriously, choosing my words very carefully. We had something called about.com, and it was essentially a content farm. And we'd have somebody who did a whole thing on Southern cooking, and then we would optimize it for Google and then Google would send traffic and we'd split revenue from them. And the site was doing really well and we could have sold it for a billion dollars. And I remember saying, why on earth would we not sell this thing? This is not our business. Billion dollars. A lot of money. And they said no, because the management team wanted to accessorize an analog outfit with digital earrings, thinking it made them look younger. Right? It was their bell bottoms or whatever it was. They thought it made them seem hipper. And then one night, literally overnight, Google changed their algorithm and 40% of our traffic went away. Like that. Like 40%. And I had this conversation, and I have this conversation with any entrepreneur. I had this conversation with Jessica Yellen, who's not noise, which I absolutely love. She's Dependent upon Meta.
- [29:11]
Kara Swisher
Yeah.
- [29:11]
Scott Galloway
I'm like the only thing a partner of Meta and Alphabet have in common over the medium and long term is you're going to get fucked.
- [29:19]
Kara Swisher
Yeah.
- [29:20]
Scott Galloway
They will run their fingers through your hair, send you traffic, call you partners, invite you to the cool party tonight, and then slowly but surely, the moment you have anything resembling real margin that they can come from, they will tweak their algorithm and suck it out. Google used to be the best place to go. Now the first two or three pages are where they can go to further monetize. And the thing that really bothers me about these generative AI descriptions now is if you type in generative, give me the major themes from Keras Wisher's book, Burn Book. It'll list links to Amazon where they can buy the book. But it summarizes it.
- [29:57]
Kara Swisher
Yeah, it does.
- [29:58]
Scott Galloway
Which means they've crawled your content, which means they haven't. Are they paying? Penguin Portfolio, Random House for Simon and Schuster. So this is a moment in time. Going back to the New York Times, I suggested that we form a consortium and stop letting Google crawl our data. I'm like, they've convinced us that this is good for us and they're sending us traffic to run shitty banner ads that nobody watches that we get 50 cent CPMs on. And they run stuff across the right rail that is much more targeted than they get a dollar for. So they're giving us two pennies, they're taking a buck from our gorgeous content and we're supposed to be happy about it. And they said, no, we're in the business of eyeballs. Da, da, da. This is before they went subscription. That was a moment in time where we could have pushed back on search, where if we'd all banded together as content creators and said, we're going to license it to Bing, which was still a player at a time, or to Google, we could have extracted a lot of money. We are at that moment in time right now with AI. And that is we need a very aggressive, very intelligent group of people and a lot of money for lawyers to go to every one of these guys and say, we have evidence everywhere that you are crawling our amazing content. That includes people who are willing to go to war zones and risk their lives. It includes people that spent a lot of money on graduate education such that they can fact check and write reasonably well. Well and compelling narrative. And you are crawling their data and running these synopses and not paying them.
- [31:22]
Kara Swisher
Right, exactly. And the Times and others spent. You made that point about the fact Checking on the article about me that you got called. He's here in the room. Ben is here. But the puff piece. Yes, the puff piece.
- [31:33]
Scott Galloway
The puff piece.
- [31:33]
Kara Swisher
No, it was not. It was very hard hitting. Oh, my God.
- [31:37]
Scott Galloway
Anyway, literally, I got a call. Can you talk about her leadership skills? Oh, God, make it stop. Tough piece.
- [31:47]
Kara Swisher
Now you're just.
- [31:48]
Scott Galloway
Tough piece in the ft.
- [31:49]
Kara Swisher
Yes, I did.
- [31:50]
Scott Galloway
Daddy got a little love.
- [31:51]
Kara Swisher
Yeah, that's right. It's too bad everybody reads it. Hello, Lies. Yeah. How many people read the FT piece? How many people read the New York Times piece? Everybody. Thank you. Okay, anyway, that literally.
- [32:05]
Scott Galloway
Okay, just so you know, you're all cynical. This is what advertising has become. Advertising media, used to shape culture, now follows me to the fucking urologist on Instagram. Congratulations.
- [32:14]
Kara Swisher
Well done in any way. In any case, they will do it again, and they will do it again and again, and they have no interest. I will give you one very quick. I was at Google when they started, and Larry Page was taking me around, showing me the office. And there was a room, and I've told this story, full of television sets, and they were all on. And it was. Everything at Google was weird at the time. You'd turn a corner and there'd be a tent or there was something. It was a very strange, quirky culture. And. And I was like, oh, a room of television's like Circuit City, essentially. And I said, what are you doing? At this point, Larry was carrying a pollution meter around his neck because he was worried about pollution. And I was like, no matter what you do, Carmen, you're gonna die. I did the moonstruck line to him, and he was like, what is that? What do you mean I'm gonna die? I'm like, you're gonna die? Like, this was the kind of conversation. But we get to this room, it's full of TVs. I'm like, what are you doing in there? And he goes, we're taping tv. And this is exactly where he talks. And I go, taping tv? He goes, yes, all of tv. And I said, you're taping TV for what? They were crawling it through closed captioning so they could search it. And I said, did you get any of the copyright to do that? And they were doing the same with books very soon after. And he goes, why would I need to do that? And I was like, because other people own that content, not you, and you're a fucking shoplifter. And he was like, I think it's gonna be good for the world. I said, I think it's gonna be good for you because no one's gonna do it after. So we had this big debate right there. But, but this is in the DNA of these companies, let me tell you. Shoplifting and thievery is in the thing. And Walt Mossberg got it right when he called them information thieves many years ago. And I think that's absolutely true. And then they serve you the solution for it. Like they give you info cancer and then say we have the medicine to cure you of info cancer, which they don't, which is a line from Mountainhead this week. Anyway, speaking of things that might cause cancer, when we come back, we'll talk about Trump launching a mobile plan. Support for Pivot comes from IBM. Bigger isn't always better, especially with AI. Super sized models can drain your budget fast. Smaller ones are smart and can help cut AI cost up to 90%. Right size your models@IBM.com the AI built for business. IBM support for this show comes from pure leaf iced tea. You know that point in the afternoon when you just hit a wall? You don't have time for self care rituals or getting some fresh air. So maybe you grab a beverage to bring you back, but somehow it doesn't do the trick or it leaves you feeling even worse. What you need is a quality break, a tea break. And you can do that with pure leaf iced tea. Real brewed tea made in a variety of bold and refreshing flavors with just the right amount of naturally occurring caffeine. With a pure leaf iced tea in hand, you'll be left feeling refreshed and revitalized with a new motivation to take on what's next. The next time you need to hit the reset button, grab a pure leaf iced tea. Time for a tea break. Time for a pure lip leave. You know that feeling when someone shows.
- [35:27]
Scott Galloway
Up for you just when you need it most.
- [35:29]
Kara Swisher
That's what Uber is all about, not just a ride or dinner at your door. It's how Uber helps you show up for the moments that matter. Because showing up can turn a tough.
- [35:38]
Scott Galloway
Day around or make a good one even better.
- [35:41]
Kara Swisher
Whatever it is, big or small, Uber is on the way.
- [35:46]
Scott Galloway
So you can be on yours. Uber on our way.
- [35:55]
Kara Swisher
And we're back live from Con. We got some time for questions. The Trump Organization has announced a mobile phone plan and a 499 smartphone they said will be made in the U.S. this is not true. You cannot make a phone in the US but they don't care if they lie about things like that. Trump Mobile will offer plans under $50. It's like the Bible will offer plans under $50 a month. The T1 smartphone appears to have a gold covering with an American flag. Obviously, gold is best. For those who haven't seen that. It's a great skit on Apple. Gold is best. Get the gold. This device will run on Google's Android operating system and Trump Organization says it will be made in the U.S. again, it's not possible. But meanwhile, in the podcasting world, the BO Smartless have also launched her own mobile phone company. We're not gonna be doing that, just so you know. But this is ridiculous. Shira OV did a great thing. She tried to sign up. They charged her immediately. She can't get her service. It's very confusing. It's obviously just. He probably did a. They did a deal with someone. It's not. Trump isn't running it. It's like stakes, except now people buy it, essentially. Any thoughts on this creating a mobile service?
- [37:10]
Scott Galloway
Well, why would we have mobile service? The grift and the criminality and the monetization of the White House has become so outrageous that this doesn't feel strange. If Obama or Reagan or Carter had tried to launch a phone service, Fox News would have had their just their hair on fire for seven days straight. But because we now have a president who opens a Swiss banking account that Qatar or anyone else can say, I'm putting $100 million in tonight at 12:03am and nobody knows. And by the way, could you stop up sending shipments of arms to these people? Or, you know, basically the White House is now for sale. The criminality is just so outrageous that we now see the monetization of something that this should not happen. This is crazy, but it almost feels like, oh, that's not a big deal, right? Sending your kids to Qatar, who is the political mouthpiece and funder of Hamas, and then taking a $400 million bribe from them. Well, if he can do that, okay, let him launch a phone. So this. What's so sad about this, by the way? You can get the exact same plan. Someone did an analysis.
- [38:13]
Kara Swisher
Some of these plans are great because you are being overcharged by Verizon and AT&T. So some of these other plans are terrific because they basically ride on Verizon and AT&T. They pay them and some of them are wonderful. And the prices should not be these prices.
- [38:28]
Scott Galloway
Well, not to get too deep into the weeds here, but there's a duopoly. A small number of companies own the networks and the FTC and the doj Said came in and said, you have to lease them out to people to start what's called an mvno. And a lot of great companies, including Mint Mobile, came in with very. With fantastic advertising and acquired a bunch of customers. And then they basically sell to one of the big guys. They end up being kind of niche customer acquisition vehicles for the duopoly that is rising. But you can get the same plan for less money. But I don't. I like these little niche offerings. If people are that crazy about Trump and they want to do it, but it's just insane that somebody who has the power of the purse, power of laws, gets to decide the most important decisions globally, that sets the tone for the rest of the world is selling a fucking phone. I mean, come on. We become so numb to how terrible and inappropriate all of this is. And just the incredible erosion I have found I'm on a bunch of panels and I have found I'm the anger pillow for Cannes. They set me up. You say brand is dead. And then they have the very articulate British person say, why brand matters more than ever. And I have felt, I don't want to say anti American resentment, but I just think globally, our brand. You want to talk about brands? There has never been a brand erosion of a brand as big fallen as far as fast as the US in the last 151 days.
- [39:55]
Kara Swisher
Well, Tesla.
- [39:58]
Scott Galloway
Fair enough. That's fair.
- [40:01]
Kara Swisher
And that's still going.
- [40:02]
Scott Galloway
But if you think about it, we used to be the good guys. People said, okay, they get it wrong. But generally speaking, the White House has an occupant in there that may be dumb, maybe not. Some fair, not dumb, maybe not. The brightest person in the world may be arrogant, may be imperialist, bad wars, but generally speaking, our heart's in the right place. I've always found that. And what I'm sensing when we go abroad is a certain level of fear. Like, I think people, quite frankly, took America a little bit for granted. They sort of said, oh, you're smart, you're nice, you have more weapons than anybody. That's kind of nice. And then when they realized, okay, our rich Uncle Sam's gone fucking crazy, they're like, wow, we kind of miss our uncle. We kind of miss the old uncle. That felt pretty good. And also there's a real decent level. I find that it's not. I don't want to say there's an anti American thing in France. We're still wonderful allies. We push back fascism together. But what I notice visibly when I'm on panels someone makes an anti American joke and that people just love it. That people just love it now. So that erosion in brand equity has enormous impact on it. It means that one of the largest exports in our nation, US education where we make $42 billion a year, we make 40 billion selling TV shows and movies overseas, we make $42 billion getting the richest kid from El Salvador to come to NYU Stern and pay 288,000 in tuition over four years. All those numbers are accurate. It we get the best and brightest. The flows of human capital in the US People have one aspiration of the best and brightest typically and that is to come to the US if you are noticing a terrorist cell forming and people wanting to get on planes to D.C. or to San Francisco. There are a lot of people who say, you know what? Americans are good people. And they notify our embassy, they highlight security threats. I have always run global companies, small companies, but global companies. And I was found when I walked into Samsung or to LVMH or Toyota in Tokyo, Seoul or Paris and I took for granted, you know what people generally like Americans. They generally speaking think you're obnoxious, funny, but they like us. They think oh you're not now though.
- [42:13]
Kara Swisher
We'Re going to have to see that.
- [42:14]
Scott Galloway
Well that's my point. That's my point is that that brand erosion, I mean you're in the business of brand. Brand erosion means less margins, it means less consideration, it means less profit. The erosion in goodwill will translate to an economic hardship and making our soft targets much bigger targets.
- [42:35]
Kara Swisher
Which is making out like bandits. And I mean bandits. I'm stressing bandits. What could they sell next? Then I want to get to questions because we only got a few minutes.
- [42:42]
Scott Galloway
I have no idea.
- [42:43]
Kara Swisher
I think erectile dysfunction.
- [42:46]
Scott Galloway
Well, if you think about advertising, advertising used to shape culture, now it sells creatine to self hating people like me.
- [42:53]
Kara Swisher
Yeah, excellent. All right, one more quick break and then we'll take take some questions from the audience. Ryan Reynolds here from Mint Mobile. With the price of just about everything going up, we thought we'd bring our prices down. So to help us we brought in a reverse auctioneer which is apparently a.
- [43:10]
Scott Galloway
Thing Mint Mobile Unlimited Premium Wireless. Get 30, 30. Better get 30, better get 20, 20, 20. Get 20, 20 better get 15, 15, 15, 15. Just 15 bucks a month.
- [43:19]
Kara Swisher
So give it a try@mintmobile.com.
- [43:23]
Scott Galloway
Upfront payment.
- [43:23]
Kara Swisher
Of $45 for three month plan equivalent to $15 per month required new customer offer for first three months only. Speed slow after 35 gigabytes of networks busy taxes and fees extra.
- [43:29]
Scott Galloway
Cmobile.com put us in a box.
- [43:34]
Kara Swisher
Go ahead. That just gives us something to break.
- [43:37]
Scott Galloway
Out of because the next generation 2025 GMC terrain elevation is raising the standard of what comes standard.
- [43:47]
Kara Swisher
As far as expectations go, why meet them when you can shatter them?
- [43:52]
Scott Galloway
What we choose to challenge we challenge completely. We are professional grade. Visit gmc.com to learn more.
- [44:01]
Kara Swisher
Shop 4th of July Savings at the Home Depot right now and get up to 40% off plus up to an extra $600 off select appliances with free delivery like Samsung. From all in one washer dryers to smart refrigerators. Upgrade to tech you can trust with Samsung appliances.
- [44:15]
Scott Galloway
The Home Depot has what you need.
- [44:17]
Kara Swisher
To simplify your routine. Don't miss 4th of July appliance savings at the Home Depot. Free delivery on appliance purchases of $396 or more. Offer valid June 18 through July 9, US only. See store online for details. Scott, we're back. Let's take some questions right here.
- [44:37]
Scott Galloway
Do you think Trump and Musk are going to make Kiss and Makeup?
- [44:40]
Kara Swisher
No. No, I do not. No. I think Trump Musk has outlived his usefulness and he's a live wire and he takes away too much attention. And Trump doesn't need him at this point. He's got his billions of dollars, he's got his presidency, he'll probably get off scot free. Not everyone in that administration will get off scot free, but Trump certainly will. And so I think he doesn't need him. And the only thing is Musk is not, like I said, it's not like Omarosa leaving. There'll be if Scott, although he has qualities of Omarosa, although I like her a lot better, I think that he could cause trouble. You just never know what he's gonna do. So I think that's one of the he has some power, especially on if he changes the algorithm on Twitter, he could fuck with him there. He could fuck with him a lot of places. That said, there's plenty of people rushing in to take his place and Trump's got most of tech by the ball. So for some reason, I don't know why, because they could certainly do damage to him. I don't know. Very quick quick or else no, no.
- [45:45]
Scott Galloway
I'm not going quick. You don't love the homie.
- [45:49]
Kara Swisher
You don't love Bowen. Yang is waiting.
- [45:51]
Scott Galloway
Oh, I'll go quick.
- [45:53]
Kara Swisher
The gays are waiting to come on. They want to see the gays.
- [45:56]
Scott Galloway
This happens every day.
- [45:57]
Kara Swisher
I'M a gay.
- [45:58]
Scott Galloway
This is a much bigger, bolder, cattier, stupider version of the following. And it happens millions of times in corporate America. My company was acquired. I didn't like working there, they didn't like me, I didn't like them. That's a little hard. Different culture. And they said, okay. I said, I want out. And they said, fine, we want you out. And they gave me a shit ton of money and I signed non disparagement and non compete agreements. That is effectively what's going on here. They have fired him. He wanted input on CIA, NASA and IRS picks. They said, no, you've overstepped your boundaries, we need you out. He started shitposting them, calling the president of pedophiles. Didn't seem to bother him when he wanted subsidies. Can you think of anything worse? You could call somebody. And meanwhile, all the right wing media that was saying, release the Epstein files, there's all these Democrats, they're all of a sudden like, oh, that's not true, that's his Trump. He just hung out with Epstein for fun. I just love how all of a sudden they're like, oh, conspiracy. Anyways, they basically said to him, boss, we're not going to give you extra money, but we're not going to put Tesla and SpaceX out of business. But you have to sign a non disparagement. This is a firing. And he's basically been told, okay, if you want US to take SpaceX from $300 billion to $30 billion by losing all contracts and you want us to take Tesla from 950 to 50, you better shut the fuck up. Sign here. This happens every day in corporations.
- [47:18]
Kara Swisher
He's much more leveraged than you, really. If Starlink falls apart, he's got a lot of problems and Tesla's on a downward spiral, which has something to do with his Trump support, but a lot to do with his lack of good cars. That's really, I mean, at the very heart of it. Hi, I'm Kendra Barnett, senior tech supporter. Abigail, fan of O. Thank you for being here today. I just wanted to ask if you guys could share any predictions about the remedies that we're going to see in both of the DOJ cases. I think go. I think probably they'll have to break it up. I think they'll have to be spinning something off. I think that judge is really smart. Actually know a lot about him, but I think Google's on the ropes on that one. The Facebook one, I'm not sure because some people felt it Wasn't a particularly strong. And Facebook's being ultra aggressive and they've got some support for the idea that they do have. I think it's a better case that they brought back that Lina Khan then resubmitted. But I think a lot of people feel that possibly Facebook will possibly. I think the judge will rule against them, but it will go to appeals. It'll go on and on and on. But I think the Google one is probably a significant issue and it'll keep going. But the Google one is more and it's very clear what's happened there. And they should not be on every side of every market, including YouTube is now television. They control so much stuff and it's so obvious that they should be broken up in some fashion. But rolling back the Instagram purchase, I don't see it happening.
- [48:45]
Scott Galloway
Yeah, there's a lot of moving parts here. But I think if Alphabet stock continues to underperform and for some reason it goes down, I think that they will decide to prophylactically spin YouTube because I think once an asset that Alphabet trades at a P of I think 16, the S&P trades at 24. The average S and P company is not nearly as impressive as Alphabet. At some point the shareholders of Alphabet will go, all right, the hole is worth less than the sum of its parts. So maybe we can kill two birds with one stone. Go to the DOJ or the FTC and say, what if we spin YouTube, which would probably be worth more than Netflix. It captures 11% of viewership. Netflix captures 7.7. So I think if they see the tea leaves, that it would be good for shareholders and potentially maintain the wolves, the FTC and DOJ wolves at the door. I think you'll see a spin. Having said that, every prediction I have made around DOJ and FTC over the last decade has been entirely wrong.
- [49:39]
Kara Swisher
But the Trump administration hasn't pulled back on this, which is interesting. I think they probably thought they might get a little bit of. But it doesn't matter. This isn't in front of a judge and we'll see what happens. But they don't seem particularly interested in helping these companies. But I do think Google's probably going to have to spend some at some point anyway. Okay, this is the end. Okay, thanks. But Bowen Yang is waiting and he's sick of you. Okay, that's the show. Thanks for listening to Pivot. Make sure to like and subscribe to our YouTube channel. We'll be back next week. Scott, let me give it to you. Read us out.
- [50:11]
Scott Galloway
You think I know about it?
- [50:12]
Kara Swisher
I'm not gonna wait for you. Go ahead. Go.
- [50:13]
Scott Galloway
All the people we value so much.
- [50:14]
Kara Swisher
You like the Hook situation. Can you please.
- [50:16]
Scott Galloway
Today's show was produced by Lauren Ammon, Zoe Marcus, Taylor Griffin and Kevin. Kevin Oliver. Ernie Anderson entering this episode. Thanks also to Jibrows, Mia Silvero and Dan Shalon. Nishad Kirwa's Vox Media executive producer podcast. Thank you to Lauren Stark Rachao and Jackie Sanguia. Do I get that right? Jackie? I've known you for so long. She's in charge of events. She does a great job at Vox. Anyone in charge of events? It's what I call an invisible until you fuck up job. Make sure to follow Pivot on your favorite podcast platform. I say that with affection. She knows. Does it? Thanks for listening to Pivot from New York magazine and Vox Media. You can subscribe to the magazine@mymag.com pod. We'll be back next week for another breakdown of all things tech and business.
- [50:56]
Kara Swisher
Thank you so much. We love you. We love you.