Snapchat's Business Trouble, Adobe's AI Worries, Are Aliens Real?

0:01Snapchat is struggling, but the ad market is rebounding. Blue skies ahead for the economy. Adobe employees are worried they're putting designers out of work and a room temperature semiconductor might be on the horizon, or maybe it's just another academic fraud. All that and more as we break down the headlines this Friday, coming up right after this. Capital One's tech team isn't just talking about multi-agentic AI. They already deployed one. It's called Chat Concierge, and it's simplifying car shopping. using self-reflection and layered reasoning with live API checks. It doesn't just help buyers find a car they love.

0:39It helps schedule a test drive, get pre-approved for financing, and estimate trade in value. Advanced, intuitive, and deployed. That's how they stack. That's technology at Capital One. The truth is AI security is identity security. An AI agent isn't just a piece of code. It's a first-class citizen in your digital ecosystem, And it needs to be treated like one. That's why Okta is taking the lead to secure these AI agents. The key to unlocking this new layer of protection? An identity security fabric. Organizations need a unified, comprehensive approach that protects every identity, human or machine, with consistent policies and oversight.

1:17Don't wait for a security incident to realize your AI agents are a massive blind spot. Learn how Okta's identity security fabric can help you secure the next generation of identities, including your AI agents. Visit Okta.com. That's O-K-T-A dot com. Welcome to Big Technology Podcast Friday edition, where we break down the news in our traditional, cool-headed, and nuanced format. I'm here with Ranjan Roy, as always, joining us to break down the week's news. Ranjan, welcome back. I'm back in New York. Excited to be back on the podcast as well. Great. Well, I think it's time for us to fight about Snapchat, because this week, following Snapchat's dismal earnings, I went on CNBC and said that the company's ad tech just isn't there compared to its competitors and company leadership has wrongfully ignored it.

2:07And just as I walked out of studio, I got a text message from you that said, I'm going to fight you on this one. Where am I wrong? Let's fight about this. For me, I will agree with you first. Snapchat certainly has not built a monetization machine on par with Facebook slash Meta. But I do think it's very important to think about where is Snapchat in the long run, again, from a user engagement perspective. And I see this both in their numbers and I see this both anecdotally around me. Everyone still in their early 20s, I know, uses Snap to communicate with their friends. It's the actual place you go to to communicate.

2:48Then from an actual user number, growth is flat, but it's not slowing, unlike threads, which we'll get to, I'm sure. But then it's also people use Snap. Snapchat Plus has 4 million subscribers. So when we talk about subscription business, all the hype is around Twitter blue and who's subscribing, who isn't. The only social media platform that has actually built a user-based subscription model, LinkedIn's subscription model, remember, is geared up more towards the advertisers or the recruiters. The only social platform who successfully built a paid subscription model is Snap. So I still think the ad tech side, they have a lot of work to do.

3:31But overall, I still think the company is well positioned for the future. So first of all, I think you're wrong on the user numbers, right? They have 397 million daily active users. They've grown, I think, 50 million by 50 million users year over year. So that is simply like they are getting the scale part of this right. The thing they're getting wrong, of course, is the monetization side. And that's sort of where I started to pick the bone. Now, I think they do have potential, right? This is one thing that I said on air. If you have 397 million users, you get as many cracks as you want to get it right.

4:06and I do know that they're in the middle of really trying to make this work. However, the thing is that it's an ad tech issue. Meta's ad tech, if you speak to advertisers, I'm curious what you think about this, but if you speak to advertisers, they say, I'm going to spend money with Meta. I'm going to spend money with Alphabet and that's why we're just at the end of a week of earnings. Meta and Alphabet beat expectations. Snapchat missed. And it's because of their far superior advertising technology that's basically gotten advertisers to gravitate. their way. Now, there's a caveat here, or an interesting point that is worth bringing up, which is that the thing that has surprised me most here was that Apple's anti-tracking moves were supposed to hamper Facebook and Google the most.

4:50If you can't track, you can't optimize, your ad system breaks, and then you end up going to effectively scale advertising based off of how many eyeballs you can reach versus how well you can target. The weird thing is that Facebook, in particular and Alphabet in some ways have both figured out how to get around Apple's ad blocking and or ad tracking blocking, not necessarily breaking the rules, but certainly using technology that's made it less of an impact for them, while smaller companies like Snapchat have struggled. And I think that's the underappreciated issue here, which is like, yes, it's an ad tech advantage, but it's also Apple, you know, by trying to regulate the ad industry actually empowered the incumbents and nobody talks about that.

5:33And I think that's a huge issue, but I'll give you an opportunity to. Yeah, no, no, I think that's, I actually think that's a fair point that Snap, or so Facebook is back, Meta is back. That was the kind of narrative of the last two earnings releases and it's been correct. And they have shown that advertisers will come back, that they've built using AI and machine learning, not the generative kind, but the traditional deep learning are able to actually target ads again and be able to predict exactly what ad to show what person without needing their activity outside on the web what other websites are going to.

6:15So I do think it gets interesting because Snap always has been known as the more privacy-focused social platform. That's why it still gets 400 million users. That's why younger people trust it more than they ever will on any meta product. So in terms of, again, keeping users engaged, in terms of being the place where people actually communicate with people they care about, remember that used to be Facebook's mission statement. I think Snap still owns it, but you're right. That actually can hamper your ability to target ads because if even within the walled gardens of Facebook and Blue and Instagram and now Threads and WhatsApp or whatever else, Facebook, even if they can't track you outside what you're doing on the web, in their own ecosystem, they still have a good amount of data to be able to show you an ad that will show you something semi-relevant.

7:08So I think that's a fair point. So you think Snapchat's going to... Okay, so all this being said, I think Snapchat does have a chance to turn it around. I do think people want to advertise there and its scale is starting to out? Yeah, no, to me, there's a few things. Snap has shown more product innovation than Facebook has over the last 12 years. I still believe with 400 million engaged users who are younger, who are kind of defining where technology moves and goes, that they have the ability to keep innovating and keep actually building things that people want to use and will be able to figure out the monetization side of it, especially if traditional direct response advertising is not the future.

7:53And again, Meta has shown, they've gotten back to where they were and grown a bit, but I don't think, I think there's going to be more creative forms of advertising. And I think Snap is better figured out how to do that than Facebook. Of course, Facebook can copy them afterwards and we'll see where that goes, but at least up till then, whoever introduces it, I'd bet on Snap. We're here live on Friday. We're on LinkedIn. We're on YouTube. We're also on your podcast feed if you choose to listen to us that way. We'd love to have you on our podcast feed. Thank you. Ranjan and I were just on This Week in Tech.

8:25It was a great long podcast, two hours on Sunday. And we know we have some listeners that have come over here after hearing us there. And I just wanted to say hello and welcome. We appreciate you and we're glad that you're here. Ranjan, you had a good time on that show? Oh, I had a great time. I never I think it was almost it ended up being two hours and 20 minutes, which was definitely a marathon on the side of podcasts. But I yeah. And we'll definitely be getting into while we were speaking on Sunday. Twitter had not yet become X. They'd said they would become X, but we kept refreshing the website and it was still the Twitter bird, which I learned was named Larry Bird.

9:07But yeah, I'm sure we'll get to that today. Yeah. And I definitely want to let's get to that right after this. The other thing I wanted to say is you're going to head out on vacation for the next couple of weeks. So I just wanted to let listeners know that we have two excellent folks that are stepping in on the next two weeks on our Friday show. Next week, we'll have Sarah Kunst. She is a venture capitalist, very knowledgeable in the world of artificial intelligence. So I'm sure we're going to cover that and the week's news. And then following that, Julia Borstein, the correspondent from CNBC, is going to come in and we'll definitely be breaking down the week's news.

9:40So there's going to be a lot of good stuff on the show. and then Ronjan will be back here later in August. Very excited for your return. We're going to have a lot to talk about, but in the meantime, let's talk about what's happened at Twitter with X. So first of all, the logged out homepage of Twitter is just hilarious. Like you go to twitter.com and it starts with an X and it says, X, happening now, join Twitter today. It seems to be the most confused rebranding where it can't even on its homepage get the fact right that it's X and not Twitter. What do you make of this rebrand now that it's been out for a week?

10:19And where do you think we're going to call it Twitter? Do you think we're going to call it X? Have you called it X in casual conversation yet? Definitely not. Exactly. I don't think anyone has. I think it's... But look, Meta seems so stupid the same way in the beginning, and now I do call it Meta. You will know, listeners will notice, I still have a hard time saying meta. I think I end up saying Facebook slash meta almost. That's my style guide. No, I mean, X is even beyond. To me, this is a sign where more and more people have seen the way Elon Musk operates. I think, and I was arguing about this with some friends over the week that, you know, still to the default, electric cars and rockets, like, you know, send people to the moon or, I mean, into outer space, electrified the entire auto industry.

11:12but if you've watched how even Tesla's operated with that like guy dancing in a robot suit last year, the Cybertruck demo, there's just been a lot, there's a lot of off the cuff type of behavior. And this is such an extreme version of it, but it's not out of the ordinary. So I think he has talked about this. He has owned the domain x.com since whatever, 1999. He tried to rename PayPal X. That was Siri talking to me. Apologies for that. But to me, the more interesting thing is Linda Yaccarino. What is going through her head right now? Because she sent the most amazing series of tweets about how X is going to be the future of everything and this vision of a super app and all these kinds of things.

12:03While someone like her, who I'm sure at NBC, anything related to branding was the most perfectly orchestrated, tightly knit and run operation that we could ever imagine. And then to come to this where half the Twitter, actual Twitter, Twitter accounts, the corporate accounts are still Twitter. I think only a couple of them are X. They actually stole the handle X on Twitter from the original owner. When speaking of advertisers, if Snap is having trouble bringing them over, Twitter is so far gone from being able to already, from an actual ad tech standpoint, attract advertisers. But now this kind of, you know, completely unpredictable behavior, I cannot imagine any major brand advertiser looking at their 2024 budgets and thinking, oh, yeah, I'm going to what percentage is going to Twitter right now?

13:01I'm not ready to I mean, look, you're not going to get a lot of dispute for me on this one, but I wouldn't throw the towel in on the Yakarino area yet. So I think there's there's plenty of room to go and she's just figuring it out. Hold on, but let's not, we could spend like the whole time debating this. I think we should really talk about the one thing that I think will be a point of contention between the two of us, which is that the question of which rebrand was worse, Twitter to X or Facebook to Meta. And my perspective is the Facebook rebrand to Meta was worse than Twitter to X. I think it would you know it tied Facebook to an experimental product that's you know long in the future it may never materialized and it's always hung over its head and frankly has has longer I mean whereas Twitter is always kind of chaotic and I think Twitter has a much better chance of surviving this this rebrand are you with me on that one with you on that one I'm not going to disagree.

14:05I'm in complete agreement because Facebook switching to meta, I agree, that tied them to reality labs and the metaverse and whatever it was. And to their credit, to Mark Zuckerberg and everyone else's credit, they have very strategically pivoted away. And I've been saying this since last September, I was on CNB saying the metaverse is over. And there was still, they're upping their spending on reality labs. But remember, part of that includes AI research into that budget. So they have been very smart about getting away from this. But in terms of a rebrand, like we've both joked about it, are they going to just call themselves AI at some point?

14:44Because I mean, the word meta, they're gonna have to move away from at some point. And I know they still say things like, well, generative AI will also have huge implications in the metaverse and creating worlds instantly etc etc but i think it's time actually would you go with a new name or would you go back to facebook honestly i would just stick with meta i think at this point it's kind of like a sunk cost and they can they've they can just roll with it that's fair i guess that's what i would do alphabet but by the way yeah alphabet stuck right it's not a great name it's not a No one cares about it.

15:21But I still think it's worse than X. And I got so much hate on Twitter for suggesting that because no one actually cares about the story or the user anymore. It's all about tribalism. And if you say that, like, you know, now you say, it used to be you say anything about Facebook, anything bad about Facebook, you got cheered. Now if you say anything puts Twitter above Facebook in any way, you get piled on Twitter, which is interesting. It's just, like, very clear that people don't look at this stuff. objectively anymore. But one thing I did apologize on air for this week was that I thought that it was going to be metaverse or bust for Facebook last year.

16:02And actually, the opposite has happened. They've revitalized their core business in a way that's been surprising to me. Last year, around this time, they actually had their first quarter of shrinking revenue. And that has bounced back and they're now growing revenue. They also had shrinking users and that has bounced back and they're growing users. So once revenue starts to shrink and once users start to shrink, it's usually the end of the line for a social network, but it hasn't been for Meta. So I would say a tremendous amount of props for that company and the way that they've turned things around, totally been unexpected.

16:43The stock is now up 149 % on the year. Yeah, no, I think that's a good point. But also, I wonder, as you're talking, I'm trying to think of what other examples of kind of major strategic disasters where companies were able to pull themselves back from it. Google Plus, I would definitely put in there because that was definitely an effort where, and for the listeners unfamiliar, this was like early 2010s. Google across the entire organization was going all in on building its own social network, trying to tie it to every product. And it was a complete abject failure. And they managed to kind of move on and continue growing their entire business and get back to the core.

17:25So, but yeah, I mean, as well, props to Mark on that one for getting the company back to its core. Absolutely. Another thing that's been interesting, one of the things that Meta has benefited from is there's been an advertising rebound. So Brian Wieser, he's a great ad analyst and writes this newsletter called Madison and Wall, wrote that this week during earnings, we've seen many of the world's largest marketers, including LVMH and Unilever, posting significant increases in advertising spending. And it really is interesting that the ad market has just completely come back and it's bolstering companies like Facebook and Google.

18:07And, you know, maybe it's a sign of just an improving economy, but it wasn't expected so soon. I'm curious what you think has brought advertisers back because they're a huge part of all these social media businesses. Yeah, I mean, in terms of the mythical soft landing where the economy is now growing and beating expectations, GDP was at 2.4%, which is above expectations. Inflation, I believe it was this morning, came out softer than expected. So overall, it actually looks like we might be in a good place. And it's something that I think very few people were expecting as of a year ago. So I think overall, advertisers forecasting for the next year, 12 to 18 to 24 months, things feel like things are OK and like the economy should be growing.

19:03And it's time to invest where you actually want your business to grow. And I've thought about it a lot in terms of, you know, is the AI bubble, which certainly feels bubblicious in its own ways, kind of generating an overall positive vibe in the business climate? Is it just the economy as a whole? But part of me does feel like there's something concrete with AI right now as a topic that brings energy to the business world, which actually makes people feel like there's hope, that there's something that's going to drive growth across the economy. I mean, it's pretty unbelievable. The S &P 500 is up 20 % this year.

19:43That is not something anybody expected. We were talking recession in January. S &P 500 up by a fifth. I mean, that's massive. and you know it is um it's kind of interesting to think about the role that the fed plays in the u.s economy i mean this is something that you've talked about in the past but it's not congress or the executive branch it's just this central bank is effectively steering the economy and you know at one point i thought well you know of course and this is something the same thing that happened in covid like well they're not going to let stocks fall that much like they have that control and i'm curious what you think about that about you know basically was this inevitable was this bounce back inevitable i mean they did seem interested willing to plunge the country into a recession but they they have it seems like they've almost assured us that like okay no matter what happens the asset prices will will stay high all right so i this is where we can nicely disagree i think uh the fed is prior to the last few years i mean prior to probably Last year, yeah, I agree, basically, we're the only players with any ability to kind of make change or really impact the economy.

20:59This was the book Lords of Easy Money, which was an incredible kind of like long, you know, history of the Fed over the last 15 years and a specific of two low interest rates in ZERB really got into how the Fed, it was because, you know, stalemate in Congress and inability for any kind of action that they were the ones who had to keep stepping in to kind of help the economy. But remember, in the last year and current economic positivity, the Inflation Reduction Act, all the legislation passed by the Biden administration, I mean, and I'm sure we're going to hear a lot more about that going into next year, assuming things stay stable and positive.

21:40there's been a lot of investment in money that's been constructively pumped into the economy as well, not just Zerpy, whatever, COVID Zerp injections of funds. So I think it's not right now, the Fed is not as singular in terms of being able to affect the economy as they were, let's say, seven or eight years ago. Okay, that's interesting. Really good point. We're here on Big Technology Podcast Friday edition with Ron John Roy. We're going through the week's news, and we have a lot more to cover. We put this together, and as we were looking through our list of stories, we're like, wow, we have a ton.

22:19Let's go quickly. We'll do rapid fire. So when we come back, we'll talk about MetaThreads stalling growth. We'll talk about how TikTok wants to sell made-in-China goods, and we'll talk about Adobe. employees wondering and worrying about whether their technology will actually cost the jobs of their customers and then finally room temperature semi superconductors and aliens can we do it all when we get back we're going to give it our best shot i promise you that back right after this shape the future of enterprise ai with agency a g n t c y now an open source linux foundation project, Agency is leading the way in establishing trusted identity and access management for the internet of agents, a collaboration layer that ensures AI agents can securely discover, connect, and work across any framework.

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23:56They already deployed one. It's called Chat Concierge, and it's simplifying car shopping. Using self-reflection and layered reasoning with live API checks, it doesn't just help buyers find a car they love. It helps schedule a test drive, get pre-approved for financing, and estimate trade in value. Advanced, intuitive, and deployed. That's how they stack. That's technology at Capital One. And we're back here on Big Technology Podcast with Ranjan Roy. Breaking down the week's news, Ranjan, a lightning round. I think we'll give it a shot. So first of all, this is one of your favorite stories to talk about the overhyping of threads and the ugly aftermath.

24:39Well, threads hit 100 million people. and Mark Zuckerberg said ideally it would be awesome if all of them or even half of them stuck around. We're not here. We're not there yet. So 50 million people have already left threads and that sort of sort of tracks with the experience I'm having there. This is from Reuters. Meta is looking to add some quote-unquote retention driving hooks which is like a very scary phrase to entice users to return to the app like making sure people who are on the Instagram app can see important threads. How do you read this? So I definitely have been saying for a long time, and I think this will go down as a strategic blunder, not quite on par with naming themselves meta, but Facebook pushing threads so aggressively.

25:25And even though they said that there was no marketing or promotion involved clearly, and we know, and anyone who went through the signup flow saw very well how, if you were an Instagram user, how frictionless, let's say, getting set up on there was. I think getting to 100 million users was a mistake because they hyped it up so much and they had this moment and everyone was interested in it. And then when it wasn't interesting, no one's going to go back. I've not been on it in days. Or I'll almost more from a research perspective, check it like once every other day. And I even started following everyone I follow on Instagram, which is friends, family, you know, interesting accounts.

26:08It is a cesspool of like, it's kind of, if listeners are familiar, there's a Kevin Roos was famous for a while for starting this Twitter account that would post the top 10 trending stories on Facebook or what are the most traffic page, the stories. And it was always either right wing type stuff or just kind of the most weird memes, like things that didn't make any sense that aren't funny. And that's kind of what my threads is turning into already. It's just, it's these awkward, odd memes that feel like the Instagram algorithm come to life and trying to inject something with you, but not for, I think no one I know is actually posting on there.

26:51So there's nothing to show me. Well, it's time for you, for us to correct the record. Cause I'm posting on there. My audience is actually quite engaged on thrills despite small size. I'm always getting some feedback and responses and some really good stuff there. I've definitely started posting there. Again, I understand that it's smaller than Twitter and my Twitter audience definitely exceeds it, but I've been like pleasantly surprised with the quality of engagement on the app. But I also think that like yeah it's it's sort of um it has suffered from that quick start and that now now it feels empty even though it's not well this it's very clear that the facebook's algorithms are not picking up that we are speaking on this podcast together every friday because i'm following you on instagram and i'm not getting any of your threads so you gotta unmute me rajan i think that's the first step ah that's what it was that's what it was so tiktok wants to sell made in china goods to americans i picked this story up because i like saw and i was like this is red meat for ron john roy here it is from the wall street journal tiktok is launching an e-commerce business in the u.s to sell made in china goods to consumers stepping up its rivalry with popular shopping platforms xian and timu to me what's so interesting about this is like the social platforms see how the ads that they have convert.

28:15And they've always had this ability to basically go ahead and bigfoot some of the, you know, made for TikTok or made for Facebook industries. And they don't because that's scary to their advertisers, but here's TikTok going ahead and doing it. What do you make of what's happening? Well, I think this is the continuation of one of the most interesting trends in commerce. As you said, red meat for me, one of my favorite ongoing stories. And I always think in these situations, Amazon is the most under threat. It's because all through the 2010s, Amazon started really bringing in, you know, kind of like small to mid-sized Chinese manufacturers onto the platform.

28:52And for anyone who's shopped on Amazon, they know that, you know, so much of the platform, it changed from either brands you knew to kind of what is the, you know, the race to the bottom, just try to find the cheapest thing you can, can't trust the reviews exactly. But what's been so fascinating is now Sheehan and Timu come in and disrupt that process. They go directly and they start building networks in this marketplace, either networks and marketplaces for these same manufacturers. And I think TikTok sees. So building that kind of network of manufacturers, being able to really, you know, deliver commerce in that fast, almost real-time way that Shein and Timo have developed.

29:35They can take feedback, like Shein's famous right now, that they'll put an item on the website, have like small amounts actually manufactured. If it starts getting clicks, they can call up the manager, not even call up, have a signal sent to the manufacturer right away, start producing more, get more onto their website. So that whole flywheel works so well. Well, obviously, TikTok is going to see that. And they say, we own the entire end part of that transaction with the consumer. So why not start actually getting into the manufacturing side of it and the selling side of it? The fascinating part of this is that you have like the basically you have media, social media and commerce starting to blend in ways that are quite remarkable.