Is a Breakup of Google Coming? Australia’s Move to Ban Young Teens From Social Media, and How to Engage Students in the Classroom

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1:23Download today. Welcome to the PropG Pod's Office Hours. This is the part of the show where we answer your questions about business, big tech, entrepreneurship, and whatever else is on your mind. If you would like to submit a question, please email a voice recording to officehours at prof2media.com. Again, that's officehours at prof2media.com. So with that, first question. I have not seen or read these questions. Hi, Scott. I'm Adam from Chicago. I'm a professor at a large public university, and I'm a big fan of the pod, especially your views on higher education. I had a prediction for 2025 that I wanted to share to get your perspective.

1:58I think the Google antitrust case will lead to a breakup of Google into four separate companies. Search and AI, Cloud, YouTube, and Waymo. This will unlock significant value for a mega-capped stock that is underperformed compared to its peers. If this happens, other mega-caps may follow suit. What do you think? And thanks. Adam from Chicago. Thanks for the question, Professor. Sir, you're thinking rationally, and I have learned the hard way. That's not how this market works. What's going on with the Google antitrust case? In 2020, Trump's Justice Department threw the antitrust hammer at Google, claiming they had an illegal monopoly in online search.

2:39This is a big deal. It was the first antitrust case of its kind in the Internet era. Since then, governments have argued that Google made illegal deals to ensure its search engine is the default on most devices. Now the stakes are getting higher. A judge already ruled against Google in part of the case, and a second trial is coming up in April to figure out what kind of penalty they might face. They were found guilty of monopoly maintenance, mostly because they paid the biggest fee to Apple to be the default search engine, and they thought no one else could compete with them. It's anti-competitive behavior.

3:08They're trying to figure out what the remedies of this guilty verdict would be, and they could be a regulator sitting there and telling them that you can't do this, you can't do this, a breakup, some sort of fine. So the question you're asking is, could the remedy be a breakup and what would that breakup look like? I can't see them being broken up into four distinct units. And you're saying a deconglomeration would add more shareholder value. And I actually believe you. I think in conglomerates, what you tend to find is the whole is less than the sum of its parts. And the thing you didn't mention is that I've done some analysis around YouTube.

3:42If you ask most people, what is the leading streaming platform, they'd say Netflix and they would be wrong. Netflix commends about 8 % of total viewership time, whereas Google, excuse me, while Alphabet's YouTube gets about 10%. And if you applied the same multiple on revenues, YouTube does more revenues than Netflix. And if you applied the same multiple, YouTube on its own entity as a spin would be worth somewhere between$500 and$600 billion. It would be worth more than Bank of America or LVMH or Salesforce. And the disposition of assets or a spin of assets in a conglomerate structure creates more value, per your point.

4:16Why? Because CEOs and controlling shareholders love to have a big, fat fucking company, especially one of this power and prosperity. And they don't like managing different ones. And CEOs love a bigger company because their compensation is based on two things, the performance of the company and how big the company is. In addition, it makes them sleep easier at night when they conglomerize because if YouTube isn't doing well, then most likely their cloud or Waymo is doing well. All right. And the fact of the matter is, is that investors don't need CEOs to diversify for them. I could go buy my own video search engine called YouTube.

4:52I would like to be able to do that. I'd like to be able to specifically say, I like, I don't believe in autonomous driving, but I believe in video search. I want to invest in YouTube and not Waymo. Or I think that search is challenged by AI, or I think it's going to be just fine and it's been overly punished. I wanted to go into search, but I don't want to be in the cloud, whatever, right? Unfortunately, they don't do that. They conglomerize and they claim there's efficiencies. And there may be, there may be so many efficiencies here between coordinating and cooperating that they, in fact, make it impossible for anyone else.

5:22They're both on the buy and the sell side in digital marketing and they make the market. Anyways, I just don't see this happening. I wonder if there will be a breakup. I hope there is. It would probably be something around their ad tech. They'd probably maybe have to spin the old double click or their ad stack or their ad model or their ad technology, if you will. But the idea, you're looking at this rationally from an investor standpoint, what would make the most sense? But here's the thing. These companies are run by individuals, and they love sitting on the iron throne of all of the seven realms, not just Westeros.

5:54So while what you're saying makes sense, it's just unlikely to happen. These organizations are run by people. They have different objectives than just doing what's right for shareholders, if you will. The biggest tax cut in the world right now would be if China and the U.S. made up. They have manufacturing. We have consumer demand. We have debt. They have cash. I mean, for God's sakes, it's Fred and fucking ginger for the global economy. That would be the biggest tax cut. The second biggest tax cut would be if we took the big guys, Amazon, Alphabet, Google, and Apple and broke them up into 11 or 12 companies.

6:26That would be the best way to auctionate the marketplace. They have such concentration of power in their specific categories that the rents they charge on consumers, whether it's what they charge you for your iPhone or the ad fees on Amazon, which have gone from about 20 % of total gross merchandise volume to like 45%. All the rents need to come down on businesses. Biggest corporate tax cut in history wouldn't be under Trump. It would be under the FTC or DOJ breaking these companies up. Anyways, that's my rant. We'll see what happens here, Professor. But call me skeptical. Question number two.

7:28namely how to verify that someone is indeed over 16. Options discussed include biometric verification and uploading approved forms of ID. Given the well-founded security and privacy concerns, this is in danger of scuppering this otherwise worthwhile policy initiative. Would love to hear your thoughts and thanks again for all that you do. Thanks for the thoughtful question, Nadal from Australia. So the most influential scholar in the world right now is my colleague, Jonathan Haidt. And everything we're talking about here, phones being banned in schools, social media being banned for kids under the age of 16, has largely been a function of Jonathan's landmark book, The Anxious Generation.

8:09So effectively, Australia is planning to make social media platforms take action to prevent online harms, including bullying, predatory behavior and harmful content. Pushed by algorithms, they're calling it the digital duty of care. Platforms including TikTok, Instagram, and X will need to actively protect users by regularly reviewing and addressing safety risks. The plan will ban kids under 16 from these social media platforms. Some critics argue that banning younger users of these platforms could reduce the pressure on these platforms to improve safety features. That's fucking ridiculous. If young people aren't on there, that will decrease the likelihood they'll put in safety restrictions for young people.

8:49I mean, that makes no sense. Literally, these people have no shame, and my favorite is that it would squelch free speech. Yeah, my 13-year-old needs free speech more than he needs protection from this bullshit that makes him insecure and want to self-harm. Yeah, okay. Free speech for 13-year-olds. That's our top priority. The legislation covers a wide range of harms, including mental health, impacts on young people, harmful practices, and illegal activities. There will be no exemptions for children with parental consent or who already have accounts. What's the plan now? Australia is currently trialing an age verification system that includes methods, including biometrics and government identification to help block children from accessing these social media platforms.

9:26So these companies, right, social media companies or companies with a social offering make$11 billion a year advertising to people under the age of 18. And when you take a multiple of whatever it is, 10 to 15 times revenues, you're talking about essentially somewhere between$100 billion and a quarter of a trillion dollars by their ability to continue to advertise to young people despite the harms. So they're going to do everything they can. They're going to nod or pretend to give a flying fuck about the Commonwealth and children. They don't. By the way, a majority of tech executives do not allow their kids on smartphones or on social media.

10:03Why? Because they know how mendacious this shit is. This is about money and nothing else. Do you really think they care about your kids' free speech or ensuring that the LGBTQ community has a chance to reach out and find other kids? Yeah, this is not perfect legislation. But on the whole, on the whole, stop signs have a downside. But they still make a lot of sense. I don't doubt that there are probably three or four, I don't know, instances of people that had a terrible reaction to the vaccines. I don't doubt it. And guess what? it's still hugely worth it. This is just so unnatural that we've let this go on for so long.

10:41So kudos to Australia for trying to implement and do something about it. The legislation will be introduced to the Australian parliament this year and if approved will take effect 12 months later. And again, for those of you who are thinking about academia or don't think a book can change the world, they are banning phones in countries because of a book called The Anxious Generation by Professor Jonathan Haidt. Also a lovely guy. He's a lovely guy. Anyways, thanks for the question. We have one quick break before our final question. Stay with us.

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12:46When did making plans get this complicated? It's time to streamline with WhatsApp. The secure messaging app that brings the whole group together. Use polls to settle dinner plans. Send event invites and pin messages so no one forgets Mom's 60th. And never miss a meme or milestone. All protected with end-to-end encryption. It's time for WhatsApp. Message privately with everyone. Learn more at whatsapp.com. Welcome back. Question number three. Hi, Scott. My name is Molly Stark-Dean. I'm a huge fan and an NYU alumni. I landed a new job at the New School teaching journalism in the machine. I feel really comfortable talking to large groups of people, but my class will be a small group of less than 20.

13:32How do I change my mass communication styles to accommodate the class size? Are there any secrets to teaching and grading AI projects? Any advice is welcome. I'll take this in reverse order. And thanks for the question, Molly. And congratulations. I kind of fell into teaching. Actually, that's not true. I knew I was wanting to teach. I was thinking about getting my own PhD. My mom got sick. I kept a date in an MBA, but I've always wanted to go back to teaching. But I find it very rewarding. Basically, as a teacher at a university, you just have to be sort of the best student in the class. Some people are literally the expert in their domain.

14:05Most of us aren't. We just do the reading and try and be very well prepared in class. But, okay, so how to grade AI projects? Shit, I don't know. What I can tell you is that I now have an eye and can spot shit written by AI. And I'll circle it and say, AI, question mark. And when I say to my kids, my kids are, the average is 28. These are adults working at Google and Salesforce and Bridgewater. And I'm like, look, if you want to turn something in and you want to be AI and not do any work, have at it. But the whole point here is to learn some skills. And generally speaking, it's interesting. I can actually now pick out AI written material, or at least I think I can.

14:44What I can help you with is, all right, if you're blessed to have, I used to have, when I first started, my classes were only 20 or 30 kids. Word got out that it was a good class, and now my classes are 300. What you have or the advantage you have with 20 kids, quite frankly, is the Socratic method and student engagement. And that is you can get to know them. And what you're meant to do, I think the best classes are, I taught three-hour sessions. was an hour of actual content and lecturing, and then two hours of critical thinking and debate. And that is, I would say, okay, should Nike take money out of advertising and open stores and vertical distribution?

15:19And I would say, Ellen, please make an argument for this as it relates to trends in modern day branding about vertical distribution. And then she'd get nervous and fumble over herself and try and make a comment. And then I'd say, okay, Joe, disagree with her and show why she has this wrong. And then he'd even make something less cogent, but the class would have time to absorb the issue. And I'd start calling on people and asking them not to argue, but to thoughtfully debate, really come out, come up with things, push back on them. I'm not afraid to say, look, that was really intelligent, what you said.

15:52What you need to be able to do is say it in a third of the time because it'll be three times as powerful. I'm gonna come back to it in 30 seconds. My point is you can really, I don't wanna say get in their face, but really get in their heads and make it super engaged and create a little bit of tension that they know you're going to call on them three or four times. And that creates a level of intensity and excitement. By the way, it's not for everyone. Some kids don't like that. I once had a kid come to my, actually I've had it several times, say, I get very nervous. I'd rather you didn't call on me.

16:20And I said, I'm going to continue to call on you, but you can say, I need a minute or I don't know, and I'll come back to you. And you're in a safe place, but you have to get past this. It's going to be very hard to be successful economically. without the ability to speak in front of at least a small group of people. So anyways, play to your strengths, a small group of people, really active conversation with 20 kids. If everyone hasn't spoken at least once during the class, you have failed. You're not as much a teacher as you are a maestro for a really robust conversation. But congratulations on your new role.

16:52I think it's very rewarding. Thanks for the question. That's all for this episode. If you'd like to submit a question, please email a voice recording to officehoursaproptomedia.com. Again, that's officehours at propertymedia.com.