All-In with Chamath, Jason, Sacks & Friedberg

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E6: Big Tech antitrust aftermath, potential effects of an M&A clampdown on Silicon Valley & more

by Jason Calacanis
July 31st 2020

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All right, everybody, welcome back. It's another episode of all in podcast, the podcast that is racing up the charts. Despite the fact that we recorded every three or four weeks. There's no marketing. There's no ads in this podcast is just four friends who played poker together who have decided to talk about the most important issues in the world. Welcome back to the podcast, David Freedberg, the Queen of kin Wah himself obviously climate dot com pizza and on undisclosed beverage startup that I'm not supposed to talk about it. Sorry about that. I know a lot of people were tweeting about this beverage startup. You're still not ready to talk about the beverage startup? Thank you, Jake. Yeah. Welcome back with I always appreciate your promotions, but when with a beverage, by the way, you guys want to talk about you guys wanna talk about Jason's home address? Because I have that. I think e wanna ask, Is that a picture in the background? I love space, by the way, As you know, but is that a picture of Uranus or what is that picture? Saturn. Saturn E

z Uh, Freeburg, obviously taking the first Virgin Galactic flight. Uh, mammoth Palihapitiya, of course. With us here, the Prince of SPAC calling in from an undisclosed location that is not burning down like the United States. How you doing on your vacay? Doing really well, thanks. Giving you the three buttons? Yeah. Thank God the microphone is perfectly positioned. So we do not have to look at your chest hair, all six of your chest hairs. Oh, my God. It's like $1000 suit that's missing all of its buttons Shirt? Rather e mean they couldn't afford to put buttons all the way up on your like, probably $2000 shirt austerity. Get back to the United States. As Jason said, my habit dasher will meet me at you when he leaves for Europe. They removed the three buttons. He comes back, the haberdasher puts him back on each shirt. Hey, does that for the entire wardrobe and of course, chime ing in his rain Man himself. David

Sacks Block professional blogger and the the fund manager of Craft Ventures. Of course, before that, working at PayPal with Peter Thio, Elon Musk and a bunch of other famous people, Um uh, two of which have gone on to have demonstrably more success than sacks. But, uh, Sacks having, of course, more than success to Montreuil success in the other 72 rocket science tests from PayPal. In between, he did a little company called Yammer, which Microsoft bought for a billion dollars. Speaking of big companies and big tech, we had a big tech hearing this week, and Jeff Bezos, Sundar and Zac himself, as well as Tim Cook, two founders and two hired guns, people who were hired for their positions defending themselves from what I thought was some pretty good questioning. My expectations were very low that anybody on that panel

would know what they were talking about. For me. I thought Jeff Bezos did the best job. He had a great opening statement and he was the most candid. Andi, I think least likely to get broken up going around the horn here. Choma, who did the best job in the hearings. I don't know if you saw all of them are just clips, but who do you think shined? I only saw it to be honest with you, your recap, which I thought was frankly, really, really good when we should. We should probably linked to that in the show notes so people could listen to it. I saw a couple of answers. Um, the thing that jumped off the page to me was I I read a little bit of Bezos. A statement. I thought it was pretty fire. I thought he did the best job kind of positioning himself. But the reality is, you know, it's kind of what I said a few days earlier on CNBC, but I just thought going in this whole thing was set up to be kind of performative theater, and it basically was that, you know, the just like the level of questions. They're just so poor. The level of understanding is so bad. And then, you know, people

just use it as a way to grandstand, and everybody did. S o you know, I wasn't completely blown away by any of it, to be quite honest, What do you think? Friedberg? Who had the best showing? Um, in those hearings, I think Zuk was the most kind of eloquent in the on point response is he was super, super well prepped for this thing. I think Bezos and and others were obviously, uh you know, they had. They had great kind of prep work done for their statement, but in terms of like warding off the attacks, I think they did a great job. You know, it was weird. It didn't feel like like Tim Cook should have been there. It was, like, kind of a random thing that he was there because everyone had an ax to grind. And the acts that everyone had to grind was a little bit different. It wasn't like this was, ah, true objective discussion about, you know, antitrust. And so the acts that people had to grind

were kind of pointed a Google and Facebook and Amazon in different ways. Uh, Tim Cook was kind of, you know, Hey, yeah, this is cool. You guys go ahead and give your responses all. Do you think that's because Apple does not have a monopoly position on a numbers basis and anyone era and or and endure because their products are so loved and universally, you know, used? I think it's actually a function of what these companies dio. So if you look at the gym Jordan rant, I don't know if you guys watch this, but Jim Jordan did this big rant, the Open first, and he went on and on, and the first thing he said he's like big Tech is out to get conservatives. And then he went on and gave all these examples about how Twitter has been pulling down Donald Trump's tweets and flagging them. And Facebook's been, you know, canceling certain people on the platform and his whole ax to grind was really about censorship on social media platforms, which has fucking nothing to do with antitrust and has nothing to do with Apple's business on DSO. Yeah, I guess my

point is like and then other people have issues with Google's dominance and ads and Amazon's impact on local business. And so there wasn't much of an ax to grind, frankly, with Apple at the end of the day. As I said, I just don't think that it was a function of, you know, a true kind of objective antitrust approach, and it was just more about like, Hey, we've all got different things we want to address and we finally got these guys here. Let's beat them up and, you know, Sacks, What do you think you with Freeburg? That it was performance art. Or do you think that or performative rather do you or do you think that there are actually substantive issues that came up during the hearings that we should discuss here? Well, you know, it was both, um you know, certainly there was a tremendous amount of grandstanding and political theater, and, um, the politicians on both sides wanted to take shots at the company's for various reasons. I mean, I think they have a slightly different hierarchy of hate. I think the the left sort of hates Facebook the most because they blame it for, um, Trump's

election, which I think is kind of a ridiculous scapegoating, which we should talk more about but on then I think the right is most suspicious towards Google. Um, but I think there are, you know, legitimate issues here as, um that were brought up. And I think the congressional hearing did score some hit points on your your previous pot. Did a good job showing some of those. Um, the these hearings were teed up, apparently over the past year by a series of subpoenas of records that the committee this is the, uh this is the house. Uh, subcommittee on antitrust had teed up. And so there were some moments where I thought that, you know, the representative scored some hits on, you know, Facebook and Google. Um, what do you think the big who took the biggest hit in all of this? Who who do you think has the most putting aside all this performance, obviously, and the politicization of everything in our country

and Jim Jordan, who to me is like the He's like the dad at the baseball game who, like the Little League game who runs on the court and pushes the Empire and gets banned for the season like he just yells over everybody, um, for no reason. But what is the actual What was the punch that landed? That is the most valid as we go around the horn one more time here. Now they've got our initial thoughts about it. What punch landed the squarest in one of these companies faces. Well, I I i me, me set this up. I think there were three big areas of concern where just about all the companies, with maybe the exception of Amazon took hits. Although even, you know, Bezos hits I think one is, um, with respect to anticompetitive actions that these platforms were taking, particularly with respect to the applications for small businesses that operated and are dependent on those platforms. I think all of the companies were interrogated about that. Um, you know, Bezos took a hit when he had toe admit there were concede that the company may not have

always followed US policy with respect to using. It's, uh, you know, third party sellers data toe to figure out how to compete with them. Uh, you know, Google was interrogated about snippets. Um, there was news today, actually, just out of Australia that the government's gonna order Google to pay small businesses for the use of its its content, Uh, for snippets, which you know. So the regulations are kind of heating up on this, but the sort of the first area was sort of anti competitive. And I think Facebook took some hits with respect to the Instagram acquisition. Um, which, you know, Uh, Congressman Nadler really went after him. And then I think, um, Giant Powell's as well on that. That's a tremendously threatening issue for Facebook, because if it is forced to divest Instagram. It would just be crippling for for the company. That's more about that. Jason has set the table to other issues that I think came up. I'll just very briefly, uh, Number two is sort of cozying

up to China. I think Google is the one that's most vulnerable here and then. The third issue is sort of this issue of censorship and bias with respect to content and politics, which has nothing to do with which has nothing to do with antitrust, the censorship issues. So that's tabled that one e think you're hitting the nail on the head. This is not about antitrust going in. I think people were, you know, kind of confused. Even Jim Jordan just I don't think he has any clue what he's talking about. He doesn't know the difference between regulation and antitrust. He doesn't know the difference between the Sherman act and like, you know, section 2 30. I think they're all kind of making it up as they go along. So in many ways I think personally that the companies that were the most at risk going in were the same companies at risk coming out, and so you know if you had to stack rank to risk. I think Facebook is number one at the top of the list. Then I think it's Google. Then I think it's Apple. And then I think far, far, far down is Amazon. In many ways, Amazon is the most inoculated

simply because the end market that they operate in this so massive, Um, and the market that Facebook operates in is so new, yet so constrained with very few competitors. So in many ways, I think that's how the risk cuts. I really think that the antitrust legislative framework that exist today isn't enough to touch any of these guys. Instead, I think what really happens is more regulatory on def. You really think about what these guys are very concerned about. It's more that Facebook, largely and then Google to a smaller degree, essentially can be kingmakers with respect to popular opinion and sentiment. And I think that they wanna have regulations, and I think that there's a good historical precedent for a bunch of industries, um that have had to come under regulation when they effectively get to 100% distribution. You know, whether it's meat or airplanes or radio or television. You know, agriculture writ large, uh, automobiles and transportation. Whenever

a market basically serves 100% of the total addressable universe government step in and they don't necessarily legislate and trust bust, they fundamentally regulate and tax. And I think in many ways that's just is bad. And frankly, in some ways it's worse because if you do that to a tech company, you're basically crippling the one thing that they're supposed to be very good at, which is to innovate. And that's the only thing that they can use to basically keep their stock price high, which is then the only thing that they can use to get people to continue to work for them. So that's the sort of circular loop that breaks if you regulate them. And I think that the risk coming in was the same is coming up. So Facebook. Let's let's take him. Let's take them one at a time. Facebook, I thought, had the worst performance because it was pretty clear that Nadler was setting them up, not on Lee to not be able to buy a company in the future, but in that clip he was sort of teeing them up that maybe the Instagram acquisition should be unwound and they should be forced to spin that off because they were

saying over and over and over again that Zuckerberg put in emails with his management team that they were going to buy these companies or kill them or copy their feature sets. And even though that may not be explicitly illegal, the fact that they've hit as a tomato is talking about such incredible market share with billions of users and because of the track record of sucker burg, you know, which may not be at all related to this, but it sets the table. No, but changes case, Jason. In fairness to mark, that decision wasn't made when Facebook had market dominance. Um, that decision was made when Facebook was still fundamentally at risk, and there was a large period of time where a lot of other people had they been left to their own devices or properly capitalized, could have actually become a relatively, you know, important competitor to Facebook. Instagram could have been at that point, but then Snapchat was the opposite Snapchat. They were at scale and then they were gonna buy it and threatened them. Either you sell to us or we're going to copy the features. I think

I think I think what, um, or logical and defensible reaction like I just think it's not defensible to say, Oh, you know what? Facebook. I didn't like the acquisition you did 10 years ago, basically because it worked. And so I'm gonna punish you 10 years later. That's crazy. That's stupid. In the review mirror, no good, more reasonable place to be is to say, Okay, this thing meaning communications writ large, has become a critical piece of societal infrastructure. And we're trying to figure out now what the rules should be and rules shouldn't be brittle. Rules should be evolutionary. They should map, you know, to the moral decisions and ideas and frameworks of the time. And so, you know, we have to figure out, for example, number one interoperability. So how can you message across all these multiple networks? You know, another simple example. Uh, you know, we legislated the ability for emergency services to be able to send a message on your mobile phone line and your landline. You should probably be able to have a back door into all the messaging network simply for

that reason. So the point is that, you know, there are all kinds of things you can do today to make this infrastructure layer of society operate in a more predictable way. On behalf of what was your best you have you thought about a regulation, Then let's stick to Facebook and then we'll go to Amazon. Sharma, Have you thought about a regulation that would make sense to Facebook whether it's divesting an asset or maybe a certain percentage of usage or allowing Facebook messenger toe work with I messenger toe work with, You know, Twitter DMS, I'll answer it in different ways. So, look, I mean, for 20 years I've run these kind of businesses, like from from one AM to a man I seek you to then, you know, at Facebook. And so, um you know, I remember in at a man I seek you we, you know, did all this hand wringing and all these meetings between us and Microsoft and Yahoo to make our messaging networks inter operate. And you know, eventually we were basically just cut off at the knees because other people just

moved around us and eventually it all just morphed anyways, away from thes sort of brittle messaging networks. My my kind of view is that I think what's best for Facebook is the status quo. And so you know, if they can basically and by the way, I think the strategy is And And Mark wrote this in his manifesto, but a couple of years ago, you know, this is sort of what led to Chris Cox resigning. If I'm playing, you know, sort of like conspiracy theorist, if you read sucks Manifesto, What he was basically saying is, Listen, we're going to take all these product and we're gonna take all that code and we're gonna mess them all together in such a complicated, convoluted mess that if and when somebody ever tells us to rip it apart, it will take another five or 10 years to do it. And that's effectively the technical read on that manifesto. It's just like you're gonna make it technically impossible. Thio unthreatened these things as independent and your visas is that's a strategy against an antitrust break up. I find that No, I

just think it's a really smart strategy. I mean, he wrote it and he published it online, so it's not like he's hiding anything. You made it. I mean, it is the beautiful part about it. He made it completely in the clear now. So that's that's the strategy is to basically make it one monolithic code base so that if and when, I think I'm not sure if this is the intention. But frankly, if and when somebody knocked on the door and said, Hey, you need to strip apart what's happened Messenger and instagram, you could say, Well, look, it's it's one monolithic code based on, you know, 50 million lines of code. It'll take me 10 years, But sure, I'll figure it out somehow. So, you know, I think what's good for Facebook as a status code now that's different from what's good for politicians. And then what's different for, um, consumers? I think what's good for consumers is fundamental interoperability. Now this is then what touches you know, Android and Apple is well liked. The idea today that you cannot have a group text message that can Onley include iPhones. You know, the off chance one of your friends is an android phone. You're basically

fucked. This kind of which happens every six months on our group that Freeburg. What do you think in terms of Facebook and any potential action that could be taken, or any possible solution to them having such a dominant position? Because they are the only one of the four that has a dominant position? I would think about the You know how these businesses are kind of built right there. In all these businesses, there's an infrastructure. Layer three infrastructure layer, in the case of Google and Facebook is reasonably similar. It's a bunch of data centers and hardware and software infrastructure to run all of their services on top and then on top. There are consumer products, and then there are advertising products, and the and the customer base for the consumer products is obviously users. And, you know, customer base for the advertising products is thes. Advertisers that pay to access these consumers and give them ads and get clicks from them and sell them stuff

. Um, and so if you think about what do you pull out? Um, it sounds like on the Google side, there's there's there's concern both on the advertising and on the consumer products that are being offered, and the scale and the leverage that Google has and how they make those products kind of come to market. Onda with Facebook It's really about this absolute kind of monopoly on, you know, on social products and services, whereas Google's got this great monopoly on search products for consumers. So you could kind of take a layman's view and say, Hey, like, rip out what's happened rip out, uh, instagram And you know, then Facebook is good, but the problem is in that infrastructure layer, they've created the social graph and this connection between, you know, all the people that you know and they've got all the stuff sitting on the same servers. And Jamaat points out all the same code base, and there's a lot of commonality there. So the reality of like ripping something out from there is a lot more nuance and a lot more challenging than just saying, Hey, you've got to get rid of WhatsApp where you've got to

get rid of Instagram on. But it's more likely some sort of Chinese wall situation where you end up with a negotiated exit, continued ownership and control. But you know, almost like what happened with the banks in the eighties, you kind of got to separate one side of the business from the other. That could be one way that this goes because, you know, it's really hard to kind of break apart, given the way that these businesses were built and how you think about that solution, Uh, which, Uh, they conceded, Hey, we're not gonna buy any more of these, uh, competing social networks, which I think it would be kind of hard for them to buy one right now. I think that's done. I mean, like, you can even see that Fitbit. I mean, Fitbit is, you know, what is it? A 1.2 or $3 billion acquisition? It's gonna take almost two years to close. And Google is already making concessions antitrust concessions to the you for you know, this is a $1 trillion company trying to buy a $1 billion company. So I think Large acquisition and M and A by the Big Four it's impossible. Is that good for society

trauma? They're bad for society. Is it good for our business of investing in services are bad for us investing in startups. Well, I. I think it's good in one very important way, which is that it forces the capital markets to support thes companies. And what I mean by that is, you know, I told you guys a couple times, but in the year 2000, there was 8000 public companies in the year 2020 July 2020. As we sit there August 2020 there's about 4000. So we've seen a shrinking off 50% of the number of public companies. So the idea that there isn't an M and a on ramp anymore means that Mawr Capital and the capital markets will become more fluid. And we will support emerging growth companies in the public markets. Is my suspicion if only there was, Yeah. If only there was an easy way for these companies to get public. I had David respond. Well, I was. I mean, I think that I think you're raising the right issue, which is, um, the chilling effect on M and A that these hearings we're gonna have

even if Facebook has never broken up or or that deal is sort of retroactively challenged, um, the big four tech companies have to be looking at these hearings, and now they're gonna be second guessing every acquisition they want to make, and it's gonna have a chilling effect. And I think that's a disaster for Silicon Valley. Um, because we know that most of the startups don't work. Um and, you know, uh, and there's really only, you know, most them go out of business and there's only two good exits. One is an I P o. The other is M and A. And if you take the m and a exit off the table because it's no longer sort of feasible from a regulatory standpoint, um, not all those companies are gonna Yeah, but David, what you what you're saying doesn't make logical sense, because if those companies are shit, anyway, they should be going out of business. And who cares about an Aqua hire or some mini modest higher that gets you two times your money? There's a lot of acquisitions, um, where the acquirer is picking them up because they provide an important

component or technology or product. But that that that startup would not have been a great standalone public companies would ever be worth more today. And would you be worth more money. Would your investors be worth more money if yammer had specked Yes or no? David. Um uh, that Okay, So, David, your your argument makes no sense. I think you're playing to lose. It's not that it doesn't make sense. I think David David does bring up something that's important in the following way, which is there's a lot of companies Jason that get to a certain amount of scale. And then they basically start running out of oxygen, whether it's because they've overbuilt or they've over higher, they've over spent or there's a natural audience for the product. Yeah, maybe, but I think I think a lot of it is just sort of more over building and just kind of distracted capital allocation. But then, you know, you need somebody to come in, and this is the problem with Silicon Valley, and I think what David speaks to is the following. If big tech Emma is off the table, the single biggest thing that will change is valuations

by late stage, private late stage privates. Because if you know that you can't get a two X mark to market from the last post. Guess what will happen to your post money. It'll go way down, right, Because that was always the understood assumption. You know, all these guys, these late stage money can come in and say, Well, sure, I'll put you know, $2.5 billion post a $3 billion post, because in their mind, what they've been taught is that immediately sets the mark to get acquired as two X. And in many ways, Facebook started it because Facebook came to buy Instagram literally weeks after that growth stage round at 500 million. That's why they paid a billion one. They doubled evolution, but wouldn't it hold on? Wouldn't it be healthier, though, for the entire ecosystem? If we weren't building those late stage companies, uh, to be flipped to a major company, maybe merging them with medium sized companies or slightly stronger and then taking them public to your point mammoth? The point is, if you don't have a fucked up cap table, you could do all of those things. It's the fucked up the table, so this solves that. Who

needs this late stage capital coming in and doing these fake aka Crazy rounds? Why not take the company's public earlier. Well, because, look, uh, you don't always know what's gonna happen. I mean, this is the reason why Instagram sold is the reason yammer sold is you don't know exactly what's gonna happen. You don't know what the outcome is going to be. And in a lot of those cases that you're saying, what would become I pose? Uh, if they weren't acquired. Well, a lot of them just, you know, aren't gonna work. It's it's crazy to be taking those exits off the table when both the startup and you know, the acquirer, the big tech company, you know, want to do the do the transaction. Um, and and and and And one of the reasons why I think these, you know, there are a lot of these emanate type outcomes is because big companies have realized they're not very good at R and D at sort of good at sort of new product development. And so what they've done is they've outsourced a lot of their R and D budgets to m and A. And so they let the startups run the experiments. You know, in any category, uh, in any new area you end up having

a dozen of these startups get funded. You know, we make fun of it because they're all you know. There's so many competitors in every little space. But those startups are the laboratory where all these experiments are taking place. And then, you know, the big company comes in at the end and see which experiment reality acquire it, E. I mean, I think the advantage of being a platform business is you can plug something in and immediately gain a lot of scale from it. So I mean, you know, Instagram and YouTube are perfect examples. They were, you know, reasonably fast growing had millions of users. Um, but once they were plugged into the engine of the bigger platform, they were worth 100 times as much over a few years because of all the usage and the infrastructure and the distribution etcetera, that was provided. But, you know, it looked insane at the time to pay a billion dollars in a billion six for those two businesses. Each of them are easily worth 100 billion plus today, probably some multiple of that on DSO. I think

it's Zach's Point is right is like I'd rather as a look. I worked in Emma at Google for ah, couple of years. Early in my career, I left Google and in 2000 and six, and a lot of the infrastructure that makes Google's, you know revenue engine was acquired. You know, we bought a company called Applied Semantics for 100 million bucks or 100 something million dollars at the time, which ultimately became AdSense and applied semantics could scan a Web page on, basically, determine what keywords that Web page represented, and then match ads from AdWords onto the Web page. That acquisition with $100 million. I mean, I don't track anymore how much but tens of billions of dollars of revenue were generated by that, Uh, you know, by that AdSense system today we're bringing up something really important, which is at the time, Google was not a trillion dollar company. So the point is that Google had access to enough capital market scale where, you know, nobody is going to get in the way of a 5 10 $20 billion

company trying to buy $100 million business like that. I just don't think you're going to see you know any regulatory body? Take that seriously. So didn't we just paint the picture? You What is not the perfect picture? E Think what it means is the $20 billion company. Now, probabilistic Lee can ask you in. So, for example, like look at this Intuit creditkarma transaction, right? The question is, you know, could a smaller company have bought creditkarma? Probably, but not at the price that you know into it is willing to pay now into it gets big enough where there is a chilling effect and regulators say Okay, you know, you're above a magic threshold and, you know, no bueno on the M and a anymore. Now, Creditkarma has two choices, which is maybe they sell for four billion to a very different company. Right? Um, or maybe they sell. Actually, let's take a different example. Papal PayPal is now a top 20 business in America, right by market cap. So if paypal isn't allowed, for example, to buy, uh, you know, a bunch of sort of like, you know, payment rail payment companies. Um, maybe

what happens is like a you know, a medium to your business is allowed to buy them, and Now, all of a sudden, those meetings, your businesses can compete with people. That's what I think, that that's actually seems like the best solution that we've. We've kind of stumbled on here. Can't slack then become or Dropbox or uber or any Airbnb Now they could become the acquirers of these companies, and then they could compete. So why don't we just say, Hey, if you're over a trillion dollars, where if you're over 500 billion, you can buy 1% of your market cap? I'm just throwing a Jason. Let me jump in on this that That's not what Nadler was arguing for. You know, it's not like Nadler was saying that if you're a big fork tech company, you can't do these deals. But everyone else can. The the standard that that Nadler and the precedent that he was essentially setting in that hearing is, you know, 2020 hindsight bias. You know, if if a company acquires, um, you know, putting, that s I agree with you on that. But putting that aside if we were going to come up with the rule because we know the rules as they currently

exist are inadequate to do any type of regulation for these companies because none of them have 95% market share. So if in fact, we need a new solution how about this for a solution? I was putting it out here. You can acquire something that is under 5% of your market cap. So if your market cap over the last years a billion, you could buy something 50 billion or less if you're under five, if you're under 250 billion, you could buy whatever the hell you want. But, Jake, let me Let me Let me ask this question. You know, the points we made earlier about YouTube and Instagram They were successful because of the scale of the user base of the platforms that acquired them and the work that had already been done, and so they could have been totally successful. With that, they would have been success, But would they have been worth $300 billion like they like? But Instagram was 13 people. YouTube was a couple dozen people. It doesn't matter. The story is a small group were brought in with with an interesting platform that was kind of working at the time, and then they became these $3 billion platform. So that's one

scenario, and a lot of money could be used on Google. And Facebook used a lot of money to be the best acquirer to be able to acquire those businesses. And that's the argument for this. Hey, there are such a scale right now. No one else can compete because only they can pay this This fee, as Jamaat points out with Intuit in creditkarma Onley into it, come by credit karma at that price. Now the alternative way to think about this is what if there is vertical expansion? So instead of leveraging their existing platform in their existing dominance, what if Google, in this case, is trying to get into the cloud business right there, competing viciously with Amazon and Microsoft and others in this enterprise cloud business marketplace that is continuously evolving, changing Every year there's a different kind of lead and a different company that suddenly growing faster than the others. And Google spent $2.6 billion to buy Looker. Buying looker for $2.6 billion does not advantage Google's advertisers. It does not advance. I mean to some degree. It does not advantage Google's users, and it is not about platform dominance in their traditional ad business. It's about vertical expansion

into a new market. So here's how I'll rewrite the law. David, if you have over 70% market share in your vertical, you cannot make acquisition additional acquisitions in that vertical. If you have, they're buying into a new vertical right s. So then the caveat is, if you're buying into a new vertical, you don't have a way already have that we already have. I mean, that that's that's basically the way the rules work today is that you look at market share. I mean, CO cannot buy Pepsi. Facebook cannot buy Twitter today. Um, but what we're talking about is at a much earlier stage are you gonna interfere with the M and A Or are you gonna retroactively go back and unwind these transactions? Transactions makes no sense, e Think the point is, this is all water under the bridge, and but the incremental lemon A for these big guys is very unlikely. Now David does bring up a good point unless it's in basically a, you know, do nothing not that important you know, in the positioning category, relative

to the core business. And so this is why, you know, again, go back to, like, why it did look er close faster than Fitbit. It's half the price. Lookers twice the price, right? Fitbit is half the price. You Mark Newmarket completely. Yeah, Yeah. And so So there is a fear that there is going to be a calm, pounding advantage that regulators have a responsibility to stop. So I think it goes back to, um once you get to a certain level of scale, The thing that we're missing with online businesses is this kind of like, you know, there's like a There's like a great original sin here that we're not admitting, which is that the Internet is now a pervasive and critical part of human infrastructure. As such, there needs to be people that regulate and manage the Internet the same way the FAA manages and regulates planes and wind turbines like to think about the FAA. Let's just take aviation. It is impossible for

you to go and just go into your garage, build some random thing to carry people from point A to point B in the absence of some certification. Okay, take agriculture. It is impossible for you to basically going like, build up a farm and build up, you know, uh, livestock or whatever and all of a sudden just supply it into fucking so bees and Safeway without any sort of, like checks and balances. Similarly, And the reason is because it's simple human infrastructure that everybody relies on. And I just think that we have to admit that now the Internet also those air life and death this can be too. I mean, like, wasn't the guy that read the Post about, like the pedophiles and the pizza joint came up with the naked 47? Yeah. I mean, it's quite an edge case compared to flying on a plane. This stuff is life and death at some level. But even more than life and death, it's the anointing of power that then determines life into that. And that's I think the key is that its power. Jamaat. Do you think that there should be an Internet regulatory

body that decides how businesses operate and how content is censored and managed on the Internet? Is that what you're kind of suggesting? Yeah, So let me be very specific. So I think that there are very specific kinds of businesses on business models that should be overseen. Specifically, I think the first and most important thing is a body that oversees the collection of user data and how it drives targeting and identification. So privacy concerns around that that's a that's a no brainer. Um, that's the first one. And then I think the second one is something that essentially tears the fig leaf off of Internet companies and says, You know what? You are the equivalent of a publisher and a platform some weird hybrid that we didn't think could exist when we wrote these rules. And so we're now going to adapt these rules because, you know, if you think about it, nobody is happy with the Internet publishers today. You know, the left

, things that excuse, right, the right things. Excuse left, everybody's confused. Nobody gets what they want on DSO. I think somebody has to step in and kind of so I think this is a good segue. Two sacks this point and then I guess we we have We have a fork here Now in the discussion Do we want to go and talk about censorship and that specific issue across Facebook? Or do we want to get into Amazon for a second? Which way do we want to go? Sex? Oh, okay. Well, let's let's jump. Let's jump the fence here. Should there be two timeouts point sacks? A regulatory body that decides what people can and cannot say on social networks, Yes or no? No. I mean, let's let's think about that. What we're saying is we need the politicians to set up a regulatory body to control how the people talk about the politicians. I mean, that seems like a recipe for disaster. What about specific lies and intentionality to, um

, frame debates incorrectly? Sexy? That's not what I'm saying. I'm saying like like you go to a movie and you know, there's a little blurb here that says Who could go to the movie and who cannot, Um, you know, you get a you buy an album and it tells you whether there's explicit lyrics or not like you. Before you turn on the TV. There's like some rating agency that tells you whether your kids should be watching it with you. My, my point is what is the equivalent version? We all need to think about what it is. But to say that there should be nothing I think is crazy. Sacks. Well, well, I think, um, e I mean, those ratings are mostly about, um you know, uh, standards related toe kids, you know, and, um, the big Internet companies already have a lot of child safety features. I don't know that you need to create laws around that. Um, and I don't think that's what we're talking about, anyway. I mean, I think the big debate about Facebook or Twitter is whether they're engaging in censorship or bias

. Um, right, And that that goes way beyond, um, this topic of child safety. So Okay, let's let's unpack. I don't think that they're censoring. All I'm saying is, I think you need to label, and you need to be more clearly designate what this content is so that people can choose, Like, for example, on twitter. You know, I follow a bunch of people on the right. I follow a bunch of people on the left. I follow one or two Cuban on accounts Onley because, like, I just want to see it all. And then I want a judge and I feel like if I can see everything Aiken sort of like, lay it all on the table and figure out where the rough center is and kind of move to that, you know? So you feel you're intelligent, mature enough to do that. She meth. But the rest of the world isn't No, not really. But I try to do it because I think it's important for me. Would you rather the platforms or some regulators come up with what you could see on those platforms to mouth again? Not what I can see. But there has to be a simple way. For example, you know, you could have something. And again, this, this

, this all all this does is it breaks business models, which then it breaks modernization, and it breaks the market cap of these companies. But for example, let's just say you had a new kind of job, which was, you know, all these you had you hired 500,000 people and these were a combination of lawyers, journalists, you know, academics, all kinds of random people, artists, everybody Okay, it's normal, folks, blue collar folks and you paid them full time to basically read stuff and kind of like, you know, you know, wisdom of the crowd style. Tell us where the sad in a spectrum. Okay, uh, this is on the left. This is on the right. This is kind of center. This seems laughable. This seems unbelievable. This seems relatives incredible. And I think that you would get, you know, very quickly, and I don't think the Leighton see would be that high. But probably minutes where you know, 40 or 50,000 signals would tell you whether something is you know, where something is in the spectrum of you know how to understand it. And then that that system that

system will get paid, get, get played, though I don't get gamed, right. Like someone will figure out a way toe, turn all of tomatoes, tweet labels into super evil tweets. And you know, now and everyone will meet you because you're super evil. Yeah, I think we just defined George Orwell's 1984 like or cancel culture, right? Like you're being 500,000 or a million people. If Facebook and Google and these guys come together and Twitter and they pay a body of people to do this work on dso You don't know who posts it. You just see the content. You read it, you label it. It's a classifier. So what do you What do you think you would get classified as? And then what if you disagreed with what you were classified us so that David, like what I'm saying is you wouldn't know. It's me. Like if I wrote an article on medium right and I wanted to publish it in Twitter. That article first hits a Q. 50,000 people read it, they human classify it and then it gets published. And now what? If you don't like the way it's classified and you don't want those tags attached to it and you want a place to publish freely without classifications

, without tagging? Then there will be a company that supports that, too, and you'll see how much people care about that. E. I think the free market could handle what you're saying some off because that I think David's concerns would be the same as mine, which is who is doing this classification. What kind of transparency is there? And we already have the wisdom of the crowds, which is things that are outrageous automatically get pushed up on Twitter, which allows anonymous. And then Facebook seems to be all the top trends seem to be on the right. Um, let's swing over tow sack sacks. What do you think of of the 1984 proposal from, uh, from a 500,000 sensors, uh, telling you what to think of a post before you read it. E don't want. It's the question, but it's been saying, e it's it's a It's a little bit like Twitter fact checking The politicians, they don't like it za form of like soft censorship. And, you know, I I actually think that, you know, Zuckerberg gets attacked the most

, but I think his position on speech actually makes the most sense. I mean, it seems like what he said is, we want to be a neutral free speech platform, and, you know, whereas I think you know Twitter and Snapchat, for that matter, much more likely to engage in either, uh, you know, censorship or or fact checking, which is paradoxical. Twitter's initial position, David was it was the free speech platform. No, I totally agree because I think sucks Position is the most defensible, but it also is the most untenable because it's the most. Its's the least technologically and socially palatable. But it is the most defensible and philosophically, in my opinion, the only position you can have. But it's not gonna be what winds right? Well, its's. The reason why Zuckerberg is hated is because if you're going to different defend the principle of free speech, you always end up defending speech that society hates, you know, like the Lun smoky and eso

. You know, Zuckerberg, I think, has done the best job sticking to his guns. I mean, the reason why Twitter is sort of, you know, loved on the left is precisely because they gave in to the mob and they've, you know, they've started, uh, taking down accounts that the mob doesn't like or are, you know, fact checking them, Whereas I think, you know, and and that Zuckerberg's refusal to do that and by the way, I don't think he's been like perfect in this regard, but has been much better about standing up for the principle of free speech. That's what's made him, you know, anathema to the left. I think that and the fact that Facebook still gets blamed for free break. I have to have to specific follow ups to what David just said for you, which is one how much of this has to do with anonymity being allowed on Twitter versus not being allowed on Facebook. And, second, how much of it has to do with the fact that we have algorithms, that trend topics If we didn't have those algorithms trending them, perhaps this wouldn't be an issue, because if you wrote something that was inflammatory

, it wouldn't. And false. Let's say in that situation, both characteristics. It wouldn't go to the top of the list, which is what everybody's kind of upset about is that something that's false? Goes to the top of your feed comment on those two issues? Well, I think your second, your second point, an important one, which is like social media, helps to enhance the stimulation of the amygdala in the human brain. You know, you see something that makes you angry or something that makes you related, you are more likely to engage with it if you see something that is kind of a rational discussion about something that doesn't incite emotion, and you you're less likely to engage in it. And so whatever the engagement model is, it ends up, you know, creating a lot more vitality and chatter, and it kind of gets brought to the surface. And there's a lot that's been written and said about this that I don't think we're kind of uniquely in a position toe to say anything more on on. But that's obviously what a lot of people are kind of concerned about is the inflammatory and polarizing nature of the content that is getting highlighted on these platforms and is getting greater distribution on these platforms. And then I think your prior

point. I'm not sure it's about anonymity as much as it is, um, about any form of censorship that ultimately can be viewed as biased. So Jim Jordans points were actually, you know, as much as the guy rants and goes on and sounds like a guy running on the soccer field to punch the coach, um, it's really interesting to hear the point of view that as a conservative, I believe that a lot of what Donald Trump is saying or what some conservative voices they're saying is reasonable in that voice should be heard and to hear over and over about Twitter pulling these things down and then seeing a whole bunch of stuff like anarchists taking over Seattle and taking over Portland and they don't get their stuff taken down. You know them claiming that they could hold down the streets of Portland and Seattle because that's, you know the way that it should be. Doesn't, you know, incite any sort of censorship? But Donald Trump saying he's gonna end it inside censorship on DSO I think it's not as much about anonymity as much as it is about, you know, having censorship tied to a voice and censorship tied to a labeled

or tagged point of view, or labeled or tagged individual or voice on the platform. So without anonymity, I think the problem goes away for Twitter. I think Twitter is working on a project, and I've been saying this for a decade that they should let everybody pay $50 a year, $5 a month or 30 bucks a year, $10 a month, whatever it is to go through a verification process to make sure it's their name on the account, which, by the way, next door is doing at scale. Not only do they know it's you, they know it's your your the person who lives at that address because you got a postcard there, I think, and in Korea, South Korea, you're required to put your Social Security number in tow, open a social account that would solve the entire problem. Now that may seem, and then it would drive other users who want anonymity to anonymous platforms. And that's where Twitter. It's trying to have its cake and eating it, too, and they're falling on their face. They have one level, which is troll accounts, because you can do whatever the hell they want playing on the same playing field with people who can. And this is just a disaster for them. Jim Jordan may be an idiot, Andi, just a loud mouth, but

I think I agree with you. If the situation was reversed and we were talking about Obama being censored for some reason and the right and right wing people or left wing people being silenced or deprecating on the platform, you know soft band people will be up in arms but that was a different form. He should be doing that in a censorship, and they should have a censorship committee talking about that. What do you think, Mammoth? About these two issues? Anonymity on these platforms and the velocity in which things that outrage people. Because you yourself mammoth went from holding. But I wanted to do this stuff for each month. You yourself went from being on perennial guests on a lot of these programs. And then now, since you've been a little bit more vocal about how you feel about social issues, when you said break everything up, who cares on CNBC? And then when you said, um, who cares, let them fail. They don't get their summer Hamptons house. You gained 150,000 followers. And now you've learned that if you're mawr, I don't wanna say the word outrageous. But if you're more vocal about social issues, you're going to gain a lot of attention. Um

, do you think you should have been labeled as somebody who is hysterical by your 500,000 people or being outrageous? Um, both and all platforms were littered with fake accounts. The the interesting factoid from yesterday was. I think Facebook says they take down 6.3 billion fake accounts or something. Some crazy, crazy, crazy numbers. So they're paying playing whack a mole. Twitter just basically says, We don't have the team in the infrastructure, So just let the six billion the cows beat. That's the only difference between Facebook and Twitter. Its's an acknowledgement of the problem and a transparency on the reporting. So, you know, Look, my my point of view on this is that I think that, uh, irrespective of what I believe about free speech, I think it's becoming harder and harder for me, just as a layman reading to figure out what's true and not true. I think that the line is getting

very gray, and I think that sources that usedto have complete, um, integrity that were, you know, just just beyond reproach in terms of their integrity. Um, it's not clear anymore because the business model of the Internet is driven towards clicks. So I think what's actually happening is that we are dismantling um, information and news and journalism. Um, the first place where I think that goes is places like Sub Stack, which is going to rebuild it bottoms up where people will vote with their subscription dollars, what to believe and what not to believe. And then, on top of that, people will overlay aggregation tools so that you can actually have multi subscriptions and create sort of like next generation magazines and content subscriptions or whatever. I think that's where the that's where the world is going in terms of information and content. Jason, my honest belief is that I don't think I've ever said anything

that particularly crazy. I just think that I'm reasonably intelligent and I'm precise and what I say, and it cuts through a lot of the bullshit because most people have nothing to say. So you know, when I make a fucking investment, I write a one pager and I posted, and I'm willing to be held accountable. You know, when I don't understand about climate change, I just post about it, even though I want to invest $2 billion of my own money in it. And so I think being authentic and just being straightforward is sort of like what is valuable at some level on the Internet. E think that governments are going to regulate these companies. Let's just be clear. Yeah, And you, you, Whatever I think about censorship, it just doesn't matter what I think. Because governments are of a belief that these platforms craft and shape public opinion and sentiment which drive the aggregation and coalescing of power, which fundamentally disrupts the business model of the politician. Uh, let's go swing over two sacks here. Sacks. Any

comments on that censorship issue or, uh, the once very respected sources of news, Maybe being less respected Now, I think the New York Times came to mind when, uh Mammoth was sort of outlining that phenomenon. And then we'll move on to Amazon. Yeah. I mean, I think there are things that these platforms could do toe elevate the, you know, the discourse. You know, the quality of the information people are getting. I think that eliminating the body counts. I think it's a huge problem on Twitter that that you know that they're out there. Um, they're not really doing much about it. I think that's something they could improve and fix. Um, you know, requiring people toe to be who they purport to be, you know, I think, and this is tied to the body issue of, you know, not allowing thes sort of sock puppet accounts. Um, s O But the thing about those those steps that they could take is their speech neutral. Write the rules would apply to everybody, um

, you know, to free Berg's point. And so I think they should look at doing more of those things. But, you know, what I'm concerned about is that, um you know, eh? So much of the debate. So much of the pressure that's being brought on Facebook is toe actually moderate and control the type of speech that occurs on its platform. And, um and I think the reason why Zuckerberg is is attacked Mawr than say, you know, Jack Dorsey is because he's been more resistant to doing that. I think I think it's actually because you have a bunch of what seems like real names. But again, I think that there is a fake account issue on Facebook. That's Justus bad as Twitter. It's just the differences, you know, the fake accounts on Facebook have proper first and last names, whereas Twitter you have all kinds of alphanumeric garbage as an account name. So here's a different proposal why, you know, maybe what? Maybe what we need is the decision that we allow complete, unfettered free speech, and there's a layer of both

Facebook and Twitter and YouTube where that's completely allowed. But the precursor toe have that access is you need to put in your Social Security number or something that's uniquely identifiable by your government, so that if you say something and there's a law against you saying something already a pre established law, there is recourse. Where can you go on be anonymous to mob? Because, you know, on a Web page you can create any Web page you want. Nobody's going to say then I think what it creates is a decision by a user to coalesce on completely different platforms. If what you want is complete anonymity for a very different reason, and I think that that's very reasonable to my point is the solution to this David is diversity, not toe have one thing, and to companies trying to create some Swiss Army knife Frankenstein product that solves, it's it's just not possible. And I think we're both saying the same thing, which is like you have completely different behaviors trying to go in through the same channel. It's not possible. I actually I like the idea of these platforms doing MAWR to eliminate body counts

and and anonymity because those are neutral rules of the game, and they do improve the quality of the debate that occurs on those platforms. Um, I think those would be good things. I think it's just hard to do. I think that those companies may even want to do that. It seems like Facebook certainly does. It's just a hard thing to X. It's actually not that hard. I mean, if you just said, Hey, listen, this account, in order to have a verified account, you have to have a phone number and email. So that's two steps that ah spammer trying to create. A lot of accounts would not be able to do because you have to get burned a phone number after burner phone number, which is a cost. It's possible, but it's a cost. And if you wanna be verified, we need your phone number and we need your email address and we need you to you put in your credit card and get charged a dollar on your credit card just over over credit over overnight. Read it would become the new Twitter. Overnight read. It would be cut. Four. Chan would become the new Facebook. I mean overnight. Like you know, there's a have an account Freeburg. But to have the blue check mark so you would still be able to. And then over time, people would say, I don't want to see replies unless

they've been verified and it could be just a toggle. You pick. By the way, Facebook, Google and Twitter already have this mechanism because that's what they do to graduate advertisers up the spending curve. You know, you could start as an anonymous advertiser, just spending you know, one Z two z dollars. Um, you know, just off of a Web page, basically, just you go through and you do self serve ads, and the more you spend or the more targeting capability you want, you graduate. You self identify, you give more information, you get more capability back. You get more trust in the system. So it does exist for the customers of these big tech companies, and this is the other big thing. What it shows you is that it's actually solve the problem for the customers is just doesn't solve it for the, you know, futile ist feedstock, which are the users because they won't pay. And so if you said hey, listen, there's a user to customers they could be The Twitter is coming out with a paid version, so they're obviously on the on the halfway there. They're going to come up with the paid version of Twitter. Jack said it on his, uh, quarterly earnings. I'm gonna I'm gonna sell my Twitter stock

. Well, I mean, it's not. It's not one of the other Freeburg, though you don't have to pick one or the other. You could still be anonymous, but you have the opportunity because right now they're not accepting new verified users. And unless you're a muckety muck, you don't get to even go down that route. So shouldn't everybody I would like? I mean, I person would like Twitter mawr if it verified identity. I mean, I don't I don't think there should be a speech tax. I don't know why they have to charge a dollar, but but taking taking additional dollar means we have your credit card. It's just another hurdle. That's why you could do it like a $1 off without actually charging anyone's card. Yes, you could do that, for example, like if you if you actually force people to verify by putting in their Social Security number like there's a couple of guys I follow, I'll just name them Scott Adams, who wrote the Dilbert comments. There's a guy like Vince who I'm really not sure I understand his politics, but I follow him because I because you know he goes all kinds of a point, is you know, it's not just people on the left, but I think it would be people on the

left, people in the center of people on the right who would basically pay the quote unquote tax because they're already riel people, and they would just They would then have more guarantees and assurances that Twitter won't be arbitrary. And I think that makes Twitter better. And if it maybe it makes it smaller, right, and then maybe you're right. Freeburg, like fortune or HN or read it, become good for a different kind of behavior. By the way, I mean, like, that's what we do today. We don't need the same fucking thing every goddamn day. We don't wear the same pants every day. I agree with where he's going with that. I mean, the defining feature of read it is that it is basically anonymous. People have user names, but you never know who it is. Pseudonyms. And it creates a certain kind of conversation. And that's fine. Twitter is supposed to be really people. I mean, it's not I mean, Facebook even more so. But, you know, when I think about the accounts that I follow on Twitter, um, you know, it's it's, you know, all of them are real people. Occasionally you'll get occasion. You'll get a anonymous. Yeah

, you'll get, like, a startup L. Jackson or something like that And, you know, and I think that's okay. Yeah, but you would choose to then follow them the difference with, like, a startup. L. Jackson. Is there not a fake account? There's using a pseudonym, right? You know that when you follow them, and over time they've proven to be toe, provide some value that makes people follow them, and so you could be anonymous. If you get a certain number of followers, I guess you rise above the noise Here's another solution. There are no, um, there's no nuance about truth or how much you believe this is true as a voting mechanism. So if you were verified on Twitter and there was a scale that says how true, how truthful do you believe this is? And you could slide it on pick. You know, from 1 to 5, you could actually have another signal there. What do you think about some sort of a signal to Matt's point about community values saying, I buy this. I don't 97% of people wouldn't use it, and the 3% that do would completely biased the results. Okay, try mouth what

you think would happen. I agree with Freeburg. I I don't I don't think that Z I don't think it's a really good idea. My only comment was just offering the other thing. By the way, I know it sounds crazy. It's just offering it as like the, you know, the way that this, um, negotiated solution will end up, and it's kind of sort of what these Internet companies are being forced to do, which are these weird, you know, pseudo action bodies that, like review things and, like you know, So it's all just a slippery slope to that outcome. But by the way, you were speaking about started Paul Jackson, you know, there was another guy, Super Mugatu. Um and you know, he turned out to be this, you know, really good young up and coming investor Dan McMurtry. And he was soon, you know, he used a pseudonym for a long time, built up a huge audience and then flipped himself and basically came out and said, Here, my name is Dan McMurtry and I run a fund and, you know, it was wonderful. Yeah, I think it's a very good marketing strategy. It's a growth strategy now. Beast started about Jackson. When you venture partner, what are you going to announce? That you're the guy behind

BC brides? I'm not ready. I'm not ready. I'm people thought it was May. I was like, I'm getting tortured. Wait, Do you hear that? I'm the guy behind zero Hedge. That'll really well, 00 hedge is instructive. Didn't he get banned or the she get banned for posting about stuff in coronavirus that eventually turned out to be acceptable and true? Now imagine if he had verified his account. He had his Social Security number. He had all that stuff in there, just verified. That's just information that zero hedge Israel. It's a real person. And you know, the rule is when you're that level of verified, you can publish whatever you want. So you can you could say false statements as a real person. So Donald Trump is a real person. He's a verified account, and he's saying things that Twitter is then determining or false or inflammatory. Rather, you know, um, them not try to do it, Andi. I'd rather have pundits that you can believe in So like the other problem is like, Look, when you have public figures, you

have punditry around public figures. But the problem isn't what that person says. It's You can't believe the punditry because half of them are fake. So at some point you have to break the cycle and somebody has to be really well, and this is the problem with that. The trump issue in a pandemic is to edge cases put together, and now we're figuring out what the actual cost of it is, Trump said. Masks or bullshit, you don't need to wear a mask, blah, blah, blah. I choose not to wear a mask. I'm not gonna give people satisfaction seeing my mask. Turns out masks are correct. We we should have put that. Should we have put in front of Trump's non mass comments? Hey, this is against what the guidelines are, um, or the fact is, the Who said the World Health Organization said You shouldn't wear masks then it turns out now we have a bunch of conservatives dying who didn't wear masks. No, I don't think I don't think you should have put anything there. Andi let all the conservatives who believe him die. It's It's not

about letting conservatives die. I think that's a crazy way of positioning it like he's allowed to have his opinion and really like if anything, I think social media has shown that the way that we used to venerate like veneration is sort of like, uh, it's kind of it's been disrupted by social media like the idea that you venerate somebody because like they want an election in a moment is so crazy because they're basically like you and in many cases, maybe dumber than you. With respect all these ideas surrounding the idea that we need toe regulate these platforms. Um, I think we just remember that the way stuff gets into your feed is that you make the decision to follow it. You know, these feeds ourself curated. I mean, there is this issue about Well, you know, the algorithm does sort of, um, emphasize or sort of increase the volume on. Do you know, we want to make sure those algorithms, um, you know, are done in a neutral way. They're not. They're not biased somehow. But you know, the content that appears in people's feed is content. They've they've chosen to see

, with the exception of trending topics on both platforms. Well, like I said, though, as long as those algorithms air unbiased and work in a speech neutral way, I think they're they're fine. Um, but the you know, the reason why Facebook has been boycotted, um, is that they refused toe censor some of Donald Trump's tweets, you know, and but But you don't see those. You don't see those posts rather unless you've chosen to follow them. I think it's crazy that they want to ban him. Problem is, it's a chain of. It's a chain of fake accounts and real accounts, right? Let's be honest. It's this combination of both that exists on both Facebook and Twitter toe amplify content in ways that none of us really understand. And I would I would be very skeptical that anybody there really understands every single piece of content, how and why it gets waited the way it does. And, you know, like, I bet you that there's probably a way to tell whether an account is fake

. I mean, obviously they have system integrity tools to figure this out. That's there's no way you could have eliminated six billion accounts if that wasn't true. Um, but then, you know, you choose not to suppress the weighting of those. Or maybe you do suppress the weighting of them entirely. It's just unaltered you're talking about, but but in terms of implication, Okay, so maybe maybe you could game the trending topics that way. But you can't get in my feed unless either I choose to follow you or you you pay toe run an ad which my eyes were just trained toe skip over. Um, so, you know, I think if you were to ask the average person. Do you believe that you are, um, sort of influenced by deceptive content on Twitter and Facebook, or you're sort of unduly influenced? Uh, they would say no. You know, none of us believe that we are. But then if you ask, But if you if you said, do you interact in groups and forums, uh, with a bunch of people that you don't know, the answer would

100%. Yes. But what I'm saying is that the average person doesn't believe that they're unduly influence. But if you ask them, why do you think other people are? They would say, David, of course, Like, it's like, you know, when you're having a fucking Slurpee, it's like, you know, Do you think that this is unduly gonna hurt? You know, it's 1200 calories of liquid sugar. All right, I think we beat this horse to death. There's no solution, Uh, just on the edges. But let's let's go to Amazon because I thought that this was a particularly interesting one. Amazon, Uh, I thought came out the best of everybody and is the least likely to be broken up. I think some of you agree with that. What were your impressions on Amazon's performance and Amazon in terms of being broken up? Let's start with you Friedberg, and then we'll go back to your month. I think the intention of antitrust laws, obviously, to protect consumers and protect markets and protect market pricing from being manipulated by monopolist monopolies. And so you know, the point that was made about Walmart years ago is

the same point that's being made about Amazon today, which is that they're crushing small local businesses. Andi. As a result, there is a lot of damage being done, and they're quote unquote too powerful. But the reality is that the pricing, um, effect of what they're doing is what needs to ultimately be scrutinized. And I think is what will ultimately drive, whether or not these guys have either some massive penalty or get forced to break up. And so you ask yourself the question. Look, if I'm gonna buy, call it a mattress or let's let's use something like a pillow eyes a cheaper for me to buy that pillow as a consumer through Amazon or from the local store. Now what if the local stores put out of business because of Amazon. And now Amazon is the only place I could get a pillow. Is the pillow now going to be more expensive or less expensive than it would have been otherwise? Ammand, I think that is the lens by which we need to kind of assess. And the regulators will ultimately assess whether or not Amazon is causing harm in the marketplace because of its use, its power

. Look, I have several businesses that sell on Amazon. Um, and it is fucking expensive. One of my companies I'm on the board of we've been the number one food product on Amazon multiple times. Way kind of slide up and down the top 10. Can you say what that is? Yeah. Toilet, toilet. And so we sell a lot of Soylent on Amazon. And it is expensive, man. I mean, the fulfillment, the shipping, the advertising fees they force you to pay. I will tell you that as a business owner or board member of a business that sells and have several others that sell on Amazon too. Um, it is a It is a grind on git is cheaper for us to sell directly through shot. Why don't you just raise the price on Amazon eso to some extent. So Amazon for this is actually part of the problem. So Amazon forces certain best pricing negotiations. If you're a large seller on Amazon, you have to make sure in order for them to promote you and make you kind of a sponsored item and show you at the top of the list, you have to give them the best

deal. Sort of like what Walmart does, right? You can't have a cheaper price anywhere else. God. So that was something that did not come up. They force you to have the best price there, even if you charge Mawr on your website in these negotiated deals. Yeah, and so you have to make sure that you're providing, um on. I'm not sure what the deal is specifically with toilets. I don't wanna kind of speak incorrectly here. No, no, no. The same thing from other folks. What if that is kind of part of what happens? And so I will tell you like it is harder for It is cheaper for me to sell Soylent. I think it's cheaper for some of these products to be so I could tell you my other company, which we sell Kenya. It's cheaper for us to sell through retail stores than it is to sell on Amazon. We actually give up more margin selling on Amazon. What would you do it? Because it s so you've made the decision as an entrepreneur to sell you Kenya in all places. Even though you lose some margin, you make it back in aggregate s capitalism. To me. Well, this goes to the market problem, because now I was a I have less choice as a business owner because the only place I confined

consumers is in this online marketplace called Amazon. I could no longer go sell at 50 local grocery stores because people don't go to the freaking local grocery stores anymore. And that's obviously a little bit of an extreme statement. But let's say I'm a pillow guy. I can't go sell up 50 pillow stores because they've all been shut down because all the consumers go to Amazon. But could you also sell that target? And walmart and those other competitors who seem to be doing just, you know, pretty well actually, they're doing well. Yeah, and a lot of people have said that they're the kind of, you know, the exceptions, but there's 1000 versions of Sears and other stores that haven't done as well. Walmart Target just happen to be extremely well run businesses, but there's nothing fundamental kicked you off the platform is that we're not going to allow third party sellers. Would you be happier? What would you be? Saturn? It will be Saturday. Got it? Came out. What? Your thoughts. Amazon specific. Yeah, I think David said it really well up front, which is that it's a it's kind of a went and not. And if so, it's, you know, Amazon today I don't think is at risk. Just because it's in market is

so big. But I think within five or 10 years, um, it definitely will be looked at through the same lens as Facebook and Google. And actually just those two, Um look, and I think David said it also really well, like the antitrust law that you would get, um, you know, to be successful if applied to Facebook and Google has nothing to do with users and content, and it has everything to do with the pricing of the adds to their customers. And if anybody actually were smart enough to figure out whether there was some way in which they're auctions were working, Um that was effectively pricing inventory in a market quote unquote or in a system manipulated way. That's probably the best hooked to nab one of these folks in antitrust law. But other than that, it's gonna be regulation in terms of Amazon, I think they're going to get away unscathed. What's incredible, by the way, is you know, two days later they're like, Hey, by the way, we just got an FCC license and we're going a lot of $10 billion satellite constellation. And

you know, if you if you looked at their RFP thio to the to the FCC, the number of people that you know basically complained and cried. It was incredible, by the way. I think this is a huge important point that we haven't made, which is the benefit of scale. For large, innovative companies. There is no way any company would have out of the blue been able to afford a $10 billion distributed satellite program without having customers. And all this other stuff lined up Amazon can afford to take that risk, just like alphabet has taken the risk with self driving cars and did so before anyone else for many years, which is a net benefit for society corrected, which is a net benefit for society. So by having scale, by having incredible profits by and then by reinvesting it in R and D, creating jobs, innovating it's the only way this kind of stuff is going to get done. You're not gonna get it done by breaking up these companies and having 100 companies that only have $10 million of profit each and then each of them are. You know, no one at all can afford to do these grand important projects that move markets forward, ultimately, for humanity. Freeburg, you see these trillion dollar plus

companies as because they could make those big swings a net benefit for humanity as a technologist and as a kind of person that hopes for the future. I hope I hope that they that these sorts of companies can continue to persist and that they're led by people that want to take innovative risk with R and D dollars and by the way, if they don't. They're gonna fucking fail eventually, right? It's these guys that are leading these companies Onda and putting these crazy bets on crazy new ideas that are allowing these businesses to remain competitive on def they didn't. And, you know, some big company manager were to come in and start running these things and distributing cash in dividends back to shareholders. This wouldn't be happening. And, you know, capitalism would take care of itself. And then the next big, innovative risk taker that could generate a profit reinvest that profit in a smart way would end up winning in the marketplace. Saxon. You're a big investor in space six at Craft Ventures. I understand. Uh, when you see Bezos copy every single thing

Ellen does from, you know, launching the Rockets to then putting up the satellites, Do you think he's just a copycat? Well, you know, I think he's the scariest monopolists out of the whole bunch. Um, you know, if you look at kind of Amazon versus a Google or Facebook or apple, I mean those other companies, they're sort of sticking to their original footprint, whereas Amazon keeps expanding into new areas. Um, you know, it's that that whole Montri has about your profit is my opportunity. And so, yeah, with each, uh, you know, with with each advancement they make as they get into. You know, as they get to a new level of scale, they then turn around and on and seek to take over kind of, um, you know, the areas that, um, that their vendors or business partners are operating. And so, you know, it started with first they did retail, you know, books. And then they explained each other areas of retail and then they take over, um, infrastructure. And now there's talk about them getting in tow, frayed or trucking on DSO Yeah, they keep expanding

into these new areas. And it za really a statement about our politics. I agree with Jamaat that Bezos went pretty much unscathed, and I think it has a lot to do with, you know, he did win the Internet with that opening statement that he gave It was really, um, sort of great, you know, rags to riches only in America type story. And so I think I agree Timothy is gonna get away pretty unscathed. But I do think that they are the scariest monopolist of the bunch. We'll comment specifically on him copying every one of Elon Musk's ideas. Uh huh. Well, you know, uh, copying is it is it is sort of a part of the game, you know, it is part of the game, and I've heard you attack a Zuckerberg for doing the same thing. And, you know, look, I get it. You know, we way prize innovation and way love innovators. Um, but as soon as you say that you can't that other companies can't copy those innovations, you do stifle progress. And I look at it as mawr How consistently you

do you do that as your playbook? When you look at Amazon basics, this is the point I wanted to make when and I made in my my earlier podcast, which was, you know, the Amazon basics. And the third party seller system is the thing that, uh, they keyed in on these hearings. They did not key in on, uh, the issue of that Freeburg brought up, which was what is the margin they're taking from those third party sellers, which I think would have been ah, much more deft approach to questioning them. But when it comes to third party sellers. The fact is there allowing people to compete with them on their own platform, which drives prices so low. And when they make a better USB C cable, that doesn't take a genius to make a better cable. So do you think Amazon basics should be allowed and is great for humanity? Or do you think that that using of the data because they have the sales data on it is in some way abhorrent

and a problem given the way antitrust laws are currently framed? Sacks Well, okay, so I think this is an area where eso the area you're talking about, is the way that these platforms treat the applications or small businesses that operate on their platforms. And I do think this is a good area for Congress to keep scrutinizing. Um, there's a saying in in chess that that the threat is greater than the execution. So sort of a chess strategy principle. I think that's true here, where we I think the execution would be a disaster if we actually impose a lot of these rules. If we broke up these companies, if we stopped Amazon from innovating I think that that would be a disaster for, uh, for those companies and for the economy, because I do think they do a lot of good things, but in a weird way, I think we have to keep threatening Thio do those things in order to get these companies not to do anticompetitive things. I mean, we heard Bezos say

that he couldn't guarantee that they weren't using their their cellars data thio in inappropriate ways, basically, Amazon to break Amazon's own policy. And so I think you do have to apply this kind of scrutiny to these companies because I don't think we wanna be retroactively. Uh, you know, remediating a situation. I don't think we wanna be breaking them up or doing something like that. But I do think we want them second guessing these anticompetitive decisions before they actually happen. Um, because otherwise, you know, So some scrutiny, some rules, but we certainly don't wanna ankle them versus their competitors in China as we wrap up here because we're getting way past our our We're now about 80 minutes, and we said in Max and 90 here was what we all agreed on. Um I want to talk about the election. We're now at the 100 day mark. We all thought Biden was a shoe in. Now I have my own visas. I wanna float it and see what you guys think. Um, you had Trump start

wearing a mask last week telling everybody they should wear masks. Now there's universal discussion of wearing masks. We've got a little bit of vaccine hope and it will get to Friedberg position on. Is that vaccine false cold or is it actual reality? But we know that masks are going to take three or four weeks. Uh, if they're implemented properly for us to see the case logo down, which then the caseload starts going down in three or four weeks after that, the debts would start going down. We may have even seen a little plateau in the number of cases. Cases is ramping up. We hit a record 850 or 900,000 just yesterday at the time of taping, I think on the 29th of July. Now my visa says Trump goes all in on masks. The vaccine starts to show promise, right? As the debates start, he gets in there with Biden. We see caseloads go down. We see deaths plummet. We get down under 250 deaths per day in America. By

September 15th, the market rips and on septa end of September, we have the first presidential debate. Biden dunks on a senile or maybe not crisp Biden Trump sales in and we were just talking two months ago, anything could happen, but Trump was definitely not going to be there. Let's go around the horn, Friedberg vaccine, false gold or really promising. And what happens in the election? I think there's tons of promise with vaccine news in the next two months. Three months. I guess the point is you're going to hear mawr upside. Then you're gonna hear downside news on vaccines for sure. You know whether or not we have a vaccine and by when and Gary Ott percentage chance We have a vaccine. We're gonna have a vaccine. I think it's a function of how many doses a twat point in time on. Do you know there is this 30,000 trial happening with Madonna right now there's, ah, Russian vaccine that just got approved yesterday

in Russia that they're saying is ready to go, and they're starting to distribute it. So there is a vax. There are vaccines, right? This is a a no known eso. That news will only continue to improve and build. And they'll only beam or um or indications of success with vaccines between now and November. How that effects markets. I think I'm not sure that drives markets as much as some of the other stuff that's going on in markets with the Fed and Onda, with policy and with stimulus packages. I think those air are frankly important drivers right now on how much the markets ultimately affect the election. I don't know. Um, so yeah, it's still it's it's all still pretty uncertain. Who's gonna win the I think it's pretty uncertain. Okay, you have to put your entire net worth on one person. Go. Um, yeah, I still think Trump is I kind of have been Vassil ating on this. I think trump is probably Onley

gonna improve from here on out. So your entire net worth is on the line in three to place your bet. I'd go Trump. Wow. Well, it's still it's still it's still to me. I mean, Trump has has gotta be the huge underdog here. I mean, right now it looks like buying is gonna win. I mean, his basement strategy could backfire in the sense that if, you know, fundamental conditions improve with respect to covert or the economy. The fact that he hasn't said anything done, anything gone anywhere, um, you know, it it could it could turn out to be a mistake. But right now it looks like it's working. And, um and you know, Trump seems to be completely knocked off his game. You know, just earlier in the week, he floated this trial balloon about delaying the election that was completely shot down by Republicans. And when you saw, what did you think as a Republican, when you saw him tweet that, what did you think was your emotional, visceral reaction as our token? You know, I don't I don't necessarily identify with with partisan

politics, so we just have to state that. But sure, it's an American to him saying delay the election course. Everybody, everybody Sure your reaction. Everybody shot it down for good reason. We're not your reactions, of course. Of course, we're not gonna delay the election. We've, you know, um, you know, we we haven't delayed way. Didn't delay the election toe to fight you to pin doesn't Republican. He's It's not gonna fuck with your deal. Flow sacks. You could be a Republican your entire net worth. We have to wrap your entire network sacks. You could write out 32 Yeah. Right now, it looks like buying is gonna win that Trump Trump's been knocked off his game and me to say, Like I think the problem that Trump has right now is he's a salesman without a sales pitch. Um, you know, go back to the state of the Union, Pre Cove it He had it all worked out. He was going to run on the greatest economy ever. Keep America great. That issue's been taken away from him, and it seems like he's still trying to regain his footing. He's trying to figure out what to run on and the fact that

he can't do these rallies which were really, you know, the fact that he was able to go in 2016 to these swing states, he would be, you know, flying around on his plane and he would three. He did three rallies a day in these swing states with tens of thousands of he wanted it. He wanted to win. It was It was it was that. And it gave him a way to go over the heads of the media and speak directly to the people. And then those people talk to other people. There's a lot of word of mouth. Um and so he the inability for him toe hold those rallies, I think has just been, um, devastating for the type of campaigning that he likes to do. And so, in a weird way, we have less than 100 days to the election. But it feels like the campaign hasn't really started yet because Trump can't do rallies. And Biden hasn't left his basement. Um, math, entire net worth on the line. All stacks SPAC be SPAC see SPAC d Whatever you got smacked up all your spats on the line. Everything. The warriors position 3 to 2 way

. Don't need to guess, But I'll tell you why. Um You know, uh, we had a 33% drop in GDP. We have double digit unemployment, and I think Trump's riel path to winning the White House which we talked about before was getting an enormous stimulus bill passed, and he didn't force the Republican Senate to the table to make sure that these unemployment benefits didn't roll off. Now there's a very practical problem with these unemployment benefits, which is that it is not administered at the federal level. It's administered by literally 50 state agencies that run relatively decrepit software. Now, just so you guys don't, why do we pick $600? It was, and an estimated numerical average because what the Republicans really wanted to do was just top it up. You know, whatever. You used to get to get 200 it was technically not feasible to implement across 50 different eso. Somebody in Boise, Idaho, is different than somebody in New York

, so there were, like, 600 bucks. So my point is, it's going to take 4 to 8 weeks to re implement unemployment insurance once we decide what we're going to do so that basically if you started today, puts you somewhere between September 1 and October 1 and you know so you have been 30 days to basically catch a positive tailwind or 60 days, so call it mid 600.45 days. You know, you have now federal eviction laws that are rolling off, so I think that it's setting itself up for a difficult, very difficult path. Hey, just stopped spending. I believe in Michigan. Trump did, um, which is, you know, not a good sign. Um, he actually has over spent in Georgia. Um, so if you look at the facts on the ground, your entire net worth goes on. Now Biden it za languishing campaign. As of today, David is right. He's a salesman without a pitch. And unfortunately, he's a

The path isn't clear. The path should have been paid with money. It's It's such a no brainer. Let me give you one and all that money to. And why would you stop printing the money If you gave everybody $1200.6 weeks of unemployment, why not just do it for another six weeks and give everybody another 1200? I don't understand why that's such a difficult decision for Trump Free Burgo. Let me give you a scary poll that just came out by YouGov. It says 55% of supporters of Donald Trump say that they will not accept the election victory of Joe Biden if mail in votes are allowed. Eso You know the framing of this is actually a little bit more serious than just who's gonna win. There is a further polarization, constitutional crisis, question rioting. You know, whatever disregard for the election entirely kind of moment coming up here because Trump and others have kind of framed this as such a non election election because it's all fake and it's all fake news. And, you know, this is all part

of the conspiracy. So there is something scary brewing, I think, and that that's what I'm kind of most interested in. Tracking is really where does this all go percentage chance that we get to a constitutional crisis? And Trump says, I'm not leaving the White House on a percentage basis. Freeburg. I don't think he'll say I'm not leaving the White House. I think he's gonna be fucking happy to go back to wherever he's gonna be. Oh, yeah, but I think e think there's gonna be other ramifications that are worth us figuring out of thinking about, because that's the scary stuff that's coming next 25% chance of a constitutional crisis. I think if the elections close, we could easily have, like a Gore V. Bush type situation. It could be very damaging for for the Republic. I do not think there will be a hanging chad issue in this election. This is going to be one way or the other, incredibly decisive on Electoral College. Okay, Final. I don't not set up for it to be that that close. Okay, well, I don't think the election right now, it's not trying to be close. It all is trying to be a blowout. And so I think we'll avoid the the

crisis because it's not close and it looks like buying is gonna run away with it. But if it does get super close, um, you know, I could imagine there being a crisis based on people not accepting that. If the margin of error is within the margin of these mail in ballots and you have, you know, at 30 40% of the population, saying they're not going to accept it. I'm not saying we'll have like, a legal crisis, but I think you could have a legitimacy crisis. It could be very bad for the Republic. Not as bad as Trump's presidency. Clearly eso Final question Final Final question. If Trump believes he's not gonna win and he's essentially given up right now, which it feels like he's kind of given up, what would do you think? Who would win if Trump says Nikki, Haley and Pence can run? I've done such an amazing job. I've been the best president in the history of the union. But I want to get back to my life, and I think Pence Nikki Haley should go for it. What happens and who wins Sacks Too late for that. For that, You can't You can't put Pence

and Nikki Haley on the ballot. Why not? Of course you can if he says I'm feeling under it. If he bows out, the Republicans would have to pick a successor. It's not a new third party that the Republicans would be allowed to pick a successor if he said, I'm not doing it for, you know, health reasons. Whatever the reason, he comes up with who wins. Nikki Haley, now too silly. I think he might drop out. I think that I'm putting it out there. I think it's a 5% chance he doesn't wanna be demolished, and he says, You know what? I'll take the deal. You agree to not prosecute me, getting out of here. I'll take it and I change. I change my bed to Joe Biden. I've changed my bed after that. After you risk your whole network, you change to Joe Biden. Well, he's clearly the favor right now, and the question is whether there's still time for there to be a change. I mean, honestly, e. I think we should stop betting on what the outcome is. I think it's stupid. I think what we should really be worried about is what, What are we doing? Like letting tens of millions of Americans roll off of unemployment

insurance with zero like the Republican Senate went on vacation? It's ridiculous. I mean, they should all be fired. It's the craziest thing we have the biggest crisis in our lifetime. If you roll up the last three crisis 9 11 dot com bust and the great recession, those three pale in comparison to the magnitude of this one, and these motherfuckers are going on vacation. I agree with you. It's outrageous. I don't think partisan politics or that interesting, but I think they will eventually pass a bill. I think, um, the issue on the unemployment is not that the Republicans don't support an extension of unemployment. But the magnitude the unemployment now, um, exceeds what workers would get if they went back toe work. And so I think they're concerned about creating a disincentive for workers going back to work difference. Why not make it $300? Honestly, it is such fake fucking news, like it's like it has been shown that people that end up spending that money like, I don't know if you guys saw, but like there are industries

that are posting. It's not just Facebook, Amazon and Google posting meat and beats like you wouldn't believe in boating in housing. People are spending this money. It drives GDP. So whether you put 600 or 200 or 1200 into people's pockets, they have a proclivity to spend it. They should have gotten something done. Trump, as well as all the Republicans, are up for re election. I think we just cave on this issue and I think it will get done. The Republicans air opposing it are the ones who aren't up for reelection and are concerned about debt. You know, that's the That's the That's the concern that although what does that matter if we go into a depression, David? Why not? The incremental six weeks of unemployment put it at $300. But get something done. David. Why are you not getting something done? David? Why is your team fucking this up, David? Yeah, I don't I don't wear a jersey. I'm not on the team, but I think they will get something done. I mean, I'm not when they're back vacation

. Do you think they should have gone on vacation? They got their own vacation, David. They can't. They got to come back to work. These guys went duck hunting instead of taking care of the 15 million your team went duck hunting in Washington, D. C. Because they're obviously there's a lot of there's enough Republicans who want to get something done. I mean, why not blame the Democrats for being too intransigent? Sorry. What I'm saying is, it's not republicans. I'm saying the entire the entire you were breaking your chops. Sex. The entire group should not have gone on vacation. The entire half. Half half of the Congress has gone. They're not to be found. Where are they? What? What are they doing? That's more important. Maybe they're hanging out in their basement. Like like Biden e Love you guys. All right, everybody, stay safe On behalf of the dictator himself, bestie. See the the SPAC meister himself. Stay safe. Cha meth. On behalf of the Queen of Kin Wah the freed burger himself. Uh, stay

safe, David Freeburg, in whichever one of your three houses you're in right now and we owe it to rain, Man, he's definitely burn. Don't burn, baby. He's definitely a great driver in the driveway. Yeah, definitely. Still, Yeah. He's definitely investing Wapner. And, of course, having fish sticks. And, of course, he's still investing from craft. Certainly. Craft funds still investing. We'll see you all next time on the six most popular podcast out of the gate. Let's see, Maybe if you tell your friends about this podcast will go to number one on the technology list. I love you boys. Stay safe. Can't wait to play poker by great job. Everybody

E6: Big Tech antitrust aftermath, potential effects of an M&A clampdown on Silicon Valley & more
E6: Big Tech antitrust aftermath, potential effects of an M&A clampdown on Silicon Valley & more
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