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Four Weddings And A Funeral

Jun. 14, 2020 1:41 AM ETLMND, TWTR, AAPL, GOOG, GOOGL, MSFT, META, AMZN, SONO35 Comments
Scott Galloway profile picture
Scott Galloway


  • A weak DOJ and accretion of market cap for the biggest tech players make 2020 a year for high-profile acquisitions (weddings) and one spectacular failure (a funeral).
  • Big tech has no choice but to enter the fields of healthcare and education.
  • They need to add more than half a trillion dollars to their top-line incomes over next 5 years. This will result in them entering new markets, and coming for each other.

We witness border skirmishes between big tech firms on a regular basis. This year, one or more will erupt into a shooting war. Just as most wars are not a function of ideology but economics, the armies of search, handsets, and performative posts will begin landing paratroopers behind enemy lines and initiate heavy equipment assaults. Yes, I watch too much History Channel.

Wars also make strange bedfellows. For a hot minute (four years) we fought side by side with the USSR. Upon our collective victory, they promptly became our adversary. A weak DOJ and accretion of market cap for the biggest players make 2020 a year for high-profile acquisitions (weddings) and one spectacular failure (a funeral).

As I’ve written, big tech has no choice but to enter the fields of healthcare and education. These are the only two sectors, other than government, that offer the margin dollars required to sate investors’ growth expectations. Google (GOOG) (GOOGL) and Facebook (FB) could wipe out the entire radio industry, and they’d still wake up hungry for more profits within 24-36 months based on investors’ expectations.

Every big tech firm must implicitly, or explicitly, assure investors there is a reasonable chance their stock will double in the next five years. Otherwise investors will buy Zoom (ZM), Lemonade (LMND) (which filed to go public this week), or another “disruptive” firm. Big tech is running up against staggering appetites, like Brad Pitt being forced to feed off humans, as rats just can’t sate his thirst. Remember that movie? Pale and a bad haircut ...

And. Still. Dreamy.

Anyway, the Four plus Microsoft (MSFT) need to add more than half a trillion dollars to their top-line incomes over the next five years. This will result in them entering new markets, and coming for each other.

Some scenarios — four

This article was written by

Scott Galloway profile picture
Scott Galloway is a Professor of Marketing at the NYU Stern School of Business where he teaches brand strategy and digital marketing. In 2012, Professor Galloway was named “One of the World’s 50 Best Business School Professors” by Poets & Quants. He is also the founder of Red Envelope and Prophet Brand Strategy. Scott was elected to the World Economic Forum’s Global Leaders of Tomorrow and has served on the boards of directors of Eddie Bauer (Nasdaq: EBHI), The New York Times Company (NYSE: NYT), Urban Outfitters, and UC Berkeley’s Haas School of Business. He received a B.A. from UCLA and an M.B.A. from UC Berkeley.

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Comments (35)

I must say.....a very fine, incisive article on the opportunities facing big tech firms. Not so much an investing "paper" but more of a strategic framework for the 4 mentioned here (leaving Quibi out of it) - which of course also helps investors to understand what drives tech firms to stay competitive or get ahead. I liked the analogies or the metaphors to current topics as it puts things in a modern perspective - BUT most of the comments here refer to the metaphors & ignore the essence of the "lesson" . The woods... and those trees.........!
What a rant worthy of a narc.
thumb.ai profile picture
As usual that was fun.

Facebook provides a high R0 score for the virus of fake news. This requires skilled study to know, like epidemiology, not just your anecdotal personal experience (because personalization algorithms etc).  

But if Facebook keeps kith and kin together better than email, which it does, then that is a superpower. It’s the Family Network Effect. Someone in the family uses Facebook, and therefore they know about all of us.

Google will grow as reality’s information and tools grow and expand on the internet. You gotta find them somehow. Google is the amazing butler that sells you out a little on the side. So hard to find good help these days.

Microsoft has been pulling great judo moves the last few years. Reminds me of the early 1990’s, the bastards. And I am not afraid to say Windows is still better than MacOS. Android and iOS are app launchers, and Chromebooks are great hardware accelerated web browsers.

Identity - yes that could be a superpower, but what happens that makes it super profitable?  
- LinkedIn is filled with people trying to make themselves look good for their next employer, commenting on employers’ marketing communication. That’s seems to be it? A social network in the image of those kids who ran for student council. An old Wayfair furniture catalog would win more attention in a taste test.
- as @moon Kill Woong said better here, Twitter is a complaints board as much as anything else. Would you subscribe for Premium Complaints Access? Maybe.

Totally agree on Netflix + Spotify. Match made in a logical Heaven.
is it true that revenue has to grow by that multiple for EV to double? Is that a straight up math? I meant revenue growth of, let's say 2% might be cheered and EV can be double - well thats really far-fetched number, but hope you get the point @Scott Galloway
Tiki Bar Capital profile picture
Scott, you're a brilliant guy, but lay off the damn Kool-Aid.

The notion that FB is turning red for the GOP is flat-out insane. My FB stream is filled with tons of Dem political advertisements and posts from friends with Progressive messages. I have conservative friends, but the FB algos don't seem to prioritize their posts.

Gee, I wonder why...?

There is an illiberal disease in the Progressive mind that confuses non-censorship with alliance. But they are not the same thing. Liberals know that. Progressives don't. Or perhaps they've simply put it down the Memory Hole, like so many other core American values.
@Tiki Bar Capital Just proves the Profs point - older, retired people and tech....not a match made in Heaven.
Tiki Bar Capital profile picture
@RockyRod -- What the heck are you saying?

If what you're attempting to articulate (it's unclear) is that my age and retired status mean I'm somehow more susceptible to tech manipulation, I suggest that you drop off social media for a week and take a walk through protest-land. As you do so, observe young people on their phones. Ask them what they are viewing on these devices. Then talk to them about what their beliefs are.

You'll find that the social media content viewed by these youngsters sync pretty much perfectly with their beliefs. Because that's what social media tech firms excel at -- driving social conformity, confirming priors, and ensuring you're exposed to uncomfortable ideas outside your ideological bubble as rarely as possible. The last thing these firms want is to encourage critical thinking. That might drive you off the platform! (God forbid you pick up a book...)

Most retired folks have the advantage of growing up in an era when critical thinking was taught in schools and required in the workplace. Our brains developed through engagement with the world and other people, not molded by social media algos. Our longer attentions spans were shaped by endeavors that required patience rather than immediate gratification.

Doesn't mean oldsters can't be manipulated by social media. Anyone can be, if you let it carry you away. But we have a lot more capacity for resisting the collectivization of the Borg because we were raised not only to think more independently, but to live more independently. (And yes, that's a criticism of the vast horde of millenials who are still bankrolled by their Boomer parents. You know who you are.)

Guys like @Scott Galloway recognize all of this. Like I said, he's a brilliant guy, and he's old enough to understand that freedom of expression is a core American value that makes the United States the most free nation on earth. But he's also very ambitious, and he plays to the Progressive crowd because that's where his market lies. It's fashionable among Progressives to demonize FB for giving R politicians a platform and to demand they be censored, so that's what @Scott Galloway does.

Which is more than a little bit shameful. He and I are both old enough to remember times when the demand for censorship was directed at left wing thinkers. The First Amendment saved them, and that made America a better place.

How quickly America's leftists forget where they came from.
tradervic1 profile picture
Stopped reading when you couldn't hold your perverted political opinions to yourself.
powerful-crow-juju profile picture
It's rational to take the good ideas, even from your "enemies"

His writing style is purposely bombastic and exaggerated, so I could see how it would turn people off
"Advertising is the s**t that gives us cancer (tobacco)" Abusing substances that were never intended to be consumed daily is what causes Crater-Syndrome. It's not the substance itself...
I dont know which as more intriguing (enlightening), the article or the commentary.
Billr331 profile picture
Behind the headline you need to add in (warning personal political bias included)
OpusVector profile picture
Professor, well said , let’s keep the pressure for a FULL TIME CEO on TWTR and unleash the potential on this global company
Our company sale in 115 countries and every one of our clients is on tweeter because their local and national government is on and must of the news come that way first hand , also all of the traditional news papers have turned to Twiter and have created a Twitter division. This stock should be over $100 by now and after all this years.
Lost me when you got political. May have been a good article but this reader will never know (or follow).
JackWolf profile picture
Oh, man, look out with the drinking, @Scott Galloway . As someone with 20+ years without a drink, I tell you, it nearly killed me and it took years to get back my health and reputation. And even then, I still suffer some health consequences and they are quite painful. I also suffer from climate anxiety. As a scientist, I know what's ahead and it is truly frightful. Oddly enough, my doctor prescribed pot and it has truly helped with both conditions. So, check out some cannabis stocks. And if you like life, go green with your investments. Have a good day.
Comes to mind the old Alka-Seltzer ads. Do you recommend trading a headache for an upset stomach?
Enjoyed the commentary. Agreed with a bit of it, tbh. I don’t see Google as much of a bad guy as the author although I do agree FB has sold out to the highest bidder. The truth on Facebook is whatever has the most funding behind it to facilitate mass distribute (reposting). A present day version of the golden rule. FYI: He with the gold, makes the rules. Control of the media is what Hitler did. What Stalin did. What Chavez is doing in Venezuela. The news is what their media platform says it is. Is Facebook taking us in that direction? I say yes. It is, as the author says, full of hate and conspiracy talk.
Moon Kil Woong profile picture
Just like all tech, it is easy to say a given idea, however, very difficult to do it. Apple tried to just make competitive mapping to compete with Google but it did horribly and they then canned it and used Google again. Likewise, DuckDuckGo is a good alternative to Google if you are looking for academic information or general stuff, however, I would not use it for daily stuff. People use it for anonymity mostly which is not the direction Apple wants to go to, especially if they are money hungry. Apple will risk their whole hardware base forcing users to an inferior search engine. One doesn't think of DuchDuckGo as inferior simply because you don't use it all the time for everything. It is inferior, but decent. That said, ts privacy policy is stellar.

Likewise, Microsoft will have a hard time making a competing social media business. For one thing there is a trust issue. Microsoft is about as trendy and dependable as getting Office as a birthday present. And Microsoft is about as good as staying up to date as Facebook's Executive is at being politically in tune with anything. It has only taken it decades to revamp office into something better and it has moved it into the cloud by literally forcing it on users. As for non-cloud licensing, its pricing is so messed up even its vendors have a hard time dealing with it. No, Microsoft can only deal where it has a reasonable chance at being a monopoly and as far from users demands as possible.

Google has many places to grow but anywhere is still too small of a pond. That said, it will still be around and their browsing business will only grow due to Covid. If anything Google is an amoeba which keeps growing but realizes it will fill up the petri dish soon if it can't get out.

Which leads me to Twitter which is like a starved bird in a cage. Twitter has always had a hard time monetizing itself and has grown by feeding off of Trump's media blasts. That said, it is clearly giving it trouble given his growing unpopularity and divisive messages. If rage drives twitter if it can't grow profit these days it isn't going to fare that well in the future. Twitter knows it needs a subscription or another dependable and growing revenue stream. It just hasn't been able to get one with its business model. Maybe they should buy talk radio stations and stream to divergent groups. This is the problem with their base, it is not a community as much as it is people shouting into the dark looking for only those who agree with them. It is not a healthy base at all, and one that doesn't like being monetized and is likely to hate Twitter as much as it hates what it hates. Raging customers don't make a good client base, just ask your local bar owner.

If anything Twitter needs to attract young positive people and keep attracting and holding them. It needs to grow a new demographic fast before they become a tech has been. This means trying to do better at engaging education which is what everyone is always trying to do since Apple gave away free computers to schools to get kids addicted to their hardware. It is a hard road they must take, but a road they must take and win more than doing anything else. Back to basics Twitter.
“stay thirsty” indeed. Maybe not the most interesting man in the world, but one of the most interesting I’ve seen on SA. As a pretty religious and rare drinker myself, I enjoy and probably need your perspective.
Excellent article and food for thought. I really enjoy your take on these things. Cheers!
Value Investor90 profile picture
It is not Facebooks job to decide what is truth and what not. A company that big with over 2 billion users, that serves as an infrastructure for communication and distribution of information, never should have that power.
vectoradam profile picture
true, but here we are. antisocial media is facilitating the deterioration of modern society.
TheVillagePirate profile picture
What a sad life.
Atheism and Alcohol as the Saviors of one Scott Galloway.
A cursory review of Nations that went down the path of Atheism shows us that Nazi Germany, North Korea, Cuba, the USSR are prime examples of that route. Nations are merely the cumulative summation of individuals. Dark, soulless individuals multiplied millions of times over leads to the Aethistic world of a Communist China which must enslave a Million Muslims for fear their spiritual beliefs will destroy their fascistic control of its population. Sadly, Aethism has taken such a strong root in China, few seem to care about such crimes.
Criminals are largely Atheistic. They have no regret for their crimes, there are no consequences for their acts for they have no future. They abdicated any future life in favor of oblivion.
Atheism, far from freeing an individual to explore new territory is the one chained to a one lifetime of existence. No future, no past. Joy and happiness or sadness and despair become eventually become irrelevant to the Atheist.
No future and no past results in no consequences of one's acts, an eventful vanishing of responsibility with the end result being eventual criminality.
It matters not what the Atheist does. Kill, rape, create beautiful art or design clothes or write articles, it matters not.
So, it's understandable that Drugs and Alcohol are the chosen companions of the Atheist. Seeking to numb the pain of daily life Drugs and Alcohol are a perfect remedy. Dull the pain, always dull the pain.
In reading Scott's article one could feel a sadness woven throughout the text. His revelation, confession or closing statement (pick your favorite discription) explained all.
Hopefully, one day he will have a realization, a cognition, an increase in understanding that yes, he is an Atheist and Alcohol Dependant and its consequences. Then he could move on and discover that he, like all of us, are children of God, timeless and deathless spiritual beings, created with unlimited potential.
Good Luck, Scott. I wish you well.
Well said.
Christoph Liu profile picture
While I do not share all the views expressed in the present article, I do sincerely doubt that either alcohol nor religion - or the lack thereof - have played a role in forming them. (Admittedly, I can not be sure whether the article was written under the influence of alcohol since I was not present during the writing process.)
It is also quite a bold statement to make that "criminals are largely atheistic". On the contrary, there are probably more religiously motivated crimes than there are crimes motivated by atheism (9/11 just being one albeit probably the most prominent example). Also, there are countless criminals who are religious although that has nothing to do with their respective crimes (just think of most of the high profile drug traffickers, most of whom are Christians too various degrees of devotion). Just statistically there is even a correlation between a high degree of religiousness and violent crime rates in free, democratically ruled countries.
Furthermore, Nazi Germany was not an atheist country (the SS for example did not accept atheists) but there was a crude mixture of Christian and Neo-Pagan religious elements. When it comes to Cuba and the USSR the problem is arguably not atheism but communism. North Korea even has a leader cult around the Kim-family that clearly has religious elements.
Remember during the demise of the Roman empire the leaders in Rome decided to keep the public at bay by distributing freely alcohol to dull ones senses and spirit and to have people focus on something other than their problems they gave the people sport to rally around know as 'Gladiators' fighting it out in the colosseum. What do we give the people today? Drugs, alcohol and professional sports to watch. Sorry but the current empire wants nothing to do with diversions such as religion and families to take away from their goals of mass consumption.
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