E113: DOJ tries to break up Google, vaccine questions, Ukraine escalation & more

because of all this, it probably is reasonable to take a step back and have a commission that just uncovers all of this stuff

You know, you start to question. I think we will start to see people question whether those are appropriate.

one of the costs of this policy is going to be that people will stop trusting vaccination in general

I'm not getting boosted again, no.

Well, yeah, where Larry Fink was like, hey, they're going to need three quarters of a trillion dollars of reconstruction support. We saw that play out in Iraq as well, where at first it was the war machine, and then it was the reconstruction machine, and together it was trillions and trillions of dollars.

Those are called infrastructure funds. And those infrastructure funds raise hundreds of billions of dollars to make investments, to build new infrastructure in markets that need it and that are willing to pay for it. And it will likely end up being kind of long-term debt assumed by that region to pay to do this work, and the beneficiaries will be the investors and owners of those infrastructure funds.

And so I just think it means that the DOJ is more focused on trying to punish these great American companies than it is in trying to be logical and reasoned. And so I don't think this is going to work.

it's like killing the golden goose. I mean, this is one of the big job creators, innovators and taxpayers and employers and drivers of economic growth.

My position is I think they want to have an outcome. And their outcome is they want to stick it to big tech because it's too powerful. And then you just said yourself, square peg, round hole. They're trying to find something to get Google on. This is not it.

But it does feel to me like the government is lashing out against companies like Google because they're perceived as being too powerful. That's what's going on.

The second thing is that if you had done this chart many years ago, Amazon would not have really even been there. And over the last five years, they represent almost 12% of the entire market. And it means that if you forecast it forward, they could be at 15 to 20% in a few years as well.

I know this from experience on a couple of boards I'm at where companies stopped spending on Facebook and Google and just started spending exclusively on Amazon.

Show me where someone's made a better competitor to Google search. Show me where consumers don't choose to go to another search engine because Google's built a better search engine.

No, it's because there's a data network effect there, that the more searches they provide, the more data they get. It's the reinforcement learning.

The West is never going to trust them again. The Germans are never going to buy their oil again.

We've basically shifted Europe onto American natural gas. We've destroyed Nord Stream.

So I just think that what all of this is, is now sort of they're entering the endgame, David, to use a chess analogy. And it looks like they're setting the wheels in motion to kind of put all the pieces together for a negotiated settlement.

So this war of attrition has to resolve itself with some sort of settlement. But we just can't go on for two or three years, can it? I mean, it has to settle at some point.

And it feels to me like the true believers are on top right now because we just keep escalating this war more and more. And I think that's dangerous. That polarizes the outcomes, right?

there may be a Franz Ferdinand moment here, where one thing goes too far and triggers a cataclysmic outcome. And in this case, the cataclysmic outcome is tactical nuclear weapons.

So and then for the first time, we're even talking about Google search supremacy being challenged by ChatGPT.

we could build the best product in the world, but if Microsoft gives it away with this other product that is quasi-essential, they'll always beat us. And there's nothing we can do about it.

So I think the marketplace will compete. And if you look at Slack itself, it's still growing the same percentage growth it did inside of Salesforce that it did as an independent company.

I think that this bundling behavior is a form of dumping, where in the short run, it looks like consumers are benefiting because they're getting a Zoom clone for free or a Slack clone for free. But then what happens is once they've hobbled those companies, they raise the price of the bundle.

when it comes to software, if your product is the same as the other guy's product, maybe they deserve to win by bundling. And maybe it's okay for them to offer a discount and beat you on pricing.

And by the way, all the social networks that people thought had massive lock-in effect turns out they don't, right?

But if you're a social network or if you're some deep machine-learned thing that basically generates great search results, that's much harder to copy because more and more of the product and what generates the product quality is underneath the waterline.

that change is now going to make this hit very, very hard beginning in 2024 So the ad networks themselves are already being massively hurt by Apple's ID changes, the third party cookies being removed. It's becoming harder to target consumers, harder to make money for publishers.

There's two other things that they really should be looking at as these ad networks are losing their market share in the overall digital ad spend. There are two other players, Disney and Netflix doing these digital ads on their platforms and having ad tiers. And then you may have noticed Uber is doing an ad business now.