February 13, 2024 • 35 mins
Enjoying the show? Hating the show? Want to let us know either way? Text us!
We chatted about the Apple Vision Pro previously and now the reviews are in....how are they stacking up for the Vision Pro and how did our predictions work out for themselves, so far? And what predictions to we have from here?
Also...Meta announced dividends at its last earnings call...and now Goldman Sachs analysts are (maybe) portending that this will lead Alphabet and Amazon to do the same. But do we actually think that this is as imminent as the headlines suggest?
As an aside....PJ published a blog post about this very topic on 2.7.2024...check it out here: https://trickybitsblog.github.io/2024/02/07/meta-earnings-report-dividend.html
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Ierengaym.
(00:03):
com ierengaym.
PJ (00:09):
Welcome back everybody.
Tricky bits with Rob and pj.
The day today is February 12th,2024 and part of that is that
we're gonna be doing a littlebit of after action report on
some of the things we've talkedabout in the past.
So if you haven't listened toour AR episode, you might wanna
(00:29):
go back and do that.
If you haven't looked, listenedto some of our discussions about
the big tech companies and theirlayoffs, you might wanna listen
to that one as well.
You can obviously pick it up,right from here, and that's
akay.
But first off, we're gonna startwith Apple.
So.
We had talked a little bit aboutthe Vision Pro coming out.
We talked about augmentedreality and we had a few
(00:52):
predictions, Rob, about what wasgonna happen and now the reviews
are out.
So Rob, how closely have thereviews been tracking with what
you have been with what youpredicted previously?
Rob (01:06):
As I said before, AR has this massive wow factor.
When you first pull it on yourhead, you're like, whoa, I've
never seen anything like thisbefore.
And your head start, you startto go crazy with all the ideas
that you think of.
I could do this, I could dothat.
And in theory, you could do allof these things, whatever they
may be.
simply reality is the technologydoesn't really fit any of those
(01:28):
use cases.
And I think over time you'll seeit with the other devices, it's
AR is boom, amazing.
And then you've seen aliens comeoutta the wall plenty of times
and you're like, okay, I'm fedup with this.
the killer app?
And I think exactly what's goingon with the Vision Pro right
now.
It's people are like, yeah, it'sreally cool.
It does a really good job atwhat it does.
No killer app for$3,500 is asteep sell.
(01:51):
And it may become an enterprisething, it may become a business
meeting thing just so you canmake Zoom calls even more weird.
I think that's where it's gonnago.
Without a consumer killer app,people are not going to pay
$3,500 for that device.
the reviews kind of go alongwith that.
All the initial reviews are,it's good, but, and some reviews
(02:16):
now have, they've used it longerand it's like, well now what?
So I think it'll play outexactly like we said it would.
And I think it has to play outthat way.
'cause it's not gonna be, peoplearen't rushing out to buy it,
so, and never were with thatprice tag.
So it's not gonna be a marketsaturation device.
PJ (02:35):
Uh, I agree.
One of the, one of the funthings, and we talked about this
a lot in, in the AR episode onVision Pro.
Everyone who got a chance to useit.
Got a chance to use it for likefive minutes at the announcement
last June and it was like, oh myGod, like you said, it's
exciting.
It's like, oh, I can see whereall this stuff can be and what,
where can, what it can do.
(02:56):
And we have had six, sevenmonths of basically runup of
anticipation where people havebeen using their imagination to
like everything that it couldpossibly be.
And to be fair, there are somereviewers that actually love it.
and I think there's a lot ofreviewers though that are trying
to love it.
Like they don't actually want toadmit to themselves that they
(03:17):
were wrong.
And so there's a lot of couchingof, oh, we can see where the
future is going.
Or we can see that this is firstgeneration hardware.
And I think they're reallytrying to satisfy that kind of
emotional need to say, yeah,this kind of stinks, but I don't
wanna admit that the thing I waslooking forward to for the last
seven months is a bit of a dud.
(03:41):
I don't wanna admit that Applebasically may have just shipped,
and this is from a differentpodcast that I listened to, but
they may have shipped a newversion of the Newton, which is
something that's a little bitahead of its time.
Rob (03:51):
I agree.
And I think in 10 years we'lllook back and we might have the
same Newton story the hardware'sgreat.
The concept is great.
It's just that we can't do thekiller apps that I think we have
to be able to do.
The first killer app is takethis thing outdoors and do
outside things with it.
And right now people are justusing it as goggles when it's
outside.
But I did say in the AR episode,it won't take long for someone
(04:12):
to drive in this thing.
And I was absolutely rightbecause some idiot.
Did drive.
It was a self-driving Tesla, soit technically wasn't driving,
he had it on while driving hisTesla.
It was guaranteed to happen, butit doesn't have good enough
hardware to work outdoors.
As we talked about in the AIepisode, not gonna repeat all of
that.
Go listen to it.
All the killer apps are outdoors
PJ (04:31):
Yep.
Rob (04:32):
without the outdoor, and the outdoor features, it's not
gonna work outdoors.
And no, right now no one's gonnawalk around with this thing on
the head.
Even if it has life passthrough, it looks ridiculous.
Unless you're skiing, you couldprobably pull it off skin.
PJ (04:45):
I actually listened to a podcast recently where someone,
has done the skiing test.
Rob (04:51):
Somebody I watched a, I think it was New York Times
PJ (04:54):
Yes,
Rob (04:55):
left it on, left it on her head for 24
PJ (04:56):
yes.
Rob (04:57):
and, uh, I don't think she slept in it, but she did go
skiing in it.
But they did close the hill.
It was all organized, so they
PJ (05:02):
Right, right,
Rob (05:03):
could ski by herself.
Um, but at that point, you'rejust watching a video of what's
in front
PJ (05:08):
right.
Rob (05:09):
app to assist you in skiing.
It's like, can you wear this?
Well, it's a camera feed, adisplay in your face.
So technically you could doanything
PJ (05:15):
Yep.
Rob (05:16):
it.
But why?
I can see with my eyes, I don'tneed to see my eyes on a panel.
That gives me eye strain.
That's just a camera feed.
If you're not gonna mark up thatvideo feed with augmented
reality
PJ (05:29):
Yeah.
Rob (05:30):
is the whole purpose of the device, then why wear it?
It all?
I'll just put a piece of glassin front of my face.
PJ (05:35):
One of the use cases that I keep hearing about where people
are really excited about thisis, oh, it's the best
entertainment device everbecause we have a huge screen,
which I'll double down on mystatement, which is that is a VR
application, not an ARapplication.
Like I don't, I don't care.
Rob (05:54):
could do the same
PJ (05:55):
Absolutely.
And.
I, I really want us to try andfind someone who is actively
using it right now, just to seetheir excitement in this moment,
because I think this is thehighlight.
I think this is the highwatermark of the excitement is
right now, and my prediction I'mgonna make on this is that most
people will not be using this ona regular basis in six months.
(06:18):
If you've got it today, youwon't be, I might, I might be
like long, I might be, it mightbe three months.
Rob (06:26):
It might be a year, but it's gonna be a short time.
unless they can get that pricedown to the Quest price where
more people will buy it andyou'll get more inherent users
that way, that it's not gonna bea device.
I guess that's the Quest couldeasily do the same video
playback.
PJ (06:41):
Yes.
Rob (06:42):
the Vision Pro can do, doesn't have quite as good
screens, but good enough.
And the whole idea of having abig display, you're sitting on
an airplane seat.
You don't wanna deal with theairplane, you just put your
vision pro on.
You watch a movie on a bigscreen.
Totally.
Im immersed.
That is fully a VR
PJ (06:59):
Absolutely.
Rob (07:00):
a VR application, it's just a, a side effect of having a
display on your
PJ (07:04):
Yes.
Rob (07:05):
It doesn't track with your head.
So it's technically not even vr,but we have a lot more r and d
and a lot more app developmentexperience in that vr.
Space than we're doing the ARspace.
The AR space, like I said, isn'tabout technology.
The technology has been aroundsince Magic Leap.
PJ (07:21):
Yep,
Rob (07:21):
Magic Leap probably were the first ones to pull it
together.
The problem with AR isunderstanding what you are
PJ (07:28):
yep.
Rob (07:28):
Like I said, you put it on skiing and you go down the ski
slope, like does it even knowyour on a
PJ (07:33):
Right?
Rob (07:33):
Which ski slope are you on?
What information is it gonnagive you If it's just gonna give
you GPS speed, I can already buya pair of glasses that give me
GPS speed in my,
PJ (07:43):
Yeah.
In your eyesight.
Yeah.
Rob (07:45):
That's, that's not a, that's not an AR
PJ (07:48):
Agreed.
Rob (07:49):
AR applications through AR applications are few and far
between and incredibly hard todevelop and incredibly hard to
contain that.
They always give you the correct
PJ (08:00):
A hundred percent.
Rob (08:02):
AR apps break so easily.
'cause like I said, my kitchenisn't your kitchen.
So if I have an AR app thatworks in the kitchen, it's.
It's gonna have a hard timeknowing if it's a kitchen.
Now there are some cool thingson the Vision Pro.
demo that I saw was the timerswhere you could put a timer on
top of a saucepan and be like,okay, 10 minutes for this one
(08:23):
and
PJ (08:23):
I heard about this one.
Yeah.
Rob (08:24):
would just sit above the pans and you're wearing it in
the kitchen and they awaycooking.
And the timers, you canbasically place them in space,
which is a, a novel thing.
It's an AR thing.
Having a timer attached to athing in the real world is of
nice.
there are little, little bits ofhope
PJ (08:42):
Yeah, I get it.
Rob (08:44):
AR can solve these things, but they're so, they're so
insignificant.
Trivial in, in the grand scheme
PJ (08:51):
They're niche.
They're very niche.
Rob (08:53):
not gonna cook in my Vision Pro just so I can stick a timer
to the
PJ (08:56):
Correct.
Rob (08:57):
when I can just shout across the room to Siri and make
her do a timer
PJ (09:02):
Uh, uh, or, or, you know, or put a timer on your phone.
You can do multiple timers on,on your iPhone.
Rob (09:09):
you know what else you can do.
You can buy
PJ (09:12):
They could do that too.
Twist them.
Rob (09:14):
cost like 99 cents.
have one for each burner on mystove for$4, I can spend the
rest of it in the pub.
PJ (09:23):
It's probably, well less than the regulatory fee of
buying the Apple Vision Pro.
Rob (09:27):
Absolutely.
PJ (09:28):
Uh, I,
Rob (09:29):
ridiculous.
I don't think, I think we'regonna see it just taper away and
it's like, okay, it exists.
No one
PJ (09:34):
if, if there is any kind of enterprise, a applications for
it.
I don't think Apple will, jumpon that.
They are a consumer company.
They wanna have consumer scaleand we're
Rob (09:45):
agree.
PJ (09:45):
so I think
Rob (09:46):
the enterprise has already, like HoloLens still exists in
enterprise space and
PJ (09:50):
yeah, it's like why bother?
Rob (09:52):
they're doing military contracts and things
PJ (09:53):
Right.
Rob (09:54):
I that space is taken, I think Magic Leap trying to get
into that space.
And Microsoft is like, no,we've.
are the enterprise company.
PJ (10:02):
Agreed.
Agree.
I,
Rob (10:04):
all fronts.
It HoloLens integrates with, uh,office backends and things like
that, and
PJ (10:11):
yeah.
Rob (10:12):
The ecosystem for enterprise is the Microsoft
ecosystem, and HoloLens isperfectly placed for that.
I do believe there's a middleground, though.
It's not enterprise and it's notconsumer, it's the business
space.
It's still consumer orientated,but you are in the business
environment such as things likevirtual avatars for Zoom calls
(10:32):
and FaceTime and things likethat.
But like I said, it just makesit more weird.
PJ (10:37):
Yeah.
Rob (10:37):
the avatars that I've seen, it kind of does scan your face
and it just kind of makes youlook like this weird washed out
PJ (10:46):
Uh, I,
Rob (10:48):
it's bizarre in that it, the, the face that it makes, and
I had my face scanned when I wasat Apple doing this and.
I never saw the results, so I,uh, I'd like to find that and I,
if I can like that, I cannothave to do it again on a, on a,
real device.
PJ (11:00):
I am disinclined that that's gonna work, and I actually
believe that for where we're atcurrently, the uncanny value
problem is something we have notsolved.
I.
And if anything, We need toactually back away from the Ann
Kenney Valley, if you wanna havesomething that has more empathy.
I would love to get into this asa separate podcast by sort of
thesis is that C3 PO has moreempathy than some of these
(11:23):
robots you see coming out todaywhere they're supposed to be
human based.
Rob (11:28):
think that's a market they, that's the only market that can
afford it.
This is why I think will be used'cause people will have it and
basically need to use it.
So it's like I'll just do a Zoomcall in it.
But like I said, it's gonna makeZoom calls more weird than they
already are.
PJ (11:44):
More delightful and more isolating.
Rob (11:46):
if like, if you have
PJ (11:47):
So our per
Rob (11:48):
are they both gonna
PJ (11:49):
our,
Rob (11:49):
and just be isolated themselves for be in the same
PJ (11:51):
oh my God,
Rob (11:52):
Like you could just take those off and be in the same
room and it looks of likevirtual world, but it's real.
And you can write on pieces,pieces of paper and give it to
each other and you do all magicthings.
There's a whiteboard over there,I can write on that with a pen
with no latency and you can seeit in real time.
PJ (12:09):
reality is the ultimate virtual reality.
Rob (12:12):
Exactly.
so.
I think.
I, I think it'll burn out and belike, okay, we're done.
What I am interested in is thisis the Vision Pro and based on
Apple's naming conventions, willthere be a vision without the
Pro Monica, which is cheaper,and how much cheaper can it be
and still be of that samequality hardware?
The hardware, by the way, Iworked on it, it is fantastic
(12:34):
hardware.
That's why it costs so much.
Even if you factor in the Appletax,
PJ (12:40):
Yep.
Rob (12:41):
still a a fantastic piece of hardware.
I don't believe
PJ (12:46):
I,
Rob (12:46):
do anything remotely like that.
Same experience for a lowercost.
PJ (12:52):
I agree.
Rob (12:53):
So it may be a time factor.
Let technology get better, thenwe can make it better, it
cheaper, but by then people willbe
PJ (13:02):
I agree.
So we should check in in threemonths to see what our
predictions look like.
Is the Vision Pro still a thing?
Rob (13:09):
Okay.
PJ (13:10):
check in at six.
Um.
Okay.
Let us hop over to somethingthat came outta the last 24
hours.
People are chatting about it andit's a Amazon and Alphabet.
So meta in its earnings callissued a statement that they're
gonna be finally issuingdividends, and this caused the
(13:32):
stock price to jump about 20%.
I mean, they also had a atremendous quarter.
This is coming off of a year ofefficiency as Zuckerberg called
it, and they laid off a wholelot of people.
Now at the same time, Amazon andAlphabet also did a whole slew
year and then a bunch this year.
So a story came out whereGoldman Sachs analysts think
(13:57):
that Amazon and Alphabet willhave dividends in 2024.
And I did write a blog postabout this last week.
I'll link it into the shownotes.
One of the things I findfascinating, Rob, is that, the
headlines for this have been alittle bit, I think, overblown
where it seems like they almosthave inside information.
(14:21):
And I do wanna, temper thisslightly.
I'm not sure if you have aparticular take on this before I
start going into my own rants.
Rob (14:28):
Uh, go on on your ran and I'll, I'll interject.
PJ (14:32):
Okay.
So, a lot of my insights that Iwrote into the blog post were,
trying to.
Piece out that Meta was one ofthe largest tech companies that
hadn't paid a dividend out.
apple has done it for years, youknow, after Steve Jobs death.
Microsoft has done it for years.
(14:52):
It, it is a hallmark of, let'ssay, a company that's ending its
growth period and entering intoa more mature blue chip period.
Not, and it's always a littlebit fuzzy, so the statements
that are made of the headlinesare like, yes, they think Amazon
and Alphabet will have dividendsin 2024.
When you actually start tryingto dig in, and I'm trying to
find the actual Goldman Sachsnote on this.
(15:15):
It's a little bit more temperedbecause, you know, the, the
statements, and this is from, I,I got this out of Seeking Alpha
Kostin, who's the, the analyst,the chief analyst I believe of
Goldman Sachs said.
Google and Amazon are the twolargest stocks that currently
don't pay a dividend, but havefundamentals that are
historically implied, higherodds of initiating a dividend
(15:36):
relative to peers.
And that's a different statementbecause you're just saying
historically these companies inthese similar positions would
initiate a dividend.
I agree with the notion that Ithink Wall Street will be
putting more pressure ontoAmazon and Alphabet to start
(15:57):
issuing dividends, but there'snot a smoking gun here for me,
like this is not saying there'ssome new information that we've
been given.
It's basically like historicallythis has been true.
Rob (16:09):
I agree.
And that's what I was gonna sayat the start.
It's, it's, they're in aposition to pay a dividend
PJ (16:15):
They are.
Rob (16:16):
been, have been for years.
And you've gotta think that
PJ (16:18):
Yeah,
Rob (16:18):
has to be a quite strong position.
You're committing to severalbillion dollars in cash
PJ (16:23):
a hundred percent.
Rob (16:24):
and and they both have that.
They both, they both make enoughprofit that they could pay that.
It does signify that transitionthat you talked about.
And it, it signifies it.
Like I says, the whole new wayof thinking of it becomes a more
driven by shareholders thandriven by growth.
And you've gotta think, wetalked about this before, like
(16:45):
meta run out of people.
So it has little
PJ (16:47):
Yep.
Rob (16:48):
growth.
It now has to expand theplatforms to make them more
usable to get growth.
But it's still a massiveadvertising platform, so it has
a huge amount of cash.
Let's pay some of that back.
I also think there's a bit of ame too here, the analysts are
just looking, well, meta did itwith these.
PJ (17:02):
I, I agree.
Rob (17:03):
criteria.
And I go, who else could do it?
And it's the obvious suspect isthe answer.
Didn't take an analyst to comeup with that one.
And there's a bit of me toohere.
It's like maybe Amazon can dothe same thing and get a 20%
stock boost and that's where theWall Street pressure will come
from.
And maybe they'll do it, maybethey won't.
(17:23):
But it's only a blip in timeover time.
It's changes how the companieswork internally.
Money that was earmark for thisis now earmarked for, dividends
and Amazon doesn't have thatmuch cash though.
So is Amazon may not, in myeyes, wouldn't be the one who
PJ (17:44):
I,
Rob (17:44):
for
PJ (17:44):
there's a.
Rob (17:46):
I, I don't really look that closely at their, at their
numbers, but they've always beenthe one who like, kind of
doesn't make any money.
They just put it all back intogrowth, maybe that's changing,
but yeah, Google for sure is,the one you would think would
pay a dividend and currentlydoesn't.
PJ (17:59):
I'll tell you my take on it is this, is that, you're right,
Amazon has no, never had a lotof cash on hand.
They have tended to reinvest andthey've reinvested really
heavily in logistics.
They've reinvested in theirproducts, they've reinvested in
AWS, which they're still theleader in that space.
They have done a tremendous jobat the same time of being very
(18:22):
fiscally responsible.
Amazon, I mean, has a graveyardof its own of products.
And the reason those, it has agraveyard is that it tried those
products in the marketplace,wasn't able to create a
profitability story from it, andthen killed it.
And they were always reallyclear about that.
(18:42):
Like, these are aboutprofitability.
Can we make this somethingsustainable economically?
So it's, it's fascinatingbecause you're right, Amazon
doesn't have a lot of cash onhand for this sort of thing yet.
They've been much, much morefiscally disciplined than
Alphabet.
Alphabet has got a huge amountof cash, and they're similar in
(19:05):
some, I mean, they're similar inthat way to Apple, but they
really only have a smalloffering of products that
actually provide profitability.
You know, search ads, YouTubetwo ads, and they're trying to
build a business out of GCP.
So it it like on if one companyhad the fiscal discipline and
(19:25):
the money, yes, I would see thatas being like really obvious in
terms of taking the path ofgiving a dividend.
But each of them basically havethis sort of orthogonal set of
characteristics that, indicatethat, you know, Amazon is not in
a position in my mind to bepaying out a dividend and.
(19:47):
Alphabet is still running, Ithink fairly inefficiently to be
paying out of a, a dividend.
And there's one other bit toalphabet that I'll get to in a
second.
Rob (19:55):
So do you think if they do pay a dividend, it's gonna be
purely Wall Street pressure?
After Meta did the buyback ofshares, which boost the stock
price and the dividend, whichalso boosted the stock price
resulting in a 20% boost, that'sa huge
PJ (20:12):
It, so let's talk, let's,
Rob (20:15):
think the institution at Whole oldest don't care about
the dividend.
They like, oh, if it's going toinstantaneously boost me 20%, we
can, uh, can time some, quick
PJ (20:25):
I,
Rob (20:25):
that and make a crap ton of money and then put it in some
other stock.
PJ (20:29):
I gotta talk about this in the, in the, the blog post.
So Amazon has only ever issuedone type of stock, common stock.
There's a plurality that's ownedby Jeff Bezos, but the reason
why it's important is that thatstock, it's only one type of
stock, like, as far as I know,it doesn't have any special
classes of stock for votingshares.
(20:51):
So there is more opportunity, Ithink, for Amazon to have a vote
that actually would vote forsomething like the dividends.
I, and I, I apologize, I don'tknow the exact, you know,
breakdown of who owns what stockbut there, there's an actual
opportunity for a forum to takeplace to vote whether or not the
(21:11):
shareholders want to havedividend.
Why am I stating this?
I'm stating this becauseAlphabet is different.
Alphabet.
Alphabet has actually threeclasses of stock A, B, and C.
B is not traded on the openmarket.
A and C are, A, has votingrights, B has voting rights, C
(21:32):
does not.
The thing about the B classthough is it has 10 x the voting
rights.
So even though like LarrySergey, Eric and a few, a few of
the board of directors I thinkhave this, this small amount of
B class stock, they have theability to have outsized voting
(21:53):
rights over the A side ofthings.
So why am I going through all ofthis?
The decision whether or not topay out the dividend is gonna be
completely up to Larry, Sergeyand Eric and a few others.
And I think if they decide to doit, they're gonna do it because
like, look, there's a huge boostthat we can have to our personal
(22:16):
fortunes by effectively saying,we got, we want to have
dividends.
So it, the, the Wall Streetpressure, I think is really
going to be whether or not theywant to increase their fortunes,
frankly.
Rob (22:29):
Like you said, you went into the whole hiring thing in
the past of like how thisaffects hiring.
I don't think it makes anydifference in the long term.
You still get a stock grant, youstill get this, you might get
less because the shares areworth more, blah, blah, blah.
I don't think it it directlyaffects the hiring and firing of
people.
I do think it, uh, it mightchange who wants to go there and
(22:54):
it, it does change at thebackend, the amount of money
available for projects thatthese programmers may be working
on, or not necessarilyprogrammers, but anybody who
goes
PJ (23:03):
Yep.
Rob (23:04):
there it's.
It just literally changed theallocation of the cash and if
one division starts to generateall the money, which is what
happens in Google quite a lot,is one
PJ (23:17):
Yeah,
Rob (23:17):
money.
One division pays the dividend,it basically becomes a A to B
transfer, and all the teams dostart to get left out.
So I think there are subtlethings that can happen along the
way, but I think immediatelyit's not gonna
PJ (23:30):
so
Rob (23:31):
on the hiring and fire in
PJ (23:32):
I, I'm, I'm actually, I'm gonna keep doubling down on my
statement that I think this doeschange the hiring and firing,
and the reason why is that metaspent the last year in which
they called the year ofefficiency, and they let go 20%
of their staff.
It was a large number.
So I think they were planning onthis dividend thing for a long
(23:53):
time, at least a year with.
Rob (23:56):
It's not something you just pull out your ass one day and be
like, let's pay a dividend.
PJ (24:00):
And, and so if Amazon and Alphabet are gonna be feeling
similar pressure, then I thinkwhat would be the sign of this
coming would be, Hey, we have todo a similar thing that Meta
did.
We're going to actually keepdoing layoffs.
So I think it actuallyaccelerates the number of
(24:20):
layoffs we would see from thesecompanies if they're planning on
doing a dividend.
Now, my only data point is thatprior to the meta announcement,
Sundar had sent off an email,again, this got leaked.
So this is not private news thatthere were gonna be more layoffs
at Alphabet.
(24:40):
They didn't say exactly whenyet, but, or how many or how big
or whatever.
But this was something that wasgoing to be happening.
it's impossible to run thescenario both times, but.
Does that mean that, we'd seeeven more layoffs now because
Google slash Alphabet wants tocatch up to what Meta did, or
like signal to the marketplacethat, hey, we're gonna be paying
(25:01):
out a dividend and we're goingto be doing our own efficiency
by laying off a whole bunch ofpeople.
I still think that the layoffsare the sign, like we start
seeing significant percentagesof alphabet getting laid off,
Amazon getting laid off.
I think this is the sign for adividend coming.
And I think that this would be,it's a little harder to do now
(25:23):
as a surprise.
Like I don't think you'd see aone day run up of 20% for these
companies.
But I do think that the marketwould basically over the next
year, start increasinglyrewarding these companies for
doing layoffs because theybelieve a dividend's coming.
So I think that's anotherapproach that could be happening
here, is that they will dolayoffs that makes the market
(25:45):
think, Hey, a dividend's coming,let's increase the stock price.
'cause meta did it.
Rob (25:49):
But meta also did the whole year of efficiency thing, which
was more than just layoffs.
It was literally a year ofefficiency, which included
layoffs.
are the other companies doinganything else other than laying
off and calling it efficiency?
Uh.
PJ (26:02):
Yeah, it's a good question.
I mean, I've stated this before,pretty, pretty blatantly, on the
layoffs episode unless I startto see Sundar actually like,
turning down whole product areaswhere it's like, Hey, we're
selling off this division.
We're not gonna do maps anymore.
We're not gonna do drive, orwe're not gonna do, you know,
pick anything that's not makingmoney for them.
(26:23):
To actually make bigger signalslike, hey, we are actually like
getting into something that'smuch more efficient, much more
lean, much more focused on ourcore offerings here.
Rob (26:33):
Did they kind of do that with the division of saying
they're not gonna fund itinternally anymore, they're
gonna look for external venturefunding.
PJ (26:42):
It's a,
Rob (26:43):
isn't that a step in that direction?
PJ (26:46):
um, I mean, I think it's a drop in the bucket in my mind.
I mean, the structure ofAlphabet as it is always had
this desire to have, if you'reunder the alphabet umbrella,
then anything that's not Googlehas this opportunity for outside
investment.
I think Waymo might be gettingoutside investment from
(27:08):
somewhere else as well, it's agood question though.
Basically, if it's like, Hey, X,you gotta go find your own
money, we're not gonna fundanyone.
Rob (27:15):
said.
It wasn't like you can get yourown external funding, it was,
you kind of now have to go andfind your external funding.
'cause Google and the venturearm of Google, I assume, isn't
gonna fund the internal projectsanymore.
So it's kind of, it's, it's,going down that path in my eyes.
PJ (27:32):
You make bring up a really good point, which is like, look
at the flotilla of companiesthat are under Alphabet and they
will probably, be the ones thatget hit first, where it's like,
go find funding.
If you can't find funding, we'regonna be letting you go.
And the more you see of that atthe, the sort of edges of
Google, if you will, where I'mtalking about, I think the big
(27:55):
things that need to be done arewithin Google, which is like,
look, we only have a few productareas that are really actually
making money.
And the ones that are not areeither that are gonna be
reduced.
Or sold off or gotten rid of.
And that's the areas I'm notcert I think those are the area,
those are the things that needto be done to get it into
(28:16):
something that's lean.
I don't know if it's, if it isthe moves that Sundar's got the
guts to do.
Rob (28:21):
I guess we'll have to wait and see.
PJ (28:23):
yeah.
Amazon I think is, is gonna bemore interesting in this arena
because if they are going to endup going down the route of
dividends, I think there's somemore trimming that they would
do.
Who knows, maybe they decide,we're not gonna make you know
Lord of the Rings anymorebecause that's costing us
several billion dollars toactually go do.
(28:44):
And so maybe their contentdivision is an area where that
would be something either theywould let go of.
'cause it's a lot of moneygetting dumped into that with,
I'm not sure exactly how muchreturn.
Or we go back and say like, Hey,content should be everywhere.
So Amazon starts putting itsstuff on Netflix and Hulu.
I think similar things will bedone with Amazon in terms of
(29:06):
trimming if it wants to pay outa dividend.
I
Rob (29:09):
do agree that content is king, but.
To a limit.
It's, I think a lot of thesecompanies make content because
they want to be the next killercontent.
they're now the owner of thenext Lord of the Rings.
If you step into a content suchas a Lord of the Rings at its
midlife end of life, wherever itis right now, it's incredibly
(29:30):
expensive.
It's incredibly valuable.
I don't think you get any returnfrom that.
PJ (29:36):
yeah,
Rob (29:36):
if you were the owner, like the founder and developer of
Lord of the Rings, sure, massivereturns, but stepping in at the
end game is, is not what I meanby content everywhere.
But
PJ (29:48):
I agree.
I agree, and I think this iswhere there's gonna be a lot of
scrutiny about what the returnon investment of this content
development really is
Rob (29:57):
I also think that Amazon are looking at a lot of other
content they have, like startingto be a more traditional games
publisher.
think easier to cut thatcontent.
For small developers than it isto cut a lot of the ring
content, which will have a hugepublic, optics problem.
And also it's potentially likebetter lawyers who make the deal
(30:19):
so it can't be cut or at leasthuge paybacks if it gets cut,
which some of the smallerdevelopers may not have.
So I think it may affect thesmaller developers in the
content realm more than the Lordof the Rings, even though Lord
of the Rings is taking all themoney and it's not gonna make
anywhere near enough money.
PJ (30:35):
to make up for it.
I, I, so I'll agree with you.
I think the, the, the gamedevelopers will be affected.
I think the lawyer agreementsare probably what holds this
stuff together.
I have never been convinced onthe, oh, people will get upset
with Amazon if they kill Lord ofthe Rings.
Part of my premise is that like,no one's gonna, if if they
(30:55):
killed Lord of the Rings, noone's gonna stop buying Amazon.
Like that to me feels like a, asilly argument.
Like I've never, and, but I madethis about Google, like, it's
like if Google let go of anymajor thing, like Google Drive
or photos or, you know, pickanything except maybe YouTube,
uh, but that makes money forthem.
(31:16):
If you, if they let go of anyproduct that wasn't making
money, it's not as if people aregonna stop using Google as a
search engine.
So I, I've always thoughtthere's been this particular
fear, and I've heard it multipletech companies now, where, oh,
we can't cut that'cause it's badpr.
It's like, eh, not really.
You'll piss off a few people,but.
(31:36):
You know most people, the vast,vast majority of people are
still gonna use your coreservices that are making you
money.
Rob (31:42):
The A, the Amazon one's an interesting one because I did
stop using Amazon Prime because.
The ads on Amazon video, itannoyed me so much I stopped
using it.
I actually made a spreadsheetand went through all my orders
of the last things for the lastyear
PJ (31:56):
Yeah.
Rob (31:57):
up the shipping cost of like, if I actually bought this
and paid for shipping, would ithave cost?
The cost about the same.
I don't buy much on Amazon.
It cost about the same as Prime,so I got rid of Prime.
I still do use Amazon a littlebit, but I did get rid of Prime
and that's kind of how it'llstay.
I don't see the point of,
PJ (32:17):
Well.
Rob (32:17):
the services of Prime enough, and if now I've the hard
numbers for the shipping, it'salso like, eh, it's not worth
it.
PJ (32:24):
Well, what's fascinating, Rob, is that you're still paying
money to Amazon.
You're just not paying as muchmoney, so,
Rob (32:30):
Depending on what type of product you're buying, and a lot
of those have free shippingwithout any subscription
service.
So, if, if if
PJ (32:36):
exactly.
So,
Rob (32:38):
and it's not much
PJ (32:39):
yep.
Rob (32:39):
like open two web browser tabs and see who has the best
price and factor the whole pricein, not just the stated price,
then buy from there.
And so that'll make me buy lessfrom Amazon.
that's basically all for addingads to Amazon video, which I
didn't even use to begin with.
The biggest thing that pissed meoff for Amazon, and this is what
started the whole thing, is likeI now dislike Amazon, is I
(33:01):
bought every season of Top Gearon Amazon.
I paid for it, I owned it, I hadit in my library and I could go
watch it and then at some point,half of it disappeared.
Because rights or whatever, andit's like, oh, they didn't gimme
my money
PJ (33:18):
Yeah, yeah,
Rob (33:19):
already owned that.
If I'd have owned A DVD and youwould change your licensing, you
can't come and take the DVDback, but you could take back
PJ (33:26):
yeah.
Rob (33:26):
version.
PJ (33:27):
get into this one.
Rob (33:28):
that's utter bullshit.
So I kinda stopped using Amazonvideo at that point.
I've never been back and nowthey've added ads.
It was just like salt in thewound.
So I looked at the other stuff.
So I think people will look atservices
PJ (33:40):
get into this one.
Rob (33:41):
and start to back away them, not because the service
isn't
PJ (33:47):
We should get into this one.
Rob (33:48):
because of the salt in the wound.
Like, no, you screwed me once.
I'm not going back.
But, I do think they're moreconnected than black and white
would say they are.
PJ (33:59):
I'll agree.
I'll put the alpha valuesomewhere between zero and one,
but, closer to zero for me interms of correlation than one.
so.
With this, again, we've gotthese analysts that have
basically released a statement.
My comment on it is, you know,there's not a lot of new
information.
The prediction I've got is if westart seeing more layoffs, that
(34:21):
probably portents the dividend.
So it's something we'll be ableto track throughout the rest of
this year.
Rob (34:26):
I think the analyst announcement was just analysts
being analysts, and like I said,it doesn't take a rocket
science.
PJ (34:32):
I agree.
Rob (34:33):
uh, or an analyst to be like, well, meta did it.
Who else could do it?
Oh, look, Amazon and Google.
PJ (34:39):
Agreed,
Rob (34:40):
You have an
PJ (34:41):
agreed,
Rob (34:41):
me that.
I could have told you that theday of the meta announcement.
I could have told you all threeof them the day before.
It's like, it's not difficult topull some stats and be like,
well, these people should paydividends, but don't.
PJ (34:52):
agreed.
A lot of the commentary I'veseen is much more about what it
would do to the overallmarketplace rather than an
analysis of the companiesthemselves.
So in that, I think we're aheadof them.
Cool.
All right.
We'll come back to this one asnews comes out, frankly, we'll
sort of see exactly how wellthis is playing out in the next
month, two months, six months,basically.
We'll see how our predictionsdo, and we'll grade'em then.
Rob (35:14):
Cool.
That works.
PJ (35:15):
Cool.
Ierengaym.
(00:03):
com ierengaym.
PJ (00:09):
Welcome back everybody.
Tricky bits with Rob and pj.
The day today is February 12th,2024 and part of that is that
we're gonna be doing a littlebit of after action report on
some of the things we've talkedabout in the past.
So if you haven't listened toour AR episode, you might wanna
(00:29):
go back and do that.
If you haven't looked, listenedto some of our discussions about
the big tech companies and theirlayoffs, you might wanna listen
to that one as well.
You can obviously pick it up,right from here, and that's
akay.
But first off, we're gonna startwith Apple.
So.
We had talked a little bit aboutthe Vision Pro coming out.
We talked about augmentedreality and we had a few
(00:52):
predictions, Rob, about what wasgonna happen and now the reviews
are out.
So Rob, how closely have thereviews been tracking with what
you have been with what youpredicted previously?
Rob (01:06):
As I said before, AR has this massive wow factor.
When you first pull it on yourhead, you're like, whoa, I've
never seen anything like thisbefore.
And your head start, you startto go crazy with all the ideas
that you think of.
I could do this, I could dothat.
And in theory, you could do allof these things, whatever they
may be.
simply reality is the technologydoesn't really fit any of those
(01:28):
use cases.
And I think over time you'll seeit with the other devices, it's
AR is boom, amazing.
And then you've seen aliens comeoutta the wall plenty of times
and you're like, okay, I'm fedup with this.
the killer app?
And I think exactly what's goingon with the Vision Pro right
now.
It's people are like, yeah, it'sreally cool.
It does a really good job atwhat it does.
No killer app for$3,500 is asteep sell.
(01:51):
And it may become an enterprisething, it may become a business
meeting thing just so you canmake Zoom calls even more weird.
I think that's where it's gonnago.
Without a consumer killer app,people are not going to pay
$3,500 for that device.
the reviews kind of go alongwith that.
All the initial reviews are,it's good, but, and some reviews
(02:16):
now have, they've used it longerand it's like, well now what?
So I think it'll play outexactly like we said it would.
And I think it has to play outthat way.
'cause it's not gonna be, peoplearen't rushing out to buy it,
so, and never were with thatprice tag.
So it's not gonna be a marketsaturation device.
PJ (02:35):
Uh, I agree.
One of the, one of the funthings, and we talked about this
a lot in, in the AR episode onVision Pro.
Everyone who got a chance to useit.
Got a chance to use it for likefive minutes at the announcement
last June and it was like, oh myGod, like you said, it's
exciting.
It's like, oh, I can see whereall this stuff can be and what,
where can, what it can do.
(02:56):
And we have had six, sevenmonths of basically runup of
anticipation where people havebeen using their imagination to
like everything that it couldpossibly be.
And to be fair, there are somereviewers that actually love it.
and I think there's a lot ofreviewers though that are trying
to love it.
Like they don't actually want toadmit to themselves that they
(03:17):
were wrong.
And so there's a lot of couchingof, oh, we can see where the
future is going.
Or we can see that this is firstgeneration hardware.
And I think they're reallytrying to satisfy that kind of
emotional need to say, yeah,this kind of stinks, but I don't
wanna admit that the thing I waslooking forward to for the last
seven months is a bit of a dud.
(03:41):
I don't wanna admit that Applebasically may have just shipped,
and this is from a differentpodcast that I listened to, but
they may have shipped a newversion of the Newton, which is
something that's a little bitahead of its time.
Rob (03:51):
I agree.
And I think in 10 years we'lllook back and we might have the
same Newton story the hardware'sgreat.
The concept is great.
It's just that we can't do thekiller apps that I think we have
to be able to do.
The first killer app is takethis thing outdoors and do
outside things with it.
And right now people are justusing it as goggles when it's
outside.
But I did say in the AR episode,it won't take long for someone
(04:12):
to drive in this thing.
And I was absolutely rightbecause some idiot.
Did drive.
It was a self-driving Tesla, soit technically wasn't driving,
he had it on while driving hisTesla.
It was guaranteed to happen, butit doesn't have good enough
hardware to work outdoors.
As we talked about in the AIepisode, not gonna repeat all of
that.
Go listen to it.
All the killer apps are outdoors
PJ (04:31):
Yep.
Rob (04:32):
without the outdoor, and the outdoor features, it's not
gonna work outdoors.
And no, right now no one's gonnawalk around with this thing on
the head.
Even if it has life passthrough, it looks ridiculous.
Unless you're skiing, you couldprobably pull it off skin.
PJ (04:45):
I actually listened to a podcast recently where someone,
has done the skiing test.
Rob (04:51):
Somebody I watched a, I think it was New York Times
PJ (04:54):
Yes,
Rob (04:55):
left it on, left it on her head for 24
PJ (04:56):
yes.
Rob (04:57):
and, uh, I don't think she slept in it, but she did go
skiing in it.
But they did close the hill.
It was all organized, so they
PJ (05:02):
Right, right,
Rob (05:03):
could ski by herself.
Um, but at that point, you'rejust watching a video of what's
in front
PJ (05:08):
right.
Rob (05:09):
app to assist you in skiing.
It's like, can you wear this?
Well, it's a camera feed, adisplay in your face.
So technically you could doanything
PJ (05:15):
Yep.
Rob (05:16):
it.
But why?
I can see with my eyes, I don'tneed to see my eyes on a panel.
That gives me eye strain.
That's just a camera feed.
If you're not gonna mark up thatvideo feed with augmented
reality
PJ (05:29):
Yeah.
Rob (05:30):
is the whole purpose of the device, then why wear it?
It all?
I'll just put a piece of glassin front of my face.
PJ (05:35):
One of the use cases that I keep hearing about where people
are really excited about thisis, oh, it's the best
entertainment device everbecause we have a huge screen,
which I'll double down on mystatement, which is that is a VR
application, not an ARapplication.
Like I don't, I don't care.
Rob (05:54):
could do the same
PJ (05:55):
Absolutely.
And.
I, I really want us to try andfind someone who is actively
using it right now, just to seetheir excitement in this moment,
because I think this is thehighlight.
I think this is the highwatermark of the excitement is
right now, and my prediction I'mgonna make on this is that most
people will not be using this ona regular basis in six months.
(06:18):
If you've got it today, youwon't be, I might, I might be
like long, I might be, it mightbe three months.
Rob (06:26):
It might be a year, but it's gonna be a short time.
unless they can get that pricedown to the Quest price where
more people will buy it andyou'll get more inherent users
that way, that it's not gonna bea device.
I guess that's the Quest couldeasily do the same video
playback.
PJ (06:41):
Yes.
Rob (06:42):
the Vision Pro can do, doesn't have quite as good
screens, but good enough.
And the whole idea of having abig display, you're sitting on
an airplane seat.
You don't wanna deal with theairplane, you just put your
vision pro on.
You watch a movie on a bigscreen.
Totally.
Im immersed.
That is fully a VR
PJ (06:59):
Absolutely.
Rob (07:00):
a VR application, it's just a, a side effect of having a
display on your
PJ (07:04):
Yes.
Rob (07:05):
It doesn't track with your head.
So it's technically not even vr,but we have a lot more r and d
and a lot more app developmentexperience in that vr.
Space than we're doing the ARspace.
The AR space, like I said, isn'tabout technology.
The technology has been aroundsince Magic Leap.
PJ (07:21):
Yep,
Rob (07:21):
Magic Leap probably were the first ones to pull it
together.
The problem with AR isunderstanding what you are
PJ (07:28):
yep.
Rob (07:28):
Like I said, you put it on skiing and you go down the ski
slope, like does it even knowyour on a
PJ (07:33):
Right?
Rob (07:33):
Which ski slope are you on?
What information is it gonnagive you If it's just gonna give
you GPS speed, I can already buya pair of glasses that give me
GPS speed in my,
PJ (07:43):
Yeah.
In your eyesight.
Yeah.
Rob (07:45):
That's, that's not a, that's not an AR
PJ (07:48):
Agreed.
Rob (07:49):
AR applications through AR applications are few and far
between and incredibly hard todevelop and incredibly hard to
contain that.
They always give you the correct
PJ (08:00):
A hundred percent.
Rob (08:02):
AR apps break so easily.
'cause like I said, my kitchenisn't your kitchen.
So if I have an AR app thatworks in the kitchen, it's.
It's gonna have a hard timeknowing if it's a kitchen.
Now there are some cool thingson the Vision Pro.
demo that I saw was the timerswhere you could put a timer on
top of a saucepan and be like,okay, 10 minutes for this one
(08:23):
and
PJ (08:23):
I heard about this one.
Yeah.
Rob (08:24):
would just sit above the pans and you're wearing it in
the kitchen and they awaycooking.
And the timers, you canbasically place them in space,
which is a, a novel thing.
It's an AR thing.
Having a timer attached to athing in the real world is of
nice.
there are little, little bits ofhope
PJ (08:42):
Yeah, I get it.
Rob (08:44):
AR can solve these things, but they're so, they're so
insignificant.
Trivial in, in the grand scheme
PJ (08:51):
They're niche.
They're very niche.
Rob (08:53):
not gonna cook in my Vision Pro just so I can stick a timer
to the
PJ (08:56):
Correct.
Rob (08:57):
when I can just shout across the room to Siri and make
her do a timer
PJ (09:02):
Uh, uh, or, or, you know, or put a timer on your phone.
You can do multiple timers on,on your iPhone.
Rob (09:09):
you know what else you can do.
You can buy
PJ (09:12):
They could do that too.
Twist them.
Rob (09:14):
cost like 99 cents.
have one for each burner on mystove for$4, I can spend the
rest of it in the pub.
PJ (09:23):
It's probably, well less than the regulatory fee of
buying the Apple Vision Pro.
Rob (09:27):
Absolutely.
PJ (09:28):
Uh, I,
Rob (09:29):
ridiculous.
I don't think, I think we'regonna see it just taper away and
it's like, okay, it exists.
No one
PJ (09:34):
if, if there is any kind of enterprise, a applications for
it.
I don't think Apple will, jumpon that.
They are a consumer company.
They wanna have consumer scaleand we're
Rob (09:45):
agree.
PJ (09:45):
so I think
Rob (09:46):
the enterprise has already, like HoloLens still exists in
enterprise space and
PJ (09:50):
yeah, it's like why bother?
Rob (09:52):
they're doing military contracts and things
PJ (09:53):
Right.
Rob (09:54):
I that space is taken, I think Magic Leap trying to get
into that space.
And Microsoft is like, no,we've.
are the enterprise company.
PJ (10:02):
Agreed.
Agree.
I,
Rob (10:04):
all fronts.
It HoloLens integrates with, uh,office backends and things like
that, and
PJ (10:11):
yeah.
Rob (10:12):
The ecosystem for enterprise is the Microsoft
ecosystem, and HoloLens isperfectly placed for that.
I do believe there's a middleground, though.
It's not enterprise and it's notconsumer, it's the business
space.
It's still consumer orientated,but you are in the business
environment such as things likevirtual avatars for Zoom calls
(10:32):
and FaceTime and things likethat.
But like I said, it just makesit more weird.
PJ (10:37):
Yeah.
Rob (10:37):
the avatars that I've seen, it kind of does scan your face
and it just kind of makes youlook like this weird washed out
PJ (10:46):
Uh, I,
Rob (10:48):
it's bizarre in that it, the, the face that it makes, and
I had my face scanned when I wasat Apple doing this and.
I never saw the results, so I,uh, I'd like to find that and I,
if I can like that, I cannothave to do it again on a, on a,
real device.
PJ (11:00):
I am disinclined that that's gonna work, and I actually
believe that for where we're atcurrently, the uncanny value
problem is something we have notsolved.
I.
And if anything, We need toactually back away from the Ann
Kenney Valley, if you wanna havesomething that has more empathy.
I would love to get into this asa separate podcast by sort of
thesis is that C3 PO has moreempathy than some of these
(11:23):
robots you see coming out todaywhere they're supposed to be
human based.
Rob (11:28):
think that's a market they, that's the only market that can
afford it.
This is why I think will be used'cause people will have it and
basically need to use it.
So it's like I'll just do a Zoomcall in it.
But like I said, it's gonna makeZoom calls more weird than they
already are.
PJ (11:44):
More delightful and more isolating.
Rob (11:46):
if like, if you have
PJ (11:47):
So our per
Rob (11:48):
are they both gonna
PJ (11:49):
our,
Rob (11:49):
and just be isolated themselves for be in the same
PJ (11:51):
oh my God,
Rob (11:52):
Like you could just take those off and be in the same
room and it looks of likevirtual world, but it's real.
And you can write on pieces,pieces of paper and give it to
each other and you do all magicthings.
There's a whiteboard over there,I can write on that with a pen
with no latency and you can seeit in real time.
PJ (12:09):
reality is the ultimate virtual reality.
Rob (12:12):
Exactly.
so.
I think.
I, I think it'll burn out and belike, okay, we're done.
What I am interested in is thisis the Vision Pro and based on
Apple's naming conventions, willthere be a vision without the
Pro Monica, which is cheaper,and how much cheaper can it be
and still be of that samequality hardware?
The hardware, by the way, Iworked on it, it is fantastic
(12:34):
hardware.
That's why it costs so much.
Even if you factor in the Appletax,
PJ (12:40):
Yep.
Rob (12:41):
still a a fantastic piece of hardware.
I don't believe
PJ (12:46):
I,
Rob (12:46):
do anything remotely like that.
Same experience for a lowercost.
PJ (12:52):
I agree.
Rob (12:53):
So it may be a time factor.
Let technology get better, thenwe can make it better, it
cheaper, but by then people willbe
PJ (13:02):
I agree.
So we should check in in threemonths to see what our
predictions look like.
Is the Vision Pro still a thing?
Rob (13:09):
Okay.
PJ (13:10):
check in at six.
Um.
Okay.
Let us hop over to somethingthat came outta the last 24
hours.
People are chatting about it andit's a Amazon and Alphabet.
So meta in its earnings callissued a statement that they're
gonna be finally issuingdividends, and this caused the
(13:32):
stock price to jump about 20%.
I mean, they also had a atremendous quarter.
This is coming off of a year ofefficiency as Zuckerberg called
it, and they laid off a wholelot of people.
Now at the same time, Amazon andAlphabet also did a whole slew
year and then a bunch this year.
So a story came out whereGoldman Sachs analysts think
(13:57):
that Amazon and Alphabet willhave dividends in 2024.
And I did write a blog postabout this last week.
I'll link it into the shownotes.
One of the things I findfascinating, Rob, is that, the
headlines for this have been alittle bit, I think, overblown
where it seems like they almosthave inside information.
(14:21):
And I do wanna, temper thisslightly.
I'm not sure if you have aparticular take on this before I
start going into my own rants.
Rob (14:28):
Uh, go on on your ran and I'll, I'll interject.
PJ (14:32):
Okay.
So, a lot of my insights that Iwrote into the blog post were,
trying to.
Piece out that Meta was one ofthe largest tech companies that
hadn't paid a dividend out.
apple has done it for years, youknow, after Steve Jobs death.
Microsoft has done it for years.
(14:52):
It, it is a hallmark of, let'ssay, a company that's ending its
growth period and entering intoa more mature blue chip period.
Not, and it's always a littlebit fuzzy, so the statements
that are made of the headlinesare like, yes, they think Amazon
and Alphabet will have dividendsin 2024.
When you actually start tryingto dig in, and I'm trying to
find the actual Goldman Sachsnote on this.
(15:15):
It's a little bit more temperedbecause, you know, the, the
statements, and this is from, I,I got this out of Seeking Alpha
Kostin, who's the, the analyst,the chief analyst I believe of
Goldman Sachs said.
Google and Amazon are the twolargest stocks that currently
don't pay a dividend, but havefundamentals that are
historically implied, higherodds of initiating a dividend
(15:36):
relative to peers.
And that's a different statementbecause you're just saying
historically these companies inthese similar positions would
initiate a dividend.
I agree with the notion that Ithink Wall Street will be
putting more pressure ontoAmazon and Alphabet to start
(15:57):
issuing dividends, but there'snot a smoking gun here for me,
like this is not saying there'ssome new information that we've
been given.
It's basically like historicallythis has been true.
Rob (16:09):
I agree.
And that's what I was gonna sayat the start.
It's, it's, they're in aposition to pay a dividend
PJ (16:15):
They are.
Rob (16:16):
been, have been for years.
And you've gotta think that
PJ (16:18):
Yeah,
Rob (16:18):
has to be a quite strong position.
You're committing to severalbillion dollars in cash
PJ (16:23):
a hundred percent.
Rob (16:24):
and and they both have that.
They both, they both make enoughprofit that they could pay that.
It does signify that transitionthat you talked about.
And it, it signifies it.
Like I says, the whole new wayof thinking of it becomes a more
driven by shareholders thandriven by growth.
And you've gotta think, wetalked about this before, like
(16:45):
meta run out of people.
So it has little
PJ (16:47):
Yep.
Rob (16:48):
growth.
It now has to expand theplatforms to make them more
usable to get growth.
But it's still a massiveadvertising platform, so it has
a huge amount of cash.
Let's pay some of that back.
I also think there's a bit of ame too here, the analysts are
just looking, well, meta did itwith these.
PJ (17:02):
I, I agree.
Rob (17:03):
criteria.
And I go, who else could do it?
And it's the obvious suspect isthe answer.
Didn't take an analyst to comeup with that one.
And there's a bit of me toohere.
It's like maybe Amazon can dothe same thing and get a 20%
stock boost and that's where theWall Street pressure will come
from.
And maybe they'll do it, maybethey won't.
(17:23):
But it's only a blip in timeover time.
It's changes how the companieswork internally.
Money that was earmark for thisis now earmarked for, dividends
and Amazon doesn't have thatmuch cash though.
So is Amazon may not, in myeyes, wouldn't be the one who
PJ (17:44):
I,
Rob (17:44):
for
PJ (17:44):
there's a.
Rob (17:46):
I, I don't really look that closely at their, at their
numbers, but they've always beenthe one who like, kind of
doesn't make any money.
They just put it all back intogrowth, maybe that's changing,
but yeah, Google for sure is,the one you would think would
pay a dividend and currentlydoesn't.
PJ (17:59):
I'll tell you my take on it is this, is that, you're right,
Amazon has no, never had a lotof cash on hand.
They have tended to reinvest andthey've reinvested really
heavily in logistics.
They've reinvested in theirproducts, they've reinvested in
AWS, which they're still theleader in that space.
They have done a tremendous jobat the same time of being very
(18:22):
fiscally responsible.
Amazon, I mean, has a graveyardof its own of products.
And the reason those, it has agraveyard is that it tried those
products in the marketplace,wasn't able to create a
profitability story from it, andthen killed it.
And they were always reallyclear about that.
(18:42):
Like, these are aboutprofitability.
Can we make this somethingsustainable economically?
So it's, it's fascinatingbecause you're right, Amazon
doesn't have a lot of cash onhand for this sort of thing yet.
They've been much, much morefiscally disciplined than
Alphabet.
Alphabet has got a huge amountof cash, and they're similar in
(19:05):
some, I mean, they're similar inthat way to Apple, but they
really only have a smalloffering of products that
actually provide profitability.
You know, search ads, YouTubetwo ads, and they're trying to
build a business out of GCP.
So it it like on if one companyhad the fiscal discipline and
(19:25):
the money, yes, I would see thatas being like really obvious in
terms of taking the path ofgiving a dividend.
But each of them basically havethis sort of orthogonal set of
characteristics that, indicatethat, you know, Amazon is not in
a position in my mind to bepaying out a dividend and.
(19:47):
Alphabet is still running, Ithink fairly inefficiently to be
paying out of a, a dividend.
And there's one other bit toalphabet that I'll get to in a
second.
Rob (19:55):
So do you think if they do pay a dividend, it's gonna be
purely Wall Street pressure?
After Meta did the buyback ofshares, which boost the stock
price and the dividend, whichalso boosted the stock price
resulting in a 20% boost, that'sa huge
PJ (20:12):
It, so let's talk, let's,
Rob (20:15):
think the institution at Whole oldest don't care about
the dividend.
They like, oh, if it's going toinstantaneously boost me 20%, we
can, uh, can time some, quick
PJ (20:25):
I,
Rob (20:25):
that and make a crap ton of money and then put it in some
other stock.
PJ (20:29):
I gotta talk about this in the, in the, the blog post.
So Amazon has only ever issuedone type of stock, common stock.
There's a plurality that's ownedby Jeff Bezos, but the reason
why it's important is that thatstock, it's only one type of
stock, like, as far as I know,it doesn't have any special
classes of stock for votingshares.
(20:51):
So there is more opportunity, Ithink, for Amazon to have a vote
that actually would vote forsomething like the dividends.
I, and I, I apologize, I don'tknow the exact, you know,
breakdown of who owns what stockbut there, there's an actual
opportunity for a forum to takeplace to vote whether or not the
(21:11):
shareholders want to havedividend.
Why am I stating this?
I'm stating this becauseAlphabet is different.
Alphabet.
Alphabet has actually threeclasses of stock A, B, and C.
B is not traded on the openmarket.
A and C are, A, has votingrights, B has voting rights, C
(21:32):
does not.
The thing about the B classthough is it has 10 x the voting
rights.
So even though like LarrySergey, Eric and a few, a few of
the board of directors I thinkhave this, this small amount of
B class stock, they have theability to have outsized voting
(21:53):
rights over the A side ofthings.
So why am I going through all ofthis?
The decision whether or not topay out the dividend is gonna be
completely up to Larry, Sergeyand Eric and a few others.
And I think if they decide to doit, they're gonna do it because
like, look, there's a huge boostthat we can have to our personal
(22:16):
fortunes by effectively saying,we got, we want to have
dividends.
So it, the, the Wall Streetpressure, I think is really
going to be whether or not theywant to increase their fortunes,
frankly.
Rob (22:29):
Like you said, you went into the whole hiring thing in
the past of like how thisaffects hiring.
I don't think it makes anydifference in the long term.
You still get a stock grant, youstill get this, you might get
less because the shares areworth more, blah, blah, blah.
I don't think it it directlyaffects the hiring and firing of
people.
I do think it, uh, it mightchange who wants to go there and
(22:54):
it, it does change at thebackend, the amount of money
available for projects thatthese programmers may be working
on, or not necessarilyprogrammers, but anybody who
goes
PJ (23:03):
Yep.
Rob (23:04):
there it's.
It just literally changed theallocation of the cash and if
one division starts to generateall the money, which is what
happens in Google quite a lot,is one
PJ (23:17):
Yeah,
Rob (23:17):
money.
One division pays the dividend,it basically becomes a A to B
transfer, and all the teams dostart to get left out.
So I think there are subtlethings that can happen along the
way, but I think immediatelyit's not gonna
PJ (23:30):
so
Rob (23:31):
on the hiring and fire in
PJ (23:32):
I, I'm, I'm actually, I'm gonna keep doubling down on my
statement that I think this doeschange the hiring and firing,
and the reason why is that metaspent the last year in which
they called the year ofefficiency, and they let go 20%
of their staff.
It was a large number.
So I think they were planning onthis dividend thing for a long
(23:53):
time, at least a year with.
Rob (23:56):
It's not something you just pull out your ass one day and be
like, let's pay a dividend.
PJ (24:00):
And, and so if Amazon and Alphabet are gonna be feeling
similar pressure, then I thinkwhat would be the sign of this
coming would be, Hey, we have todo a similar thing that Meta
did.
We're going to actually keepdoing layoffs.
So I think it actuallyaccelerates the number of
(24:20):
layoffs we would see from thesecompanies if they're planning on
doing a dividend.
Now, my only data point is thatprior to the meta announcement,
Sundar had sent off an email,again, this got leaked.
So this is not private news thatthere were gonna be more layoffs
at Alphabet.
(24:40):
They didn't say exactly whenyet, but, or how many or how big
or whatever.
But this was something that wasgoing to be happening.
it's impossible to run thescenario both times, but.
Does that mean that, we'd seeeven more layoffs now because
Google slash Alphabet wants tocatch up to what Meta did, or
like signal to the marketplacethat, hey, we're gonna be paying
(25:01):
out a dividend and we're goingto be doing our own efficiency
by laying off a whole bunch ofpeople.
I still think that the layoffsare the sign, like we start
seeing significant percentagesof alphabet getting laid off,
Amazon getting laid off.
I think this is the sign for adividend coming.
And I think that this would be,it's a little harder to do now
(25:23):
as a surprise.
Like I don't think you'd see aone day run up of 20% for these
companies.
But I do think that the marketwould basically over the next
year, start increasinglyrewarding these companies for
doing layoffs because theybelieve a dividend's coming.
So I think that's anotherapproach that could be happening
here, is that they will dolayoffs that makes the market
(25:45):
think, Hey, a dividend's coming,let's increase the stock price.
'cause meta did it.
Rob (25:49):
But meta also did the whole year of efficiency thing, which
was more than just layoffs.
It was literally a year ofefficiency, which included
layoffs.
are the other companies doinganything else other than laying
off and calling it efficiency?
Uh.
PJ (26:02):
Yeah, it's a good question.
I mean, I've stated this before,pretty, pretty blatantly, on the
layoffs episode unless I startto see Sundar actually like,
turning down whole product areaswhere it's like, Hey, we're
selling off this division.
We're not gonna do maps anymore.
We're not gonna do drive, orwe're not gonna do, you know,
pick anything that's not makingmoney for them.
(26:23):
To actually make bigger signalslike, hey, we are actually like
getting into something that'smuch more efficient, much more
lean, much more focused on ourcore offerings here.
Rob (26:33):
Did they kind of do that with the division of saying
they're not gonna fund itinternally anymore, they're
gonna look for external venturefunding.
PJ (26:42):
It's a,
Rob (26:43):
isn't that a step in that direction?
PJ (26:46):
um, I mean, I think it's a drop in the bucket in my mind.
I mean, the structure ofAlphabet as it is always had
this desire to have, if you'reunder the alphabet umbrella,
then anything that's not Googlehas this opportunity for outside
investment.
I think Waymo might be gettingoutside investment from
(27:08):
somewhere else as well, it's agood question though.
Basically, if it's like, Hey, X,you gotta go find your own
money, we're not gonna fundanyone.
Rob (27:15):
said.
It wasn't like you can get yourown external funding, it was,
you kind of now have to go andfind your external funding.
'cause Google and the venturearm of Google, I assume, isn't
gonna fund the internal projectsanymore.
So it's kind of, it's, it's,going down that path in my eyes.
PJ (27:32):
You make bring up a really good point, which is like, look
at the flotilla of companiesthat are under Alphabet and they
will probably, be the ones thatget hit first, where it's like,
go find funding.
If you can't find funding, we'regonna be letting you go.
And the more you see of that atthe, the sort of edges of
Google, if you will, where I'mtalking about, I think the big
(27:55):
things that need to be done arewithin Google, which is like,
look, we only have a few productareas that are really actually
making money.
And the ones that are not areeither that are gonna be
reduced.
Or sold off or gotten rid of.
And that's the areas I'm notcert I think those are the area,
those are the things that needto be done to get it into
(28:16):
something that's lean.
I don't know if it's, if it isthe moves that Sundar's got the
guts to do.
Rob (28:21):
I guess we'll have to wait and see.
PJ (28:23):
yeah.
Amazon I think is, is gonna bemore interesting in this arena
because if they are going to endup going down the route of
dividends, I think there's somemore trimming that they would
do.
Who knows, maybe they decide,we're not gonna make you know
Lord of the Rings anymorebecause that's costing us
several billion dollars toactually go do.
(28:44):
And so maybe their contentdivision is an area where that
would be something either theywould let go of.
'cause it's a lot of moneygetting dumped into that with,
I'm not sure exactly how muchreturn.
Or we go back and say like, Hey,content should be everywhere.
So Amazon starts putting itsstuff on Netflix and Hulu.
I think similar things will bedone with Amazon in terms of
(29:06):
trimming if it wants to pay outa dividend.
I
Rob (29:09):
do agree that content is king, but.
To a limit.
It's, I think a lot of thesecompanies make content because
they want to be the next killercontent.
they're now the owner of thenext Lord of the Rings.
If you step into a content suchas a Lord of the Rings at its
midlife end of life, wherever itis right now, it's incredibly
(29:30):
expensive.
It's incredibly valuable.
I don't think you get any returnfrom that.
PJ (29:36):
yeah,
Rob (29:36):
if you were the owner, like the founder and developer of
Lord of the Rings, sure, massivereturns, but stepping in at the
end game is, is not what I meanby content everywhere.
But
PJ (29:48):
I agree.
I agree, and I think this iswhere there's gonna be a lot of
scrutiny about what the returnon investment of this content
development really is
Rob (29:57):
I also think that Amazon are looking at a lot of other
content they have, like startingto be a more traditional games
publisher.
think easier to cut thatcontent.
For small developers than it isto cut a lot of the ring
content, which will have a hugepublic, optics problem.
And also it's potentially likebetter lawyers who make the deal
(30:19):
so it can't be cut or at leasthuge paybacks if it gets cut,
which some of the smallerdevelopers may not have.
So I think it may affect thesmaller developers in the
content realm more than the Lordof the Rings, even though Lord
of the Rings is taking all themoney and it's not gonna make
anywhere near enough money.
PJ (30:35):
to make up for it.
I, I, so I'll agree with you.
I think the, the, the gamedevelopers will be affected.
I think the lawyer agreementsare probably what holds this
stuff together.
I have never been convinced onthe, oh, people will get upset
with Amazon if they kill Lord ofthe Rings.
Part of my premise is that like,no one's gonna, if if they
(30:55):
killed Lord of the Rings, noone's gonna stop buying Amazon.
Like that to me feels like a, asilly argument.
Like I've never, and, but I madethis about Google, like, it's
like if Google let go of anymajor thing, like Google Drive
or photos or, you know, pickanything except maybe YouTube,
uh, but that makes money forthem.
(31:16):
If you, if they let go of anyproduct that wasn't making
money, it's not as if people aregonna stop using Google as a
search engine.
So I, I've always thoughtthere's been this particular
fear, and I've heard it multipletech companies now, where, oh,
we can't cut that'cause it's badpr.
It's like, eh, not really.
You'll piss off a few people,but.
(31:36):
You know most people, the vast,vast majority of people are
still gonna use your coreservices that are making you
money.
Rob (31:42):
The A, the Amazon one's an interesting one because I did
stop using Amazon Prime because.
The ads on Amazon video, itannoyed me so much I stopped
using it.
I actually made a spreadsheetand went through all my orders
of the last things for the lastyear
PJ (31:56):
Yeah.
Rob (31:57):
up the shipping cost of like, if I actually bought this
and paid for shipping, would ithave cost?
The cost about the same.
I don't buy much on Amazon.
It cost about the same as Prime,so I got rid of Prime.
I still do use Amazon a littlebit, but I did get rid of Prime
and that's kind of how it'llstay.
I don't see the point of,
PJ (32:17):
Well.
Rob (32:17):
the services of Prime enough, and if now I've the hard
numbers for the shipping, it'salso like, eh, it's not worth
it.
PJ (32:24):
Well, what's fascinating, Rob, is that you're still paying
money to Amazon.
You're just not paying as muchmoney, so,
Rob (32:30):
Depending on what type of product you're buying, and a lot
of those have free shippingwithout any subscription
service.
So, if, if if
PJ (32:36):
exactly.
So,
Rob (32:38):
and it's not much
PJ (32:39):
yep.
Rob (32:39):
like open two web browser tabs and see who has the best
price and factor the whole pricein, not just the stated price,
then buy from there.
And so that'll make me buy lessfrom Amazon.
that's basically all for addingads to Amazon video, which I
didn't even use to begin with.
The biggest thing that pissed meoff for Amazon, and this is what
started the whole thing, is likeI now dislike Amazon, is I
(33:01):
bought every season of Top Gearon Amazon.
I paid for it, I owned it, I hadit in my library and I could go
watch it and then at some point,half of it disappeared.
Because rights or whatever, andit's like, oh, they didn't gimme
my money
PJ (33:18):
Yeah, yeah,
Rob (33:19):
already owned that.
If I'd have owned A DVD and youwould change your licensing, you
can't come and take the DVDback, but you could take back
PJ (33:26):
yeah.
Rob (33:26):
version.
PJ (33:27):
get into this one.
Rob (33:28):
that's utter bullshit.
So I kinda stopped using Amazonvideo at that point.
I've never been back and nowthey've added ads.
It was just like salt in thewound.
So I looked at the other stuff.
So I think people will look atservices
PJ (33:40):
get into this one.
Rob (33:41):
and start to back away them, not because the service
isn't
PJ (33:47):
We should get into this one.
Rob (33:48):
because of the salt in the wound.
Like, no, you screwed me once.
I'm not going back.
But, I do think they're moreconnected than black and white
would say they are.
PJ (33:59):
I'll agree.
I'll put the alpha valuesomewhere between zero and one,
but, closer to zero for me interms of correlation than one.
so.
With this, again, we've gotthese analysts that have
basically released a statement.
My comment on it is, you know,there's not a lot of new
information.
The prediction I've got is if westart seeing more layoffs, that
(34:21):
probably portents the dividend.
So it's something we'll be ableto track throughout the rest of
this year.
Rob (34:26):
I think the analyst announcement was just analysts
being analysts, and like I said,it doesn't take a rocket
science.
PJ (34:32):
I agree.
Rob (34:33):
uh, or an analyst to be like, well, meta did it.
Who else could do it?
Oh, look, Amazon and Google.
PJ (34:39):
Agreed,
Rob (34:40):
You have an
PJ (34:41):
agreed,
Rob (34:41):
me that.
I could have told you that theday of the meta announcement.
I could have told you all threeof them the day before.
It's like, it's not difficult topull some stats and be like,
well, these people should paydividends, but don't.
PJ (34:52):
agreed.
A lot of the commentary I'veseen is much more about what it
would do to the overallmarketplace rather than an
analysis of the companiesthemselves.
So in that, I think we're aheadof them.
Cool.
All right.
We'll come back to this one asnews comes out, frankly, we'll
sort of see exactly how wellthis is playing out in the next
month, two months, six months,basically.
We'll see how our predictionsdo, and we'll grade'em then.
Rob (35:14):
Cool.
That works.
PJ (35:15):
Cool.
Popular Podcasts
Las Culturistas with Matt Rogers and Bowen Yang
Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com