Meta Layoffs Wall Street Debate, PINS is Important, Google is now Yahoo

Ahoy Metamates! 🚢 🏴‍☠️

Let's dive right into it because this issue will be long - I was listening to a lot of Jay Z writing this soooooooo...... read at your own peril :)

PS: The Pinterest piece is too long so it cuts off on email. Read it on web pls. 

Search 2.0 : What Google's Demise Means for Meta

Once upon a time there was a company named Yahoo - some of you reading may be too young to remember but it was the Meta of its day. Up until 2002, when a string of bad business decisions made it fully irrelevant. Yahoo thought it's so big to fail. Until it did. Google is 2-4 years away from being Yahoo.  Don't @ me on this - Sundar is like a snail with a laptop compared to Satya. No chance for Google.

How is this relevant for Meta today? Search is up for grabs.

1) Microsoft can surpass Google in text search. But the future is not that - the new era of search is visual, discovery and community driven. Meta has the best foothold across all 3.

• WhatsApp and Business Messaging can be Search 2.0 for commerce. I analyzed parallels between Asia and US commerce search products at length here

• Microsoft is actively turning its attention AWAY from Meta to go all in on Google.

2) Search and commerce will converge.  If you look at mature consumer products in the Asia commerce space, they're all super-apps connected on messaging platforms. Meta has been building in this direction for the last couple of years and is way ahead of any competitors on breadth of services.

The Layoff Debate: Wall Street vs Tech Boulevard

Link: Full breakdown of Earnings Call and Stock price.

Every tech company of Meta's size faces the innovator's dilemma. Meta has a massive, profitable business that works today but will be irrelevant tomorrow without major shift in strategy. Mark is ready to shift, but the market keeps pulling him back. 

The last few earnings calls are like a sh*tty version of broken telephone:

Q4:Mark: Here's proof everything we're building is being applied towards real revenue - can I PLEASE have your attention to talk about the next 10 years for Meta?

🤠 Brian Nowak at MS : Nah bro, we're good. Imma write a report that has next to nothing to do with any of the points you made.

The net- net of this exchange is clear:  Very little choice but to do another layoff OR report a win in a new line of business like WhatsApp/ Business Messaging. It's either / or. Analysts will not come around without further concessions.

What has happened so far re: staffing:

• The Earnings Call hinted at engineers being replaced by AI - more here

• Some TPMS and PMs are being asked to merge functions

• Middle management layers are being cut and folks are being asked to find an IC role

• I'm told the VP count is being carefully looked at and new VPs are going to come in for key areas

Competitive Intel: It's time to pay attention to Pinterest

Pinterest only did one thing wrong - it was early. In its heyday, it was hiring the top AI folks to build visual search and it had a vision of discovery commerce. That never materialized at scale in the US. What DID happen was that it got a reputation for the place your Mom goes to learn 5 new cupcake decorating techniques.

But wait - THERE'S MORE! ( qvc reference that will make sense in like 2 mins)

Pinterest's vision actually became a reality somewhere else - in China. Every commerce app there looks like a mature Pinterest, had it not been f***ed up. 

So why is it relevant to look at it now?

• PINS new CEO was the Google's President of Commerce

• I'm seeing some very strong investment in places Instagram is flailing

• PINS is still at a size where someone can buy it - and if that's Shopify or Alibaba, it's huge trouble for Meta.

• PINS board has been infiltrated by a hedge fund activist, making a sell off likely.

Let's look at the metrics together - this is actually SUPER interesting and I'm stunned no none's talking about it.

( spoiler: PINS is building QVC on steroids and it can screw both Meta and TikTok).

Subscribe to read a deep-dive on how PINS new strategy - the new QVC, affects Meta and why a potential sale of PINS can really upset monetization in Instagram Reels and commerce.

Subscribe to That's So Meta to read the rest.