LIZ: TECH INVESTORS, WE'RE NOT
SURPRISED OR YOU KNOW, WE
UNDERSTAND IF YOU'RE STILL
SHUDDERING FROM THE AFTERSHOCKS
OF LAST QUARTER'S DISASTROUS
ENDING TO 2018.
THE NASDAQ, THERE IT IS ON THE
SCREEN, FOR THE LAST THREE
MONTHS OF THE YEAR, LOST 17% IN
THE FINAL QUARTER.
THAT SNAPS A SIX-YEAR WIN
STREAK.
FLIP IT OTHE
FLIP IT OVEE
FLIP IT OVER TO RIGHT NOW.
WE HAVE THE NASDAQ HIGHER BY A
FEW POINTS HERE AND SOME OF THE
TECH STOCKS ARE LOOKING PRETTY
STRONG HERE.
FACEBOOK, AMAZON AND ALPHABET
ARE ALL UP.
APPLE FOR THE MOMENT DOWN HALF A
PERCENT.
WE HAVE NETFLIX DOWN HALF A
PERCENT.
LET ME FOCUS ON FACEBOOK.
CEO MARK ZUCKERBERG, HIS STOCK
MAY BE UP ABOUT 3% BUT HE IS
SUFFERING FROM A NEW YEAR'S
HANGOVER.
HE POSTED AN END OF THE YEAR
FACEBOOK MESSAGE THAT'S GETTING
HEAPS OF BACKLASH AFTER SAYING
HE IS PROUD OF THE PROGRESS THAT
FACEBOOK HAS MADE.
ZUCKERBERG STATED THAT FACEBOOK
HAS QUOTE, FUNDAMENTALLY ALTERED
OUR DNA TO FOCUS MORE ON
PREVENTING HARM IN ALL OF OUR
SERVICES AND WE HAVE
SYSTEMATICALLY SHIFTED A LARGE
PORTION OF OUR COMPANY TO WORK
ON PREVENTING HARM.
CRITICS DO NOT SHARE THE SAME
SENTIMENT, EVEN CALLING SOME OF
THEM, AT LEAST, FOR HIS
RESIGNATION.
I SUPPOSE YOU'RE NOT THE HEAD OF
A COMPANY IF SOMEBODY ISN'T
CALLING YOU TO GET OUT.
BUT OUR NEXT GUESTS ARE LOCKED
AND LOADED WITH THEIR BIGGEST
TECH SURPRISES AND
DISAPPOINTMENT PREDICTIONS FOR
2019, INCLUDING FACEBOOK.
MOBILE NATION SENIOR EDITOR
RUSSELL HAWLEY COVERS THE
TECHNOLOGY INDUSTRY EXTENSIVELY
ALONG WITH BENCHMARK INVESTMENTS
MANAGING PARTNER KEVIN KELLY.
GREAT TO SEE YOU BOTH.
RUSSELL, TO YOU FIRST.
THE LAST TIME YOU WERE ON THE
SHOW, YOU SAID FACEBOOK'S
PRIVACY AND FAKE NEWS ISSUE IS A
SYSTEMIC PROBLEM, AND FACEBOOK'S
PLATFORM REALLY HAS TO BE
CHANGED.
DID HIS STATEMENT THAT THE DNA
HAS BEEN ALTERED MOLLIFY YOU,
MAKE YOU FEEL HE'S ON THE RIGHT
TRACK?
>> NO.
NOT AT ALL.
BECAUSE IT'S THE SAME KIND OF
STATEMENT WE HAVE SEEN FROM MARK
ZUCKERBERG AND HIS OTHER STAFF
OVER THE LAST YEAR WITHOUT ANY
ACTION PLANNED BEHIND IT.
WE HAVE HEARD A LOT THAT THERE'S
STEPS BEING TAKEN TO FIX THIS.
WE HAVE NO IDEA WHAT THOSE STEPS
ARE.
I CAN'T FIND A SINGLE PERSON
THAT FOUND RESULTS THAT SIGNIFY
THINGS ARE ACTUALLY CHANGING.
LIZ: DO YOU LIKE WHERE THE
COMPANY STANDS, THOUGH, IF AN
INVESTOR WERE LOOKING AT IT
SAYING OKAY, THIS MAY CALM
PEOPLE DOWN AND IT MAY DO BETTER
IN 2019?
>> I MEAN, IT'S CERTAINLY
POSSIBLE IT MAY CALM A FEW
PEOPLE DOWN.
WE HAVE ALREADY SEEN THE RESULTS
FROM THIS HAVE BEEN
OVERWHELMINGLY NEGATIVE BECAUSE
THIS IS A LOT OF THE SAME
INFORMATION WE HAVE HEARD FROM
MARK ZUCKERBERG AND SHERYL
SANDBERG AND OTHERS JUST OVER
THE LAST YEAR.
THERE WAS A COMMERCIAL AIRING ON
TELEVISION EARLIER THIS YEAR TO
APOLOGIZE FOR SOME OF THE THINGS
THAT HAVE HAPPENED BUT THERE
STILL REALLY HASN'T BEEN AN
ACTION PLAN OR FEATURES OR
ANYTHING LIKE THAT TO GIVE USERS
MORE POWER OVER THIS KIND OF
PROBLEM IN THE FUTURE.
LIZ: KEVIN, WHAT DOES HE NEED TO
DO?
DOES HE NEED TO -- I JUST CAME
BACK FROM FRANCE, WHERE THEY NOW
HAVE, ALL OF EUROPE, REALLY, THE
EUROPEAN UNION, HAS THE GENERAL
PROTECTIONS, THE GENERAL DATA
PROTECTIONS NOW THAT ARE REALLY,
REALLY STRONG AND THEY GAVE ALL
THE POWER TO THE USER, AND YOU
HAVE TO GIVE YOUR EXPLICIT
APPROVAL AS TO WHETHER YOUR DATA
CAN BE USED FOR ANYTHING.
>> YEAH, I THINK IT'S IMPORTANT
TO NOTE THAT WHAT HE SHOULD DO
IS THE QUESTION YOU ASKED, AND
HE SHOULD GO AWAY.
THINK ABOUT 2018.
IT WAS DEFINED BY THEIR SCANDALS
INCLUDING ATTACKING GEORGE
SOROS.
THIS IS A COMPANY THAT WENT OUT
AND BOUGHT YOUR BANKING DATA.
THEY BOUGHT YOUR BANKING
INFORMATION.
THEY CAME UP WITH SHADOW
ACCOUNTS FOR PEOPLE THAT WEREN'T
EVEN USERS.
THIS IS A GUY THAT WANTED TO
COME UP WITH A THIRD CLASS OF
SHARES SO SHOULD HE SELL OUT ALL
OF HIS SHARES, HE WOULD STILL
MAINTAIN CONTROL.
WHAT NEEDS TO BE DONE IS MARK
ZUCKERBERG NEEDS TO BE REPLACED
IN THE LEADERSHIP POSITION, AND
THAT'S WHAT'S GOING TO
FUNDAMENTALLY CHANGE THEIR DNA
AS HE ALLUDED TO IN HIS LETTER
BUT THAT'S NOT GOING TO HAPPEN.
NOW YOU ARE STARTING TO SEE
DEFECTIONS IN LEADERSHIP.
YOU HAVE SEEN INSTAGRAM'S
LEADERSHIP GO AWAY, THE WHATS
APP PEOPLE HAVE GONE AWAY.
THIS IS A CRISIS IN LEADERSHIP
AND NOTHING HAS BEEN CHANGED
FUNDAMENTALLY.
LIZ: I WANT YOU TO BE ZOLTAR
FROM THE MOVIE "BIG" WHERE YOU
MAKE PREDICTIONS.
FIRST, YOUR OUT OF THE BALLPARK
SUCCESS PREDICTION FOR 2019.
>> I THINK A BIG SUCCESS
PREDICTION, LOT OF PEOPLE DON'T
TALK QUITE ENOUGH ABOUT, IS
ACTUALLY GOING TO BE MICROSOFT.
WE HAVE SEEN THEM JUST GROW
TREMENDOUSLY, DOING VERY KIND OF
STICK TO THE BASIC THINGS OVER
THE LAST COUPLE YEARS AND I
THINK THAT'S GOING TO CONTINUE.
WE WILL SEE THE SURFACE BRAND OF
HARDWARE DEVICES CONTINUE TO
GROW AND BE MORE POPULAR, AND I
THINK WE WILL ALSO SEE AN
EXCITING THING FROM THE TEAM
LATER THIS YEAR FOR AUGMENTED
REALITY.
IT WILL BE AN EXCITING YEAR.
LIZ: I LIKE THAT PREDICTION.
KEVIN?
>> YEAH, I WILL PIGGYBACK OFF
WHAT HE JUST SAID.
THE ONLY WAY MICROSOFT CAN
SUCCEED IS THROUGH THE DATA
CENTERS AND BUILDOUT OF THE
WIRELESS TOWERS.
I THINK EVERYBODY NEEDS TO GET
ACCESS TO THAT THROUGH THE SR-VR
ETF.
MICROSOFT SAID THEY NEED 4,000
MORE DATA CENTERS BUILT BY 2020
JUST TO MEET CURRENT CLOUD
DEMAND GROWTH.
SO IT'S A LOW VOL TECH WAY TO
PLAY AND GET DEFENSIVE.
LIZ: OKAY.
YOU HAVE A SURPRISE PREDICTION
HERE ON TWILIO AND PACER
BENCHMARK DATA INFRASTRUCTURE
REAL ESTATE.
>> TWILIO IS THE BACKGROUND
COMMUNICATIONS ON YOUR CELL
PHONE.
IT'S THEIR SOFTWARE ENABLING YOU
TO CALL YOUR UBER DRIVER, AND
YOU ARE STARTING TO SEE
NORDSTROM'S ENABLE IT SO IT IS
WHAT PAYPAL WAS TO UBER WHEN THE
PAYMENT PROCESSING, IT'S THE
BACKBONE OF COMMUNICATION
SERVICES.
LIZ: YOU ARE SAYING GO FOR THOSE
TWO.
RUSSELL, GIVE ME YOUR BIGGEST
DISAPPOINTMENT THAT YOU EXPECT
IN 2019.
>> WEIRDLY, ONE OF THE BIG
DISAPPOINTMENTS OF 2019 IS GOING
TO END UP BEING T-MOBILE.
THERE'S BEEN A LOT OF TALK OVER
THE LAST COUPLE MONTHS THAT
T-MOBILE KIND OF HYPING UP A LOT
OF ITS PRODUCTS AND ITS CURRENT
AUDIENCE IS EXCITED ABOUT THEIR
PUSH INTO 5G AND POSSIBLY INTO
HOME NETWORKS.
THERE'S NOT A LOT OF EVIDENCE OF
INFRASTRUCTURE FROM EITHER OF
THOSE THINGS IN PLACE.
WHEN THOSE ANNOUNCEMENTS FINALLY
DO HAPPEN IN AN ATTEMPT TO
COMPETE WITH THE OTHER BIG
NETWORKS, IT'S GOING TO FALL A
LITTLE SHORT AND CAUSE SOME
PROBLEMS.
LIZ: OKAY.
I WANT TO JUST QUICKLY ASK ABOUT
NETFLIX BECAUSE THERE'S BEEN
QUITE A BIT OF NEWS WITH
NETFLIX.
GUYS, ALL I HEAR IS THEY ARE
SPENDING WAY TOO MUCH MONEY,
THROWING MONEY AT EVERY POSSIBLE
SHRED OF CONTENT THAT CAN GET
OUT THERE IN HOLLYWOOD WHICH IS
NICE FOR THE WRITERS, BUT WHO
KNOWS WHAT HAPPENS WITH THE
INVESTMENT COMMUNITY.
KEVIN?
>> YEAH.
I THINK THE BIGGEST THREAT
LOOMING ON NETFLIX IS THAT
DISNEY WILL COME OUT WITH THEIR
OVER THE TOP SOLUTION RIGHT NOW
AND SO WE KNOW NETFLIX IS
THROWING MONEY AFTER EVERY PIECE
OF CONTENT BECAUSE THEY ARE
GOING TO LOSE MARVEL AND LOSE
DISNEY.
WE KNOW THAT WAS AT LEAST 25% OF
THE CONTENT STREAMED ON THEIR
PLATFORM.
SO THEY HAVE A GIANT LOOMING
THREAT COMING AT THEM.
LIZ: INTERESTING.
RUSSELL, YOU?
>> DISNEY IS GOING TO BE A BIG
PROBLEM FOR NETFLIX MOVING
FORWARD BUT NETFLIX HAS
DEMONSTRATED AN INCREDIBLE
ABILITY TO PULL IN SOURCES THAT
ARE JUST NEW AND FRESH AND FROM
OTHER ELEMENTS OF POP CULTURE.
I REALLY THINK THE IDEA OF
THROWING MONEY AT THIS PROBLEM
IS ACTUALLY THE ONLY WAY TO
STAVE OFF THE INEVITABLE RUSH OF
PEOPLE LEAVING NETFLIX FOR
DISNEY.
LIZ: THERE IS EVEN A SATURDAY
NIGHT LIVE SEGMENT NOW ABOUT
PEOPLE PITCHING AND THEY GET TWO
WORDS INTO THE PITCH FOR AN
EXECUTIVE AT NETFLIX AND THE
EXECUTIVE SAYS I'LL BUY IT.
>> IT'S INTERESTING WHEN THERE'S
A HEAD LINE ABOUT SOMETHING
NETFLIX WON'T TAKE.
THAT ENDS UP BEING A BIG DEAL.