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Microsoft is more valuable than Apple again. Why?


Earlier this week, Apple — which just months ago became the first company to reach a $1 trillion market cap — was worth less than Microsoft, the once-omnipotent tech giant that supposedly “lost” the consumer market to Apple under the tenure of former CEO Steve Ballmer.

On the latest episode of Pivot with Kara Swisher and Scott Galloway, Scott argued that Satya Nadella, who succeeded Ballmer in 2014, deserves the title of “tech CEO of the year.”

“Under Ballmer, the company went sideways for a good 10-15 years,” Galloway said. “Then two, three years into the Nadella reign and this company is again the most valuable company in the world, or at least it was briefly on Wednesday.”

(At the time of this writing, after the markets closed on Thursday, Microsoft’s market cap was about $846 billion and Apple had barely pulled back ahead at $852 billion.)

Galloway explained that part of Nadella’s success is diversifying Microsoft’s business into enough verticals that the company hasn’t been as impacted by tech stocks’ recent decline. But that’s only part of the story; while Apple has struggled to keep convincing iPhone buyers to upgrade, he said, Microsoft just has to stay the course with businesses.

“More than anything, it’s got the recurring revenue business model, and that is the ultimate monogamous relationship between corporate America and an organization is the relationship between global corporations and Microsoft Office, who every year pony up hundreds of dollars per worker and the renewal rates are practically 100 percent,” he said. “As we’re all barking at the moon and talking about Facebook and Apple, they just keep plugging along. It’s incredible.”

You can listen to Pivot with Kara Swisher and Scott Galloway wherever you get your podcasts — including Apple Podcasts, Spotify, Google Podcasts, Pocket Casts and Overcast.

Below, we’ve shared a full transcript of Kara and Scott’s latest episode.


Kara Swisher: Hi, everyone, this is Pivot from the Vox Media Podcast Network and I’m Kara Swisher.

Scott Galloway: And I’m Scott Galloway.

Hello, Scott. How are you doing in this freezing cold weather?

How are you, Kara? You pulled out the ultimate excuse for being late. Your kid forgot his lunch.

Yes, and he guilted me. It was his fault and then he blamed me for not reminding him and then he got me to bring it school. I’m an Uber driver, really, is what I’ve become.

Aren’t we all? Well, good.

Yeah, he’s 13. I don’t know. I just brought it. I just remembered when … I don’t know. I don’t know. I don’t know, Scott.

They’ll take care of us when we’re old, Kara. That’s what we have to remember. Someone has to take care of us when we’re old.

I hope that’s the case. I was thinking that the other night. I’m like, “I wonder if these two bozos are gonna take care of me when I’m older.” I wasn’t certain. I’m not certain. One of them, maybe. The other I’m not so … The other will just pay for it, which I’m fine with, too. That’s fine, too.

That’s good, too. That works. What’s going on this week?

Well, there’s a lot going on. I just reported a story yesterday that Laurene Powell-Jobs, who is the widow of Steve Jobs, but that’s not her only criteria, she’s also an entrepreneur. She’s an investor. She’s done a ton of philanthropy. She bought a company called Pop-Up Magazines Productions, another media buy.

I thought you might have some thoughts on all these zillionaires buying up properties. This is a really interesting property. She’s been buying interesting properties. We got Microsoft surpassing Apple. We got all kinds of things. Tell me what you wanna talk about.

A lot of good stuff. It’s interesting, the Pop-Up, that company, I had never heard of it before but there’s definitely a trend in what I would describe as Ritalin retail. The Frosé Mansion or Museum of Pizza and the notion that retail …

The Frosé Mansion? Okay, go ahead.

Frosé Mansion, let’s go have rosé and explore our imagination and unleash the bounds of our creativity for 45 bucks to drink champagne. Anyway, the key attribute in these things is scarcity and that is, you know, the Museum of Ice Cream’s going away.

This seems to be a trend. It’s gonna have a lot of impact on retail, especially malls that are used to co-opting brands into signing 10-year commitments.

Right.

I think this is an example of it, turning content into quote-unquote “experiential retail.” In terms of billionaires …

Content, it’s just a show. I don’t know if it’s experiential retail. I’m not sure if that’s … Have you been to one? I’m gonna take you to one. They’re great. They’re really great.

I’d like that.

You know what’s interesting about them?

So you’ve been to one? Describe it.

I’ve been to tons and tons. I love them.

What is it?

They started in San Francisco and they sell out immediately ‘cause they’re so delightful. It’s a magazine acted out.

One of them, Jenna Wortham, who works for the New York Times, she took one of her New York Times stories and she did it in shadow puppets and it was so entertaining. It’s delightful. Then, they don’t record it, so you can’t see it again, which is like most theater but it’s really …

Again, scarcity.

It’s fun and interesting and inventive and it always pushes you from a journalistic perspective.

Anyway, then they have a magazine that they’ve distributed. You know how Sunday magazines are over at big newspaper chains ‘cause they cost so much. They make one that is inserted into the San Francisco Chronicle and certain readers of the Los Angeles Times and the San Francisco Chronicle and some other places. It’s really great journalism and they’ve gotten very close to several national magazine awards in a very short time and they’ve won, I know we gave them an award, I’m on the board of the Livingston Awards.

They’re just really a great little company, but she had invested $10 million in them and now has picked up the rest.

Wow. Yeah, so Republicans buy football teams and Democrats buy media companies.

Right. What do you think of that? What do you think about big … Big rich people have owned media forever, but what do you think of that trend?

I actually think on the whole, it’s a good thing. I think organizations like the New York Times should be owned by a benign billionaire with the resources and the commitment to … There needs to be checks and balances, but my sense is these organizations don’t make great for-profit entities. So if a billionaire with deep pockets and a commitment to democracy and journalism comes in, you know, I’m all good with that. What do you think?

I think it’s interesting ‘cause they’re all tech people. Like Marc Benioff buys Time Magazine, Laurene Powell-Jobs is buying, she bought a big piece of the Atlantic, she bought a bunch of movie studios, really interesting ones, one called Macro and it focuses on stories of people of color.

She’s bought into Axios, she’s bought into Gimlet Media. And then obviously Jeff Bezos. I think you’re right, it’s mostly tech people, which is really interesting to me ‘cause they’re the people sort of ruining media at the same time, which is kind of ironic.

But the fear is that these people are gonna come in and turn it into their vehicle for personal use.

Which used to be the case.

Like a [Sheldon] Adelson model. I would argue both … There was fear that Rupert Murdoch was gonna ruin the Wall Street Journal. I read the Wall Street Journal, it’s as good as it’s ever been, and I think the Washington Post has actually made a lot of progress since Bezos bought it.

We’re for rich people buying media, in other words.

Yeah, there you go.

Okay, we’re in agreement.

Have at it.

I do worry about the idea that … The thing is, when I do worry about it, I think oh my God, the Bancrofts owned the [Wall Street Journal], the … whoever on the Los Angeles Times. There’s always been a rich family and either they’re good rich families like the Grahams of the Washington Post or they’re bad rich families like the Adelsons who meddle and do stuff with their properties. There you have it.

Over the last 30 years, media has taken a lot of very rich families and turned them into just rich families. I don’t think the Grahams or the Sulzbergers have the economic influence they used to.

Yeah, that’s the case. I think you’re right.

They still have a tremendous commitment to journalism, but the Bancrofts, who sold to Murdoch, they look like geniuses.

They do.

They sold at the top of the market.

That was a struggle, if you remember that thing.

Huge fight.

I was at the Journal at the time and I knew them pretty well and we had one of our conferences, our all-team conference that Rupert was at and some of the Bancroft people, the family, and it was really tense. Super tense. They fought.

I imagine you were one of the folks that was saying, “No way.”

No, I wasn’t.

You said sell?

It was interesting because, no, I thought they should sell, maybe not to him. At one point, I know the Washington Post was worried, the owners of the Washington Post were worried that Rupert Murdoch would try to buy the Washington Post and that’s why they sort of sidled it up to Bezos, I think, in a lot of ways. I think they didn’t want it to be owned by Rupert Murdoch.

Anyway, that’s the situation in media. What’s interesting… Another one is Microsoft surpassing Apple in market value. I thought you’d have some thoughts on that. Please, illuminate me.

It’s not so much that Microsoft passed Apple, it’s that Apple fell below Microsoft. I think Satya Nadella, I would argue, is probably the tech CEO of the year.

Explain that.

He’s been a real visionary. Under Ballmer, the company went sideways for a good 10-15 years.

Yes, yes.

Then two, three years into the Nadella reign and this company is again the most valuable company in the world, or at least it was briefly on Wednesday.

It goes to two things and I think there’s key learnings here for what I talk to my students about in terms of the careers they wanna pursue. One is more just a financial, smoothing out the lumps. You haven’t seen nearly the fall in Microsoft as you’ve seen in some of the other big tech. And that is, the company’s just more diversified. It has several distinct revenue streams, diversification, markets like that.

But more than anything, it’s got the recurring revenue business model and that is the ultimate monogamous relationship between corporate American and an organization is the relationship between global corporations and Microsoft Office, who every year pony up hundreds of dollars per worker and the renewal rates are practically 100 percent.

The market just loves monogamy, or specifically recurring revenue, and Microsoft for a long time has had just this tens of billions of dollars of recurring revenue in the form of Office. Satya Nadella and Microsoft, as we’re all barking at the moon and talking about Facebook and Apple, they just keep plugging along. It’s incredible.

He’s an interesting guy. He’s got a really interesting, tough family life. Two of his kids have some learning disabilities and he’s just one of these really interesting, quiet guys who I’ve known for a long, long time, knew him when he was running different products at Microsoft.

He was sort of the candidate nobody thought. They had all these big names for the head of Microsoft and he sort of, again, sidled in there. Very quiet, very self-effacing. He had one little hiccup around when he said something wrong about women at one of the women’s events, but in general, I think he’s been a really solid person.

And the era of Ballmer was just, I covered that whole thing and it was really something to see. He kept saying, “Mobile’s not gonna be there. Who cares about cellphones?” It just went on and on about really missed calls all over the place when I was covering that company. Ballmer’s a salesman at heart, really. He could be selling Xerox machines. He could sell anything, essentially.

But they really did need someone who was more of a technologist, more of pulled the politics out of it, pulled the … Just quiet and steady wins the race kind of personality. I really, I actually like him personally. He’s very, he’s sort of geeky but he can talk to you. You know what I mean? He’s a very solid CEO that really is …

He’s very likable.

Yeah, very much so. It’s interesting to think about that for Microsoft now versus Microsoft 10, 15 years ago even. What was interesting, the reason I wanna sort of pivot to the idea that this is a company than underwent an antitrust scrutiny and then, of course, lost in court. They’ve managed to pull themselves back and get back into cloud. That’s another thing that Amazon was sort of running away with.

What’s interesting is this week, Google’s cloud head left. Diane Green. I think there’s probably some tension between … I know there was some tension between her and Sundar Pichai, the CEO of Google. What’s interesting about her is she’s also on the board of Google, which is kind of odd situation.

Really?

Yeah. She left and that was, they replaced her with someone else, I think from Oracle. But Google has not kept up the same way in the cloud business as they should have and missed that turn very much so, compared to Microsoft, which got it back, I think.

It’s interesting you bring up the DOJ action against Microsoft in the late ’90s. I would argue that if the DOJ had moved in on Microsoft in the late ’90s and said “stop killing small companies in the crib as you did with Netscape,” that we’d all be saying, I don’t know, “Bing it.”

That they would’ve used their bundling and economic power to kill Google in the crib and the object of every innovator’s affection, Google, 750 billion in market cap, 75,000 great jobs created, is a function of antitrust action and we forget that antitrust can actually be oxygenating and also birth giants.

Yes, absolutely. I think it was a big, that was a really interesting thing. I covered it for the Washington Post, that trial, and I just keep remembering when Gates had that, when he was with the lawyers and he just messed up so badly. They were so arrogant. It just oozed out of that company and it’s certainly a different company now. It is, absolutely.

And I think it’s much more in Satya’s image than it is in the two founders, really, which was Steve Ballmer, even though he wasn’t, well, he was a founder, I think, and Bill Gates. I think they’re just plugging away at what they do and they got out of the media business, speaking of that, like a lot of their … MSN, that went on for far too long and it was sad to watch.

Yeah.

It’s interesting. They’re an interesting sort of dark horse of a company, you think of Microsoft as so scary but they actually seem very pleasant. Surpassing Apple, what do you think about that part? I thought you’d have a thought on Apple.

Look, Apple has turned into the iPhone and the seven dwarves. People talk about the services component, again recurring revenue. But, it’s really, Apple, and it’s an incredible problem to have, but the most profitable device in the history of business and probably the most transformative device, the iPhone … The company is … If the iPhone sneezes, Apple’s gonna get a cold. And there’s some insecurity and some wobbliness around people not replacing their iPhone as often.

Mm-hmm.

I don’t know if you saw the Supreme Court case around competitive behavior.

Yeah. Explain that.

Well, effectively, of all people, some iPhone users are saying that they have no choice and that Apple is making apps more expensive than they need to be because effectively Apple has a monopoly on it and you have to go to the App Store and pay a 30 percent surcharge, which is what Apple charges. They take a 30 percent tax.

This all comes back to the same thing and that is if you own the rails and you’re shipping all the products and you get to see where every product’s going, should you also own the businesses that you’re shipping products to?

Yep.

Do you have insight …

You have insights.

If you’re a platform, should you also be competing against …

Like Amazon, you can say the same thing about Amazon.

Against all of them. And going back to Microsoft, the reason why the DOJ moved in on Microsoft — when I would argue they had even less monopoly power than where Google and Facebook and Apple are right now — is because quite frankly, Steve Ballmer and Bill Gates at that time were not nearly as likable.

They were also perceived as conservatives and I’m convinced that being perceived as a progressive politically is the ultimate sheep’s clothing.

I don’t know about that. Hello, Facebook. I mean, come on.

Well, it’s changing, there’s no doubt about it, but well after it should’ve. I think to date, it’s interesting. Progressives, you and I are both progressives, we’re perceived as nice but weak. We’re Alan Alda petting our Labrador, watching PBS. We’re not a threat to anybody.

I am.

Except for you. Whereas conservatives are generally stereotyped as smart but mean. The perfect illusion, this trick, is to wrap yourself in a progressive blanket, and I think these companies have done that brilliantly. Whereas Microsoft, it’s changed with the Gates Foundation, but largely, loosely speaking, they were pretty unlikable.

Pretty unlikeable?

Pretty unattractive duo.

They were very unlikable, having covered them.

Very unlikable, yeah.

It’s interesting.

So the DOJ moved in on them.

Well, we’ll see what’s gonna happen. And it’s amazing we haven’t talked for even a second about Facebook but I will say, again, Mark not appearing before the committee in Britain, which has a cache of emails, which are probably … Once again, who’s making these calls?

Wow. And you know what? There’s a deeper story here. MP … Member of Parliament Damian Collins …

Damian Collins. I’m going to interview him.

I mean, this is really big.

I’m going to interview Damian Collins.

Oh, that’s going to be interesting, because I’ll tell you, the U.K. is going gangster on Facebook. Think about what they did. They found documentation or they think there was documents that might reveal damaging information against Facebook. They found the CEO of an app that was closed down by Facebook in 2015 … They found out the CEO was going to be in the U.K. and they had the Sergeant at Arms go over to his hotel and say, “Hey, we know you’re here. Give us this documentation. You have 24 hours.”

So if they can go that deep, if they’re thinking that strategically and that meticulously about how to get information that Facebook doesn’t want released … It was sealed by a California court, that information. The U.K. is coming for Facebook.

Yep. Yep. What are they going to do?

It’s going to be very interesting, and if you think about it, what other tech CEO or what other Fortune 500 CEO would refuse to testify in front of Canadian and British parliament and not be fired?

Well, that’s another issue. I discussed that last week in my column.

Yep.

Who indeed? Someone who controls everything, that’s who indeed. Anyway, it’ll be interesting to watch that development, for sure. And I think they’re coming to Capitol Hill again, right? A lot of these executives are coming back.

Oh, that’s right. Round two. Or round seven, I should say.

Yeah. It’ll be interesting.

Just a quick update: You had a very interesting point. I think it resonated with a lot of viewers last week that everyone’s going after Sheryl. The knives are out. They continue to sharpen. But at the end of the day, it’s the white dude, The Zuck, who’s responsible, and he seems, everyone capitulates and says …

Not just him. Listen, there was a story in Vanity Fair. Again, I was like, hey, there was a CFO here, there was a CLO here, the chief legal officer. There was a CTO here, a chief technology officer. There was a really major executive named Chris Cox. Where’s he? Do you know his name? I will tell it to you. He is just as powerful as Sheryl Sandberg.

Let me just say there’s a lot of other people here, and again, I’m saying she is absolutely at fault. It’s just you don’t hear anybody else’s name. It’s because they are so reductive about how we assign blame to people. And it’s a group cluster-fuck. That’s my feeling, and that’s how it should be looked at. That’s all I’m saying. That’s all I’m asking for is equal crapping on these people, essentially. Thank you.

Equal crapping. There you go.

Equal crapping.

You heard it here.

Under the law. It’s the 29th amendment.

Scott, you were in Florida last week. My kids were in Cuba, and I got a lecture on “soft communism” from them, along with cigars. And it’s safe to say … I don’t smoke cigars. A lot of us were not reading the news over the holiday, but it doesn’t mean there wasn’t a lot of news happening. There really was, besides everything Trump said. There was so many things in that regard, which let’s not go over.

One of the things that I thought was interesting was this… You know, I bang this China drum, how frightening they are as a country from an internet point of view and from a surveillance point of view, and so this new story came out about China issuing citizen scores, like credit scores. This was an episode of “Black Mirror,” by the way.

It was interesting, yeah.

It’s a national reputation system being developed like credit scores. Some internet companies … I’m trying to think … Affirm does look at your social media thing to decide whether to give you money or not, but they’re trying to assess their economic and social reputation. It makes it easier to do business, essentially. It’s a reputation system, but to me it’s a form of mass surveillance that they’ve been doing already. And the citizens are quite welcoming to do it in how they shop, where they go.

What do you think of this? I mean, I think it’s inevitable, but what are your thoughts on this? Because I am banging this drum on surveillance economies, and I think they’re becoming increasingly disturbing.

It’s typically not the idea that freaks people out, it’s when organizations get really good at it, and so we’ve got a credit score and we’re a capitalist society, so we want private information on people’s ability to pay their bills, which you could argue is a violation of their privacy, and you have a credit score from a very early age.

They’re starting it perfect … This new system in China, you start at 1,000, I think it is, but it’s really interesting. So, for example, if you buy diapers, your credit score goes up because their assumption is you’re responsible and you’re taking care of children. If you buy video games, your credit score goes down. You get a DUI, that’s a big hit, and what gets sort of scary, though, is that there’s definitely sort of a social classification and real ramifications. If you have a high social score, your heating bills go down and you get invited to fun soft communist events.

By the way, I love the term “soft communism.” What is that, MSNBC? I don’t know what that means, “soft communism.”

Hahaha, no. That’s hard socialism. No.

There you go. Hard socialism.

He was trying to make the distinct … Before he left, I said, “I think Cuba is soft communism now,” because there’s a lot of entrepreneurial activity, all this kind of stuff. And he decided, he came back, and it was hard socialism. So it was interesting. There’s a lot of people lecturing about the U.S. system, and at the same time, there’s a lot of entrepreneurial activity.

That is interesting. Wait, this is a 13-year-old using terms like hard socialism?

Yeah, he’s brilliant. My son is brilliant.

Oh, my gosh. That’s crazy.

My 13 year old. He’s exhausting. I’m actually sending him to debate school because he’s quite …

Oh, that’s what you need!

I know, I was thinking …

A teenager at debate school!

Yeah, he’s going to go to debate school.

Yeah, remind me to skip Thanksgiving at the Swishers. Oh my gosh.

He’s really smart. He’s brilliant. He really is. The other day, one of us was showing him a rock. It was at a museum, and we’re like, “Oh, this rock is 450 million years old. Cool.” That kind of dumb mom thing, and he goes, “Uh, Mom, everything is 450 million years old.” I was like, “Oh.”

There you go. Take that.

I mean, it was brilliant. It was brilliant. Anyway. Let’s get back to the …

I get it. I want to send my 11 year old to stoicism school.

So China is a very different situation in terms of monitoring its citizens. Do you think this is something that’s going to happen here, or what’s your thoughts?

Well, to a certain extent, I mean, we have a tendency, I think … We perceive China as scary. I think we have a bias against China. This could go a lot of bad places, but the underpinnings of this are that there is a trust deficit in China, and it’s difficult to do business with someone who you can’t do diligence on, and I think that’s holding back the economy. I think it feeds into some interesting concepts.

My colleague here at NYU, Arun Soundarajan, talks a lot about trust and identity. And Airbnb and Uber would not exist if we weren’t able to have, if you will, identity that leads to a trust score. So you know who’s getting in the back of your car, you know who’s driving you, you know who’s renting your apartment in the Castro through Airbnb. But the notion of identity as a means of really getting to trust, and attaching a trust to an individual, is key to economic growth. And that’s the underlying … I mean, I sound like the economic ministry spokesperson for China right now.

You do.

Don’t I? Yeah. The underlying motivation here is economic. I don’t think they’re trying to be Big Brother. I think they’re trying to create more trust across their hundreds of millions of citizens that they want to incorporate into the economy.

Now, could this lead bad places? Absolutely. But it’s an interesting concept, and the reality is we’ve been doing it here in the U.S. And if you’re in New York or you’re in London, you’re on camera.

Yeah, that is true.

Now they’re talking about facial recognition.

But they’re not really following Scott. They just could follow Scott. They could use the cameras. I mean, we’ve all seen … Like, what’s his name? That Matt Damon thing. “Bourne Identity.” Bourne whatever. Bourne whatever. Every time there’s a five minute … One identity after another.

But I mean, the idea that they can find you, certainly, but they don’t do it as a generalized system. Although, you could be tracked, but you aren’t particularly tracked.

Yeah. So speaking of China … So the bottom line is, I think it’s interesting. I don’t think I’m as alarmed, and I don’t know if it does us any good to be alarmed, because they’re going to do whatever they want.

That’s a fair point.

Let’s talk about an American company thinking about putting a search engine in China.

Yes, yes! And the Google people that don’t want them to do it.

What’s going on there?

Well, Google workers publicly signed a letter asking their company not to build this censored version of the search engine.

Dragonfly, right?

The Google people are chatting away. Don’t you love it? I think I’ve unleashed something with my podcast two weeks ago with the Google organizers with the walkout.

I think it’s interesting. I think they’re still doing it. I think they’re still moving forward with it. It’s a really interesting time for a company like Google, because this is an area of business. This is an area of information. They need the data. It’s hard not to do it, but they cannot go in there without doing a censored search engine. So they’re going to have to compromise and be complicit in what’s going on there, and that’s that.

And so it’s just what are the ethical underpinnings of business? I don’t know. I wouldn’t do it, but they will. So I don’t know.

Yeah, it’s hard. It’s hard. I mean, one of the reasons that Apple is the most valuable company in the world, and it is again …

They’re in China.

Exactly. They can sell their stuff in China.

But they don’t have the search engine. They’re making a product. It’s a little different. They have it easier in a lot of ways.

At the same time, I sometimes worry about things being made in China. I do. I’m like, hmm. There was that Bloomberg story, which I think Apple completely objected to, and very loudly, but you wonder. You’re like, oh, God, who knows? It’s not like alligators in the toilets, but it’s sort of like, oh, God, they’ve got to be messing with our …

Alligators in the toilets. Hard socialism.

Yes, I know.

I love this.

I know. Anyway. I am more wary of China than you are, but you are obviously a red. I’m going to call Joe McCarthy in a second on you, as soon as we get off this podcast.

There you go. There you go. But is it a good business decision though?

Probably.

Well, I’ll ask you a question, and it’s a loaded question, because I have an answer. What is the core competence of any economy that’s growing faster than any economy in the world, which is China right now? What’s the core competence?

What’s the core competence?

What do they do better than anyone? When an economy is growing faster than any other economy in the world, I would argue … I’m leading you, so I’ll just get on with it, but I would argue the core competence of any economy growing much faster than any other economy, that one thing they do really well is theft.

Okay.

That is the core competence, in my opinion, of China right now is IP theft, and the notion … They let tech companies come in just for long enough to steal their IP. They prop up a local entrepreneur, and they capture the value domestically. Which, by the way, has been a smart move.

Look at Italy, who let Google come in, and went the western way. What’s happened to their newspapers, their job base, their talk space? Look at China that lets companies come in long enough just to figure out their IP, steal it, prop up a local competitor. Boom. I would argue that the Chinese way, while you could argue unethical, not western, has probably worked out pretty well for China.

By the way, same thing the U.S. did in the 18th and 19th centuries, stealing IP for textile manufacturing out of Europe, even kidnapping artisans. It is the core competence of an economy that’s growing faster than 6 or 7 percent a year, is theft.

And to bring it back to Google, I wonder if it’s just a good business move. Why would they put their IP over there? It’s not going to end well for them.

Yeah. Yep, I agree. I agree. You know, it’ll be interesting. They were there. They actually had a very big business there. I think 26 percent of the search market there when they left, but you’re right.

26 percent.

They did. Something. It was higher than that.

That’s real.

It was a real one. It was a real one.

Anyway, the wins and the fails of the week. I wanna know what you think. What do you think the wins and fails of the week are?

So I was really inspired by NASA’s Mars lander, or Mars rover InSight, and just reading about the technological feat, of the landing of a device, an instrument on Mars. Because you have this device, you have this lander, InSight, traveling 300 million miles, and then that’s not the hard part. The hard part is it has to slow in seven minutes and the NASA engineers call it the “seven minutes of terror.” But they have to slow this thing from 12,000 miles an hour to five miles an hour. And the problem is is the atmosphere is much thinner than the atmosphere here on Earth. So even with a parachute 10 times the diameter of a parachute on Earth, you still can’t slow this thing beyond 200 or less than 200 miles an hour.

Then you have to fire booster rockets at the exact right time and not slow it down too much because then you’re not landing, you’re launching. And if you put too much fuel in the lander, it ends up being heavier and dropping faster. Meanwhile, controlling this from 300 miles away, and they actually automate it.

When you see this thing land, when you see American government and scientists just as Bezos and Musk all sword fight with their dicks over who has bigger rockets, who’s going to get to Mars first, we have …

Don’t slip that in! Okay, good ahead.

Sorry, I couldn’t help it. Right in there. But you have the government, you have engineers who decided to go to work for one of the most inspiring organizations in the history of mankind, NASA, pulling off the near impossible. Sixty percent of lunar landings have failed. They have splat into the Mars planet. So this was an exciting moment, not only for NASA but for their international partners. We forget how the space program really does bring different countries together, and we do feel more of a sense of collective humanity when things happen in space.

I agree.

So my win is the folks at NASA and InSight.

I like all those movies about NASA. Whether it’s “Hidden Figures” or it’s “First Man” or any of them. I love them all. That’s what I like.

Yeah, the Matt Damon film was really good, too. “The Martian.”

Yeah. “The Martian.” Yes, I agree with you. I think it’s really an astonishingly difficult thing to do. And that they did this is just … It’s all for the good of mankind. Although, I’m not going to Mars, Scott. I don’t know if you want to …

Oh, that’s ridiculous. Talk about weird. Newt Gingrich saying we’re taking people to Mars. You gotta be …

I’d like to put Newt Gingrich on Mars. That would work for me.

Yeah, there you go.

I know him very well.

It’s like running for president.

I used to know him well.

It’s like running for president. Anybody who decides to do it, or decides to go to Mars, by virtue of that means they’re disqualified to be president or go to Mars. That would be a terrible, a terrible life.

But anyways, we’re going to stick in San Francisco and New York, Kara.

All right, okay. Fine. I’m in D.C., Scott, by the way.

There you go. I’m sorry, D.C.

Anyway, my win of the week is myself because I think I did two really good podcasts last week. One with the Google employees, as I said, who really did speak up.

Hold on. Win of the week: Myself?

Yes. I’m gonna say it because …

Myself?

Myself. Listen to me. The Google employees I interviewed …

Oh my gosh.

I think the Google employees I interviewed showed, as I said, Facebook employees, docile, although not this week. There was some interesting back and forth around people of color at Facebook, of an employee who called them out very eloquently.

Does that sound real to you? Does that sound fair? Or is everyone just piling on?

No, I think it’s fair. I think it’s fair.

You think it’s fair? Okay.

All the companies. I don’t know if it’s particular … I think it’s incredibly fair. That was one. I thought these Google employees really went to the mat; they really went to the mattresses, as they say. They really did. They spoke their mind. Let’s listen to this tape from Stephanie Parker and Amr Gaber.

Stephanie Parker: I read the scripted speech and then I threw the paper away and I just spoke what was on my mind. I asked the crowd, “Where do you think Google got that $90 million they used to pay out Andy Rubin? They got it from every time you worked late. Every promotion you didn’t get because they said there’s not enough budget, you have to wait. It’s from every contractor who came to work sick because they have no paid time off. These are conscious decisions that the company is making, and abusers are getting rich off of our hard work. It’s just not fair, and they completely know what they’re doing.”

Amr Gaber: I’m an entry-level engineer. I got five years of industry experience before I hired at Google. Even though these issues impact some groups more than others, they affect all of us. Just because the name of the company is a baby word doesn’t mean that it’s not greedy or exploitative. The company doesn’t care what race, gender, sexual orientation, age, ability, national origin, religious belief, history of military service or job type you have as long as you’ll accept less than you’re worth.

All right, now you can see how intelligent and smart they are, Scott. See what I’m saying?

There you go. Looking forward to it.

They really did speak their mind. And I hope they can continue because their issues are very important and I hope that the Google executives are listening to them. I’ve been pummeling Google executives to listen to this podcast, at least, so they understand.

Anyway, Scott, thank you so much. You’re going to Brazil.

Thank you, Kara.

You’re going to Brazil. What are you doing there? Visiting your Nazi friends?

I’m going to Brazil. Every year I go with a bunch of buddies. We go surfing in the south of Brazil.

Oh, you’re kidding me.

Or we pretend to surf. That’s me in the waves holding onto a surfboard like a life preserver.

Huh.

But it’s a good time with friends and I’m really excited about it.

You’re going surfing in Brazil? You know what I’m doing? I have to interview Sam Altman on Monday in San Francisco. And then Barry Diller and Dara Khosrowshahi, and Andy Jasse in Vegas on the next day. And then I have to come and … Oh my God, I don’t have the right life. I just interview men.

Is this more not-so-humble bragging?

Yes. I’m just saying.

I love this. Barry Diller.

Yes, I love him.

B.D.

I love interviewing him. So fun.

A lion of media, that guy. What does he do now? Is he retired?

I love him. No he’s doing … He owns IAC.

What does he do now?

He owns IAC. He owns tons of stuff.

He still owns it?

He owns a lot of things. He’s quietly doing just fine over to the left over here.

Doing his thing.

Left me just say, Barry Diller is one of my favorite people to interview. He’s really funny. My favorite line from him … Every time I interview him, he says something really outrageously fantastic. And there’s two things, I gotta tell two Barry Diller stories.

One: He was onstage at one of our AllThingsD conferences. He was talking about Hollywood and the problems it was going to have dealing with the internet. He totally foretold what was going to happen. This was many years before Netflix and everything else. I go, “Do you think the people of Hollywood have the ability to understand the internet?” He goes, “They’re so inbred there, it’s a wonder their children have teeth.” It was just the … He did it in that Barry Diller voice.

There you go.

And then he gave an eye roll, fantastic eye roll.

All right, Scott. Thank you so much. Have a great time in Brazil. Enjoy yourself.

Thanks, Kara.

We’ll talk next time.

Sounds good.



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