Is Meta Heading The Same Way As The CD-ROM?

In their latest episode of the VALUE: After Hours Podcast, Brewster, Taylor, and Carlisle discuss Is Meta Heading The Same Way As The CD-ROM?. Here’s an excerpt from the episode:

Tobias: Meta set a pretty stunning rally recently, because they brought up the $40 billion buyback and they had $40 billion in cash. And so, that means that they’ve got to put some fetter on Zuck’s spending with respect to the Metaverse.

Bill: Mm, that was a cheap stock, man.

Tobias: No dispute from me.

Bill: Yeah, I don’t know. There was that guy that popped in the comments that said, “I never say anything worth listening to.” I told him, I said, “Meta is cheap,” and that was under a hundred. So, you’re welcome, asshole.

Jake: [laughs] Not investment advice.

Bill: Yeah, that’s right. We’re just discussing thoughts.

Jake: Yeah, just for fun.

Bill: No, I don’t know. They brained in their capex. They use the word– What did they use like?

Jake: It’s a year of efficiency.

Jake: Discipline or whatever. Yeah, efficiency, like 15 times, 18 times, or whatever.

Jake: They found Jesus in discipline with their cost, which I — [crosstalk]

Bill: I still think the bet fundamentally comes down to, do you think that Zuck someday, either, let’s say, two or three years down the road, looks at the results or lack of results and can make a rational decision on his version of the Metaverse? A lot of the capex spend is family of apps. A lot of the capex spend is– [crosstalk]

Tobias: Have you seen the Metaverse?

Bill: Have I seen inside it?

Tobias: Yeah.

Bill: I had been inside it.

Tobias: Have you seen a corporate version of it?

Jake: Is it warm?

Bill: No, I have not done that.

Tobias: I’ve seen it and I got some 1990s kind of–

Jake: Feeling?

Tobias: What was that CD– Everything was going to be on CD-ROM and it was all multimedia. It was just like, “Ugh, good luck.”

Bill: Yeah.

Jake: [laughs]

Bill: The man has earned the right to pursue this, but he has not earned the right to pursue it in perpetuity. So, we shall see whether or not he can be rational. I think he can be.

Tobias: But it’s still a good business. Somehow, the blue website is still growing.

Bill: Yeah, overseas and whatnot.

Tobias: WhatsApp undermonetized.

Bill: WhatsApp is a heck of a property. Let’s see if he ever monetizes it for real for real. But yeah.

Tobias: What did they spend on that? is it like $40 billion?

Jake: I think it was $20 billion.

Bill: WhatsApp?

Tobias: Yeah. $20 billion.

Bill: I don’t know. Don’t know off the top of my head.

Jake: Top of my head, $19 billion.

Tobias: Yeah. YouTube at a billion was probably, $1.65 billion, whatever it was, probably one of the all-time great buys– [crosstalk]

Bill: Yeah. Instagram was pretty good too.

Tobias: Instagram was– [crosstalk]

Bill: Instagram is pretty good too.

Jake: That was good.

Bill: I do think Google’s AI capabilities, from what I read, I think it makes the cloud product quite good. I don’t know how differentiated those products are, but to the extent, they are, I think AI is helping Google in the cloud.

Tobias: Has AI just become a complete commodity? Have we already commoditized AI?

Bill: It’s very possible, it does. I don’t understand how many– I get that AI people say that you need so much data in order to have this AI advantage.

Tobias: “$16 billion for WhatsApp,” Austin Reynolds.

Tobias: No, $19 billion in 2014.

Bill: Dang. That’s right.

Tobias: That’s a big dollar.

Bill: Austin, Google and you versus Jake and his brain, just lost.

Tobias: ChatGPT said $16 billion.

Bill: Oh, there you go.

Jake: ChatGPT. [laughs] But it was very, very confident about that $16 billion number.

Bill: That’s right. It made you really believe it.

Jake: [laughs]

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