Episode 101

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Published on:

20th Sep 2024

Parasitic Ad Tech

We discuss the Department of Justice’s antitrust case against Google as a classic case of fighting the last war. And even if Google’s monopoly is dismantled, history shows to be careful of what you wish for because what comes next could be worse. Plus: Airmail’s weird business, the struggles at Food52 and why chicken parm is a great American product.

Transcript
Troy Young:

Was politics always this sort of closely aligned to people's, like to these sort of cultural segments and it's a big part of our daily, like, you know, discussion and identity system?

Troy Young:

Is this

Brian Morrissey:

It was separate.

Brian Morrissey:

It was something.

Brian Morrissey:

Remember, it used to be that like people didn't pay enough attention to politics.

Brian Morrissey:

It's like, be careful what you wish for.

Brian Morrissey:

Maybe we'll get to you later because sometimes when you get it.

Brian Morrissey:

It's not what you want.

Brian Morrissey:

And, you know, for years it was people don't pay enough attention to politics.

Brian Morrissey:

They're not, engaged enough.

Brian Morrissey:

Now it's like, whoa, whoa, whoa, wait a sec.

Brian Morrissey:

We don't want you that engaged in this, this politics.

Troy Young:

it feels more like sports now.

Brian Morrissey:

Yeah, no, it's, that's what, it became like popular, popular culture.

Troy Young:

It's kind of like the NFL in that we have our teams, but it's also bigger than an American sport.

Troy Young:

It's a global sport,

Brian Morrissey:

yeah, maybe it's like World Cup.

Troy Young:

yeah.

Brian Morrissey:

I don't

Troy Young:

Happens every four years.

Brian Morrissey:

Eurovision.

Brian Morrissey:

first of all, Alex is not here.

Brian Morrissey:

This is my fault because we changed the days and then I complained and then, and then it became

Troy Young:

I don't like when you have your fits, when you get really angry

Brian Morrissey:

whatever.

Brian Morrissey:

It's not angry.

Brian Morrissey:

I'm not angry.

Troy Young:

No, but your executive functioning problems translate into just like kind of projection of your

Brian Morrissey:

That is true.

Brian Morrissey:

Anyone podcast who has ever sent me an email and not gotten a reply, do not take it personally.

Brian Morrissey:

This is my executive functioning, malfunction.

Brian Morrissey:

So,

Troy Young:

Like, I'm ter I'm brutal.

Troy Young:

I'm the I'm I think I'm more, inept than you are,

Brian Morrissey:

Oh, thank you.

Troy Young:

But I I I maybe try to bring less righteousness to it when I fuck

Brian Morrissey:

Oh, stop.

Brian Morrissey:

That's not true.

Troy Young:

we had a bad week on the PVA text threads.

Troy Young:

Yeah,

Brian Morrissey:

That's why we have to make it like our premium product.

Brian Morrissey:

I'm talking to these people from subtext about, about doing, this texting feature that

Troy Young:

they're doing it at Puck, right?

Troy Young:

Yeah, Lauren I saw Lauren's over in Milan

Brian Morrissey:

landed in Milan.

Brian Morrissey:

I don't know if that's the, I mean, I, I talk with, with some people at Puck and, and, they think it's like good for like events.

Brian Morrissey:

I don't know if people really want to get like a text message

Troy Young:

Well, I think it's good for what's really important with human media now, which is connection and intimacy.

Troy Young:

So if you feel like you're part of the insider group and you feel like you're the first to know, and you feel like you have access and you feel like you know the person you'll pay,

Brian Morrissey:

Yeah, but it's

Troy Young:

it's really important.

Brian Morrissey:

it's not interactive, which is a necessity because, for

Troy Young:

Well, it is interactive.

Troy Young:

I sent her a note on the thread.

Troy Young:

She sent

Brian Morrissey:

Okay, you get it back.

Brian Morrissey:

But you're just seeing like one way things.

Brian Morrissey:

And I think.

Brian Morrissey:

One of the big problems with those, digital community platforms is they almost, they never work.

Brian Morrissey:

it all becomes, your condo board's WhatsApp group.

Brian Morrissey:

It just becomes, a couple of people who are just, have a lot of time on their hands and a lot of issues that they want to discuss.

Brian Morrissey:

And they want to, take photos of some, photos of someone who didn't, break down their cardboard or

Troy Young:

at Hearst was telling me, you know, they've been playing around with the, that Oprah was a really successful magazine for many, many years.

Troy Young:

One of the most successful in the portfolio.

Troy Young:

And then she sort of decided that, while I was there, that she didn't want to continue with the print magazine anymore.

Troy Young:

Just like she, I think, decided it may be a good time to get out of television.

Troy Young:

And then Oprah Daily emerged, which is sort of a more kind of intimate digital subscription thing.

Troy Young:

and they just launched with a company called Circle, I believe, a community solution that ties together the, a group of subscribers with like, Direct mishaps from Oprah, and it's like, sort of like a slack for

Brian Morrissey:

Yeah,

Troy Young:

And, and then, courses on, menopause and weight loss and stuff like that.

Brian Morrissey:

Maybe, I don't know.

Brian Morrissey:

I, I've, I've, I've checked out Circle.

Brian Morrissey:

They're, they were a sort of pandemic company and it's really hard to get people to adopt a new platform.

Brian Morrissey:

And that's why people end up using like Slack because everyone, unfortunately, at least in my view, has to spend all this time in Slack and getting someone to do, to log into another platform.

Brian Morrissey:

it's just really difficult.

Brian Morrissey:

Anyway, I always find these community models very difficult to pull off, much like, as we'll discuss later, content to commerce is It sounds great in theory, but then, in reality, it's like the history just says it's like almost impossible to pull off.

Brian Morrissey:

but I want to start by talking about this Google antitrust, trial.

Brian Morrissey:

We don't, we are not the people to talk about, pre bid and, and header bidding and, and all of the rest.

Brian Morrissey:

To me, what's most, most interesting is this narrative shift.

Brian Morrissey:

And Google is fighting a, basically a two front war, In one theater.

Brian Morrissey:

It has the more serious, I think, antitrust case when it comes to its search dominance.

Brian Morrissey:

And then there's a smaller theater that is around, it's smaller for Google because it's only a 31 billion business.

Brian Morrissey:

It's dominance of, of ad tech.

Brian Morrissey:

Again, good problems to have.

Brian Morrissey:

I mean, it's good, it's good to be dominant, I guess.

Brian Morrissey:

But, Google was trying to avoid this going to trial for a while, and it was obvious why they were trying to.

Brian Morrissey:

It's going, it is, it is unleashing a bunch of embarrassing details that, make clear that it was responding to the incentives of any quote unquote monopolist.

Brian Morrissey:

It's not for me to decide if they're a monopolist, I know that, they basically control this, this sector.

Brian Morrissey:

And, They, push that to the limit and they took actions that were absolutely against the interests of their advertisers and publishers and the overall ad tech ecosystem.

Brian Morrissey:

And that's just what companies do.

Brian Morrissey:

I don't think despite my self righteousness.

Brian Morrissey:

I don't think it's a morality play.

Brian Morrissey:

I don't think it ever is.

Brian Morrissey:

It's just incentives and, I think we had to look at, it, it, there is a good chance that Google, this is not like search, they can, they can get rid of, of, of GAM, and they can get out of the ad tech business, they can spin off what, what they built around DoubleClick, and it's not, it's not as messy as it is with search or with Chrome and Android, and I think the big legacy of this, I, I was just writing

Brian Morrissey:

a piece, and I'll be publishing after this, about how it reminds me a little bit of the Microsoft, trial in the 1990s and particularly that Bill Gates deposition where Gates really turned from this nerd king into he was, he was evasive, he was, he was like, overly aggressive, and he just came off really poorly.

Brian Morrissey:

Now this is, that was in a person, but I think Google is coming off.

Brian Morrissey:

And look, there's more to this trial going and it's, it's, it's really just a B2B story, but Google is coming off really

Troy Young:

He was sitting behind me at the U.

Troy Young:

S.

Troy Young:

Open.

Brian Morrissey:

Bill Gates?

Troy Young:

Yeah,

Brian Morrissey:

Interesting.

Troy Young:

yeah,

Brian Morrissey:

shouldn't he be in a box?

Brian Morrissey:

Were you in a box?

Troy Young:

no, I was right down by the,

Brian Morrissey:

He like sits with the people?

Troy Young:

He was sitting right, this is probably the first and only time I'll ever have better seats than Bill Gates.

Troy Young:

But he was,

Brian Morrissey:

That's like shocking.

Troy Young:

But when I exited,

Brian Morrissey:

a

Brian Morrissey:

CMO is

Troy Young:

up, I brushed up against

Brian Morrissey:

box.

Troy Young:

Well, the guy, I was with someone, a media executive, and he's like, that's Bill Gates.

Troy Young:

And, like, he was literally, like, two feet from us.

Troy Young:

And he was like, what should we say?

Troy Young:

It's kind of cool.

Troy Young:

Looks

Brian Morrissey:

for Windows.

Troy Young:

He's older,

Brian Morrissey:

well, yeah, I mean, he's been through a lot in the last several years.

Brian Morrissey:

so I think what is going to be really interesting that, that comes out of this, first of all, is whether they end up splitting it off.

Brian Morrissey:

I mean, I think everything is lining up with, either a voluntary or involuntary split off.

Brian Morrissey:

They, they even offered to the European

Troy Young:

so much more than this, though.

Troy Young:

Really, are we going to nerd out on, like Like, here's the thing, Brian.

Troy Young:

All of ad tech is a parasitic business.

Troy Young:

And anybody that's worked in publishing has had to live with this reality, which is this like, yeah, we're going to put this tech on your side, or we'll manage this aspect of the stack for you.

Troy Young:

And we'll only take somewhere between five and 10 and 15 or whatever percent of the ad revenue that comes in.

Troy Young:

Or God forbid, the thing that really, that I struggled with from the earliest years is wait, I'm going to give up essentially, which it would never do in old media, give up the rights to sell my inventory to a third party.

Troy Young:

Right.

Troy Young:

Like in the case of an ad network, they're representing you early ad networks would go out with a long list of logos and say, here's our inventory that we have look, and what they would be doing is they would put up like premium inventory logos at the top.

Troy Young:

And then they would fulfill it all with Meebo or something like that, like bulk

Brian Morrissey:

chaining, I think it was right.

Brian Morrissey:

Like they would

Troy Young:

No, but, but it was all those.

Troy Young:

Community sites that, you know, had all the page views that had, no content costs and all of that anyways, it was always a racket.

Troy Young:

And it always struck me that the idea of giving up rights to my inventory to a third party was just long term dangerous.

Troy Young:

And in fact, that's what it became is because you.

Troy Young:

became highly reliant.

Troy Young:

It's always a crack pipe, right?

Troy Young:

You just become reliant on a third party revenue line.

Troy Young:

In this case, every publisher in the world has indirect as a very important revenue line, and half of it literally is being eaten by the bottom feeders in the industry, right?

Troy Young:

And Google is the king of that.

Troy Young:

And so it was incremental revenue.

Troy Young:

You've typically had no sales costs on it.

Troy Young:

So you were really thankful that it was there.

Troy Young:

And the other big issue.

Troy Young:

Is that despite literally 20 years of innovation, the sort of banner, banner, industrial complex.

Troy Young:

It's kind of shitty.

Troy Young:

Meaning we never, only the wall gardens got ad product, right.

Troy Young:

From the perspective of, scalable, long tail performance space, data targeted, auction oriented, platform, no publisher can invest at that level with that sophistication of technology.

Troy Young:

And so, basically.

Troy Young:

Now what we have is, yeah, there's some nice premium banners that make a lot of sense on premium sites that have brand value.

Troy Young:

But I would say that Those are under tremendous pressure as more and more traffic moves to a new type of aggregator, which I think we should discuss later because I have some thoughts on AI is the new aggregator and what you do as a publisher and what the consequences are when you think about the new website.

Troy Young:

I would really like to talk about that.

Troy Young:

But yeah, was Google like, Taking more than they should have did publishers pay too much.

Troy Young:

Is it a monopoly?

Troy Young:

Absolutely, you know when you look at it, would you rather have google than a bunch of like taboolas and like criteos and all, addicts, like all of the other, people that are in the, the industry picking away at you.

Troy Young:

I think it's actually the lesser of two evils, ironically.

Brian Morrissey:

that's the part I find interesting.

Brian Morrissey:

Just to go back to the, the original concept is be careful what you wish for, publishers have always complained about Google, right?

Brian Morrissey:

I mean, it might be on background to me or over cocktails or whatever.

Brian Morrissey:

Like they're, they've always complained about, but Google for the most part.

Brian Morrissey:

And it's changed over the years a little bit, but it's been a benevolent dictator to some degree.

Brian Morrissey:

I mean, dictators generally do not become benevolent, but there was a, there was some kind of symbiosis of the fact that they controlled the distribution and then, yeah, they were going to take a piece like on the other side.

Brian Morrissey:

They're sending you this traffic.

Brian Morrissey:

Well, they're not, this is not Mother Teresa's orphanage here.

Brian Morrissey:

I mean, this is, you know, they're going to then take a cut because you're going to use their ad tech and you can, you know,

Troy Young:

Yeah.

Troy Young:

It, it, it's more like a Nordic country where there was like a steady supply of oil paying for Medicare.

Troy Young:

And, at least there wasn't, kind of wars among the different factions.

Brian Morrissey:

That's true.

Brian Morrissey:

By the way, did you know that like Nigeria, what they use their oil revenue for is not like for some sovereign wealth fund or, to pay for, to invest in like human capital, but they got trapped in this thing of then offering basically almost like free fuel to like their citizens.

Brian Morrissey:

So, they're just, they're, they're caught in this, but they can't, cut it off because, you know People don't like when you take things away, but that's, that's a side story.

Brian Morrissey:

So let's actually move on then, because I thought that was a very nice, concise, point.

Brian Morrissey:

to this new interface.

Brian Morrissey:

I didn't, I didn't totally understand what you meant when, when you put that in the notes, so this is a good time to explain it, so I have no setup to it.

Brian Morrissey:

You mentioned newsletters as one.

Brian Morrissey:

I'm like, oh my God, haven't we discussed this before?

Brian Morrissey:

What is the new

Troy Young:

Well, so sort of stumbled on this and then kind of started to pull back the layers of it.

Troy Young:

And I think there's a, there's a, in my, in my mind, I'm developing a kind of a new concept for how I think about the relationship between the front end of a digital property.

Troy Young:

That's the homepage.

Troy Young:

potentially like section aggregation, right?

Troy Young:

Which is typically a section page on any site and the end point, which is an article page, right?

Troy Young:

So the prevailing kind of the thing that we all said to one another when Google took over distribution for most publishers is Every page is a homepage, right?

Troy Young:

So that, you, you didn't really have a homepage anymore.

Troy Young:

It was probably sub 20, 10 percent of your traffic.

Troy Young:

People weren't coming to your front door.

Troy Young:

We trained consumers not to type in URLs.

Troy Young:

They either went to Google or got snippets of news syndicated inside of social environments.

Troy Young:

And then those platforms became increasingly powerful and creators just ended up kind of moving directly to those platforms as a, creation distribution mechanism for content.

Troy Young:

And I was going through an exercise with a group of folks looking at a new homepage.

Troy Young:

And what I thought was a kind of an unfortunate project where we're redesigning our homepage and section pages.

Troy Young:

It's going to take six months.

Troy Young:

Here's our objectives in terms of representing the brand as a metric, whatever that means on the homepage.

Troy Young:

And basically.

Troy Young:

We're re imagining it.

Troy Young:

Just think of it as a whole bunch of blocks of content, right?

Troy Young:

Image, headline deck, you know, arranged by topic or frequency or top performing or whatever people do on high velocity web pages, right?

Troy Young:

Home pages.

Troy Young:

And I had looked at what, what Matt Sanchez had done at Yahoo in creating a sort of aggregation layer.

Troy Young:

where A.

Troy Young:

I.

Troy Young:

In the section pages like culture or like celebrity on Yahoo had kind of bubbled up a paragraph of content, and then I was thinking about two other things.

Troy Young:

Just bear with me here.

Troy Young:

One was how we're training a new generation to get it content.

Troy Young:

And, and I've got to believe, and every generation that uses tools of the internet as their predominant interface points gets retrained.

Troy Young:

And so, what did Instagram and Facebook teach us?

Troy Young:

They taught us that the feed was how you delivered content to people, like thumb, thumb, thumb, mobile phone, feed, feed, feed, right?

Troy Young:

And now what we're doing more of, I think, is asking a question and getting text back.

Troy Young:

And that's chat GPT.

Troy Young:

And so in that text, when I say, tell me more about, the new book from, Hurrar, anyway, and it'll go out and it'll deliver a response back to you.

Troy Young:

Right.

Troy Young:

And, so I was thinking, and then I was thinking about we hated websites so much that we started delivering content and relying on newsletters.

Troy Young:

Right.

Troy Young:

and I, and I think of the newsletters that I like most from major media brands and their summaries of what's they've, what they're, what they've written in the past X period of time, right?

Troy Young:

Like a summary of all the stuff you

Brian Morrissey:

They're solving the problem that they've created, right?

Brian Morrissey:

Like they're, they're, they're writing all kinds of things that are too long.

Brian Morrissey:

I mean, this is the Axios conceit, right?

Brian Morrissey:

It's like every single 750 word story should be 250 words.

Troy Young:

did it through email.

Troy Young:

Morning Brew did it through email.

Troy Young:

All the major media brands started doing daily, you know,

Brian Morrissey:

Yeah.

Brian Morrissey:

Classic hack though.

Troy Young:

Right, right.

Troy Young:

But so, why?

Troy Young:

well, ads didn't overwhelm the page.

Troy Young:

It forced a economy on the people that sent that content out.

Troy Young:

It came to me in my mailbox.

Troy Young:

and, it sort of respected my time and it was timely.

Troy Young:

And I was like, well, that's a major new media format, broadly.

Troy Young:

And I was like, the interface layer on a new homepage is going to be dramatically changed by AI.

Troy Young:

Now, this is a theme we've.

Troy Young:

we've touched on in the past on this podcast and that if really what you want is the key metric, I think if you're redesigning, like a homepage as an example is, can you actually get people to come back more frequently?

Troy Young:

Whatever your, your frequency metric is.

Troy Young:

Right.

Troy Young:

And, maybe there's some other stuff, around, getting people into pages.

Troy Young:

Cause you still need page use.

Troy Young:

Cause you still have to make money because in media, you always have to have a foot in the past, foot in the future, if you don't start disrupting yourself to me, you're, you're kind of fucked.

Troy Young:

And so I was thinking that.

Troy Young:

In fact, the mental model for the new homepage is much more like the newsletter and heavily informed by the way we are going to consume content through a chatbot.

Troy Young:

So, if I arrived at a homepage and the first blurb was like a paragraph that said, Here's what you need to know right now.

Troy Young:

And it was auto generated, right?

Troy Young:

And then, yeah, there could be links, there could be utility, there could be community that were all intelligently connected to that.

Troy Young:

That would, and by the way, if you have a piece of data on me, like, for example, I'm on the board of a, Of a soccer company, a football, it's called football code.

Troy Young:

if you know, my home team and that blurb of content is customized through that lens, even better.

Troy Young:

And if you know, three other, you know, my secondary team, or, you know, where I'm traveling or, you know, where I live, you know, you can, or who my favorite players are, you can, you could start to customize it.

Troy Young:

But the interface layer is going to take the corpus of content from that media brand and potentially from.

Troy Young:

providers that are tangential to it.

Troy Young:

They're going to summarize it up as the first connection point to a bunch of content.

Troy Young:

And then closely related to that, I was thinking, why do we, why is the article page the way it is?

Troy Young:

And what I mean by that is, a third of the page is literally the headline.

Troy Young:

depending on how big the font is, right?

Troy Young:

You got the big headline that we've been trained to read.

Troy Young:

And then there's a deck and then there's a byline.

Troy Young:

And then increasingly because of Business Insider and because of Axios, we now have summary bullets.

Troy Young:

And then we have this story that just feels like the waste from the carcass.

Troy Young:

And, and it just strikes me that.

Troy Young:

If the article page was intelligent and far more like the response I get from ai, I have a better shot at creating what, what I really want as a publisher, which is gonna be really hard for the next generation, is finding a little bit of intimacy, a unique moment, a unique connection that I can create with a reader.

Troy Young:

if we don't do that, if we rely on.

Troy Young:

The thing I described at the beginning, which is a bunch of boxes on a homepage.

Troy Young:

It's really slow.

Troy Young:

That's really a place to host ads to take you into these dumb, article pages.

Troy Young:

Like that contrasted with the aggregator and the aggregator is chat GPT.

Troy Young:

Right.

Troy Young:

And so if we want someone to interact directly, listen, you're going to put toll booths up around the, the, the, the aggregator and companies like toll bid are going to say, listen, if your content floats into the aggregator, you're going to get paid and stuff.

Troy Young:

But let's be honest, that's great.

Troy Young:

Incremental revenue.

Troy Young:

That's not going to pay all your bills.

Troy Young:

And if you don't find a way to create.

Troy Young:

Intimacy in this kind of new AI world by using technology intelligently to create better interface to information for consumers.

Troy Young:

You may as well not even publish to your own website, in my opinion.

Brian Morrissey:

Yeah.

Brian Morrissey:

Well,

Troy Young:

And so that's that's, the model, right?

Troy Young:

I kind of sketched it out.

Troy Young:

And, and I want to add one thing before, before I end my little diatribe here.

Troy Young:

And one is that, a new aggregators like perplexity now Forbes went after perplexity for sucking up their content and basically regurgitating it without changing it.

Troy Young:

That should be stopped.

Troy Young:

And that's something we need to be very, very careful about.

Troy Young:

But one thing I've been really curious about is perplexity is pumping out content.

Troy Young:

to multiple channels and multiple content types with automation.

Troy Young:

you

Brian Morrissey:

have you listened to their

Brian Morrissey:

podcasts?

Brian Morrissey:

Yeah.

Troy Young:

I listen to it all the time because I'm really curious about it.

Troy Young:

And it's called discover daily.

Troy Young:

It's read by a male and female.

Troy Young:

I think the male robots called Winston and the fit, the female one's called like Heidi or something.

Troy Young:

And so of course, British accent.

Troy Young:

And so there's two, there's a male and female robot.

Troy Young:

News reader.

Troy Young:

The news itself is aggregated by AI or created by ai.

Troy Young:

And by the way, it's not a terrible product.

Troy Young:

I'm not listening to it 'cause I want to hear like the a, you know, the all in guys.

Troy Young:

Be cute with each other or, or me and you like trade jabs and me make fun of Alex or whatever.

Troy Young:

But I'm listening to it because it's kind of straight to the vein information and it's wellmade.

Brian Morrissey:

Well that's, okay, a couple things on that.

Brian Morrissey:

One is, okay, it was very, it was very well done.

Brian Morrissey:

one is, Is text the, the, you know, the mode, right?

Brian Morrissey:

cause what you're talking about, it's going to be a mode sometimes, but I think a lot of, I think a lot of times text is not going to be the answer.

Brian Morrissey:

And, and audio is a really good, that's why I find audio a really good product because, when you think about, I don't think anyone.

Brian Morrissey:

I always says nobody gets up and says, you know, yesterday was a good day, but I wish I spent more time looking at my phone.

Brian Morrissey:

It's like the same as, like, getting off a flight and being like, it was a good trip.

Brian Morrissey:

But I wish I wish I had more to drink during the flight.

Brian Morrissey:

nobody does that.

Brian Morrissey:

You just think it's not good.

Brian Morrissey:

So people are going there is going to

Troy Young:

I don't mind having, I don't mind a cocktail or two on the plane.

Brian Morrissey:

Okay, it's different.

Brian Morrissey:

you're super dehydrated up there.

Brian Morrissey:

Get get the, get the Bloody Mary mix.

Brian Morrissey:

Maybe like Anthony Bourdain.

Brian Morrissey:

Get the Bloody Mary mix, without the,

Troy Young:

but finish your point though,

Brian Morrissey:

So my point is that, for a lot of, a lot of needs, text is not the answer.

Brian Morrissey:

And I think this is, this is a challenge for a lot of publishers in that what they're good at, right, what they've become very good at, is a shrinking market.

Brian Morrissey:

And they need to find ways to respond to changing consumer habits.

Brian Morrissey:

And I think the big change of AI is going to be changing a lot of consumer expectations.

Brian Morrissey:

I believe it's happening.

Brian Morrissey:

And when you look at an article page and, I always ask this at the, at the, the dinners that, that we do is, Do you really think that people are going to be hitting back buttons in five years on your web page?

Brian Morrissey:

It's just really difficult for me to believe that.

Brian Morrissey:

And I can't believe that, that the mix is going to be so text heavy.

Brian Morrissey:

Because a lot of times, you want, you want just the answer, and audio is fine.

Brian Morrissey:

video is, is, is good, for obviously for entertainment and for getting people deeper, deeper engagement.

Brian Morrissey:

But, I think there's too much text, to be honest with you.

Brian Morrissey:

And the other thing I would just say is, I think about it as like a choose your own adventure thing.

Brian Morrissey:

And so you're going to have to like segment your audience.

Brian Morrissey:

Like I wrote last week about about how audience segmentation is like the new surface area.

Brian Morrissey:

And that like, in a more with less here, everyone's going to have smaller audiences than they had before, or at least appeared to have.

Brian Morrissey:

with those massive com score numbers, those are gone, it's not coming back, right?

Brian Morrissey:

And so how do you create that, that surface area?

Brian Morrissey:

Well, you, you get really smart about segmenting your audience.

Brian Morrissey:

I mean, because then you can actually make more money off of those segments, but you can also provide a differentiated experience to those segments.

Brian Morrissey:

And that's, again, why I think texting is really interesting in the text world, is because you should be able to.

Brian Morrissey:

Have different segments, get different types of content based on what you know about them.

Brian Morrissey:

I mean, we've been talking about personalization forever in this industry and it's not really, it hasn't really come to fruition.

Brian Morrissey:

I don't see it like on sites.

Brian Morrissey:

Maybe, maybe ESPN gives me like,

Troy Young:

Well, but it's kind of funny.

Troy Young:

I have so many things to, to react to that.

Troy Young:

One is what people thought of was, of personalization was usually hamstrung by a lack of supply of content, right?

Troy Young:

So a publisher wanted a personalized experience, but they actually didn't have the goods.

Troy Young:

Like we did personalize.

Troy Young:

TikTok is highly personalized.

Troy Young:

The algorithm personalizes it because there's an immense corpus of content from which to

Troy Young:

personalize.

Troy Young:

ChatGPT is the knowledge of the world personalized to your question.

Troy Young:

Right.

Troy Young:

So it's massively personalized, but the idea that I got a signal from you, Brian, and I'm on the New York times, and suddenly I'm going to massively modify the feed because, I know something magical about you.

Troy Young:

Actually, it doesn't matter.

Troy Young:

You know, it's interesting.

Troy Young:

What is, I had one other thought I wanted to just share on the Google thing because you made me think of it is it really is yesterday's war.

Troy Young:

I used to marvel at how that industry, despite the fact that it's like a bunch of, like it is a bit of a, a, a parasitic industry that we could instantly.

Troy Young:

calculate the value of a person, auction them off to a buyer and deliver an ad in the moment within a millisecond to a person at the other end of a, of a connection.

Troy Young:

And I always thought that was like a huge achievement.

Troy Young:

Like the whole.

Troy Young:

if the complete middleware of, of ad tech created a way to auction off into attention in a really systematic way.

Troy Young:

But what happens with all of these monopoly things, by the time the government steps in is the game has changed.

Troy Young:

So like cracking down on the banner economy that Google dominates, like who really gives a fuck?

Troy Young:

meanwhile.

Troy Young:

Retail media, mostly controlled by, corporations that have their own platforms outside of Google, Amazon, Meta, Google, in a different way through search.

Troy Young:

and then, then all of the people that participate in, in, in the retail media space, have taken like 20 percent of the market in the last three years.

Troy Young:

retail media is what publishers should be worried about

Brian Morrissey:

Oh, for sure.

Brian Morrissey:

I mean, that

Troy Young:

than anything else.

Brian Morrissey:

that money is not just from, co op budgets.

Brian Morrissey:

It's not just from shelf takers and all the rest of that stuff.

Brian Morrissey:

I mean, it is.

Brian Morrissey:

It is

Troy Young:

It's no content cost.

Troy Young:

It's all data, leverage.

Brian Morrissey:

and these businesses have terrible margins.

Brian Morrissey:

And so this is just straight, pure margin straight to the vein.

Brian Morrissey:

Let's say.

Troy Young:

yeah.

Brian Morrissey:

So, yeah, that is that's a great point.

Brian Morrissey:

I do

Troy Young:

So this, this whole, this whole thing is a big charade.

Troy Young:

And it's a waste of government money.

Troy Young:

And it, you know, it's just, it's a waste.

Troy Young:

Just let

Brian Morrissey:

You think it's a waste.

Troy Young:

I mean, other than a big corporate smackdown, slapdown, smackdown, whatever, yes.

Troy Young:

It's a waste of money.

Brian Morrissey:

I mean, it'll, I don't know if it's a waste though.

Brian Morrissey:

I mean, just like the case against Microsoft, really,

Troy Young:

Here's where you and I differ on this shit, Brian.

Brian Morrissey:

rise of Google happened at that time.

Brian Morrissey:

It tied up Microsoft.

Troy Young:

yeah, so that somebody else could create a browser and somebody else could create a better phone and someone, yeah.

Troy Young:

And then Microsoft went on to dominate a different office segment, but I get it.

Troy Young:

and, and, and all.

Troy Young:

We got the iPhone.

Troy Young:

it's sort of like you saying, yay, come Kamala is going to give small business some kind of like incentive or tax incentive, or it's like, great.

Troy Young:

We're going to subsidize the creation of.

Troy Young:

new homes, you know, what's going to happen?

Troy Young:

We're going to create another bureaucratic layer.

Troy Young:

We're going to create a new department.

Troy Young:

There's going to be all of these companies that, that, that, that siphon money from the government and build crappy places that are not tuned to real market dynamics.

Troy Young:

And no, one's going to be better off for it.

Brian Morrissey:

Well, I, okay, I need to defend myself a little bit here, because I,

Troy Young:

you want to get a, you want to get some kind of like, small business loan from the government.

Troy Young:

Go

Brian Morrissey:

I don't want a small business loan for the government.

Brian Morrissey:

I will take, I will take, preferential tax treatment.

Brian Morrissey:

I don't think I should pay taxes for a few years, but that's, that's me.

Brian Morrissey:

no, I think that, again, to go back to be careful what you wish for, this, whether it's a declining segment of the market or not, I don't know if like what, What comes out of this, this case is necessarily quote unquote better because like you said, like the forces, the structural forces of the market are just making this Part of it less important, right?

Brian Morrissey:

There's just so many different ways and more effective ways, frankly, that advertisers can reach consumers than this entire convoluted, very impressive, the idea of doing this millisecond targeting and very impressive.

Brian Morrissey:

The end results are less impressive than the actual process, mind you.

Brian Morrissey:

I think as any consumer would attest to, but, Yeah, I mean, it's a decline.

Brian Morrissey:

I think you have to be careful what you wish for at the end of the day because it could end up in a worse situation, right?

Brian Morrissey:

I mean, everyone complained about ad tech with all the logos on Terry's slide.

Brian Morrissey:

Well, Google was just the logo at the end of the day.

Troy Young:

put what you hear through a filter.

Troy Young:

Terry Kowalcza, Luma, whatever you, you think of Terry.

Troy Young:

is obviously cheering for disruption in the market because, you know, that will mean people have to sell

Brian Morrissey:

He wants consolidation because he

Troy Young:

he wants the market to reshuffle because that's how he makes money.

Troy Young:

Let's be clear.

Brian Morrissey:

I'm not naive.

Brian Morrissey:

I'm many things.

Brian Morrissey:

Well, maybe I'm a little naive, but I don't think so.

Brian Morrissey:

By the way, I just wanted to add this, a little ad tech drama.

Brian Morrissey:

and I can't believe if I was an editor, still I would, I would be assigning the story.

Brian Morrissey:

There's, there's no stories about what's going on at open web.

Brian Morrissey:

So they, they came out with, you know, they have this commenting technology and they raised a ton of money.

Brian Morrissey:

I never really understood.

Brian Morrissey:

They've raised a ton of money, but they, the, the chairman of the board came out and said, Oh, thank you for your service.

Brian Morrissey:

We've got a new CEO, the chairman of the board.

Brian Morrissey:

And then next thing you know, Nadav's on, On LinkedIn saying I've not stepped down as open web CEO.

Brian Morrissey:

And so they have a situation.

Brian Morrissey:

He's the founder of the company where the board says there's a new CEO and the founder who's the CEO is like, no, I'm still CEO.

Brian Morrissey:

that's got, please someone, please someone report this out.

Brian Morrissey:

that's a, that's a fascinating story.

Brian Morrissey:

I don't know if you have any thoughts on it.

Troy Young:

I'll try to be brief.

Troy Young:

I know a little bit about it.

Troy Young:

yes.

Troy Young:

So Nadav is an impressive dog

Brian Morrissey:

a special forces guy.

Brian Morrissey:

Isn't he?

Brian Morrissey:

Or

Troy Young:

He's a mercenary.

Troy Young:

He's a sniper.

Troy Young:

He is one of the most relentless people I've ever met.

Troy Young:

Now the way I met Nadav is, he called me basically every week for six months.

Troy Young:

When I, hung up on him and told him to fuck off because I didn't want his commenting platform.

Troy Young:

And then he wanted to put all kinds of widgets and shit all over the pages to make, to create higher engagement and it was going to do all these great things.

Troy Young:

And then he wanted to own ad rights on the pages.

Troy Young:

Which is like the cat classic story of ad tech.

Troy Young:

I'm just going to put a little snippet of

Brian Morrissey:

One line of JavaScript, script.

Troy Young:

then I want ad rights.

Troy Young:

So he had an okay platform.

Troy Young:

I needed a solution for identity and for commenting.

Troy Young:

I didn't want any of the other junk and I wanted to pay for it on a SaaS basis.

Troy Young:

I negotiated hard.

Troy Young:

We got a good deal.

Troy Young:

And it's been a fine relationship.

Troy Young:

And.

Troy Young:

Nadav did that in several places, found that being, a kind of commenting arms supplier to the publishing industry wasn't terrific, bought an SSP, so that they could also supply ads in at the bottom, bottom top.

Troy Young:

I don't know where they put their ads.

Troy Young:

They put them somewhere they bought this French SSP and, and I would talk to, I would go to lunch with him now and again, always an admirer of this energy and his, his kind of drive.

Troy Young:

And he did a couple things really well.

Troy Young:

He created a fancy board.

Troy Young:

Scott Galloway was on the board and a bunch of other people, I think the name and the packaging of Open Web, they spent a lot on design and they made it feel like they were these sort of advocates for the open web.

Troy Young:

And that they were far more than like, your kind of standard issue commenting technology.

Troy Young:

So there was an aspirational quality to this thing that enabled them to raise a couple hundred million dollars and get a hundred and fifty million dollars, sorry, a 1.

Troy Young:

5 billion dollar ish valuation.

Troy Young:

But you have to go first principles on this stuff.

Troy Young:

Because when you would talk to Nadov, you never really understood what he was saying.

Troy Young:

you know, it's like a commenting platform within SSP, I get that.

Troy Young:

But then it was like, then you could tell things weren't going great because it would be like, and we're doing CTV, you know, it was always like the next thing, you know, and,

Brian Morrissey:

media comes

Brian Morrissey:

in the

Troy Young:

yeah, or retail media.

Troy Young:

Yeah.

Troy Young:

CTV or retail media.

Troy Young:

Totally.

Troy Young:

And I thought, Oh, this isn't, this isn't great.

Troy Young:

And I think really what happened is, There's more pressure on the, the, the sort of economy that he lives inside of the investors.

Troy Young:

They would think it was inside partners that put a lot of the money and said, things aren't going well.

Troy Young:

And they thought this was the right time to kind of move on.

Troy Young:

And what happens when you take that kind of money is the people actually that give you the money, have a lot of power.

Brian Morrissey:

Well, yeah, you can't go founder mode when you own a minority of the company.

Troy Young:

You, when you own a minority, when you've taken secondary, vitally, so congrats, he took some secondary and got a nice place in Williamsburg, but like a couple hundred million dollars is a lot of money.

Troy Young:

So you can, you can do stuff with that.

Troy Young:

Anyway, that's the story.

Troy Young:

That's But there's going to be many, many more of those stories in the ad tech world.

Troy Young:

Because it's not, it's a, it's a daunting place right now.

Brian Morrissey:

yeah, no, and there's lots of changes going on, there.

Brian Morrissey:

part of it scares me cause they're my partners.

Brian Morrissey:

the other thing is Airmail is up for sale.

Brian Morrissey:

It's, it's weird.

Brian Morrissey:

I feel like Airmail has been around for a long time, but it's only, it's only like three years old.

Brian Morrissey:

I mean, basically it's Graydon Carter, created a.

Brian Morrissey:

A newsletter business with some events attached to it.

Brian Morrissey:

And it was going to be for basically people who are aspirants to, to the

Troy Young:

It's kind of like Mon, Monocle 2.

Troy Young:

0 meets Vanity Fair.

Brian Morrissey:

Right.

Brian Morrissey:

Yeah, but like aspirants, I feel like all of these things are not there.

Brian Morrissey:

They present themselves as for this, globe trotting elite.

Brian Morrissey:

But the reality is, there's only so many people in that globe trotting elite.

Brian Morrissey:

And so if you're selling like 100 newsletter subscriptions, it's for aspirants.

Brian Morrissey:

It's not for the people in the actual at on the yachts for the people who pine to be on the yachts.

Brian Morrissey:

I think, so, you know, look, newsletters are great.

Troy Young:

So what do you want?

Troy Young:

What?

Troy Young:

Let's ask you some questions on this.

Troy Young:

So they raised 32 or 34 million dollars.

Troy Young:

It's clearly anchored to the largesse of, Carter.

Troy Young:

when I get my email from, I'm an aspirant and when I get my email from, air mail on the weekend, it's Grayden Carter here.

Troy Young:

So it's, you know, they're selling the company 'cause he's.

Troy Young:

Exiting stage left because he's tired.

Troy Young:

Because what?

Troy Young:

and you have a media brand that they, you know, in some ways we're really forward thinking, right?

Troy Young:

Like they kind of pushed into the email space before others did.

Troy Young:

They tried to bring the uniqueness and kind of luxury veneer back to a media brand that.

Troy Young:

We missed with the generation of BuzzFeeds and scale players.

Troy Young:

So hats off to them.

Troy Young:

But now what to get the capital back at a recent, decent return.

Troy Young:

They got to sell it for sweat 60 million.

Troy Young:

So it's a 60 million business.

Troy Young:

I'm sure it doesn't make any money.

Brian Morrissey:

It has 34 employees.

Troy Young:

okay.

Brian Morrissey:

for an annual subscription.

Troy Young:

yeah,

Brian Morrissey:

Like, those numbers just don't work.

Brian Morrissey:

I don't understand raising 32 million for what's in essence a newsletter business with a couple of, pop up retail.

Brian Morrissey:

I don't understand where that money goes.

Brian Morrissey:

Is it to pay Alessandra Stanley?

Brian Morrissey:

I don't understand.

Brian Morrissey:

I guess I just feel like

Troy Young:

they're not cheap.

Troy Young:

They have a lot of high profile writers.

Troy Young:

This is a, what is it?

Troy Young:

A 10 million payroll.

Troy Young:

Something like that.

Troy Young:

like is it, is it making money, Brian?

Troy Young:

Do you think they sell a little bit of advertising?

Brian Morrissey:

Hell no.

Brian Morrissey:

It's just the numbers don't work.

Brian Morrissey:

I don't understand these, these type of businesses that it's like the, the biggest advantage of building a media business, a publishing business at this time is the unbelievable low costs of doing it.

Brian Morrissey:

and to then.

Brian Morrissey:

basically do the same mistakes that were done in a previous generation of raising venture capital.

Brian Morrissey:

Media is not a venture business almost

Brian Morrissey:

always.

Brian Morrissey:

It just puts you behind the eight ball.

Brian Morrissey:

I don't get it.

Troy Young:

both sort of emerged from the same genetic pool, both Puck and Airmail, right?

Troy Young:

There's lots of connections starting with John's connection to Graydon and

Brian Morrissey:

TPG was, I think, involved in

Troy Young:

was somehow involved in both.

Troy Young:

I think John advised Airmail for a while.

Troy Young:

So the question is, is Puck any different?

Brian Morrissey:

I think so, because it's, it's, it's, it's broader, right?

Brian Morrissey:

So they, they've focused on, and Puck just turned three.

Brian Morrissey:

They had a very nice, anniversary party.

Brian Morrissey:

and

Troy Young:

I mean, did you go?

Brian Morrissey:

yeah,

Brian Morrissey:

it

Troy Young:

I didn't get the invite.

Brian Morrissey:

Really?

Brian Morrissey:

Oh, that's nice.

Brian Morrissey:

was a step and repeat.

Brian Morrissey:

I didn't

Troy Young:

they would like, I suspect, to buy your business and make you the,

Brian Morrissey:

Oh, great.

Troy Young:

make you the media marketing vertical.

Brian Morrissey:

Uh, No, that's not for me.

Brian Morrissey:

they have a different lane than I do.

Brian Morrissey:

anyway, I think what they've, they've done smart, I think, is tackle real verticals, the power verticals.

Brian Morrissey:

I get how it all adds up, right?

Brian Morrissey:

It's not around, curios of, of, of a person, right?

Brian Morrissey:

I mean, it has, okay, you, you, you focus on, and some verticals are stronger than others, but you focus on the power verticals of media, Of politics, of Silicon Valley, although I don't know if they've fully gone into Silicon Valley and and Hollywood.

Brian Morrissey:

Right?

Brian Morrissey:

And, you've got to find ad markets in in there with the 4 year consideration ads.

Brian Morrissey:

You have the all the Washington DC money that is not as great as it once was I've noticed but that goes into the Hey, regulate us, but don't regulate us in a way that hurts our business, but it helps our business.

Troy Young:

Yeah, and it's also that sort of unaccountable corporate advertising budget that you have to put somewhere.

Troy Young:

Yeah.

Brian Morrissey:

and that's great.

Brian Morrissey:

the subs then also, supplement it.

Brian Morrissey:

I get.

Brian Morrissey:

I understand the POC model, I feel like better than I do the Airmail model.

Brian Morrissey:

Now, whether that, you know, they've raised, they've raised a fair bit of money too.

Brian Morrissey:

So, they just in talking to them, they want to build a very big business.

Brian Morrissey:

I think the question with all of these businesses, how big the businesses can get, because I like to compare and contrast POC and Semaphore because they sort of are in the same semaphore is going to be two, I think, next month.

Brian Morrissey:

and Puck just turned three, so it's tidy.

Troy Young:

They both execute pretty well.

Troy Young:

Actually, I would say my big knock on both of them from a reader perspective is a complete lack of economy in how the, in, in their formats, the puck articles are so long,

Brian Morrissey:

yeah.

Troy Young:

so, so long and so are semaphores.

Troy Young:

And I, I just, I need more, you know, the

Brian Morrissey:

Wait, you think semaphores are long?

Troy Young:

they can be, they can be, but pucks are very long.

Troy Young:

I like the FT better because there's an economy to their article structure that I appreciate as a reader.

Brian Morrissey:

Yeah, they actually use the, they, they use the constraints of print.

Brian Morrissey:

I feel like, well, it translates well to digital weirdly enough.

Brian Morrissey:

Cause like they, they, if you look at like how they handle print at the FT, the front page articles, they don't, there's no jump, which is great.

Brian Morrissey:

I don't think anyone wants to hunt through it for like a six to understand that

Troy Young:

Yeah, I mean, back to the homepage thing.

Troy Young:

It's interesting to watch the evolution of my consumption on the, on New York Times that way.

Troy Young:

To me, the homepage isn't a navigation point, it's a product.

Troy Young:

I read the headline, I read, they put enough deck in there.

Troy Young:

It's So that you can get the gist of the story.

Troy Young:

And you'll notice by the way that they're putting, increasingly putting vertical video on their, on their homepage.

Brian Morrissey:

Oh yeah.

Troy Young:

And it, and it's without a long 30 second ad in front of it because they have the subscriber relationship where they can pay for that video in different ways.

Troy Young:

I really think it's a great product.

Troy Young:

Just their homepage is a good product.

Brian Morrissey:

Yeah,

Brian Morrissey:

no, for

Troy Young:

product this week though.

Troy Young:

Don't worry.

Troy Young:

Don't worry.

Troy Young:

Blisters.

Brian Morrissey:

Yeah, but actually, that's a good point about the newsletter because I mean, a lot of newsletters down if you've noticed, but like the way to shifted from treating the newsletter as a product unto itself.

Brian Morrissey:

To going back to it as a promotional vehicle or some kind of hybrid of it, right?

Brian Morrissey:

You have to optimize the something.

Brian Morrissey:

And because, again, this is the platform risk.

Brian Morrissey:

Because everyone likes to act like email is a way to get out of like the control of like platforms.

Brian Morrissey:

Uh uh.

Brian Morrissey:

Not the case.

Brian Morrissey:

Right?

Brian Morrissey:

Like you're still have a technology company that is the gatekeeper of your emails.

Brian Morrissey:

All the open rate data is like a mess.

Brian Morrissey:

You can't trust it because, because of Apple.

Brian Morrissey:

Apple just auto opens all these emails.

Brian Morrissey:

They think it's a privacy violation.

Brian Morrissey:

I have no idea why it is.

Brian Morrissey:

we have so many bigger problems in this world.

Brian Morrissey:

but then now everyone has to have click rates.

Brian Morrissey:

So they now for it to be visible In the inbox, your incentives are to make sure people click on something.

Brian Morrissey:

So then all of a sudden what you're doing again is the best part to me of email was that you can get a piece of information there and then go on with your day rather than clicking on something, going to a web page where someone can like do something to you, throw an ad in front of you, do an autoplay, get you to take some action.

Brian Morrissey:

I don't know.

Brian Morrissey:

It's another example of that.

Brian Morrissey:

But one of the things with Semaphore that I find interesting is that as it's developed, it's, it's literally a Quartz do over, you know, like, they just came out with a, I want to talk with Justin about this because I mean, Justin Smith was, one of the founders of Quartz when he was at the Atlantic and Quartz, you know, never, I don't know.

Brian Morrissey:

It never lived up to its hype, obviously.

Brian Morrissey:

I think they did some really interesting things.

Brian Morrissey:

When you think about, like, when we talk about the homepage, they turn their homepage into a chat experience.

Brian Morrissey:

And I think like that, they might, they might've been ahead of their time a little bit with, with, with how they were thinking of things.

Brian Morrissey:

and as Zach Seward, who was behind a lot of those initiatives is now at the times as they're like AI guru.

Brian Morrissey:

but they, they have, Semaphore is doing a next 3 billion.

Brian Morrissey:

conference.

Brian Morrissey:

when I was like, that sounds very familiar.

Brian Morrissey:

And that's because like quartz had the next billion conference.

Brian Morrissey:

So it just always

Troy Young:

Well, we all just have one,

Brian Morrissey:

I know that's very few, but I always say there's only one bill Belichick who's like creating a different, game plan for each team.

Brian Morrissey:

Like most people, they got an offense, they're going to run it.

Brian Morrissey:

so food 52.

Brian Morrissey:

Mark Stenberg.

Brian Morrissey:

Mark, if you're listening.

Brian Morrissey:

Great piece.

Brian Morrissey:

A classic, classic.

Brian Morrissey:

Inside, the mess at X

Troy Young:

And a nice piece, because it was like, there was some optimism in it, right?

Troy Young:

Like,

Brian Morrissey:

well, they got him on the phone.

Brian Morrissey:

This is a smart thing.

Brian Morrissey:

They got 'em on the phone.

Brian Morrissey:

A lot of times companies like go into like porcupine mode.

Brian Morrissey:

Right.

Brian Morrissey:

When a reporter comes, you know, when things haven't been going great.

Brian Morrissey:

but Erica Bodden, I guess, is now the CEO.

Brian Morrissey:

She came from, from Barstool, had a great run at Barstool.

Brian Morrissey:

Right.

Brian Morrissey:

and she's the new CEO.

Brian Morrissey:

She hasn't really been doing a lot of like interviews.

Brian Morrissey:

I feel like about, about Food 52, she's mostly been doing like the, you know, she's like an

Troy Young:

I think this was like the first big one.

Troy Young:

Eric is a super cool person and

Brian Morrissey:

Yeah, no, I like Erica.

Brian Morrissey:

She's, she's great.

Brian Morrissey:

she'd be great on this podcast.

Brian Morrissey:

But anyway, they brought her in as CEO of food 52 it was a food website that then became a content and commerce play.

Brian Morrissey:

Right.

Brian Morrissey:

They started down the affiliate route and then it was like, we're going to make our own products and sell them.

Brian Morrissey:

And they, this is the, I consider this the TPG model, right?

Brian Morrissey:

TPG funded, barstool, TPG as, as properties like meat eater.

Brian Morrissey:

they're very big into this content to commerce model.

Brian Morrissey:

they've got that.

Brian Morrissey:

epic gardening.

Brian Morrissey:

They had some really interesting, companies that they back and Food 52 is one of them.

Brian Morrissey:

So they plowed a bunch of money into Food 52 during the good old days, during the pandemic.

Brian Morrissey:

But the numbers that Mark got, assuming these are correct, are rough, very rough.

Brian Morrissey:

basically that Food 52's revenue Went from the combined company when they bought schoolhouse was 120 million in 2021.

Brian Morrissey:

They're down to like 28 million like they

Troy Young:

28 is just the Food 52

Brian Morrissey:

Okay, so then the food 52 business went from 80 million to 28 million.

Troy Young:

I think that's right.

Troy Young:

Yeah.

Brian Morrissey:

What?

Brian Morrissey:

How,

Troy Young:

What questions do you

Brian Morrissey:

how, how you take a bunch of funding.

Brian Morrissey:

So they, they close around with a TPG in 2021.

Brian Morrissey:

Look, it was crazy times then.

Brian Morrissey:

they, they raised 80 million in 2021.

Brian Morrissey:

They, they had a 300 million valuation.

Brian Morrissey:

Then they started buying, different brands.

Brian Morrissey:

They bought a cookware brand.

Brian Morrissey:

Okay, and a home decor brand that was schoolhouse, right?

Brian Morrissey:

So they spent, a bunch of money on buying their own brands.

Brian Morrissey:

And the idea was they were going to turn these, their audience into customers of these brands.

Brian Morrissey:

this is yet another example, who dinky, which is another, TPG property that completely hit a wall and is back.

Troy Young:

TCG.

Brian Morrissey:

hit a wall with this, with this approach.

Brian Morrissey:

And I don't know, is it time to, to put a fork in, in the dreams of content to commerce?

Troy Young:

Well, I don't know.

Troy Young:

I have a few remarks on this because I've watched it pretty closely.

Troy Young:

I know the people I like the people a lot.

Troy Young:

I think that TCG widely said there needs to be a different model in connecting either content and I or IP critically.

Troy Young:

And I think there's a difference To, a revenue stream.

Troy Young:

And that adver being, entirely reliant on advertising revenue wasn't the kind of assets that they were interested in.

Troy Young:

They liked food 52 because actually Amanda did an amazing job.

Troy Young:

Amanda was a New York Times, food person, and, had created a community model at Food 52 where people would submit recipes and, and the early audiences of food 52 were really.

Troy Young:

We're really, really connected to the brand, to Amanda and to, to the mission of the company and so they early on and when they were looking for funding had, stepped into commerce selling things like early on this apron and a, and a cutting board items that were unique to them.

Troy Young:

And they sold lots of them and they realized there was an opportunity to get into, So they got more and more into commerce.

Troy Young:

And I think that some of the challenges were as follows.

Troy Young:

One is, connection between a recipe, say, and SKUs that you have in your store isn't super effective.

Troy Young:

So one doesn't always lead to another.

Troy Young:

the consumption of that content doesn't lead to a transaction intimately.

Troy Young:

And, The problem with that is that you start to question why you create the content in the first place, unless it's being paid for by some other means.

Troy Young:

Then what happens as a company is you get into having to manage two businesses.

Troy Young:

One is sell media to pay for your content and then build a commerce business on the other side.

Troy Young:

We've talked about this before.

Troy Young:

Complexity plus complexity equals in many cases should show.

Troy Young:

they hired in a gentleman who was ex Williams Sonoma.

Troy Young:

to be the CEO, and really push hard into commerce.

Troy Young:

Just before that, they had bought this great brand schoolhouse and this heritage brand dance.

Troy Young:

And, those were profitable or at least schoolhouse was and doing fine.

Troy Young:

But once they started to kind of go full into commerce, they lost their, their connection, their intimacy with their audience, their homepage became.

Troy Young:

Like basically an e commerce homepage, they added tons of skews.

Troy Young:

They, got into the sort of discounting cycle

Brian Morrissey:

This is the same thing that happened to Houdinki.

Troy Young:

Yeah, except that who dinky struggled because you can't actually sell the watches that people want, like Rolex inside of their model.

Troy Young:

So you have to sell all the second tier watches.

Troy Young:

And then they also bought a marketplace for you stuff.

Troy Young:

But so there's slightly different issues, but tons of skews.

Troy Young:

Not enough uniqueness.

Troy Young:

It started to look like mass retail, except they didn't have the advantages of max retail in that those people were good at it.

Troy Young:

Those people were omni channel.

Troy Young:

Those people had stores everywhere.

Troy Young:

Those people had, well honed supply chains and, and so.

Troy Young:

They just lost money and they lost their way.

Troy Young:

So the media business suffered, the relationship with the customer suffered, and the commerce business didn't make any money outside of Schoolhouse, which was kind of trucking along and doing well.

Troy Young:

Now what Erica had done so amazingly well At Barstool is find a way to take what was a real brand, real personalities, real connection to an audience, and actually real difference in the market in terms of how it was positioned and perceived and turn that into like pizza sales, right?

Troy Young:

Or turn that into merch sales and like, no, but it was a, they sold a lot of stuff

Brian Morrissey:

Okay.

Brian Morrissey:

If gambling didn't get legalized, that, that

Brian Morrissey:

doesn't, that, that, that business doesn't look like it looked.

Brian Morrissey:

And by the way, it didn't convert really well.

Brian Morrissey:

Look at, look at the massive write down that Penn took.

Brian Morrissey:

So, I mean, look, all credit for building the business for the exit, but I'm not sure if that model

Troy Young:

The postscript on it was that it, he bought it back for nothing.

Brian Morrissey:

No, no, great for great.

Brian Morrissey:

No,

Troy Young:

no, no, no truth to what you're saying.

Troy Young:

Like it was a bit

Brian Morrissey:

some gambling book, losing a bunch of money.

Brian Morrissey:

I don't care about

Troy Young:

Right.

Troy Young:

So what is Erica doing now?

Troy Young:

Trying to bring the uniqueness back to the brand, focusing on handmade products, limited runs, cool shit that you can't get anywhere else.

Troy Young:

and then empowering creators to be part of, they have this amazing office at food 52 down on the water,

Brian Morrissey:

Oh, it's a

Troy Young:

the Navy yards.

Troy Young:

It's so beautiful.

Troy Young:

And they have all these incredible kitchens and stuff.

Troy Young:

So they're

Troy Young:

going to

Troy Young:

bring a

Brian Morrissey:

be because it's hard to get to.

Brian Morrissey:

I mean,

Troy Young:

It is hard to get to, but it's really fabulous.

Troy Young:

And so they're going to try to.

Troy Young:

create more IP, embrace like way more voices and kind of find their mojo again and then, and then correct the merchandising strategy.

Troy Young:

And I hope she does it

Troy Young:

I really liked the people.

Troy Young:

And I think she's, a really great operator.

Brian Morrissey:

100 percent agreed.

Brian Morrissey:

I think as cautionary tales pile up, right, and they all are different in their own ways, but I don't think that this is, This is not the model.

Brian Morrissey:

I think it was just, overblown.

Brian Morrissey:

Like,

Troy Young:

Yeah.

Troy Young:

Commerce business with low margin, undifferentiated skews, against a partially aligned content model is not a business.

Troy Young:

Nope.

Troy Young:

You're not going to make any money.

Brian Morrissey:

Okay.

Brian Morrissey:

Well, that's a happy note.

Brian Morrissey:

Should we get to good product?

Brian Morrissey:

We've

Troy Young:

it.

Troy Young:

Let's do it.

Troy Young:

Good product.

Troy Young:

I'm really into this thing that you talk about a lot, which is how and I don't understand how the information space works.

Troy Young:

I don't understand.

Troy Young:

And I haven't understood.

Troy Young:

I mean, I guess I guess I'm getting a better understanding, but I didn't really appreciate what, say, a person like Trump saw in our information space that we didn't see, and how his combination of shamelessness and, lying and kind of being, creating the kind of thing of the day, Trump to any, a kind of virtue of truth and ended up, building, an army underneath of him and a presidency and, maybe another one.

Troy Young:

So, and it to me is, is very much a function of, of how media distribution.

Troy Young:

and kind of the way information moves has changed.

Troy Young:

So I'm trying to understand that better.

Troy Young:

And a few things that I kind of that stood out to me this week.

Troy Young:

The first is I'm reading, Yuval's new book, on called Nexus.

Troy Young:

There we go.

Troy Young:

Can you see it?

Troy Young:

which, which is really a historical view on how information.

Troy Young:

Shapes societies and over, back from, the Romans, the Bible, the Bolsheviks, all the way through, the kind of populist moment we're in now and looking critically at how AI is going to change the, power structures in the world.

Troy Young:

And so I think that's really, really fascinating.

Troy Young:

I'll report back as I, get through more

Brian Morrissey:

I mean, he goes back to the Stone Age, so this is a broad sweep.

Troy Young:

he's really, easy writer to read.

Troy Young:

So I appreciate that.

Troy Young:

I also like to read, although sometimes his politics irritate me, Ryan Broderick can be quite strident, but spends his waking hours exploring the nooks and crannies of the information

Brian Morrissey:

yeah.

Brian Morrissey:

Garbage Day.

Brian Morrissey:

It's a great

Troy Young:

Gar Garbage Day always highlights where Weird shit comes from and now Ryan has a podcast called panic world And like last week's episode was just on the origins of the like cough syrup chicken thing Like where that came from how it spread?

Troy Young:

like You know what what it actually meant to the world

Brian Morrissey:

Yeah, no, I appreciate him because he takes first of all, he's incredibly prolific.

Brian Morrissey:

And as anyone's I'm like, I can't believe he can write this much, just shocking.

Brian Morrissey:

but also because he takes a very rigorous approach to an area that I think a lot of people just look at as unimportant, but it's, it's Obvious, I'm sure, and Yuval Hariri's book that, you have to like, truly understand it.

Brian Morrissey:

I don't think, I don't think many, I don't think many, sort of traditional, thinkers in this area truly do, and particularly in reporters, like it's just not, it's starting to get covered more seriously, but that's where, Taylor Lorenz, I give her a lot of credit.

Brian Morrissey:

She saw very early on that an area that people were dismissing was incredibly important.

Brian Morrissey:

And, and

Troy Young:

did she did it She has a new podcast too, and it's not not quite as good.

Troy Young:

It's called power user.

Troy Young:

I think on the Vox Network But then you sent an article around from your favorite publication pirate wires which is a kind of Right wing outlet led by what's his name?

Brian Morrissey:

Michael Solana,

Troy Young:

Mike's Lana, and they had done a pretty interesting interview with Jack from Twitter and Jack Dorsey.

Troy Young:

and some of the comments he made in there like was his push to get the underlying protocol at Twitter be part of essentially the public domain.

Troy Young:

So there was distance between a kind of open source protocol that controlled the core of flow of information and the interface that sat on top of it so that there was always There was essentially a disconnect between Or like, so there was like an accountability split around

Troy Young:

what actually was put into the world and the interface that sat on top of it, wherein you would have things like algorithms that you could select where Twitter would be a good company because it controlled interface and monetization and algorithm selection, but like the content.

Troy Young:

You weren't responsible for because it existed inside of this, public protocol and,

Brian Morrissey:

Well, it's a

Troy Young:

I,

Brian Morrissey:

right?

Brian Morrissey:

I, mean, it's a Dodge.

Brian Morrissey:

It's like, Oh, look, all these people are saying these horrible things.

Brian Morrissey:

We don't want to be responsible for it.

Brian Morrissey:

So let's create some mechanism that we can offload these bad assets.

Troy Young:

True, but think about it.

Troy Young:

The point he makes, and it's kind of an obvious one, is it's so hard for these platform companies to basically be in charge of what should be disseminated and what should not be, and be at the front lines of the free speech debate.

Troy Young:

And so, to me, that is an incredibly difficult place to be, in particular as you span states, nation states, and, have different policies all around the world.

Troy Young:

This is a really, really difficult

Troy Young:

place for

Troy Young:

for private

Brian Morrissey:

I

Troy Young:

to be.

Brian Morrissey:

I get that.

Brian Morrissey:

I can remember early on.

Brian Morrissey:

I think I interviewed David Kirkpatrick, who wrote one of the first biographies of Mark Zuckerberg.

Brian Morrissey:

And he made the point that in early Facebook, Zuckerberg would always talk about Facebook as utility versus, MySpace.

Brian Morrissey:

Because he would say, MySpace is about entertainment and all this stuff, but this is utility, right?

Brian Morrissey:

And the lawyers, and they finally got lawyers, said, Mark, you've got to stop.

Brian Morrissey:

You got to stop saying that and that's how platform that's how platform came in because utilities Governments didn't understand this stuff, but utilities they understand because utilities are Even if they're in the private domain, they're highly regulated.

Brian Morrissey:

Okay, and That's why we have platforms and not utilities and Yeah, it's like he made the point that it is it's a It's impossible also with a brand advertising model, which is all, which to me has been obvious for a while now.

Brian Morrissey:

And the fact that Elon Musk is attacking, brands, it's not, it's not a mistake I'm getting all the time on X they're using anybody who uses subs pay us so you don't have to see our ads has zero faith in their advertising business.

Brian Morrissey:

I mean, first of all, how insulting is that to your customers, your advertisers?

Brian Morrissey:

If you're using saying, Hey, get away from them, pay us.

Brian Morrissey:

You don't have to like hear from them.

Troy Young:

I have less of a problem with that.

Troy Young:

I think the point

Brian Morrissey:

Would you do that at Hearst?

Brian Morrissey:

Be like, okay.

Troy Young:

I mean, I think there's a lot of publications where people want an ad light experience as part of the subscription bundle.

Troy Young:

The point Jack Dorsey makes in the article is that Twitter will never be a good brand environment.

Troy Young:

And unless it figures out how to be a response play, to build direct response ad platform, they're, they're never going to get anywhere on the outside.

Troy Young:

Anyway, that's not what the good product is about.

Troy Young:

What about the reveal?

Troy Young:

What is a good product?

Troy Young:

And this is going to be a little unexpected.

Troy Young:

we know Steve Ballmer, right?

Troy Young:

Steve Ballmer, the blustery, kind of semi successful,

Brian Morrissey:

semi successful.

Brian Morrissey:

He's

Brian Morrissey:

one of the richest people in the world.

Troy Young:

100%.

Troy Young:

He made a lot of money as CEO.

Troy Young:

I think there were a lot of criticisms of how he did it and how, they lost a bunch of markets, and could really only, succeeded where kind of the, the direct sales muscle inside of companies, which, Ballmer was the king of.

Troy Young:

Right.

Troy Young:

Like he was the ultimate, B2B salesman.

Troy Young:

Anyway, it doesn't matter because he's had a moment to reflect and use his wealth, right.

Troy Young:

To buy a basketball team

Troy Young:

and the Clippers.

Troy Young:

and to kind of be a more interesting guy.

Troy Young:

And I really admire that.

Troy Young:

And so he uses his money to create something called just the facts.

Brian Morrissey:

No USA facts.

Brian Morrissey:

I

Troy Young:

Yeah.

Troy Young:

Well, I think the show on YouTube is called just the

Brian Morrissey:

Oh, okay.

Brian Morrissey:

But then the overall organization is USA facts.

Troy Young:

and I'm like, is this, this is kind of interesting.

Troy Young:

One gets surfaced to me with the YouTube algorithm and it's on the U.

Troy Young:

S.

Troy Young:

federal budget.

Troy Young:

And it's maybe a six minute video that break, breaks down where revenue comes from and where the money is spent.

Troy Young:

And it does it.

Troy Young:

he narrates it.

Troy Young:

He does a good job narrating it, and it has lots of infographics and tells the story in an extremely clear way.

Troy Young:

And I think as a, as a citizen running up to the election, just understanding where the money goes is a, is, is, is your responsibility as a voter.

Troy Young:

when you break it down, Brian, there's so little money in the discretionary back.

Troy Young:

I mean, it's trillions of dollars, but like how much of it is debt service, how much of it is entitlements and Medicare and Social Security and how much of it is military.

Troy Young:

It's like, unless you like attacking the deep state is one thing.

Troy Young:

Right from a political perspective, but actually finding where the money is.

Troy Young:

So we are going to shrink the size of the American, of the, of the public sphere so that we can align revenues with expenses is really important for citizens to understand.

Brian Morrissey:

But like, I said, we didn't want to get political, but yes, that's why that's why all the fights right now are over inconsequential idiocy.

Brian Morrissey:

Like, oh, are we going to tax over time or tips or any of that stuff?

Brian Morrissey:

Nobody's talking about the, the, the massive parts of the budget.

Brian Morrissey:

they're just talking about these little teeny

Troy Young:

Well, no one wants to look at the revenue side, right?

Troy Young:

And the fact that most of it comes from personal taxes, and a very small amount relatively comes from corporate taxes, but that's one thing.

Troy Young:

But, that's fine, you tax the end of the line.

Troy Young:

But, unless there's fundamental restructuring in how we manage expense for entitlements, military, and get the debt service down, nothing's gonna change.

Troy Young:

And we have politicians out making promises of where they're going to, fund new housing and give Brian Morrissey tax breaks for his small business.

Troy Young:

But like really understanding the big picture is great.

Troy Young:

And I, I applaud Steve Ballmer and my good product this

Troy Young:

week for making just the

Brian Morrissey:

I agree, because USA Facts that he started, Poppy McDonald, who used to be, I think she was the president of the Atlantic, maybe she was the publisher of the Atlantic, she's now the president at, USA Facts.

Brian Morrissey:

I did a, I did a podcast with her a couple years ago about this initiative, and I, leaving aside the specifics of the debt, what they're trying to do, and I think it was a little bit ahead of its time, is create some kind of shared reality in which we can have.

Brian Morrissey:

Actual discussions.

Brian Morrissey:

And, that sounds very basic, but they were like, Okay, how do we get as close to reality as possible?

Brian Morrissey:

We have to establish common facts.

Brian Morrissey:

You can have different opinions, you can have different viewpoints on, on what it means to have those facts, but if we don't start from a common set of facts, and so the entire concept of it, I really agree with.

Brian Morrissey:

I don't know if it can break through, because I don't necessarily see a massive appetite for that, But it's very, it's absolutely admirable.

Brian Morrissey:

I think the effort of what they're trying to do, because the only way we can have productive conversations is if we agree on some sense of what of reality.

Brian Morrissey:

And that usually comes down to, some, some aspect of data.

Brian Morrissey:

So that's, that's good.

Troy Young:

Okay, so that's, that's how I got there.

Troy Young:

That was my good product.

Troy Young:

I wanted to provide some background for it.

Troy Young:

But, Brian, I know you have something about suburban restaurants or something.

Brian Morrissey:

I said, mine is fine.

Brian Morrissey:

Of course you did this to sort of disadvantage me.

Brian Morrissey:

I mean, mine was a little bit more, lighthearted.

Brian Morrissey:

I went, I went, back to, the Philadelphia area, suburban Philadelphia.

Brian Morrissey:

not where I grew up and near where I grew up.

Brian Morrissey:

it's my mother's 85th birthday.

Brian Morrissey:

Happy birthday,

Brian Morrissey:

mom, if you're listening to all this.

Brian Morrissey:

so we went out to dinner and I'm always reminded, I haven't lived in the suburbs outside of, Outside of a little period during the pandemic when I fled New York like a coward.

Brian Morrissey:

but going back there, I'm always amazed.

Brian Morrissey:

American suburbs are amazing.

Brian Morrissey:

This country is amazing.

Brian Morrissey:

It is so, so rich.

Brian Morrissey:

It's amazing.

Brian Morrissey:

That how rich this country is and not I didn't grow up in any sort of super fancy area or anything, but they're just everywhere in the United States.

Brian Morrissey:

But one of the aspects that I love about suburban America is that you can go to a pretty good Italian restaurant.

Brian Morrissey:

All of them have a pretty good Italian restaurant.

Brian Morrissey:

That's in a strip mall.

Brian Morrissey:

It's next to a dry cleaners.

Brian Morrissey:

In, in Pennsylvania, because they have weird liquor laws, they have a BYOB.

Brian Morrissey:

And my, my approach to all these is, you gotta get the Chicken Parm, because Chicken Parm is the test of an American Italian restaurant.

Brian Morrissey:

It is a uniquely

Troy Young:

I like the vodka sauce, like the Penne alla

Brian Morrissey:

Pan Am thought, well that's because, okay.

Brian Morrissey:

But you're going, you're going to a, what's that, what's that douchey place?

Brian Morrissey:

Carbonara.

Troy Young:

Theirs is good, it's spicy.

Brian Morrissey:

I don't, that place is, I don't

Troy Young:

No, it's

Troy Young:

bullshit.

Troy Young:

I, I get it.

Troy Young:

I

Brian Morrissey:

I went one time.

Troy Young:

No, they've took the suburban concept and made it, you know, acceptable for rich

Brian Morrissey:

for like

Brian Morrissey:

85.

Brian Morrissey:

but the chicken parm, do you know how the chicken parm came to be?

Brian Morrissey:

Cause it didn't come from, from Italy.

Brian Morrissey:

Basically, Americans, Italian Americans, I guess they came from like Sicily or Southern Italy, where there's a lot of eggplant.

Brian Morrissey:

Parm is the dish there.

Brian Morrissey:

So whatever, my lens on the Parmesan,

Troy Young:

like pizza being invented in Canada, and basketball, you know.

Brian Morrissey:

but no, this is pretty American.

Brian Morrissey:

Basically they looked at what their German neighbors were doing with schnitzel and they're like, that's pretty good, but wait a second.

Brian Morrissey:

We know, we know how to level this up and that's how we got chicken parm.

Brian Morrissey:

So I think

Troy Young:

So was it, was it good?

Brian Morrissey:

All right, so here's, here's, because I

Troy Young:

I mean, what's so good about, where's the good product?

Troy Young:

The American Suburb, the shitty strip mall Italian restaurant,

Brian Morrissey:

Parm?

Brian Morrissey:

chicken parm is a

Troy Young:

I gotta, I gotta go.

Troy Young:

Let's wrap it up, cause

Brian Morrissey:

It's a great

Troy Young:

definitely not,

Brian Morrissey:

really difficult to do with, it can very easily be rubbery.

Brian Morrissey:

And, if you don't get the sauce to cheese ratio, I thought you would appreciate this.

Brian Morrissey:

Troy, this is my experience with good product 90 percent of the time.

Troy Young:

I just don't think Chicken Parm is a particularly good product.

Troy Young:

I like Eggplant Parm better, but, I

Brian Morrissey:

Well, that's offensive to America.

Brian Morrissey:

That's all I'm saying.

Brian Morrissey:

All right.

Brian Morrissey:

This is

Troy Young:

Well, it was fun.

Troy Young:

yeah,

Brian Morrissey:

Is he like, is he doing like an Austrian goodbye?

Troy Young:

I think he's pissed off at you.

Troy Young:

All right.

Brian Morrissey:

Okay.

Brian Morrissey:

Appreciate it.

Brian Morrissey:

Bye.

Troy Young:

but, but.

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About the Podcast

People vs Algorithms
A podcast for curious media minds.
Uncovering patterns of change in media, culture, and technology, each week media veterans Brian Morrissey, Alex Schleifer and Troy Young break down stuff that matters.
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