COMPANY SECRETS FOR MORE ON
THIS WE'RE JOINED BY 2 OF THE
WHO IS THE PARTNER AND
PORTFOLIO MANAGER AT GRANITE
INVESTMENT ADVISORS, THANKS SO
MUCH FOR JOINING US TODAY.
WE APPRECIATE IT SO LET'S DIVE
IN YESTERDAY'S EARNINGS SHOWED
A SLIGHT
BE BUT THE REAL CAUSE FOR
CONCERN HERE IS THE DROP IN
REVENUES AND SO WALK US THROUGH
THAT AND THE LARGER CONCERN AND
HOW FACEBOOK
ENSURES THAT THIS DOESN'T CARRY
OVER INTO FUTURE QUARTERS AS
WELL.
>> WELL I THINK THE NUMBERS ARE
REALLY IMPORTANT YESTERDAY IT
WAS A REVENUE FOR FACEBOOK AND
IT WAS ACTUALLY A
THE SOFTENING OF THEIR FUTURE
EXPECTATION COMPARED TO STREET
EXPECTATIONS. THINK WHAT WE'RE
SEEING IN THE MARKET TODAY IS A
RELIEF RALLY THAT IT WASN'T
WORSE THAN IT WAS THAN EXPECTED
OR MAYBE AS BAD AS
YOU KNOW THE STUFF THAT'S GOING
ON IN WASHINGTON THE
WHISTLEBLOWER SUIT AND ALL OVER
THE ANTI-TRUST ISSUES THAT ALL
BIG TECH COMPANIES SEEM TO BE
RUNNING INTO DID NOT AFFECT
MONTHLY AVERAGE USERS WHICH I
THINK THE STREET WAS RELIEVED
TO SEE THAT THE PLATFORM IS
STILL ROBUST. DESPITE ALL OF
THOSE CROSS YOU KNOW CERTAINLY
THE APPLE IOS CHANGES
HURT REVENUE ACROSS THE THOSE
ARE PRIVACY CHANGES, THEY'RE
NOT COMPETING WITH APPLE.
SO IT'S IMPORTANT TO RECOGNIZE
THE ROBUSTNESS OF FACEBOOK'S
PLATFORM IS
STILL SICK.
>> OKAY, OKAY, SO WITH THAT IN
MIND OF COURSE THESE RESULTS
FOR THE QUARTER ENDING
SEPTEMBER 30TH. YOU KNOW A LOT
OF THE FILES THAT HAVE
CONTINUED TO COME FOR GORDON
THE REPORTS FROM THE WALL
STREET JOURNAL ON THE
WHISTLEBLOWER'S THE
SOURCES THAT THEY HAVE BEEN
ABLE TO GET SOME OF THAT
INTERNAL DATA
THAT IS JUST CONTINUE TO RAGE
ON THROUGHOUT THE MONTH OF
OCTOBER AS WELL AND SO WITH ALL
OF THAT IN MIND AT THE
CENTRALLY WE'RE LIKE THIS
BROADER 2 MONTH PERIOD.
WHAT DOES THAT SHAPE UP AS WE
MOVE ON THROUGH THE REST OF
THIS YEAR AS OTHER DIGITAL
ADVERTISING COMPANIES OF COURSE
NOT TO THE SAME LEVEL AS
FACEBOOK IS HARD TO
AMASS THAT. BUT ONE IN SNAPCHAT
THAT REPORTED LAST WEEK WHICH
IS HEAVILY A SOCIAL MEDIA.
COMPANY THAT RELIES ON
ADVERTISING FOR ITS REVENUE,
THEY SAID THAT SUPPLY CHAIN
ISSUES ARE HAMPERING SOME OF
THEIR ABILITY TO SEE AD
PARTNERS CONTINUE TO HAVE THE
SAME TYPES OF SPENDS THAT THEY
HAD PREVIOUSLY IS THAT IT HAD
ONE CONCERN FOR FACEBOOK AS
WELL IS THAT
SOMETHING THAT THEY ADDRESSED
AT ALL OR IS THAT SOMETHING
THAT THEY MIGHT BE ABLE TO
SWERVE IF YOU WILL.
>> YEAH YOU KNOW AND THAT'S
THAT BIG RIGHT AT THE END OF
THE DAY WE ALL HAVE TO REMEMBER
THAT THESE ARE
ADVERTISING PLATFORMS AND
WHETHER OR NOT COMPANIES PARE
BACK ON THEIR ADVERTISING IF
THEY DON'T HAVE THE PRODUCTS TO
SELL.
NOT REALLY A LONG-TERM
PROBLEM FOR FACEBOOK OR
SNAPCHAT RIGHT TO SHORT TERM
PROBLEM THAT MAY WORK
ITSELF OUT AFTER THE HOLIDAY
SEASON WHEN THE SUPPLY CHAIN
BEGINS TO HEAL SO WE'RE LESS
CONCERNED ABOUT THAT THIS IS
NOT A
SITUATION WHERE ANOTHER
PLATFORM HAS COME IN AND TAKEN
USERS AWAY FROM THESE PLAYERS.
THE MOVE TOWARDS ONLINE
ADVERTISING CONTINUES TO GROW
AT FACEBOOK SAID THAT IN ITS
EARNINGS ANNOUNCEMENT. SO
CREATING A ROBUST ENVIRONMENT
FOR CONTENT CREATORS TO
CREATE CALM. THE DISPLAY THAT
CONTACT AND GET PAID BY
ADVERTISERS IS REALLY WHAT THE
LONG-TERM PLAYS HERE AND I
THINK YOU HEARD FROM FACEBOOK A
NUMBER OF DIFFERENT THINGS THAT
THEY'RE TRYING TO DO TO
CONTINUE TO INCREASE THAT
ROBUSTNESS IN COMPARISON WITH
YOU KNOW THE UP INCOMING THINGS
LIKE TIKTOK SO A LOT OF
POSITIVE CHANGES IN THE PRODUCT
BUT WE'LL SEE HOW THAT TURNS
INTO REVENUE.
>> OKAY, AND JUST LASTLY ON
THIS FRONT AS WELL SINCE YOU
BROUGHT IT UP EARLIER JUST
BRIEFLY WANT TO HIT ON THIS THE
CONTINUED HEADWINDS FROM APPLES
IOS 14 CHANGES PROMPTED THEM TO
MAKE
SURE THAT THEIR 4TH QUARTER
TOTAL REVENUE WOULD OR THAT
FORECAST FOR THAT REVENUE WOULD
REFLECT THE SIGNIFICANT
UNCERTAINTY PROMPTED BY THOSE
HEADWINDS FROM THE CHANGES YOU
KNOW HOW MUCH MORE THE DAMPING
OR COULD THIS BE ON REVENUE
GOING FORWARD FOR FACEBOOK.
>> WELL YOU KNOW LOOKS LIKE IT
COULD BE REASONABLY SIGNIFICANT
KIND OF CLOSE TO 10 PER SAID
THE STREET
WAS EXPECTING 34 IN THE THEY'RE
PROJECTING YOU KNOW 31 WHICH
NORMALLY WOULD BE A SIGNIFICANT
DROP IN THE STOCK IF YOU SAW
THAT KIND OF REVENUE
EXPECTATION COMPOUND. BUT WHAT
YOU'RE SEEING IS IS APPLE SELLS
NEW PHONE YOU GET MORE AND MORE
PEOPLE ON THE NEWEST OPERATING
SYSTEM. SO AS THAT CHANGE
CONTINUES ARE GOING TO CONTINUE
TO SEE THOSE SETTINGS WHAT WAS
EVERYBODY IS ON
IOWA'S 4 TEEN AND ABOVE YOU'LL
BEGIN TO SEE A NORMAL OPERATING
RATE FOR ALL THESE COMPANIES
HAS THAT KIND OF GRANDFATHERED
IN.
>> HEADLINES THIS MORNING AND
YESTERDAY EVENING SWIRLING
AROUND THAT 10 BILLION DOLLARS
THAT FACEBOOK IS GOING TO BE
SENT SPENDING ON FACEBOOK
REALITY LABS, THIS IS A NEW
RICH HARDIN STRUCTURE THAT THE
COMPANY IS COMING OUT WITH AS
WELL AND JUST TO GIVE OUR
VIEWERS KIND OF THE THE
DEFINITION THAT FACEBOOK HAS
PUT OUT IT INCLUDES AUGMENTED
AND VIRTUAL REALITY RELATED
CONSUMER
HARD WORK. SOFTWARE AND CONTENT
ARE INVESTORS GOING TO BE
COMFORTABLE WITH THE INTERIM
SPENDING THAT FACEBOOK WOULD BE
DOING ON F R L
AND YOU KNOW HOW QUICKLY WOULD
YOU EXPECT THAT TO START PAYING
OFF.
>> WELL THAT'S THE THAT'S THE
PROBLEM THAT FACEBOOK HAS HAD
FOR THE LAST FEW YEARS IS THAT
EVEN AS THE REVENUE US CONTINUE
TO GROW THEIR EXPENSE BASES
CONTINUE
TO GROW REALLY JUST AND
REGULATORY ISSUES AND TRYING TO
YOU KNOW
I DON'T WANT TO CALL IT
CENSORSHIP. BUT SOME OVERSIGHT
OVER
THE CONTENT. INVESTORS REALLY
LIKE TO SEE THINGS LIKE
FACEBOOK REALITY LABS RIGHT
THAT'S CREATING THE NEXT
PLATFORM FOR CONTENT CREATORS
AND ADVERTISERS SO THAT'S
POSITIVE WHERE THE REST OF THE
EXPENSE BASE BASED ON THE
WHISTLE BLOWERS AND ALL THE
OTHER STUFF MAY BE SOMEWHAT OF
A HEADWIND HASN'T YET IT'S GETS
COULDN'T THAT HOW CONTINGENT IS
IS FACEBOOK REALITY LABS
SUCCESS ON
SOME OF.
>> THE ACTUAL HARDWARE THAT
FACEBOOK WHEN I THINK ABOUT THE
HOME PRODUCTS THAT THEY PUT OUT
THERE IN PORTAL
THAT HAS YOU KNOW NOT
EVEN HELD IN COMPARISON TO SOME
OF THE OTHER HOME ASSISTANCE
THAT ARE OUT THERE ON THE
MARKET AMAZON ECHO GO APPLE
HOMEPOD EVEN AND AND WHAT'S
GOES ON AND SO WITH THAT IN
MIND YOU KNOW, BUT THE
OPULENCE SHE AND HAD A GREAT
QUARTER THEY KIND OF POINTED TO
THE LAUNCH
AND THE ULTIMATE SUCCESS I
SHOULD SAY THAT THEY SAW IN THE
HOLIDAY SEASON LAST YEAR BUT
HOW MUCH IS FACEBOOK REALITY
LABS CONTINGENT ON THE HARDWARE
BEING RIGHT FOR FACEBOOK.
>> WELL I THINK IT'S
EXTRAORDINARILY IMPORTANT RIGHT
AND I THINK THAT REALLY STARTS
IN THE
MOBILE SIDE AS THE AS MOBILE
PHONES AND THE ROBUSTNESS OF 5
G NETWORKS BEGIN TO OFFER MORE
AND MORE A VIRTUAL
AND AUGMENTED EXPERIENCE IS
PROBABLY GOING TO START THERE.
THEY ARE A LONG WAY AWAY FROM
ALL SITTING AROUND ON OUR SOFAS
WEARING GOGGLES I THINK WE SAW
THAT IN 3 D TELEVISION DIDN'T
REALLY TAKE OFF BECAUSE NOBODY
WANTS TO WEAR
THE GLASSES. SO I THINK BEFORE
IT IS OUR HOME BEING THE BASE
FOR OUR OUR
SOCIAL INTERACTION. IT'S GOING
TO BE OUR MOBILE DEVICES AND
THEY ARE
GETTING THAT.
>> BETTER IT'S SUCH A PLEASURE
TO GET ALL OF YOUR INSIGHTS ON
THE DAY WE'VE BEEN TRACKING
FACEBOOK OVER THE PAST 2 DAYS
OF COURSE THEIR
PRE MARKET WE'RE KEEPING A
CLOSE EYE ON THE STOCK AS WELL
AS OF RIGHT NOW LOOKS LIKE IT'S
MOVING HIGHER PREMARKET BY