Roblox Is Betting Big on the Kid Attention Economy
America’s kids are tuning into the gaming platform over 2.5 hours per day
This is the second in a series of posts about one of the most accretive paradigm shifts in our economy since globalization and digitization: dispersion.
The market added half a trillion in value in the past two weeks: AT&T busted a baller move to a rundle, the FTC filed suit against Facebook, and an overhyped DoorDash and underhyped Airbnb went public.
AT&T’s announcement that it will release movies simultaneously on HBO Max and in theaters predictably pissed off Hollywood players, who make millions from the current system. But Christopher Nolan calling HBO Max “the worst streaming service” is similar to JCPenney calling Amazon circa 1999 a terrible experience. Doctors, talent agents, and film directors should host a pity party at Jeffrey Katzenberg’s crib, catered by Planet Hollywood and with performances from Robin Thicke and Billy Squier. (Note: You know the moment when the edible kicks in? It happened in the middle of the last sentence.)
Anyway.
AT&T CEO John Stankey realized the market favors recurring revenues and narrative over transactional revenues and EBITDA. Last week, the narrative was AT&T had been on the wrong side of a trade with the smartest man in media (Jeff Bewkes) and overpaid for Time Warner. Ironic that two of the five worst acquisitions in history have the same two words: Time Warner — which 18 years previous merged with AOL. An infirmed stock price is a terrible thing to waste, and AT&T’s underperformance inoculated it against the innovator’s dilemma. (Ma Bell has less to lose.) So it went gangster on theaters, opting for the consumer. AT&T is poised to recognize an increase of $100 billion or more in market cap in 2021 on its transition from a conglomerate that makes no sense to the world’s largest recurring-revenue firm.
Next up, the FTC and 48 states filed an antitrust lawsuit against Facebook. This formed the second of two dots, the first being the DOJ’s case against Google. Two dots make a line, and that line points toward the end of Big Tech as we know it. But while it’s tempting to think of these breakups as punitive, they’re actually generative. Antitrust oxygenates the marketplace, and WhatsApp and Instagram will be the next Peloton and Zoom, creating commensurate value. It was telling that this “shocking” news had little impact on the stock. There is only one stakeholder that won’t benefit from a breakup of Facebook, and he’s the most dangerous person on the planet.
Finally, DoorDash, a food delivery firm with multiple well-capitalized competitors, IPOed and is now worth $60 billion. Its market cap is almost equivalent to Moderna, the biotech company that created a Covid-19 vaccine in less than a year. One is a warrior that may defeat a pandemic; the other delivers my burrito bowl. One is overvalued.
Airbnb, however, is not. The firm’s offering price was $68 but closed at $144 per share with a market cap of more than $100 billion, as I predicted. The company is dispersing the vacation-travel supply chain. It has a dominant brand, a global supply network, and a talented leadership team. Bottom line, Airbnb is going public despite the pandemic, while DoorDash is going public because of the pandemic. Which would you rather own when the vaccine comes?
I platform, therefore I crush it
Last week, I wrote about the Great Dispersion and the risks and opportunities it offers. One form the Great Dispersion takes is platforms. Platforms are horizontal networks that connect buyers and sellers, speakers and listeners, or creators and consumers to one another, bypassing traditional gatekeepers. (We’re launching a Platform Strategy Sprint in the spring.) The internet is such a platform, of course, and it hosts many others: Twitter and Facebook, YouTube, Etsy, eBay, and Airbnb. These platforms have become the connective tissue for billions of people. They are subeconomies that have become nation-states with market capitalizations greater than the GDP of Honduras.
Building a platform can generate huge returns. In 2000, Amazon launched its own platform, permitting third parties to sell goods alongside Amazon’s own offerings. In 2017, unit sales on Amazon Marketplace exceeded Amazon’s direct offerings and have since only increased their share. In effect, Amazon became a minority player on its own platform, a result that might strike a less innovative CEO as a bad outcome. But Bezos knows platforms, and so does the market. Amazon’s stock has appreciated at three times the pace of Walmart’s since 2017, as Amazon uses its platform dominance to create scale that is… Amazonian.
Will the DOJ put an end to that dream with a third dot on our line? Or will Bezos inoculate his company against government interference (and further enrich his shareholders) with a preempting spin? My money is on the birthing of an independent organization that will be the most valuable firm in the world in 2025: AWS.
Dispersion of creativity
Another group of platforms disperses both retail and creativity. Etsy — a pandemic winner whose prosperity is nothing short of inspiring — enables artisans to reach a global audience. YouTube made video stars out of millions, and now TikTok is leapfrogging YouTube in the mobile space. Substack, Patreon, and OnlyFans are likewise disarticulating creators from traditional gatekeepers. It appears algorithms have a better eye for great content than Meg Whitman.
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Pallet Container Market Size | Industry Forecast 2025
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Plenty of homeschooling moms and dads are fearful - concerned that their toddler will get there to the summary they did for Google
- Plenty of homeschooling moms and dads are fearful - concerned that their toddler will get there to the summary they did for Google