Marketecture: Get Smart. Fast.
00:30:25 · Ari Paparo, Eric Franchi
[00:30:25] S0: Okay. That [00:30:25] S1: was the legacy business of Perion, which gave him the cash to acquire Undertone and started this whole thing. Let's move on. Oh my god. This isn't about me. But this is about me. I was kidding. So Rembrandt, a portfolio company of, of our firm, they merged with a company called Whisper World. So Rembrandt, if you don't know, they do they do a few things. They acquired Spaceback, but effectively what they do is they use AI to do virtual product placement in existing videos. These could be, like, sitcoms from the nineties. They could be movies. They could be creator videos. Super cool stuff. This is very, very hard to scale for a number of reasons per... Particularly for professionally produced content. Whisper World kinda solve that legacy problem with standardization. They're... Another one, you know, non US. It's, it's quite a scaled business. They've been doing this for for some time, not well known. But this is one, again, from an insider perspective, is very complementary in terms of taking, like, you know, something that is scaled with scan... Standardization, bringing in, like, great AI. I am excited about this deal, and it is a merger.
00:31:34 · Ari Paparo, Eric Franchi
[00:31:34] S0: Yeah. The... This deal rhymes with the Perion deal, but the dynamics are a little different. Like, Rembrandt, real tech. Hot company. Interest... Hot hot company, but definitely it feels like this... And I know you're an investor, so I could just give you my perception, which is Whisper World, a company no one's heard of outside The US, wants to get big, wants to... They talk about going public, you know, acquiring... Effectively merging, but really acquiring The US based company with a lot of good tech seems like a a pretty important move for them to increase their, you know, awareness and whatnot. And to give one crazy example, you really can't find them on the web. Like, you could Google Whisper World, and they just do not come up, which is so weird. I had to find their website by, like, going to LinkedIn and finding their employees and clicking into their URLs and stuff. Super weird. [00:32:23] S1: I saw that. I saw that you put that in the in the notes. When I did it, I landed on their YouTube page, which then put me to their website. So, yeah, maybe an SEO vendor if you're... Or an SEO vendor. [00:32:36] S0: It was just
00:32:36 · Ari Paparo, Eric Franchi
[00:32:36] S0: It was just [00:32:37] S1: free free lead. Free lead. Get get after it. But the new the new company is called, I think, WR Labs. So, you know, we'll, we'll we'll hopefully, you know, see some see some visibility in the engines, from there. But shout out to Omar. I mean, Omar is is is a is a brilliant founder and and, you know, product and technology leader, but he's been particularly good at M and A in his, you know, kind of two point o acquired Spaceback acquired the The US business of Myriad, now merging this thing, obviously going for scale and potential IPO, knock on wood. Don't have any information like, you know, very very interesting to see, like, how Omar's trajectory has matured. [00:33:14] S0: Are you still a shareholder of the combined company? Yeah. [00:33:17] S1: Yeah. [00:33:18] S0: For sure. Okay. Great.
00:33:18 · Ari Paparo, Eric Franchi
[00:33:18] S0: For sure. Okay. Great. [00:33:19] S1: Good to hear. Alright. Cool. So earnings? Sure. Alright. There's been a lot of earnings over the course of the past week, and of course, over the course of the past night or so. So maybe the best way to do this is how we've done it before. I'll just kinda like rattle through and we'll we'll come up with, with some some insights and and some some themes. So Amazon earnings, they didn't do that great in terms of the public market performance, but ads are up 12%, AWS 39%. This is basically Google. You know, just like ads growing, cloud really, really growing. So that was Amazon. AppLovin reported last night. AppLovin absolutely crushed it. Their stock, again, we're not a stock show, but their stock was ripping. Revenue up 55% to a record 2,180,000,000, making a push into CTV finally, and a market cap of $90,000,000,000. Our friend James Burrow, who you were on just on on his pod, he did one of those tweets where it's just like, this market cap is now all of these companies and sports teams and, like, you know, the billionaires combined, like AppLovin is is certainly on an incredible trajectory again. Magnite reported. Magnite revenue up 14% to 204,000,000. CTV up 39%. Criteo revenue down 12% year over year, profits down as well. Mountain, 15% revenue growth, but CEO is out, management talking about an execution crisis, the stock got obliterated. And Teads, Teads just came out, revenue down 37% year over year. [00:35:06] S0: Not good. Not good.
00:35:06 · Ari Paparo, Eric Franchi
[00:35:06] S0: Not good. Not good. [00:35:08] S1: Alright. I'm gonna take a breath. Yeah. Tell us what this all means.
00:35:13 · Ari Paparo
[00:35:13] S0: There... There's some themes. Right? So obvious theme number one is open web. I talked about it five minutes ago. The so called death of the open web, the more exposure you have to web based advertising, the worse your earnings are gonna be. We we actually don't have on this list Taboola, which was also had a challenging but optimistic corner... Quarter. You know, I think they were down, like... Don't I remember exactly the numbers, but it was... Them as a leader in their space also had a down quarter. The t... The Teads 37% is just atomic bomb level, especially because of how much debt they have. The stock is trading at 19¢, and that is just not a great situation. So that's theme number one. Maybe Criteo can be swept into that theme a little bit. The other theme here, CTV, very exciting. Right? So CTV is the growth area. It is relatively open. You can participate in it. The value is there. The advertisers love it. Even with the bad earnings, Mountain was up eight... 15% year over year. So that's a second theme. And then the third theme is just, you know, performance. People want performance then. So that's where AppLovin crushing it. You know, they're just tweaking the algorithm and getting better results. They're they're up a little bit because they had a challenging last quarter, and they blame the last quarter on the algorithm. They said the algorithm didn't improve as much as they expected, so they missed the quarter. Well, they started whipping the engineers and whipping the data centers, and they got the algorithm to work again, and suddenly they're explosive. It tells you kind of the nature of the of the mechanics of that business. It's much more like a... Like the way Meta does business than it is like some of these other names who are still, you know, largely humans in the loop trying to sell stuff.