Shownotes Transcript
Will your lifestyle get better when you move to Hungary? I'm thinking of moving to Hungary, except for the government there's not much better, yeah. Who's fascist guy? Isn't Orban? Orban's kind of like, he's like a quasi-authoritarian, isn't he? Uh-huh. I mean, I guess you all would know all about that. Oh, my God. Oh, my God. Oh, my God. Oh, my God.
All right, let's get into it. This is a very special edition of People vs. Algorithms. Alex Schleifer had a hard stop so he couldn't make it, but...
We've got Nick Denton, who may or may not have just sold his lovely apartment in Soho and is moving to Budapest. Nick is the former CEO of Gawker Media, founder of that. Probably an iconic, I would say it was like an iconic, that word is overused, but it was one of the defining media properties of the last era of digital media. I always thought there was BuzzFeed envy and then there was Gawker envy that a lot of people in the industry had. And
I think sometimes we lose sight of the fact that Gawker was early to a lot of the trends that were sort of speed running right now. I mean, it had the authentic voices. It was a network of niches, had a tech infrastructure that was participatory with Kinja, and it moved aggressively into commerce, which is Troy's darling. And now this media industry has just been swallowed by what we call the information space industry.
It is basically viral Twitter accounts. It's outsiders that have political agendas. It is openly partisan. It's all kinds of different things. It's both exciting, but it's also a little bit scary. So I wanted to have you on, Nick, to talk about all of this. Troy, how would you set up this conversation? I would set it up in a way I'll try to maybe not flatter Nick too much.
I remember when I was at Hearst and David Carey was a big fan of yours, Nick. And I think among the executive ranks at Hearst, there was great admiration for what Nick had created at Gawker. And a desire, even if they didn't really, you know, like that old line, everybody wants to go to heaven, but no one wants to die. A desire to try to kind of find some of the Gawker magic inside of Hearst, which was a
you know, a huge transformation from, you know, this kind of deeply paternalistic print sort of holding company to something that resembled Gawker. But when I met Nick, I remember coming to the Gawker office and talking to you a couple of times, Nick. And what I saw was everything that I kind of admired in digital media at the time that I thought was sort of
the right formula where it clearly you had, you know, the aspiration to build longstanding media brands. You had a kind of rabid,
high metabolism editorial team, maybe a little too rabid at times. We'll get into that. Yeah, but certainly understood the distribution mechanics of digital media. It's important to remember that I was dealing with editors that had really no sense of what it meant to be connected to audience. So magazine editors are notoriously detached from the realities of what... It doesn't matter what their audience thinks. It matters what they think.
And then you had this analytical system, whether or not that was inspired by Jonah or not, but like that fed them sort of performance insights. And it resulted in they were big sites. You had big traffic. The other thing I admired always was you seem to find the right balance of monetization and audience experience, right? You never did what a lot of people did, which is sort of fed the audience to the wolves.
And so that was admirable. And then you did, again, what a lot of the sort of consolidators or aggregators or portfolio media companies wanted to do, which is you had a single sort of platform that was templated. And I remember at the time having these like unbelievably drawn out long arguments about whether a single system could serve Elle and Harper's Bazaar simultaneously, which is just like so maddening and so frustrating, such a waste of energy.
And then every time I talked to you back then, you were obsessed with Kinja. Now, maybe that was just me reading into it, Nick. But I saw in that that you were a systems thinker. And you realized that like a lot of the aspirations of a handful of media entrepreneurs that you wanted to find the intersection of
technology and media that would give you a little bit more of a moat than what the sort of treadmill of digital media would have otherwise given to you. And so you wanted to find a way to get
a sort of self-sustaining ecosystem with the audience kind of involved in community media was always the idea. So I've, I fucking loved what you were doing. And then I got to tell you as a guy who sort of faced, you know, the pressures of cancellation, I guess that's maybe one way of framing it.
What was yours? Well, I kind of got on the wrong side of the union and stuff at Hearst. And Ben Smith kind of went after me in the New York Times. Oh, no, we're not going to go down that. But let's not get into it. That's sort of the second half of the program. Yeah.
Just to tell you, I wasn't even particularly aware. Yeah, which I love about it. But you could have been like incredibly bitter about the Peter Thiel thing. You contextualize that moment to me with grace.
and kind of frame it in a way that i i don't know i just love how you think about it and he did he did me a huge favor he did me a favor that i i'm only now beginning to comprehend what a what a huge favor he did he did for me well you probably wouldn't have got 140 million for the company if you sold it when you wanted to sell it well i mean i i had an alibi for selling
If you're a founder, selling is always very difficult because why are you selling? What is it that you see that other people do not see? And so if you're actually making a free will choice to sell, you're immediately in a weaker position. You immediately have an explanation to give. So he gave me a pretext. He gave me a reason to sell.
I've said this before, but I was relieved when Gawker.com was shuttered. It was time. I wasn't able to do it myself. I did fire half the staff in 2015 and bring it to heel then, but I hadn't shut it down. I probably should have shut it down just for sheer business reasons.
just because there was Gizmodo and Lifehacker and Kotaku and these other incredibly valuable, extremely successful, highly profitable sites that were being dragged down by this political jihad that was taking place within Gawker and, to a lesser extent, Jezebel. Nick, where I was going with this is interested in if Gawker to me
sort of represented all the things that, you know, media shifted from being kind of supply-led in the magazine era to being demand-led in the internet era. And it meant all the fools rushed in. So it was endlessly competitive, obviously. And, you know, what it meant was I was, I was having breakfast with the magazine editor this morning and she was like, well,
The moment you shifted the business from being what used to be the civility of print to where we all had to kind of grind it out to get audience every day, everything changed. And it felt really, really, really relentlessly hard. But if that was... Everybody that was kind of trying to build stuff in that era wanted to build...
The economics, the efficiency, the incentives, the kind of data structure, community, all the things that represented the Gawker moment.
And what I'm interested in is, is, is kind of like, do we ever have a kind of sustainable media system moving forward? I mean, we still read the New York times and I still read, you know, a lot of, you know, the Atlantic or whatever you're reading, but like they all feel so fragile right now. And is, is there, is there a model, you know, in the future? And I think that to me, without asking too broad a question that doesn't really have an answer to me, um,
There's something happening that which a lot of people don't see, which I think is built around the idea of audience participation. And it has to do with really interesting things like prediction markets and AI and how they're going to sort of change the way we interact with information. And the models we have of assembling people to build audiences is really far from where we end up.
Where would you want me to start? With the past or the present? Present and future. We can go back to the past later. But yeah, with reminding us of how the past got us to the future. Trying to analyze myself, which is hard. I think I've always seen the community was the...
was the real thing, was the core of the thing. And media is just one of the means by which you draw people of a certain kind into a community. And so the original Gawker business, whether it was a talent spotting business or whether it was a media management business with measurements,
tied very, very closely to compensation and a very simple feedback mechanism for writers to maximize, first of all, page views, well before BuzzFeed, by the way, and then later influenced by BuzzFeed, tied to Unix. So there was that side of Gawker, but my core interest was always in creating a space for people to discuss and to build upon discussions
the articles to make new stuff out of what was already there, out of the narrative that was already there. And my belief was also that I couldn't just simply be an ideological echo chamber, that that was boring, that that wasn't the essence of a good community, a good party, a good event.
For that to be a good event, you needed a mix of people and they needed to be able to discuss stuff and argue. And for that argument to kind of get rough at times, but for that all to be part of the community. And so that was always and probably has always been my focus when it comes to systems design is trying to create an environment in which people are drawn out of common interest.
But they're actually able to argue and discuss and joke with each other and kind of have fun, learn and have fun. In those days when you were building Kinjo, were you the sort of product inspiration behind that? Were you pushing the teams to build that? No, that was all me.
How would you have described Kinju to someone? I guess at its most basic, it's a commenting system. The idea was simply that it was a commenting system in which it wasn't a free-for-all, but in which the person who had put up the original comment, the thing that had gotten the response, or the author of the original article, would have control over which comments they would respond to and which would be displayed publicly.
prominently. And so, yeah, it's not that different to the way the Twitter comments are organized, except the Twitter comments actually also include all of the junk at the end, the stuff that didn't get any replies by the author. And they were really high quality. They were additive. And this was at a time when
Internet comments were, I mean, I compare it to entering a porta potty. You don't look down. There's nothing good on the page when you look down on the comments. And Gawker's comments were additive and drought the different properties in Gawker Media. I mean, I was. I probably started to compromise around 2010, 11, 12. But I was a perfectionist, a perfectionist publisher. I couldn't stand the idea that there would be such idiocy on my pages.
So I couldn't bear the idea that we would actually have dumb comments, or that the sycophants would win, or just the pure idiotic trolls. You talked about how concerned we were about the environment. The moment when I kind of gave up
emotionally on Gawker. It wasn't, I don't know, the impending trial or the suspicion that Peter Thiel might be behind this legal campaign or the unionization of Gawker, although that didn't help. But it was actually, I think it was the moment when I had to sign a contract without Brain, I think it was. Whatever those junk links, was it Taboola? Maybe it was Taboola. I can't remember. Yeah.
They're the big two, although Outbrain is now Teets. Those guys revolt me, and I revolted myself for putting that junk on the page. When we had plenty of interesting discussions to put out there, we didn't need to interrupt anybody with a bunch of irrelevant links. But whatever, the internet is as it is. So how does that connect to the future in your mind, Nick?
How do you think about the model for the future? I'm really interested in it. I still think discussion is where it's all at. I suppose you could include podcasts in that. Twitter gets interesting when there's a discussion. There was a little exchange between Matic Lazius, the centrist,
economics and political writer and Joe Lonsdale who was kind of part of the teal group and there was a thread in which they were basically agreeing 100% that America was abdicating its empire, its imperial responsibilities it was allowing the system change to happen without even a fight
Complete agreement between people who are at least nominally in opposition to each other. And that's the kind of thing that you still pretty much only see on Twitter. So Twitter is still, I think, where the action is as far as I'm concerned. Ezra Klein agreeing with Elon Musk. There's a big swathe from...
Right wing social Democrat, you know, through to neo reaction. Well, the whole book abundance is you guys are right, except don't be assholes about it. And they say this after 30 years. After 30 years, they wake up and say, oh, maybe housing is an issue.
Or maybe we need a connected up regional transportation network to bring people from the housing to the jobs. Or maybe our form of government doesn't work, but we can make it work. The most pathetic thing ever was seeing Pete Buttigieg, however you pronounce his name, after the election, talking about lessons learned and where the Democrats go from here and saying that, oh, yeah, I think Ezra Klein and Matt Iglesias had some interesting ideas on housing. I mean, no kidding.
But the fact that you're just now waking up after administration after administration of overspending and irrelevant, wasteful government action, and now you're waking up to the abundance agenda way too late, it's irrelevant.
Yeah, I'm interested in like when you're talking about conversation and it being, you know, on X, you know, it might not be the best quality conversation sometimes, but it happens. Can media, can institutional media, for lack of a better word, serve that role anymore? It seems like the sort of abdicated that. I mean, a lot of properties abdicated that.
I think the New York Times comments are meaningful. It's a pretty good bellwether for moderate liberal opinion, the New York Times comments. And just the change in the New York Times comments on, say, trans issues.
has been kind of remarkable. So you can kind of see the Democratic Party mainstream moving on some of these issues if you follow them. But yeah, beyond the New York Times comments, I'm not really sure what true discussion platforms there are. Did you talk somewhere, Nick, about your love of using AI to kind of cast scenarios?
Brian, I want to try to connect two thoughts here because Brian is kind of of the belief, and he said this the day that it launched, that Polymarket was really future media. Are you familiar with Poly? You know Poly, right? And that this notion of, you know,
the you know of course the internet made media two-way and of course we're more engaged when we get to be you know in the cast right and comments make us part of it so it's kind of natural it's as close as media gets for gaming right no it's not as close as it can get even closer it gets closer in prediction markets is my point uh-huh and it gets
closer in sports betting. And it gets closer. I mean, arguably the whole creator economy is a manifestation of that same idea, right? That we're all in it. And I was reading with interest, you're talking about scenarios. Is that media? Well, let me just tell you what I do.
So I trade, as I think you see from the bio on my account, I trade stocks short, long. Did you get the Tesla short at the right time? One of them at the right time. Two of them are looking at underwater right now, but there's lots of- You get the Apple short too, right? Uh-huh.
There's still a lot to play out. Look, I do what any business journalist would do. I was with the Financial Times in Eastern Europe covering emerging markets, derivatives, then technology. I was Valleywag. That's probably the more important part of my biography than being publisher of Gawker. Certainly for my current incarnation, I don't
I was actually ValleyWag. I wrote ValleyWag in 2007. That was like a summer, wasn't it? I remember you moved out there. It was like, I think it was eight months in total. Without wanting to boast too much, when I did it, it was on everybody's screen. And they were all writing in with all of them, Andreessen, Musk,
The whole damn cast of characters all writing in with their tips and their arguments and their grievances and all that kind of stuff. It was very easy to put oneself in the middle of the information flow then. So electric cars, this is kind of how I came into all this. I was into the SU-7.
The Xiaomi SU7. It looked cool. It had a kind of inoffensive Porsche-style design. And the specs and the cost were, like, it was just, like, off the charts in terms of where it came in. You know, $27,000 for a, like, top-of-the-line kind of Porsche-equivalent car. For a Subaru. Yeah.
Well, the Altra is a supercar. Yeah. And that's a bit more expensive. That's whatever, $70,000 to $80,000 in China. But this is a car that is not made by cheap labor, but it's made in a completely or very, very highly automated factory. Not even by a carmaker, but by a phone maker. Yeah.
On its first outing in the auto market, and it comes out with this. And then you compare it against Tesla, and then you start to do questions like, okay, that's BYD versus Tesla sales in 2030.
Let's take conventional wisdom. Sometimes I would starve the AI of information. So I would turn off its web search and just have it look at its 2023 knowledge base and just go, give me the conventional wisdom on where BYD is going and where Tesla is going in terms of sales. And then you start to drop in little facts, you know, sort of, oh, oops, oops, Roman salute. Yeah.
That's not good for European sales. German's still a bit sensitive about that one, actually. And so you drop in these new little bits of information, and then you see the projections change. And when I was getting to a 10 to 1 ratio of BYD to Tesla, forget about Xiaomi and NIO and all the other Chinese manufacturers, but BYD to Tesla, 10 to 1 in 2030,
And then looking at the relative stock prices, which I think is now five to one. It was maybe eight to one when I started all this. So you look at that and that looks like the most obvious trade you've ever seen in your entire life. And the most obvious argument that you could ever make in a financial newspaper. That's Tesla relative to BYD on a medium term basis.
say five year time horizon looking, you know, Tesla is extremely overvalued in relation to BYD. Come and argue with me. The narrative written another way, the Chinese inspired collapse of the global car industry creates a Nazi renaissance as the German automotive industry. Okay.
Okay, now you're running ahead with the story a bit. It's not that hard to believe. My story actually has Elon on Mars.
The Chinese are magnanimous enough and wise enough to give America its victories, to give it Greenland. Let America take Greenland. It needs something on the map to show that all this dismantling of empire was actually worth it. Let it have its North American bastion. Let it take Cuba. America's going to need to take Cuba. They're not getting Canada there.
I'm guessing Canada would be surrounded on three sides by Alaska, Greenland, and the mainland United States. So their room for maneuver is going to be limited. But yeah, I'm assuming that they don't occupy Canada. But Greenland is another matter. Greenland wouldn't be too difficult. And then Mars...
A wise Chinese leader would let the Americans do as they have done since their ancestors' time. When the going wasn't that good back in your home continent, on your home planet,
You're up and you leave. You cross the ocean, you cross interplanetary space and go and set up a new civilization, a new branch of humanity spreading forth into the stars. If you want to go novelistic here, that's the end of my novel, is that humanity does split and the Americans go off into the void to pursue their own future.
It's possible. So how does this intersect with media? Not this part, but what we're talking about with trading on information. Because there's been hints of this, things like Hunter Brook, and media is looking for a better business model. Ads have been disastrous. What do you think an investment is? What do you think a stock purchase is? There's a memo.
There's a memo and the memo goes, here's why BYD will, in our belief, be worth more relative to Tesla in 2030 than the market currently recognizes. Here is the argument. Here are the branching counter-arguments.
Here's the thread. Here are the sub-threads, the comments, if you like. And the whole thing together makes up a tree. It's a knowledge tree. It's an argument tree, an argument tree that the AI is actually pretty good at understanding. It thinks in these terms, too. It thinks in spatial terms. It sees the argument as some kind of network.
And so if you allow the argument to be expressed as that kind of network, well, first of all, it's pretty easy visually just to see which narratives look plausible to you. A human being, an intelligent human being, you know, who's well-read, you know, has read The Economist and The Financial Times and certain select Twitter accounts for long enough, you know, will be able to tell what's plausible or not. And the AI will be able to help you.
and understand the issue better, having seen this structured argument. And so my theory is that actually there's no real difference between media and investing. Or to that matter, I mean, the line with software is pretty blurry too. So even to talk about a media industry as some kind of distinct thing makes less and less sense for me. But it's also, it's a better model, right? It's a better model than getting people to web pages to put...
to put ads in front of them. I mean, because you're basically... I'm certainly finding it a lot more fun. But you're basically like, you're injecting a meme. And memes are consequential. They're consequential, I feel like, as to how whatever this media system, if it is a system, how it works. I mean, I don't know, actually, because the China hegemon meme, the China will win meme,
In the industry, China will win. That meme. It's been going around on the internet a bit. There's the Xi Jinping meme, do nothing, win. There are the cyberpunk cities. There are those memes that go around. Now you've got black influencers marveling at high-speed trains and cities and SU-7s.
in China, so you have those memes that are going around. But in terms of who's on the China train, right now I'd say it's me, Matt Iglesias, as of maybe a couple of days ago, Balaji Srinivasan,
I mean, Ray Dalio, obviously for quite a long time, but we're talking about individuals here. We're not talking about any institutions. The moment when the Financial Times or the Wall Street Journal or The Economist will suddenly put their institutional weight behind an idea is like never. They never put themselves out on the line like that as institutions. And which is why if you really want to be ahead of the markets, you have to follow individuals rather than institutions.
Was Wirecard publicly traded when the FT took it down? I mean, that would have been great to trade against. They came out with some apparent discrepancy in the Tesla books, but then maybe walked back from that angle. I mean, they're definitely looking. I mean, everybody's looking at Tesla now.
So, you know, if you're a business – if you're any kind of business journalist in this world, financial journalist, business journalist, industrial journalist, automotive journalist, if you're anywhere close to any of those fields, like, yeah, this is the greatest story there ever was, you know. Like, rise up out of your slumber like I did because –
It doesn't get any better than this. This is absolutely epic. And it's playing out right on this phone that I'm looking at right here. At the end of this call, I'll just go and I'll switch back into whatever Elon is saying since his demotion last night.
Troy, how does this intersect with how you're looking at where the media industry, in quotes, goes? Because we talk all the time, it's like media itself has never been more plentiful and more powerful in many ways. Yet at the same time, the sort of institutional media industry is, like Nick mentioned, it's leaking power to individuals. Yeah, it makes me think a lot of things. It makes me think that
First of all, so Nick is the equivalent of a high-powered programmer in the media context, right? And a high-powered programmer doesn't like a lot of distance between their thoughts and the metal of the machine, right? Like they want to write assembler code.
And so you go to where the conversation is happening, right? You go down a level in media. That is not to say that you still don't need an interpretive layer on top of Elon Musk and, you know, whoever, Matt Iglesias and all those people to make it understandable to a lot of people. It's just a smaller business. And I think that media is vitally important. I think a couple things have happened is that
broadly speaking, I don't think prior to say two years ago, we ever spent as much time questioning the veracity of what established media was saying and the amount of interpretation that goes through every headline and therefore the amount of bias in it. And so I think that there's a healthy sort of like questioning now of the system by which we used to get information. It may be more chaotic. It may lead to like
unfortunate outcomes, but I think it's really important. What it makes me think about as an investor is that for the most part, I think that
digital media, and I really, I didn't ever want to admit this before. I think it's incredibly hard to win. You just can't win the game. Like Jonah couldn't win the game and ultimately Nick never won the game. And because there's no protection, because distribution is- It's the wrong game. It's the wrong game. Distribution is destiny and you can't control it. The only way that you can control distribution is if you have the power of network effects and platforms. And the
And those don't really sit alongside. You try to do it with Kinja. They don't sit alongside media particularly well. I think we had it for a few years. We had it from maybe 2006 to 2012 before our discussion environments got swamped by Facebook and Twitter. Those niche discussion environments that definitely worked for a few years there. So I think we had the...
you know, we had that mode of power that you need. But yeah, it's definitely difficult. You know, media skills are so valuable in other fields.
I wonder why everyone's around there pecking for pennies in the dirt along with the chicken. It's very demeaning. And there are a lot of media people with extremely good brains who are absolutely early to see big system changes. Maybe they can't do the most diligent earnings analysis.
Maybe they're not great stock analysts in the traditional sense, but I don't see how much is stored by those numbers anyway. To the extent that they are meaningful, that meaning is priced into the numbers beforehand.
I think those journalists, the journalist skills of kind of understanding who's up, who's down, which means pumped up, which, which means are looking, are looking vulnerable. That those are skills that are very, very well suited to this current phase of the markets. So give me an example that like sort of brings that home. That is someone who uses media, but not to like,
get people to web pages to put ads and even to bullet and operate and links in front of them. I mean, okay, let me tell you the weekend that I put the Tesla, my big Tesla shorts on probably prematurely. I should have waited till now, but whatever. I felt like I was in a rush.
But it was the weekend after Musk had first been restrained, after the chainsaw had been transmuted into a scalpel, I think that was the word that they used. These were going to be more delicate cuts going forward. And he still goes down to Mar-a-Lago. He doesn't get up and go back to his factories anymore.
as any self-respecting businessman would. But he's going down, he's still clinging on to Trump's leg.
Going down to Mar-a-Lago, he's there trying to get his picture being in frame with the president at the dinner. And then through the night, I think it was 3 a.m. I think I was in Europe then. It was 3 a.m. East Coast time, Florida time. And he's tweeting white babies' faces.
models of white babies on bayonets at some South African demonstration, like just pure race war, race baiting. And I'm thinking to myself, like, he's not going back to those factories. He's not going to go back to those factories anytime soon. He is completely captured by his audience on X.
And the reason I know this is because I've seen it myself. I've seen how writers, myself probably partly too, I don't think ever completely, but I've certainly seen how the Gawker writers got absolutely caught up in their audiences around 2011, 12, 13, 14, 15, during the peak of lefty Twitter. And I see that happening to Musk now. And there is no easy way out.
You talk about memes though, Nick. You called America a meme nation, the dollar a meme currency.
What does that mean? I think we all understand that there's a lot of psychology that goes into market prices. If you just look at the Tesla price since 230, I don't know what it is this morning. People call it a meme stock too, which is probably true. Yeah, people call it a meme stock. If you just look at the news, the news has been the panels of the Cybertrucks are coming off. The glue doesn't keep them on. It's not forged out of one piece of metal.
It is not one piece of metal, as I had imagined. It's actually, it looks kind of shoddy. You decided not to get one? Well, Darren was kind of into them, and that actually did persuade me that the teenage design might be, it is individual. And when you see it running along Crosby Street here in Soho, and every single delivery guy, and every UPS guy is just crazy.
ogling this thing and they're all turning to each other and smiling and laughing and you know it's the event of the day for like you can't hate it all right i i couldn't hate it people don't nurse in miami they don't look twice in now oh no plumbers like have their like decal on them our kids have got little toy cyber trucks you know like they're cool like you look at the value of tesla as a car company it's maybe worth five percent or ten percent
of what it is right now. So the rest of it is, I had a very, very ambitious projections of robot rollout.
and robot car rollout, robot taxi rollout. Or just Musk magic, real life Iron Man. You can't bet against Musk. People lost so much money betting against Musk. Do you really want to be one of the people that loses money betting against Musk? So it's that kind of magic factor. And that's probably both two things together, the magic of the numbers and optimistic forward projections.
And then the magic of Musk's aura, probably they count for nine tenths of the value. So you have to look at that as being a meme stock. And then you look at the dollar itself. You know, every single time I go anywhere else, like Hungary or Brazil, I am filled with a sense of panic that I need to get my money out of Brazil.
into a place where it can buy a real nice house for $2 million in the middle of Sao Paulo, you know, with a great gym and school and all the amenities you'd ever want of a big, big international city right there at maybe one quarter of the cost of the big American cities. And you start to look at the U.S. and the dollar itself, you know, the whole idea of a reserve currency is a psychological thing.
The reserve currency is the ultimate meme stock. It depends on people's perceptions of the strength of that power behind it, the strength of the military power, the financial power, the hidden reserves. How much gold is there in Fort Knox? Who does it belong to? And when you start to question all of that stuff,
Then things get very scary indeed. Yeah, but it seems like to me it's like media has moved from being about acquiring attention to then translate into money usually through ads, but to trying to create these memes. We talked about abundance. They created a meme. And that is the currency for influence these days, is to be able to create memes. I think my currency, I would like to think, is a bit different. Like journalists through the ages...
I believe you put out some information in order to get information. So you put out some of the information and the insights that you developed on that information, whether you've done it just through human intuition or through AI-assisted analysis, it doesn't really matter. But you can take that information
And you can make, there's no reason why you shouldn't be able to make money out of it directly. I don't really understand why we're complicating things so much when a traditional journalistic practice of putting out information and getting in information
Building on the information that you already have with new information and building up the structure of the argument in your head, looking down every single contingency. I don't see why that isn't actually perfect.
as a way to analyze the future and potential investments. And I don't understand why journalists are always so incredibly hesitant about acting upon their own insights. Have you played with this? What's the name of that application where you can follow the traits of the Congress people? I don't know. I think I made a mistake on the Lockheed Boeing bake-off application.
Because I think the Congress critters were buying Lockheed ahead of the transaction and it was a mistake. And I think I went in alongside them, which was unwise. So just to put a bow on this, how would you sum up your theory of the case about Lockheed?
about all of this, about how media can be used in a different way to make money. I mean, it's not new or anything, but like we were saying, it's still incredibly powerful and influential to be able to use the tools and practices of journalism exactly. But the old ways of making money from that are increasingly obsolete to me. Who is able to keep in their head both argument and counter-argument?
But what kind of person is able to see that things could go this way, but if he did this, then things would go this way? Who is capable of actually analyzing those kind of situations, trying to work out what Elon Musk's psychological payoff structure is? What are the options open to somebody? If he's trying to write the science fiction novel of his own life,
What are the next likely moves? You can analyze this as a science fiction narrative if you want, because he's suddenly writing one. And so I guess all I'm saying is that whether or not you actually assign percentages to each potential path, or whether you just simply judge the credibility of a particular narrative path, it doesn't really matter. But journalists...
Maybe my tutor at Oxford was particularly good at doing that whole, being able to take either side of an argument pretty much in the same session. There are certain intellectual traditions that allow for that. And I think journalism, at least done in a certain way, does allow for that. Well, hey, Nick, a slightly different question for you. Have your points of view on journalistic ethics changed since...
you know, the day you fired half the staff at Gawker and where you sit today. Meaning the role of journalists sort of now we have this need to feed the machine every day and some of it feels like sort of petty hawk-haul monitoring to, you know, to like out-and-out Schoedenfroid to like holding power accountable.
Like, do you never thought on that continuum? I got to say, I think I probably said all I possibly can about media and maybe answered one question too many already because I don't think about this that much. I don't think about the media industry that much. I mean, I can tell you who I read and it's almost all individuals. I do follow them very closely.
Those individuals who I think of as being bellwethers of one particular group or another. It's almost all individuals. I don't think there's any institutions that I follow. But I don't track the industry at all. When you come to the New York Times or the FT, you go to Twitter first. I would read Ganesh at the FT. There are certain people. I like Joe Weisenthal.
at Bloomberg. So yes, there are certain people at certain institutions that I pay attention to. Do you think Substack's an interesting business? I don't know. There's certainly some interesting people on it. Iglesias basically is the democratic body as far as I can tell. I mean, he certainly provides most of the intellectual content. Yeah. Well, it's kind of the successor to blogs in some ways. Newsletters are the new blogs to some degree. Similar ecosystem.
Are you surprised that Silicon Valley turned on the media world? You saw you were doing ValleyWag. And so at the time you were doing ValleyWag, that was unusual, right? This was the time of fawning coverage still. I think it was still fawning coverage then for most media. ValleyWag was only the Gorgasides were a mix. So they were definitely critical media.
pieces and you know some of them more serious than others you know carried interest for instance we have a little campaign against carried interest and
But look, they've always been touchy. They used to be more hands-on in their media management. They used to be in your inbox, in your email. And Peter Thiel was still trying to whine, and maybe not dine, but certainly whine Ryan Tate as late as 2011, three years after the supposed terrible insult that had been visited upon him. So they definitely, their media management...
varies from, you know, gentle encouragement, you know, through to lethal lawsuits. And
must certainly seems to be inclining towards the more aggressive end of the spectrum right now. It seems to be mainly rhetorical, mainly threatening people. That was a very Dr. Evil point he did. I'm guessing he was talking about Reid Hoffman. He was like, and we're going to get you. It had a definite supervillain quality to it. So I assume he's going to
Some move against the media would be popular about now. I don't exactly know who the target is. What's the media expression of Reid Hoffman? Do you boot him from X? I don't know. How did this little Nick Dunn Renaissance star, like about three weeks ago, did you decide that you were going to have a moment?
I mean, I think you're being partly, I don't know, you joke a little bit about selling the apartment. Surely that wasn't the motivation. Is it because you're leaving the country imminently? Is it because you felt like there was enough stuff that you wanted to talk about? Yeah.
Are we going to expect to hear more from you? It was January 20th. It was not the Trump inauguration. It was not the Musk Roman salute, but it was the deep seek drop.
And playing around with DeepSeek for a few days then, we were on vacation in a place where the dollar goes a long way. And playing around with DeepSeek and realizing that it was better than Claude, it was cleaner, like seemingly less censored from my point of view. I didn't ask it about Tiananmen.
And the idea of American AI supremacy fell away in an instant. You can see it was obvious. Okay, well, so they've matched in this. They're going to match in pretty much every other AI model type.
And the story of AI is going to be the same as the story of every hardware industry, which is the Chinese come up at the low end of the market. And maybe their initial products aren't quite as good, but they're priced at 10x less or 100x less. And gradually they move up the value chain. And clearly AI, by extension software, are going to be no different than drones, drones.
or electric cars, or robots, or batteries, or any other industry you want to think about. And when you come to that conclusion that all of these different industries are not all different industries, but they are all part of one larger industry, that there is no real difference between phones, batteries, robots, drones, and a bunch of other sectors, that this is all one industry.
in which companies are competing. And the only one that America has is Tesla in that field. Europe has nothing. And China has probably about a dozen different contenders coming at it from robots, phones, cars, batteries, in all directions. So that was the trigger, really. Why is all of my money in U.S. stocks?
and US real estate when China is already in 2023 twice
the electricity production of the United States, heading towards 10x the electricity production of the United States. Electricity production is a good proxy for the new economy. So I expect the Chinese new economy to be multiples of the size of the American new economy. And taking that scenario, work out, hey, AI, if I believe this, tell me how I can best make money. It's not that hard. Yeah, I told you to come out of your shell and talk.
What happened? But suddenly you were like, I don't want to be quiet anymore. This is too interesting. Like I said, it's the best story. In my time, I've covered the fall of the Soviet empire, the revolutions in Eastern Europe, emerging markets, the rise of the emerging markets, the derivative scandals of the 1990s, the first kind of wave of...
international finance in Europe and Southeast Asia. Then Silicon Valley, seen up close when I was doing ValleyWag from a greater distance when I was with the Financial Times. And I can tell you that this right now is by far the best story that I've ever heard.
come across in my life. And if you're not mesmerized by it, I mean, I don't know what else is as interesting as this. There's certainly no fiction that's as interesting as this right now. Right. So it is, you know, let's bring it back to media. I know we should be talking about media. This is the biggest media story I have ever seen.
Bar none, no question. There's trillions of dollars at stake. There are empires at stake. There is a new era coming. And it's all going to play out right in front of us, through our fingertips.
you know, through the clips that we take. It's awesome. And you're short America in this narrative. I'm actually not. I'm not short America. Chamath from the All In podcast said he was short Wall Street, long Main Street. So I did own a bunch of copper stocks. And I don't see why this should be so bad for, you know, if this ends up with a devaluation, let's say a devaluation of 50% of the dollar. After all the tariff,
dance is complete, we just end up with, you know, this is unstable. The markets need to move into equilibrium. And the way for them to move into equilibrium is that the dollar must drop because it's ridiculous that America is running a deficit in the agricultural trade right now when America ought to be one of the great agricultural suppliers to the entire planet. So if you bring down the dollar by 50%, I don't think that's so bad for the fracking industry.
Not necessarily. Natural gas industry. Is that so bad for corn? Is that so bad for Iowa? Is that so bad for American manufacturers? Is that so bad for Arizona? For the inland states, this could be fine.
It's going to be not as fun to go to Italy in the summer, I got to say, in this scenario. You all have been lording it over us for way too long. Don't you think that those Europores insults were, you know, they just kind of passed through us without any feelings being hurt. Yeah.
You are all calling us Europoers, both liberals and conservatives. Hey, I just want to go to Sicily, Nick. I don't want this hostility. I think of you as a local. A local. One of the funny things that I thought you did in an article I read somewhere is that you apologized for sending us
the Irish and Scots that became hillbillies. Is that what you said? It was when Vance and the others were big into thank yous. You know, Europe should have been, you know, the French should have said thank you for saving them from speaking German and
And Zelensky should have been more thankful for, you know, for sending thousands of men to their death to save Europe from a Russian invader. So it was around the time of the thank yous. And I was running through all the things that I thought America should thank Europe for. You know, patience.
That we don't pull out our money from the US stock market and treasuries, just like that. That we don't respond to every outrageous insult from Vance or Musk or Rubio or Trump in the same tone that they were delivered. There's a lot of anger in Europe about this kind of, this constant, this succession of insults that just continues.
It's demeaning and if you think that people are just going to switch back to the way things were before, you've got another thing coming. But anyway, I was in the middle of this rant and then I realized, well, actually, we didn't really send them all our best. Let's be a little bit honest here. Amongst the Jewish scientists...
and the hard-working Germans after the 1848 revolution. We send you some high-quality human capital, that's for sure. But you know what? There were a lot of
penniless Sicilian peasants in the mix too. And then I think maybe we're going to find the most expensive of all were the Scots-Irish, the borderers who were pernicious and pugnacious even before they arrived on the East Coast.
And when they did arrive on the East Coast, they were pushed by the peace-loving Quakers, by the coastal elites of that time, nudged them gently up the valleys so they could die fighting the Indians on the frontier. And that original betrayal in America, people talk about whatever the original sin of America was. And there are several original sins to choose from.
But I've always thought that that original scene is one that should be a little stronger in the narrative, because that's the story of J.D. Vance's ancestors. You know, J.D. Vance's ancestors who arrived already despised on the East Coast and then were pushed into the hills by the lowlanders that didn't want anything to do with them, with their fighty ways. Would we have the Quakers to thank for that?
I think it was both the Quakers in Pennsylvania and the, I guess, the Gentry in Virginia. But definitely the Quakers. You should read Albion's seed for the more detailed history of this. Well, Nick, if one wanted to participate in Nick Inc. in the future, do you trade on your own account? Do you create a Denton hedge fund?
Do I, does my money fall with yours, Nick? Or do I put seed capital into the next kind of polymarket-esque AI-assisted scenario planning medium? You know all the lingo. You know all the lingo already. Right. Somebody's been doing some talking with AI here. Is there a business coming? Is there a URL, Nick?
Well, there's my business, which is investing in my family's money. And so we have, I guess, a two-month try record now.
And I think I've disclosed all the trades. It's long BYD, long Xiaomi, short Tesla, short Apple, long gold. So you are short America. I mean, that's as short America as you can get. No, sorry, long grab in Southeast Asia too. Well, I wouldn't say that. I would actually say it's more like a rebalancing.
Will you be taking visitors in Hungary? Yeah, I'm actually thinking of opening up a little space, a little cafe. You know, just like in the old days when news and financial speculation and coffee and maybe a drink after 6 p.m. Our friend Andre Balazs is...
He's a great Hungarian, is he not? He is a Hungarian. I don't think I'm friends with him. I can connect you if you're interested, but is there a way that we could maybe get him to decorate your new hotel?
Does he spend much time in Budapest? You know, I don't know. I only see him on Shelter Island where he has a little hotel room. Things don't take too long to spin up in Hungary. So come over to Budapest in September and we'll do a podcast from over there. Oh, that's a great thing. Maybe we could do a little conference over there on...
The space is very small, deliberately so. It fits maybe a dozen people participating and maybe a few more watching. Well, maybe we could take it out of your space and get a hotel or something. I actually like the idea of something small. Yeah, that's just me. I'm not looking to do an events business.
But the idea of you put out information and you get information, we're just trading. I want to track your trades, Nick. I want to start putting them in. I want to know when you got in. Let me see whether I can dig out the dates. The call, you can more or less work it out by the BYD. Oh, I forgot Tencent. BYD, Xiaomi, and Tencent was at the beginning of February, maybe the second week of February.
When did you short Apple? More recently. I think that was the, it was people like DHH and Gruber, like some real hardcore Apple fanboys turning against it. Gruber gave them a little slap a couple of weeks ago. I think those kind of things, those things are meaningful. That's a meaningful event when somebody like Gruber turns. And then there's also a very interesting Palmer Luckey.
interview on YouTube with a YouTube podcaster in which he has a whole six minute, you've got to look at this thing. It's a six minute playbook on how Xi Jinping could shut Apple down with one signature on a piece of paper.
You know, basically how the design in California means nothing. What matters is that it's made in China and China could seize the supply chain at a moment's notice. It would be easy for them to do. And as long as that's the case, they just have apples balls in their hands. Well, you know, I like a Palmer rant as much as the next guy. Oh, he's awesome.
If America had 100 more like him, 100 more Travis Kalanicks, Palmer Luckys, and Elon Musk, if it had 100 more of them, those kind of Ayn Randian figures who don't give a fuck, then I might actually have some second thoughts about my bets. Brian, for your edification, if we want to tie this conversation up in a bow,
To me, there needs to be a media layer on top of Nick Denton because most people aren't going to do that work. They're not going to abstract the insights out of the Palmer Lucky conversation. They're not going to follow Matt Inglesias. And someone needs to make sense of that. And if you tied that in with stock trading information, I think we could make an interesting media product. There hasn't been a good new financial publication yet.
Do you follow the people called Unusual Whales? Yeah. I think the following list is public there.
That's basically everybody I follow. So you can pretty much get a very clear sense of who I'm paying attention to. It's basically right-wing thinkers, traders, some Musk fanboys, some swing voters in the teal world, a few financial journalists. Yeah, that's pretty much it. One final media question is, why do you think there's so much more
in the sort of right-wing part of this alternative media than there is in left-wing. Because it was kind of the opposite before. Was it? I feel like it was. I haven't found anything that the left has said interesting in, I don't know, several decades. Oh, really? I mean, Stoller...
Like Matt Stoller and some of the anti-monopoly people. It's the same tune, but yeah, it's a good tune. And I agree with the neoliberals. Yes. The abundance agenda is awesome. I believe in the housing theory of everything. Yeah. Sign me up. I'm there. I'm there. I'm there. I'm a Yimby. I'm a total Yimby. I love the Yimby's. It really is ridiculous. Yeah.
I'm sorry, I'm not going to put my... You've just woken up now in 2025, in the final years of the empire, with a plan to turn it around. Probably your last chance was back in 2008. That was probably the last real chance to turn it around. Or there's something wrong with the system. Well, obviously. Obviously. But the fact that podcasting is so filled with...
right-wing figures versus left-wing figures, that doesn't surprise you at all. That's par for the course, I guess. No, I mean, they've been a lot more... Look at my follow list. I think there's barely a left-winger in there. And that's not... I mean, maybe that's just me being ideological about it, but I think I'm curious enough...
I'm curious for different points of view and interesting facts and insights that I might not have otherwise followed. And I will take them from absolutely anywhere. I'm completely, I'm an information omnivore. I'll take it all. And I just don't see anything interesting that's coming from them. Look, I like Matt Iglesias' President for Life. If I was voting in America, I would vote for him. There's no way he can ever stand for election. He's a Singapore kind of leader, not an American kind of leader.
Well, maybe, maybe, Nick. How's your Hungarian? It's okay. Do you think you could run for president?
I was colleagues with Chrystia Freeland, who later became Canadian finance minister and Trump's bet noire. And I guess she's an enemy of Putin as a Ukrainian. And we used to fantasize about what we would do if we had control of one of these European countries like, I guess, Hungary or Ukraine. But thank God they never gave it to us because...
We were, I think, far too detached from the everyday. So it was very theoretical. Will this move require you to give up? Do you have American citizenship? No, I never took it. So you don't have to pay American taxes? No.
Right now I do, yeah. Troy, are you... Anything you need to announce? Well, I'm afraid I was stayed because I was being a little idealistic and I... You went right for the taxes. That's all I know. Is there something going on? You know, I'm Canadian, but I'm now an American citizen. Are you going to renounce your citizenship for tax reasons?
I never said that. I'm just going to move to Miami just like you. Yeah, that's fine. That's an in-between. We'll make sure you make whatever move for the exit taxes coming. That's a good one. All right. Should we leave it there? Nick, thank you so much for taking the time. Thanks, Matt. Good talking to you. Do we want an anonymous banker to join? If I'll come on, sure. Maybe we can debrief with an anonymous banker. Hey, you know what? We had a nice conversation, AB, with the one and only Nick Denham. Yeah.
He has a lot of big theories. He's short on a lot of things. He's short on- Well, first of all, he's over media. He doesn't want to talk about the media business, but he likes media to make money still. And it seems like he's just- Well, he thinks that the skills of journalists are relevant to making money. This intrigued me. So he said that, you mean you don't need to be a journalist to make money in media at this point? Well, if he was going to make money in media, he'd do the ultimate affiliate, which is straight stocks.
Right. He's short on Apple, by the way, AB. He's short on Tesla, obviously. He's long on all the Chinese car brands. He's going into gold. He's got a prepper portfolio. Did he say anything on Reddit? No, he didn't mention Reddit. But he's very long on community media and media discussion as media.
Which I thought was a really great part of the conversation, Brad. Yeah, I mean, it's interesting. I think they said Discord. Discord just filed or will go public later this year at some point. So I think there's communities copping up everywhere. There's a lot of places, I think, based on your ages and mine, that we don't necessarily...
understand the communities. Like I, I can use discord, but there's a lot of connectivity happening. People talking, chatting. I don't know. I'm glad you can't use discord because Alex, who had a hard stop, so it couldn't be here. He was always giving me shit because like I said, discord was just fried my brain. I can't, I can't handle it. Hold it. Did, did a, did a B just put himself in our age cohort? I'm one below. Yeah.
Two below Troy, one below me. I'm old. I'm old. Yeah, but it's weird when he would use these. Brian, I'm not a boomer, Brian. So Ana said, I said, we might do a Gen X episode. She said, isn't Troy a boomer?
I was right before that. I laughed so hard. That's funny. I think what's always interesting is when you try to use a product that is giving a ton of traction and you can't, it just doesn't make sense. It's a weird thing, like Snapchat, for example. But that just doesn't work for me. Yeah. Well, Brian, I just want to go back to the Gen X thing for a minute because I was reminded today at a meeting I had that
The latchkey kids that are Gen X are now having to kind of drag the bodies from, you know, the digital wreckage and find new ways to hunt, eat and kill. Or the other way around, kill, hunt, kill, eat. Yes. There's more and more of us. Wait, explain that. What does that mean?
What I mean is there's no institutional protection for any of the Gen Xers anymore. It's over. No, this is all... The New York Times had a great piece that got sent to me by several people about the creative class of Gen X that got their knees cut out from under them right when they're in the primordial years. It was a tough one. And I can tell you from what I'm seeing, a lot of these traditional media...
either the public companies are going to be splitting themselves apart again to find value or any combination is so much of the potential value upset after the combination or be coupling is through headcount reductions and it's at that middle stat, right? That there are people
late 30s, maybe 40s to mid 50s, who, like you said, Brian, are in their higher earning years. And there's just duplicative staff. There's ways that they're in technologies getting necessarily, they don't are necessarily needed anymore. And so, and there's not net new jobs. In traditional media space, obviously this happened in newspapers, it's happening in TV, radio, but there's just, there's not a need to have
extra bodies running. It's the only way when you have headwinds from advertising revenue and declining audiences to make these businesses work.
Last week, I think it was reported that Apollo is going to start shopping Cox Media Group, which they acquired, I think, four to five years ago. And the question everyone has is like, who's going to buy that? The strategics in this space might get some regulatory relief from Congress to be able to buy more TV stations. But otherwise, there's not another private equity firm that's there to buy it.
And when a strategic buys it, they're going to be buying basically stations that they already, like they're going to be buying a station in the market where they might already have a station. And so the only way to make it make sense from an MA perspective is to just cut a bunch. You're basically combining both stations together. You're ripping out the entire back office. And the only thing that you're keeping separate is the news product and a little bit of that sales. So this is like the time for the, I mean, we talked about this with the cleanup, right? And this is going to be,
I guess what you're saying is it's going to be broader than just some like struggling digital media publishers. Yeah. I mean, it's already happened a lot in the newspaper space. It happened in radio. It's going to happen now in TV. The main reason why it's happening on TV is there was a lifeline that traditional or local TV got, which is in the form of the retransmission fees from distributors.
And what had happened is at the beginning when they first got those fees, all the big networks started charging and the affiliate fees. So they were, so ABC, NBC, they were getting part of their retransmission fee. And over time, the amount that the kind of the corporate overlord was taken from the local community station has crept up. And so that line of revenue has gone from a big contributor to the bottom line to basically nothing. And so the only real way to make these stations work is
And political is up and down over time. But the only way to make these stations work is to just cut costs out. It's like the last of all the local media. And the political money was a big part of the story. Yeah. And also, I don't know if the political money comes back as strong because Trump and the Republicans proved that TV advertising in politics is totally overrated.
to some degree. I mean, he was able to, he's a unique candidate. He was able to earn a lot of it, but they got outspent like tremendously and they poured a lot of money and energy into, you know, get out the vote and, and those, the kind of like ground operations that they were always weaker on, I thought. But it's interesting to see how that'll affect the TV market.
Yeah, I mean, there's a dirty little secret. A lot of general, they're called GCs of campaigns, take a percentage fee from traditional TV ad spend. And so it's almost like- They're all loaded. This is the best business to be some political consultant. Be like, yeah, I got just the guy who can handle the media buy. Yeah, and then everybody from college makes the TV commercials. And so they spend 80% on ad buys. They take, I think, less from the digital advertising. So I think there's still-
a longer tail in political ad buying, but the rest of the market, like for everybody, even like smaller advertisers, the internet's easier and easier to advertise on. So having long-term and just the number of subs is going down, the number of subscribers. I think I remember looking at the research when full distribution was over a hundred million households. It's now down to like 55. And at the time everyone thought, okay, this is like, I'm
someone's predicting it's going to go down five to 10% a year and it's happened. Right. And people are getting reconnected in a lot different ways. Hey, AB, what pronouns do you prefer? He. A and B. He. We're in Trump's Trump, Trump land. So. Okay. What else hit the market this week, AB? Well,
I don't know. The Kotsuma East side is people are trying to figure out what's going to happen there. I think there's more news on the Kit Talk stuff of who's in that process. It sounds like they haven't really gotten that much information, but it sounds like there's more investment firms trying to pair up. As we thought about before, it's a pretty large purchase. Any smaller stuff, AB? I think you'll see a couple of these like Rembrandt.
remaining orphan digital assets get sold in the next month or two. I know a lot of these processes are just finishing up. You do those, though. That's your stock trade, right, AP? Orphan digital assets? Can you define an orphan digital asset?
Just think of like the platforms that got built up five years ago. Yeah. So orphan, like at Yahoo, you know, they have much stronger, larger strategic priorities. And so there's some things non-core that's losing money, but you know, there's, they're selling these assets. And I think the values that they're selling them, then that are pretty low. They're just trying to get them to a home where someone's not going to just completely blow it up. Did they shuffle that one off to the glue factory or what's your take on that one?
Yeah, but they're unsustainable businesses. So it's sort of the only place they can end up by glue factory. It's just operators that are going to spend less on content lean into different distribution platforms like Google News and Google Discover and then probably add a bunch more ad units to the page. Yeah, glue factory. Yeah.
But that's the only way that traditional or digital media works these days. I don't think there's too many profitable people that don't have subscriptions that are actually making it work. You know, it's funny. I just wonder if slathering a bunch of ad units and floating video players on a web page makes anything more effective.
It seems like a shell game. Yeah. And it's going to be more of a shell game when the traffic or more are the different agents running around retrieving information for people and it's not a real person. You know what the most dangerous thing is, is that
publishers are consoled by Google discovery traffic as a core SERP high intent traffic wanes. And they're just going to get hit again when the whole page changes and discover evaporates. Discover is like the Achilles heel. That's keeping afloat a lot of publishers. Everybody, everybody right now, because if,
You think about you're running in a 20%. We're just going to take some very broad trope assumptions here. If you're running a 20% to 30% margin in your business and you're all programmatic revenue and Google Discover is 20% to 30% of your traffic, if that goes away, your business just went unprofitable. I think the deal to talk about this week is the Rocket Mortgage deal with Mr. Cooper. I don't think most people have ever heard of Mr. Cooper. Was Mr. Cooper the banker on it? Exactly, Nick.
I did work for a Mr. Cooper before. Explain Rocket Mortgage for those who don't know. Public company, big mortgage company, I think one of the top three or top five. But they've been buying assets. Yeah, so they bought Redfin. What does Redfin do? It's like Zillow. Yeah, it was meant to make the home buying experience better. So they had their own agents. They were like, look, most people don't like this experience. Most consumers are finding the houses on their own. Why do they need an agent? So let's just charge less. It worked okay. They hired some of their own agents.
But I think what this year is turning into, there was like a headline that said deal volume is less in Q1 this year than it was last year. I think that that's an easy headline. I think it's a little bit different when you look by market because some markets are up, some markets are down. But what you're seeing with like a rocket mortgage, this sort of deal is similar to like the Gen Digital Moneyline deal where people that have large audiences online and
and that are starting to transact more online, wanna basically own the full ecosystem. So with Rocket Mortgage, combining with Redfin and Mr. Cooper, which is a big loan servicing business, you basically complete the funnel. So one of the biggest things in mortgage is refinancing. And people believe as the rates go down, that refinancing business will get bigger and bigger.
And so you can see Rocket Mortgage is in the perfect position because they know they can contact the consumer because they have all this loan servicing data. They now own a part of their business, Redfin, that makes money on future sales or future buying. And so it's just really...
We'll see if it works, but it's a very large company in the real estate space that basically owns every single part of the consumer journey and a life cycle. And it should be a little bit more immune to having to pay Mena or Google for net new customers or any other person in this landscape that drives leads. So that's sort of the thesis. And their belief is,
Even if we can get a little bit of Mr. Cooper's business to help to refinance the Rocket Mortgage on our platform, we won't be paying anything for customer acquisition. And so it will drop straight to the bottom line in terms of contribution. And then owning Renfin is like the perfect way because it's like you get pre-approved for a house. I think a lot of times people take that pre-approval and then use that bank to finance their eventual purchase. So you can see...
when you're looking for a house you'll automatically know what you can pay hopefully the data gets fit enough where you're already approved and instead of waiting 60 days you can close much quicker because you won't probably have already uploaded all your information you're basically collapsing the home fine finding part with the financing part
And then it'll be serviced by Mr. Cooper. I mean, does this fit? Is this a media business? I'm just wondering. It is. It's media and transactions. Well, that's what I sort of to tie it back to like Nick, that's what I sort of, you know, media has never, I don't say never, but it's, it's very powerful still. It's just, it doesn't work as a standalone business in most cases. No, I think the reason why it's scary for media companies is, you
you know, Rocket Mortgage, I'm sure, sponsors some sort of sports stadium or something like that. And they probably pump a lot into different publications where they think that consumers are going to be looking for homes or whatever, high propensity to get a mortgage. And so as they have these ecosystems, they'll need to spend less to find new customers. Well, that's a good update, A.B. I look forward to getting your feedback on the Nick Denton conversation. Sounds good. To else is he won't.
Gold? What else? Gold? That's all we talked about here. Well, Tencent, BYD. I'm going to get his portfolio and start tracking it. Nice. Is he in Newsmax? No. He thinks so.
That's it for this episode of People vs. Algorithms, where each week we uncover patterns shaping media, culture, and technology. Big thanks, as always, to our producer, Vanya Arsinov. She always makes us a little clearer and more understandable, and we appreciate her very, very much. If you're enjoying these conversations, we'd love for you to leave us a review. It helps us get the word out and keeps our community growing.
Remember, you can find People vs. Algorithms on Apple Podcasts, on Spotify, and now on YouTube. Thanks for listening, and we'll see you again next week. That's it. Thanks, guys. All right. Bye.