Hey Snackers,
Plants already won the week — Burger King's now cooking its meat-free Impossible Whopper nationwide.
Stocks touched record highs again as (another) US trade delegation heads to China to end the trade war and more earnings reports head to Wall Street.
Google falls 7% because Big Tech stole its ads
Off by a billion... Revenue growth for Google-parent Alphabet decelerated hard in the 1st quarter to its slowest pace since 2015. And the profit made off that $1B-less-than-expected revenue was also (you got it) less than expected. Shares tanked 7% after investors learned Google is ~~human~~ fallible.
"Hey Google: What is competition?"... It's Facebook, Twitter, Snapchat, and Amazon. All of them have surging advertising divisions and they're all bad for Google. Here's the ad growth scoreboard for Q1:
Google's monopoly game is over... For 15 years, its business model was to grow the internet (developed to developing nations, desktop to mobile), then reap more and more $$ off it with online ads. Now it's ad-dependent — Ads are 86% of its revenues. With today's real competition, Google needs to embrace a new skill or embrace less growth.
Spotify's $158M loss highlights why it needs podcasts
Hitting 100M app downloads deserves Adele's Grammy... Getting 100M humans to pay monthly for something is elite tech status — Netflix and Amazon have it, and now Spotify has joined the band, too. Quarterly earnings showed 217M people logged into Spotify accounts at least once a month. Here's who they/you are:
- 100M premium users (twice as many as Apple Music): Family and student discounts have cut the average amount users pay to just $5.27/month. But that's okay because streaming customers are "very sticky" — "Premium" revenue makes up 90% of Spotify's total.
- 117M free users: They can jam out on "Taylor Swift Radio" until Love Story gets buzz-killed by a mortgage ad. Spotify's goal is converting them to Premium via those free trials and discounts.
A scrub is a guy that thinks he's fly... but doesn't make profits. If you're surprised Spotify lost $158M last quarter, remember it pays 70% of revenue back to artists like TLC and their record labels. And it splurged $500M lately to buy podcast companies...
Pods are Spotify's profit puppies... CEO Daniel Ek thinks 20% of listening on his platform won't be music — that's why he calls Spotify an "audio" company. And it's why he bought Gimlet's pod portfolio in February. Spotify doesn't have to share revenue with podcasts because they're financed by their own in-pod ads. Or Spotify already owns them.
Marriott and Airbnb simultaneously unveil knock-offs (of each other)
Same architect?... Marriott International and Airbnb both announced shiny new ventures Monday. But they look a lot alike: Airbnb is entering the hotel biz, while Marriott is jumping into home rentals:
- Marriott unveiled "Homes & Villas" — A booking platform for shared apartments and houses (sounds Airbnb-ish). The best part for Marriott's hardcore customers: It's reward-program eligible.
- Airbnb unveiled... it's actually not named anything yet. But this "new category of urban lodging" begins with 10-floors of curated, designer-designed high-end hotel-like units in NYC's Rockefeller Center. Airbnb calls it "authentic." New Yorkers doubt that.
That's not where the similarities end... Both will feel more hotel, less Craigslist. They'll be maintained and cleaned by 3rd party management companies so you're not guessing whether the sheets are supposed to be off-white.
Same product, but different target customers... As Airbnb preps to IPO soon, Marriott doesn't want to lose its old school business travelers. And Airbnb wants its Millennials to stop wasting money at old school hotels. They're each dipping into the other's playbook to hospitably keep their same core users.
What else we’re Snackin’
- Build: WeWork just "confidentially" filed to IPO (its last valuation was $47B)
- Flop: Moviepass competitor Sinemia shuts down US operations
- Guilt-free: Mondelez (maker of Oreo's, Toblerone, and Cadbury) pledges to go full-on, 100% sustainable cocoa by 2025
- Grounded: Jetblue, American, and other big airlines faced a system-wide computer glitch for ticketing
- Spacial: Blue Origin (Jeff Bezos' rocket company) posts a cryptic "5.9.19" Shackleton-ish adventure tweet
Tuesday
- Earnings from Apple, GE, McDonald's, Mastercard, Pfizer, and Blue Apron
- The Fed's 2-day policy meeting kicks off
- US trade delegation hits Beijing to talk tariffs
- Japan's emperor abdicates the throne for the 1st time in 200 years
Correction: Yesterday's Snacks referenced that PayPal acquired the parent company of Venmo for $26M. In fact, the parent company of Venmo (Braintree) had acquired Venmo for $26M in 2011, while PayPal acquired Braintree for $800M in 2013.