Scott Kessler, Global Sector Lead for Technology Media and Telecommunications at Third Bridge gives his outlook on Facebook.
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Scott first I’ll ask about Facebook and just in general the
possibility of regulating big tech. It doesn’t look like the

market’s concerned at all. Are the regulators just toothless.
Are we optimistic than that. Washington just doesn’t have the

drive to really do it.
Well thanks a lot for having me that. So I guess a couple of

things right. So in terms of regulating big tech I mean one
could argue that big tech to some extent is being regulated now.

And I don’t know if there’s really this kind of
hard push to oversee and restrain big tech. And I think one of

the big reasons for that is because consumers for the most part
seem satisfied at worst with big tech and happy at best with big

tech. I think they get a lot of value from the products and
services that big tech provides. And I think that people see

other major issues that are far more pressing than big tech.
That being said however it does seem with every day with every

revelation like there is more critical mass to do something. And
I think you essentially ask the question who exactly is going to

do something and what exactly are they going to do. And at this
point it would seem you could do something on the regulatory

front where you could implement new rules rules and regulations.
And I think those are more and more likely to happen. And then

you have obviously legislatures taking action. And I don’t know
that there really is a need at this point and a lot of people’s

minds are for something like that to happen. And what form would
it take shape.

Aren’t just to outline the concerns about not only Facebook but
also

Google and Twitter. There have been allegations that
misinformation was used to try and influence U.S. elections.

Hate speech
has grown even post short of Black Lives Matter era. And a lot

of studies point to social media as one of the huge drivers
behind the polarization that seems to be tearing the country

apart. Do you disagree.
So let me just be clear here. So I don’t disagree with that at

all. I just think that a lot of people see far bigger priorities
that require attention now than regulating big tech which may or

may not address some of the issues that you went through and
Facebook when they report results later. They’re probably going

to speak to the fact that more than half of the company’s
employees right now seem to be addressing this issue of safety

and security. They’re going to talk about probably billions of
dollars that they already spend to try to address this problem.

Clearly they’re not doing enough. It would seem. And they’re not
doing it well enough to address the very issues that you

highlighted. But I think that’s kind of the existential question
is exactly what should Facebook do. How much more money should

they spend and what other things should they be doing to ensure
that there is a greater level of truth on the platform and less

divisiveness. I think all of us would like to see that. I just
don’t know if there is really enough of an impetus for

legislators for example to take action.
What do you think about earnings expectations. Naomi was talking

to us about the fact that they’re having trouble with growth in
terms of teens and young adults. What else should be watch out

for tonight. Yeah. Look Matt I’ve been following Facebook since
I went public. I feel like that has been a refrain that people

have been thinking about talking about and concerned about since
that period when it was a private to public company. That being

said I think this is continuing to become an important issue
particularly as there are many alternatives. But I think what a

lot of people forget is that Facebook isn’t just about the
Facebook platform. It’s about Instagram. It’s about WhatsApp.

It’s about messenger. And look I mean we speak to experts day in
and day out about these issues these companies. And they

regularly say that Instagram has become the social media by not
Facebook not tick tock not Twitter Instagram because their

combination of audience reach as well as targeting as well as
value that they provide to advertisers. So that’s really

something to watch for is how well Instagram is providing. How
well are they offsetting some of the challenges in the core

Facebook platform. That being said I think it’s all about
growth. Because Facebook is going to talk up how much they’re

spending on a lot of the issues related to number one safety and
security. Number two funding creators. And then number three

they’re going to talk about this concept of the metaverse which
obviously requires a substantial amount of capital. We’re

looking at 40 percent growth expectations roughly I think for
this quarter and for this year. What’s happening is last year

they were at roughly 20 percent. And people are expecting them
to be at 20 percent for next year. So is this kind of a post or

interim pandemic boom. Maybe. But I think you’re going to see
normalization expectations for Facebook and we’ll see what the

company says about costs which tends to kind of indicate how
people people should be thinking about the name.