00:00Well, let's dig into this a bit more, get some more analysis on this with Santosh Rao from the venture
00:05capitalist firm Manhattan Venture Partners.
00:07Santosh, great to have you back with us. Thanks so much.
00:09So this is a very big case. And how big a hit is this financially for Meta?
00:14And how much of a game changer do you think this is for the American domestic regulation of social media?
00:21Yes, thank you for having me. Financial hit? No, it's very insignificant.
00:25It's small, $1.7 billion a year, even if they pay the full amount.
00:30It's nothing for a company that makes $200 billion in revenue and all that.
00:34So financially, it's nothing. It's more regarding compliance and the real world adherence to the requirements that they have.
00:44So I think that will be the real challenge, how to get it all together, how to standardize all the
00:49viewing habits and this and that.
00:51I think that's going to take some time. But I think they couldn't have asked for a better settlement.
00:59And the main thing is, I don't think the teenage cohort was never really a big part of their whole
01:05base.
01:07It's less than 1% of their whole base.
01:09So I think their real monetization is in other parts of Facebook and Instagram.
01:14So it's really not that significant in that sense.
01:17So I don't see that. I think it's a good settlement as far as I see it at this point.
01:23If it goes through, I'm sure there's some appeals going on.
01:27But the bigger thing is it takes some big uncertainty out of the way.
01:31So now they have a clear target. There's just one settlement, one legal case going on.
01:36So other small ones will always go on. But I think this takes a big hammer out.
01:40And so you can focus on forward forward movement.
01:44And that increase in certainty, Santos, is that the reason you think that shares rose, why investors were quite reassured,
01:50perhaps?
01:52Absolutely. That certainty is what people are looking for.
01:55The potential liability was close to a trillion dollars, if you believe some of the lawsuits that were going on.
02:01So I think this was a good settlement in terms financially doesn't affect.
02:05Yes, there are going to be some adjustments that need to be done.
02:09The funnel that they have might get a little bit on the edges, might get impacted to pull people in.
02:16But teenage crowd had moved out of Facebook already.
02:19They moved to Instagram and then to other places.
02:22So it's really the big guys.
02:23They're in there.
02:24The businesses are in there.
02:25And that's where they make all the money.
02:27So not a big issue.
02:29I think they just need to figure out how to comply with the requirements that this lawsuit requires them to
02:35do.
02:35What do you think the potential wider implications of this case could be?
02:39And could the U.S. end up getting more in line with what we're seeing here in Europe and in
02:44Australia and New Zealand,
02:45more stringent restrictions for access to social media for young people?
02:50Absolutely.
02:51I think that's what's going to happen.
02:52And it's good.
02:52It's healthy.
02:53It's good for everybody, just like the tobacco settlement, like the person mentioned before me.
02:58It kind of clears.
03:00It's for the broader good.
03:02And so companies will adjust around that.
03:04If you have a framework, which is what this one will give you, I think you can do a healthy
03:09social media platform.
03:11And we needed that.
03:12So it's good.
03:14Long time coming.
03:15And it's finally here.
03:16So I think it will force others to come in.
03:18And the new people who come in, the new companies that come in, have a higher gating factor to comply
03:24with everything.
03:24So it won't be easy to just start a social media platform.
03:27There's going to be some requirements, some standardization, some compliance.
03:31So I think it's all good all around.
03:33I think it's I can't knock anything out of this one.
03:36And what about the other big social media companies?
03:39What do you think they will take from this?
03:41Well, they need to comply also, right?
03:43So Facebook is requiring them to do it.
03:45So, yes, they will have to come in line as well in the beginning.
03:50I think TikTok and all the other guys also will also, as long as you're in the U.S., I
03:55think you will have to comply with everything here.
03:57I think that's good.
03:58So overall, in the near term, maybe they will get that incremental new subscriber.
04:04But long run, they all have to come into the same line, same platform, same requirements.
04:09So I think it will standardize everything and it will be a healthy platform for teenagers and adults and everybody
04:16right now.
04:16I think that's what we needed.
04:18All right, Santosh.
04:19Always great to get your insights.
04:21Thanks so much.
04:21Really appreciate it.
04:22Santosh Rao from the Manhattan Venture Partners.
04:25Many thanks.
