Wednesday Jun.12, 2019

Trends aren’t good for Facebook & Google

_Every non-Amazon delivery company right now_
_Every non-Amazon delivery company right now_

Hey Snackers,

Cargo shorts. Tamagotchi. Westeros. All good things must come to an end.

The longest winning streak for stocks in two months is done too. Shocker: Blame trade issues — Fresh after avoiding a trade war with Mexico, the US is now threatening new tariffs on China.

Trends

Mary Meeker's epic "Internet Trends Report" has victims: Google & Facebook

Stop what you're doing... We've got trends to report. Mary Meeker, aka Queen of the Internet, just dropped her 333-slide "Internet Trends Report." The hugely successful tech investor's annual deck is read across the venture capital community to find the next "BLANK of BLANK." We read it for you.

It comes down to 3 key trends... (but here's the full deck for your reading pleasure).

  • Internet growth worldwide is slowing: The number of www users grew just 6% (the slowest growth ever) in the past year to 3.8B people.
  • Online ads are growing in an interesting way: 22% more bucks were spent on online ads, and that growth is rising. But targeted ads (aka the ones that freakishly know you clicked a blue shirt, so keep offering you blue shirts) are getting hit by regulation like Europe's GDPR. And Amazon & Twitter are winning ad market share from Facebook and Google.
  • Americans are disturbingly online all the time: Time spent on the internet rose from 5.9 hours/day to 6.3 this year. 26% of US adults say they're "almost constantly online."

This hurts Google and Facebook the hardest... Big Tech was already on the defense everywhere. Now two of its leaders can add "Internet Trends" to the list of things they have to fight against:

  • Congress held a hearing yesterday to see if the pair's online advertising dominance was killing news (and thereby threatening our democracy).
  • The Federal Trade Commission and Department of Justice just added them to their radars for antitrust worries (aka are they monopolies that should be regulated).
  • Apple is religiously positioning itself as a privacy god compared to Google and Facebook (see its new "Sign in with Apple").
Devoured

Amazon shuts down "Amazon Restaurants" — Grubhub celebrates with 8% jump

Apparently Amazon fails at some things... The company's restaurant delivery service, uncreatively-named Amazon Restaurants, will end on June 24th — The 1-hour meal delivery for Prime members is over. Now "Restaurants" gets to join the rarely-discussed club of Amazon un-successes:

  • Amazon Fire: A smartphone. 2014-2015. RIP.
  • Destinations: An attempt to get into the travel bookings game. Shut down the year it launched.
  • Dash Buttons: $5 gadgets you press to auto-order more things, like Tide. Barking at Alexa turned out to be easier.
  • And now, Amazon Restaurants: It was tiny — Just 20 cities and 2% of the overall market.

90% of the food delivery market... is devoured by 4 companies: Grubhub, Uber Eats, DoorDash, and Postmates. Word that Amazon canceled its delivery plans popped Grubhub shares 8% Tuesday (shares of the others are either private or complicated by Uber's ride-share majority business). Amazon's not completely out, though — Last month it led a $575M investment in UK-based deliverer Deliveroo.

Amazon clearly didn’t promote Restaurants enough... And we found a key example that highlights that: Fast food partnerships. Uber Eats delivers for McDonald's, DoorDash has Wendy's, and Grubhub handles Taco Bell. Amazon didn't invest in driving growth to its own service, so it'll invest in startups to do that instead.

Viral

Snapchat's freaky face filters doubled app downloads

All the cool kids are doing it... Last month, Snap whipped out two new filters — One transformed your face into a baby's, the other switched your gender. The result for society: Good material to share/scare your friends, big conversations on "gender," and it was used to catch a pedophile.

But we just got the results for Snapchat... and they were big:

  • 600K: The number of Snapchat downloads/day worldwide before the baby/gender switcheroo filters.
  • 1.5M+: Daily downloads of the app after the filters hit, according to a report.

But will it be copied?... Back in 2016, Snapchat was the fastest-growing social network in the US. Then "inspired" Facebook "replicated" its features (first Stories, now Bitmoji). When Snapchat debuted its Lens filters in 2015, Facebook even acquired facial-recognition startup Msqrd to build its own filters. Snapchat's #GenderSwitch needs IP protection from the 'Book so it can get loyalty from you.

What else we’re Snackin’

  • Sued: LaCroix-owner National Beverage Corp hits a 3-year low after another lawsuit linked to its claim of "all-natural"-ness
  • Charged: Tesla teased an electric pickup unveil (for this summer) and a 400-mile range car ("won't be long")
  • Zero: Boeing received zero orders for commercial planes for the 2nd-straight month
  • Real-ish: Beyond Meat reveals plant-based "faux-marbling" and bigger burger patties — But falls after analysts downgrade the stock
  • Hang-up: T-Mobile and Sprint shares dip after Attorneys General in 10 states sue to stop the merger they think will hurt consumers

Wednesday

Disclosure: Authors of this Snacks own shares of Beyond Meat, Amazon, Lululemon, and Tesla.

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In its third and fourth quarter earnings report, Tesla said that its current Cybertruck production capacity was greater than 125,000 a year. Musk had previously said he expected to produce 250,000 Cybertrucks a year by 2025.

Either way, that’s a lot more than the roughly 775 it’s delivered each month so far.

The recall is over an issue with the gas pedal pad that, the National Highway Traffic Safety Administration says when pressed, “may dislodge, which may cause the pedal to become trapped in the interior trim above the pedal.” The cause of the issue: “unapproved” soap that the manufacturer used to aid in getting the pad on the pedal.

A Cybertruck customer this week posted a TikTok about a terrifying incident in which this happened and “held the accelerator down 100%” in his 6,000+ pound vehicle. Thanks to some quick thinking where he held down the brake and put it in park, he wasn’t injured.

This is the long-awaited Cybertruck’s second recall since it came out five months ago.

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Either way, that’s a lot more than the roughly 775 it’s delivered each month so far.

The recall is over an issue with the gas pedal pad that, the National Highway Traffic Safety Administration says when pressed, “may dislodge, which may cause the pedal to become trapped in the interior trim above the pedal.” The cause of the issue: “unapproved” soap that the manufacturer used to aid in getting the pad on the pedal.

A Cybertruck customer this week posted a TikTok about a terrifying incident in which this happened and “held the accelerator down 100%” in his 6,000+ pound vehicle. Thanks to some quick thinking where he held down the brake and put it in park, he wasn’t injured.

This is the long-awaited Cybertruck’s second recall since it came out five months ago.

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“In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential,” its shareholders letter read. “But now we’re generating very substantial profit and free cash flow.” The company said that it will focus on revenue and operating margin as its main financial metrics, while it will look at time spent on the platform to gauge customer satisfaction.

Another way to read this? They’ve hit market saturation and just aren’t going to be growing that much anymore, and they thought they’d end on a good note. Going forward they’re focusing on how to get more money out of the customers they do have.

They’re doing so by cracking down on password sharing and charging for extra members. They’re also pushing people to ad tiers, which are more profitable than non-ad tiers.

“Scaling ads to become a more meaningful contributor to our business in ‘25 and beyond,” Netflix said.

Netflix’s ads membership grew another 65% in Q1 over the previous one, after rising 70% the quarter before, and 40% of signups in ad markets continue to be for those ad plans.