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#SocialStocks: Meta has even more powerful AI system in the works

Posted September 14, 2023 at 11:15 am
Andrew Perez
The Fly

Zoom alleges anticompetitive practices by Microsoft, Snap CEO sells shares and other notable stories from this week

Welcome to “#SocialStocks,” The Fly’s weekly recap of Wall Street’s reactions to social media stock news.

CAR GO ZOOM: 

Haris Ramic, Director, Product Management Android Auto, Android, announced in a blog post: “Beginning today, WebEx by Cisco and Zoom (ZM) are both rolling out on Android Auto with audio-only capability, introducing a whole new category of apps. Years ago, the ability to answer a phone call directly from your car display revolutionized how we communicate on the road. We’re taking the next step by making it easy and safe for you to quickly join scheduled meetings and conference calls from your car display, so you won’t have to go fumbling for your phone… [Amazon (AMZN)] Prime Video is now available on Google Play for select Renault, Polestar and Volvo Cars, with other brands to follow. Whether you’re waiting for school to let out or charging your vehicle, you can now catch up on your favorite content… We’re also expanding your parked entertainment options beyond video. Already available in some cars as a standalone app, Vivaldi, a Chromium-based internet browser, is rolling out starting today on Google Play in the car.”

FOOTBALL IN AR:

Genius Sports (GENI) has struck a new partnership with Snap (SNAP) to power augmented reality, or AR, fan experiences via Snapchat Lenses. Genius Sports will help to power the next wave of Snapchat Lenses through NFL Official League Data, providing millions of fans with phone-based, shareable content. Genius Sports is also the exclusive distributor of the NFL Official League Data and Next Gen Stats feeds to global media and betting markets. The sponsored Lens provides a powerful way for Verizon (VZ), the Official 5G Network of the NFL, to connect with fans through the power of AR. Verizon will be the first sponsor to run a Lens that incorporates Genius Sports technology. As part of this partnership, Genius Sports and Verizon’s 5G network will help to power Verizon’s NFL Lens, including live data visualizations and an AR commerce platform. The Lens will debut at SoFi Stadium on September 17 when the LA Rams host the San Francisco 49ers and will include real-time game stats, merch try-on, and a 3D interactive map of the stadium, exclusively for Verizon 5G customers.

AI ARMS RACE: 

Meta (META) is working on a new artificial-intelligence system intended to be as powerful as the most advanced model offered by OpenAI, the Microsoft (MSFT)-backed startup that created ChatGPT, The Wall Street Journal’s Deepa Seetharaman and Tom Dotan reported, citing people familiar with the matter. Meta aims for its new AI model, which it hopes to be ready next year, to be several times more powerful than the one it released just two months ago, dubbed Llama 2.

ROBLOX ON QUEST: 

Roblox (RBLX) said that, soon, Roblox will be accessible on Meta Quest and PlayStation (SONY) platforms. “More than 65 million people are on Roblox every day, enjoying immersive experiences and connecting with others all over the world,” the company said. “Soon, Roblox will be accessible to even more people to enjoy – on Meta Quest and PlayStation.”

SNAP SHARE SALE: 

Snap disclosed that its CEO Evan Spiegel sold 150K shares of common stock on September 5 in a total transaction size of $1.55M.

COMPETITION CONCERNS: 

Zoom Video (ZM) has spoken with regulators from the U.S., EU, and other jurisdictions to express concerns about allegedly anticompetitive practices by Microsoft, Bloomberg’s Brody Ford and Leah Nylen wrote. The communications software company met with the U.S. FTC, as well as competition watchdogs from the EU, U.K., and Germany over the past year, the authors say, citing a person familiar with the matter.

Separately, the EU has designated Alphabet (GOOGL), Amazon, Apple (AAPL), Meta, Microsoft and Tik Tok parent ByteDance as Digital Market Act, or DMA, gatekeepers, and will take more time to assess if some Microsoft services and iMessage qualify, Bloomberg’s Samuel Stolton reported. The probe will not result in a fine, the report notes. “We are finally reining in the economic power of six gatekeepers, giving more choice to consumers and creating new opportunities for smaller innovative tech companies,” said Thierry Breton, the EU’s internal market commissioner.

TEEN SAFETY: 

In an earlier entry to its Privacy and Safety Hub blog, Snap said, in part: “Creating a safe and positive experience for Snapchatters is a top priority, which is why we’re always trying to do more to help keep our community safe. As a messaging platform for real friends, our goal is to help Snapchatters communicate with people that matter to them and to ensure that the content they view on our app is informative, fun, and age-appropriate. With that goal in mind, today we are announcing new features to further protect 13-17-year-olds from potential online risks. These features, which will begin to roll out in the coming weeks, are designed to 1) protect teens from being contacted by people they may not know in real life; 2) provide a more age-appropriate viewing experience on our content platform; and 3) enable us to more effectively remove accounts that may be trying to market and promote age-inappropriate content through a new strike system and new detection technologies. In addition, we are releasing new resources for families, including an updated parents guide at parents.snapchat.com that covers our protections for teens, our tools for parents, and a new YouTube explainer series.ls for parents, and a new YouTube explainer series.”

COMMUNITY NOTES: 

Social network X, formerly known as Twitter (TWTR), debuts Community Notes for videos. Community Notes “aims to create a better informed world by empowering people on Twitter to collaboratively add context to potentially misleading Tweets,” according to the company. In an earlier tweet, X announced that notes by contributors attached to a video will appear in all posts with that video. “Notes written on videos will automatically show on other posts containing matching videos. A highly-scalable way of adding context to edited clips, AI-generated videos, and more,” the company said in a tweet, on X. the social media company owned by Elon Musk added “Not just for images anymore – introducing notes on videos! Notes written on videos will automatically show on other posts containing matching videos. A highly-scalable way of adding context to edited clips, AI-generated videos, and more.”

ANALYST COMMENTARY: 

Morgan Stanley said Meta’s periodic Reels revenue disclosure, which was most recently shared in Q2 of 2023, helps the firm estimate that Reels global ARPU is still only about 28% the rate of other average Meta engagement. Even reaching 44% in 2024 implies about $25B of 2024 Reels ad revenue, estimates the firm, whose bottom-up ad analysis gives it “higher confidence in our base case” for 13% revenue growth in 2024. With higher Reels monetization and/or faster core ad growth, added Morgan Stanley.

Barclays believes the Amazon deal could add an incremental $209M in 2024 and $495M in 2025 to the firm’s current Pinterest (PINS) revenue estimates. An analysis shows upwards of $500M in possible incremental revenue by 2025, the analyst told investors in a research note. Barclays estimates the initial improvement in advertising selection could increase relevancy and boost “net” CPM by around 10% in 2024 across two-thirds of Pinterest’s traffic.

Originally Posted September 13, 2023 – #SocialStocks: Meta has even more powerful AI system in the works

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