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We could see a brief shift away from obsessive AI talk this week. On Wednesday, Meta Platforms CEO Mark Zuckerberg is due to testify in the Los Angeles trial hearing a lawsuit filed by a young California woman against big tech firms, namely Google and Meta. The woman claims her social media addiction led to depression and suicidal thoughts, as we described here. Last week, one of Zuckerberg’s lieutenants, Instagram chief Adam Mosseri, testified in the trial.
For all the discomfort Zuckerberg might feel on the witness stand, his business is doing gangbusters, as we’ve reported. You couldn’t say the same for Pinterest, whose stock plunged 17% on Friday to close at $15.42, the lowest since the 2020 pandemic-triggered market crash, and several dollars below its 2019 IPO price of $19. A reaction to Pinterest’s weak ad sales in the fourth quarter, the sell-off cast a pall on a company that seemed to have rediscovered its mojo since CEO Bill Ready took the reins in 2022. Now you might wonder whether Pinterest is about to become another Snap, forever stalled as a subscale social media player. That would be a harsh fate: The Snapchat owner’s fourth-quarter ad revenue growth was 5%, bringing its full-year growth rate to just 5.8%, nearly half its 2024 growth rate.
What’s striking about the Pinterest-Snap experience in the fourth quarter is how different it is from those of Meta and the other big digital ad firms, Google and Amazon, which are using their strength in AI to accelerate growth. Take Meta, which last year generated 38 times as many ad dollars as Snap and yet managed to post 22% growth in ad revenue, a slightly faster rate than in 2024. The same is true for Google, whose search ad revenue growth expanded to 16.6% in the fourth quarter and 13.4% for the year. Two years earlier, search grew 7.8%. Both Meta and Google are investing heavily in cutting-edge AI. And both are applying their AI to fine-tune the effectiveness of ads on their platforms, making them more appealing to marketers.
Amazon’s ad revenue growth also accelerated in the fourth quarter, to 23%. That’s a little harder to parse, as the company is expanding in video streaming thanks to its Prime Video service. But sponsored product ads in its online store are still its biggest ad business, and Amazon is using AI to fine-tune their delivery, it said on its recent earnings call.
Both Pinterest and Snap have dug into AI, to be sure. Pinterest, as we reported, is incorporating AI in its products and ad formats, including its visual search, which fits a service that people browse for ideas about shopping or cooking or home decor. Snap, meanwhile, has added AI-powered features to its camera, for instance, and incorporated AI across its ad products. But new AI technologies are magnifying the advantages bestowed by scale. The battle for the scraps of the ad market among small competitors seems likely to become even bloodier.
Earnings This Week
In terms of earnings, this week offers a relative respite until chip firms like Nvidia and enterprise software companies start reporting the week of Feb. 23. One company that will release earnings this week is DoorDash, which reports on Wednesday. Analysts expect the food-delivery firm to report revenue of $3.986 billion, 39% higher than for the year-earlier quarter, a growth rate boosted by DoorDash’s acquisition last October of U.K. delivery firm Deliveroo.
In Other News
• The Federal Trade Commission has ramped up its scrutiny of Microsoft as it probes whether the company has an illegal monopoly in the cloud and software markets, Bloomberg reported Friday.
• The Department of Homeland Security has begun ramping up its use of administrative subpoenas to obtain identifying information from major tech companies on anonymous social-media accounts that criticize or track Immigration and Customs Enforcement or post about ICE agents’ locations, the New York Times reported.
• The U.S. Department of War is considering ending its partnership with Anthropic over a dispute about how the startup’s AI model, Claude, can be used by the U.S. military, according to an Axios report.
• ByteDance has released its new generation of large language models, Doubao Seed 2.0, as the Chinese tech giant tries to compete at the highest level with U.S. rivals in all types of AI models, from LLMs to video.
• Disney, Paramount Skydance and the largest union for U.S. entertainment professionals sent cease-and-desist letters to ByteDance after videos generated by the Chinese tech giant’s AI video model, Seedance 2.0, went viral on social media, the entertainment publication Variety reported.
Friday on The Information’s TITV
Check out our latest episode of TITV in which we speak with the co-founder of Arena, formerly LMArena, about the future of AI model benchmarking.
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