South korea, spain or australia. If you were to create a society with these companies you would have something that looks like the b. C. Him out of the matt damon movie. This year, when america wakes up to the fact that google, amazon, facebook and google are the biggest tax avoiders in the world offering 20,000 to store their eggs and offer battery eternity benefits, there and municipal Transportation Health benefits, dna testing, effectively economically through lobbyists they have achieved what the south was unable to do militarily, he effectively seceded from the u. S. And i think theres going to be a revolt against the. They decided they opted out of our tax and government system as they feel they can do it better on their own. So lets talk about amazon. We think amazon will decline in influence. That is why i was invited. I one of the few who believes that. Why is that . We dont believe pure play mono channel, retail works for anybody including amazon. The best example of this is 250 million in sales, raise money, billion dollar valuation at the end of 2013, 14 months later sold for scrap, declined 98. 5 in market capitalization. And i dont know how many of you use a fantastic Consumer Value proposition, giving you 100 of value for 80 bucks. Is great for everyone except shareholders. It cant work. The new Ecommerce Stores accessing cheap capital the consumer always wins. A great website great retail or great retail over the digital connected tissue between stores great web site and the consumer the answer is no. 3. I argue theres not a Single Company that is going to survive. We fail slowly over ten years. Pure play ecommerce does not work. For all the excitement and hype once the media falls out of love with magnetic founders and capital rise of these companies will be sold or go out of business. So they are opening stores. The number one most successful retailers in the history of business, apple in terms of economics number 2, parker just have tiffany, now opening stores. Retailers are not be funneled waiting to get disrupted by amazon. These are retailers additional brick and mortar retailers who grew Online Business faster than amazon this year. If you thought of innovation and stock reaching you would not think amazon has been the best return to shareholders, it hasnt. Macys outperformed over the past five for ten years. Has has nordstrom. Where it is amazon trying to establish competitive advantage . They made a multibilliondollar investment, trying to get 50 of americans between two to four hours. It is an extraordinary investment. They have tremendous ip around one click ordering. We believe the achilles heel in the amazon deal is the less investment. And shipping costs last year took in 3 billion and that is growing 40 year. That is not sustainable even for amazon. The last mile is too expensive for amazon with the current solution. When you look innovation in the payment space near catching up to one quick in things like apple pay giving us the opportunity, and we think that will erode their advantage. More often anything the Disruptive Force for amazon will give other retailers a solution for a fraction of the Capital Investment when i see hoover, it came to be in florida, i forgot my beach chair, and came back and was 4, gave my grocery list to the organic market, 12 bucks, we affectively at the post Office Without unions for collective bargaining, without uniforms and they buy their own trucks, becoming a vascular system to the business world. A private car service, the last solution for every retailer entity billions of dollars to create that solution. If you are visiting from out of town, take a taxi. They are going to die, they are the driving debt. This is the ratio of taxes tos in 2014, this is change in los angeles, miami, atlanta. Ready for this . Taxes are dying. They are going to go away. They make no sense. They offer Worst Service but are more expensive. The rise of the biggest trend in retail globally is we didnt realize consumers left the order to pick up and score. The biggest mistake including amazon is they opted for speed over convenience the consumer would rather go to fifth avenue and pick up their order when they want as opposed to getting home and finding out the listed on their door within an hour of ordering and they werent home. Convenience over speed, that is what stores offer even in france, not thought of as an innovative economy, 3,000 pick publications versus a year earlier. The future looked like me sees more than amazon. Closing a lot of Stores Opening new ones where they can justify reinvesting capital and fulfillment technology. It is a larger metaphor for what is happening in the economy. We are losing a lot of jobs to government, a typical middleclass jobs. You get into the information economy you have the right skills and never been a better time to be an american. If your anybody else it never is going to worst, there has never been a worse time, most of the job growth is the service jobs are basically 350 million serving 7 million lords in the u. S. We are turning into the middle class is going the way and theres a decent argument the middleclass the free market economy basically rewards the most productive people to an unbelievable extent at this is playing out in the labor markets. The ultimate destroyer of jobs, Technology Creates jobs, it doesnt. It destroys jobs. Google needs, and people for every 10 million in revenue, they need 50 or 60. Amazon needs 12 people, macys need 65. For every 10 million these Companies Growing revenue you will lose 40 to 50 middleclass jobs, they will grow 30 to 40 billion a year so you can take the meadowlands, Madison Square garden the rose bowl, pasadena, copywriters retailers, and give them a pink slip and say courtesy of amazon, google, facebook and apple, you are now out of business. Some predictions. Amazon will decline in value. It will be forced to make the transformative brick and mortar acquisition. I dont think theyre going out of business. They will be an enormous retail. They will buy gas station companies, we are used to driving in and out of gas stations and picking up stuff, the perfect Consumer Behavior compliment amazon, going into that place and picking it up and stopping for ecommerce companies. Lets talk about facebook. Facebook has redefined what it means to have a relationship or be a friend. It be defined the semantics of relationships. They also pull out the greatest data switch in history, they convince brands to spend tens of millions of dollars to build communities and put a Walled Garden around these communities in sages king you have to pay. It is 6 meaning one in 16 messages they send to their community actually reach them. Facebook sales represent assumed the organic reached is zero and forcing everybody to pay to access the communities they can pay the bill. I say that in a respectful way. It is the bait and switch. There probably the smartest supplier of companies in the country. Instagram, remember he sold that company. It is worth 40 billion. If you look at what it is, it is strong everywhere facebook is week. Facebook is the most Successful Company in shares of relationships in the history of business. Facebook is losing teams the instagram owned by facebook. The most Popular Social Network wealthy teens, you never hear any individuals and we are not interested in will be teens, theyre the future of business, most Popular Network is instagram. If you look it engagement rates by the percentage of community on a piece of content, by the community, it is the most powerful platform in the world. Some of the losers interest will be blown off the map the moment instagram announces pages where you can be your phone is you see piece of the interest to go to less than the one billion dollars. I wish was a public stock. It broke my heart, but the product, Image Management team going away. Twitter is oversheight and fantastic opportunity to shorten my view. Social media traffic actually converting to purchase, very low. Social commerce is an enormous head fake and twitter has been over. There are more advertisers on linkedin the and twitter. The last 7 years, tumbler, instagram, the last five years tom was purchased for more and instagram will be 1. 5 billion, Marissa Meyer never mentions tumblers in their earnings fall. Theres a quiet war between facebook and google and that is key to the war on line, to attach your identity to your specific actions so the company can sell more specific higher price dads to advertisers. Facebook is winning the war. We decided it is okay for facebook to attach actions to identity. We are not comfortable with people attaching our searches to our identity. We would rather people not know what we put in that box and attach it to an identity. That would make me uncomfortable. Crazy stuff goes in that box. As a result the only way google can attach identity is for g mail and google plus which the have the same attraction. Facebook was winning the war of identity. I want to have some customer content from here. In the board of the new york times, the first Board Meeting of this in recommended a shot off google, they are the enemy of all Media Companies. They quoted information that wants to be free but they fought intention should be sold to the highest bidder and a lot of Media Companies were totally blind sighted in the enamored with the cool kid who decided to be part of the pepsi generation to let google called a data and we debased content to slice it up and sell to the highest bidder when we got a bunch of cheap meaningless traffic. You would have thought we would have learned from this mistake. Theyre doing it twice with facebook, publishing on the platform in exchange for 100 of revenues of people dont leave the platform. Theyre doing it again, expediting their own demise. They want to be scarce and expensive. That is the future of great media and these have taken it for the second time. And they pulled the trigger again. What a stupid move. Facebook, 1 billion step identified catholics in the world, 2. 4 billion people have a relationship with facebook, the most successful product, religion, nation in the history of mankind. Sales facebook associates should go Something Like this. And twitter, tumbler or anything else a lot of awards, when you are interested in building a brand globally and i have more relationships and gone and i am on a mobile phone. We think google will decline in value, dominant share but new places to searches, there are a billion search query they on facebook 3 billion on google a billion on facebook. The cost per click is going down. Revenue and profits have stalled. Google didnt see the ship to the mobile economy happening as fast as they did. 80 of our time on mobile in apps and in air when we are less likely to search. We are moving away from Google Search by every time we spend less time on the desktop and move to mobile is bad for google. Google plus is that, harvested for its organs. Theyre taking its best features and incorporating to other products. People talk about youtube disrupting tv, facebook is likely going to disrupt youtube. There are more videos being up loaded to facebook native lee then youtube. That is a seminal moment in terms of the eco system. Google glass is not where rubble, it is prophylactic insuring you never conceive a child because no one will get near you. This e pmi is is how Technology Companies to for granted how difficult it is to get people to put something on their person and how meaningful is in our decision process about branded items. Berkshire would never have let this happen. Lets talk about apple. We teach luxury, it is a light corn and i cant describe it but they can recognize that. The touch l. A. What luxury is. An artist with a passion for a product. And iconic founder that embodies the product, the brand in a 3dimensional format that identifies you as a luxury player, and more than 50 of Luxury Brands are sold, branding moved through broadcast to the store, at the gap. It starts to put money into the stores from 96 to 2004, it used to be a Parent Company in the world, 7 billion to 4 billion. Your global Luxury Brands permeate cultural and geographic boundaries that is in any other grand because the most boring people in the world, smell the same. And middleclass people that different tastes. Rich people fly british airways, they are strikingly homogenous and boring and Luxury Brands have an easy time going global. You have self expressive benefits. And it is incredibly based the this is the key to shareholder value and the most successful industry in the world. If you look at the riches 400 in the world and take inherited wealth, more people from luxury and technology. A tremendous amount of irrational decisions translate to profit and margins based on what we are signalling to other people, self expressive benefiting. No one knows this better than Luxury Brands. This is not a time piece. It is my main attempted for masculinity to people i need and at the end of the day is really about signaling to females that children will likely survive and if you meet with someone with a swatch watch. This basic notion we dont like to talk how distinctive or how many books we read your how many subscriptions in the new or times or graduate degrees we have, has been for tens of millions of years, the primary source of the greatest Value Creation in the history of modern business, luxury of the last 20 or 30 years. Apple is the best luxury brand in the world now. You have partisanship, iconic founder, exceptional price point, the First Technology product in history that expanded its margins and matured. You have incredible vertical management, the most successful Retail Company in the world is a tech company, 13 years ago has blown out every notion of core competence. Apples core competence, seven including retail, incredible Global Management or associations across geographic boundaries but they are from the in luxury. We now know through the wash, only 3 things we do in business and we appeal to a three organ, the rational, these are bad businesses because rational decisions mean lowmargin transportation to Petroleum Service industries for survival. We appeal to peoples hearts, choosy moms choose just other species, we need to love to be loved how long you live, how many people in your life you are actively loving, new mothers to not die people take care of parents and live longer, that is the number one, how fat you are how skinny whar or how much you smoke or dont smoke but how many people in your life you love that how many love you directly related to happen is that dont live in the locker, some people you are taking care of. P n g figured that out and communicate to people if you watch kids detergent you love the more. Martians when the. We then appeal to reproductive organs, informed signaling to weather people buy more attractive, stronger, more interesting. These are highly irrational decisions. As you move down for so margins get better. Tesla is not an environmental car. It is a humble way of saying i can afford 140,000 car but i am groovy on granola. It is a way of signaling. Women will continue to buy 600 ergonomic the impossible shoes to solicit inbound offers from the simpson driving those teslas. That is the evolution of what is driving business right in all. Apple has migrated down the torso, rational decision used to be a better computer singing to our heart with music and now is the self expressive branch. Mobile operating systems in new york if you want to live in new york in and upper income household you own and apple. If you live in lowincome households in new jersey you own and enjoy. If you live in el a near the beach or Beverly Hills or South Central the inland empire you own and android. People think the apple watches the world market it is the death of the wearable market. They were more in 24 hours than in the entire world market in the first in the last year. The apple watch is not terrible, it is the Second Screen for your iphone and about the everywhere rubble company out of business. The first year of launching the apple watch is going to be the biggest box company in the world. This hurts everybody. King retailers have been wrecked by looking at problems at apple problems kids identify themselves with their phone these Companies Take a hit. The number of 300,000 product people can buy when you have to and to 20 billion consumer discretion of the eco system will be reduced substantially it feels there at the naval about brand or product problem. Some predict apple will be the first trillion dollar market that company unsuccessful migration down the course of the luxury end hit a wall. Lets summarize with amazon and google declined in value, facebook and apple will increase in value. My name is Scott Galloway and i appreciate it. [applause] i am going to go to introduce you to our panelists and we will jump into the discussion. To my right is my mentor and role model Dominique Raccah who is publisher of source book and the Largest Independent Book publisher in the u. S. And to my left i have gareth cuddy, Enterprise SoftwareCompany Providing ebook distribution, sales analytics and data to publishers around the world. Bethlam forsa from