Midroll + Stitcher (acquired by Scripps)

The meta show: Ben and David turn their gaze inward and examine the podcasting industry through E. W. Scripps’ recent acquisitions of the Midroll podcast advertising network and Stitcher podcast client. Featuring discussion of our own product process and metrics at Acquired. Sponsors: Vanta: https://bit.ly/acquiredvantaServiceNow: https://bit.ly/acquiredservicenow26Legora: https://bit.ly/acquiredlegoraStatsig: https://bit.ly/acquiredstatsig26 More Acquired! Get email updates https://www.acquired.fm/email with hints on next episode and follow-ups from recent episodesJoin the Slack http://acquired.fm/slackSubscribe to ACQ2 https://pod.link/acquiredlpMerch Store https://www.acquired.fm/store! © Copyright 2015-2026 ACQ, LLC Announcements: We’re pivoting! (not really) Our new show description: A Podcast About Technology Acquisitions http://www.acquired.fm That Actually Went WellBut we are launching a new feature! Since so many of you, our listeners, are also tech and startup folks and/or other builders, we wanted to create a space to feature cool products, companies and side projects you’re working on. Thus we’re adding a "Community Showcase” section to the show. If you’d like to be included just send us a Slack message or email, and we’ll choose one submission to feature on each show. This episode we’re highlighting BESTR http://bestr.co, from community member David Resnick (aka @the_rezonator in Slack), which is an online platform to share lists of great things. Check it out and let David know what you think. Topics covered include: Top Google search results for “acquired podcast https://www.google.com/#q=acquired+podcast"Midroll’s origins in the comedy podcast Comedy Bang Bang http://www.earwolf.com/show/comedy-bang-bang/ (now an tv show on IFC http://www.ifc.com/shows/comedy-bang-bang) and exit last year to Scripps The structural challenges inherent to podcasting as a medium and the gap between audience size/engagement and industry revenuesOpportunities for independent podcasters and our own audience and business metrics at Acquired Stitcher’s long corporate history as a venture backed company, first acquisition by French music company Deezer, and now second acquisition from Deezer by ScrippsProblems with Stitcher as a product and industry reaction to the acquisition including John Gruber's response https://daringfireball.net/linked/2016/06/06/midroll-stitcher, Ben Thompson’s article on Stratechery https://stratechery.com/2016/the-future-of-podcasting/, and Ben & James Allworth's discussion on their excellent podcast Exponent http://exponent.fm/episode-082-a-podcast-about-podcasts/Handicapping Stitcher+Midroll’s chances for success within Scripps, and opportunities for new startups & innovation in the podcasting spacePioneer Square Labs’ own past efforts in the podcasting space and their process for evaluating potential new company ideas Shoutout to Pocket Casts and our listeners down under Followups: Twitch: bringing tipping onto the platform with the launch of Cheering + Bits https://blog.twitch.tv/introducing-cheering-celebrate-together-da62af41fac6#.3c3uby5d5 (H/t Slack community member jamesk)Facebook Instant Articles: pour one out for Facebook Paper http://www.theverge.com/2016/6/30/12062124/facebook-paper-shutdown (developed by the Push Pop Press team)LinkedIn: the hotly anticipated SEC filing detailing all the negotiation drama https://www.sec.gov/Archives/edgar/data/1271024/000110465916130837/a16-14187_1prem14a.htm is now live (scroll down to "Background of the Merger” on p.31) The Carve Out: Ben: Mark Titus, AKA @ClubTrillion is joining the Ringer https://twitter.com/clubtrillion/status/750363071777046528/David: OKR’s https://en.wikipedia.org/wiki/OKR and regular goal setting, including great “how to" from GV partner Rick Klau https://library.gv.com/how-google-sets-goals-okrs-a1f69b0b72c7#.g5fzysrrm

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  We'd like to thank our one listener that we see in our analytics on Zune.

• 0:05David Rosenthal?

  And the one listener on Stitcher who happens to be my wife.

• 0:12Speaker 00

  It's a great way to lead into this episode.

• 0:30Speaker 00

  Welcome back to episode 16 of Acquired, the podcast where we talk about technology acquisitions. I'm Ben Gilbert.

• 0:38David Rosenthal?

  I'm David Rosenthal.

• 0:39Speaker 00

  And we are your hosts. Today, we have a few notes before we dive into it. I wanted to take a minute and say a huge thank you to one of our listeners, David Resnick. He's known as The Resonator in Slack. David is an entrepreneur with a company called Bester, but in a former career, he was a recording engineer and music producer. David's been helping us tremendously with audio quality, so I wanted to give a shout out to his company. Bester is a platform to share the best things. Curate your bests into topics with automated images and links. You can use their widget with your branding embedded on your website. Find out more at bestr.co. That's www.b-e-s-t-r.co.

• 1:23Speaker 00

  Which brings me to my next point. David and I were grabbing-

• 1:26David Rosenthal?

  Big announcement alert.

• 1:27Speaker 00

  Yeah. Do do, do do, do do. If this were a really high-production podcast, we would have some-

• 1:32David Rosenthal?

  We'd have sound effects.

• 1:33Speaker 00

  That's right. That's right. We wanted to do something a little bit different with this podcast. We're at about the size where we could start doing some advertising. And actually, we'll get into our analytics a little bit later this episode as part of the topic of the show. Instead, we wanted to do something called Community Showcase. And since so many of our listeners are entrepreneurs that are building things, product people at companies, or venture capitalists, or finance people, really people that are involved in creating products themselves, we thought it would be really cool to try and just do a community focus every episode.

• 2:11David Rosenthal?

  Rather than advertising, at least for now, we're going to experiment with this. We're not charging anything or making any money on this, but we really just wanted to do it as a thank you to our community and listeners and especially those that are really engaged on the Slack channel and emailing us. So if you have something you're working on and you want us to talk about it on the show, either hit us up in the Slack community or send us an email.

• 2:36Speaker 00

  That's [email protected].

• 2:39David Rosenthal?

  Also on our website and we will aim to do, start with one and maybe do more of these every show. Let us know what you think.

• 2:47Speaker 00

  Yeah, that's true. You can hit us up on Twitter to @acquiredfm. And we may do a more kind of traditional advertising thing later, but if you're working on something, we'd love to give you a shout out on the show. So David, you ready to dive in?

• 2:59David Rosenthal?

  I think with that, all of the preamble here is very appropriate because this episode is a meta-episode.

• 3:06Speaker 00

  Da-da-da.

• 3:07David Rosenthal?

  About podcasts.

• 3:09Speaker 00

  Yes. Today, on this episode 16, we will be covering the acquisition by Scripps of both Midroll and Stitcher. So I think we'll dive right into it. David, you want to do history and facts?

• 3:24David Rosenthal?

  Yeah. And I should say before we do this, the theme here was, topic was first inspired by my wife Jenny. I wanted to make sure I give her a shout out. She was trying to get to our website and she was Googling acquired podcast and realized that we weren't in the top hits on SEO. So this is an unabashed SEO play to get to the top of the Google hits for acquired podcast.

• 3:53Speaker 00

  This is the first I'm hearing of this.

• 3:57David Rosenthal?

  So EW Scripps Company, for those that aren't familiar, is a very old company by technology standards, not a technology company. They are a broadcast media company and historically had also been a newspaper publisher, but they operated a number of cable networks and television and radio broadcasting stations locally around the country. And in the, over the last two years, they've made two acquisitions that have made a huge splash in the business of podcasting space. Something that Ben and I have gotten to know a little bit about over the last year. So the first company that they bought was a bootstrapped startup called Midroll.

• 4:41David Rosenthal?

  And Midroll has a super interesting history. Some of our listeners might be familiar with parts of the company. It was started in 2010 by two guys, Scott Aukerman and Jeff Erlich. And it was started as a company called Earwolf. It was actually a comedy podcasting network. So Scott had a podcast that was part, it was in LA, in LA. And he had a, a radio comedy show that I believe was originally called Comedy Death Ray, I think. And they eventually changed the name of it as a podcast to Comedy Bang Bang. And he had a bunch of comedians on the show and it had a pretty loyal following.

• 5:23David Rosenthal?

  And so they decided to sort of start a podcasting network around it. So they added a bunch of other comedy shows, added culture shows and music podcasts over time. And yes, it was Comedy Death Ray that it started as and, and actually it originally, the origins of it were in the Upright Citizens Brigade. Standup comedy in, in Hollywood that Scott had started doing there. And, and then it actually went on separate from what the company that became Midroll. Comedy Bang Bang went on to become a television show on IFC, a comedy television show.

• 6:00David Rosenthal?

  So interesting roots for what is today the giant among midgets in the, in the podcasting world. So they bootstrapped this company. For a couple of years, they were just purely a content network. And then in 2014, they were doing their own advertising for, for all the podcasts in the network. They were direct selling ads and they started getting approached by advertisers who wanted to buy ad space on other podcasts that weren't part of their own network of shows that they were producing. And they kind of thought, well, that's interesting. So they launched a separate product that was an ad, an ad network, one of the first,

• 6:45David Rosenthal?

  if not the first, ad network for the podcasting industry. This was in 2014. They called it Midroll Media.

• 6:51Speaker 00

  That, that, that gives you a sense of how new this whole thing is. I mean, it is, is less than two years ago.

• 6:55David Rosenthal?

  Less than two years ago, which is crazy, given that, you know, podcasting has been around for over 10 years, you know, going back to the iPod.

• 7:02Speaker 00

  Yeah, pretty, pretty new to the, an advertising based revenue model.

• 7:07David Rosenthal?

  Yeah.

• 7:08Speaker 00

  Or really, really monetization at all.

• 7:10David Rosenthal?

  Yeah. And, and we'll get into this in, in tech themes and others, but you know, this industry, the podcasting industry is so fragmented relative to like how many people, millions, hundreds of millions of people listen to podcasts.

• 7:25Speaker 00

  Yeah.

• 7:25David Rosenthal?

  So, so from the press release, when they launched Midroll, they said, this, the new company, Midroll, offers a 360 degree suite of production, distribution and monetization services to artists, entertainers and thought leaders. Advertisers benefit from access to the talented hosts of more than 120 shows and their engaged audiences totaling more than 15 million downloads a month, using the industry's first user-focused self-service platform. So this is crazy. This is 2014. The first self-service advertising platform for the podcasting industry has 120 shows. I mean, compare that to like ad networks for display ads or other forms of advertising.

• 8:08Speaker 00

  AdWords has, you know, millions and millions of advertisers.

• 8:11David Rosenthal?

  Millions, like this is-

• 8:12Speaker 00

  Or maybe millions of sites, hundreds of thousands of, no, probably millions of advertisers.

• 8:16David Rosenthal?

  Yeah, this is like a grain of sand compared to like every beach on earth.

• 8:20Speaker 00

  Yeah, and, and we'll get to the dollar amounts too, but again, a grain of sand.

• 8:24David Rosenthal?

  But they sign up some pretty large podcasts to be part of the network. So WTF with Marc Maron, which is one of the largest podcasts out there. Barack Obama was on it recently. They have Bill Simmons's podcasts and all the Ringer podcasts. So about a year after this, and, and one year ago now, Scripps comes in and they buy the company. And it was not announced at the time how much they paid for it, but it has since come out, reported $50 million upfront and another $10 million earnout to basically take out like the giant in this industry. Which pretty good return for, for Scott and Jeff, considering that, you know, this was totally bootstrapped. They never raised any money.

• 9:03Speaker 00

  Yeah, yeah. I mean, 50 million is, well, let's just, we're not going to beat around the bush. We'll get into the numbers now. Podcast advertising, there's not that much money spent right now in podcasting as a medium. According to a Wall Street Journal article from earlier this year, advertisers are only expected to spend about 35 million on podcasts this year, and that's only up about 2% from last year.

• 9:27David Rosenthal?

  Yeah, so the whole industry, 35 million, across the whole industry, of which Midroll represents many of the largest podcasts, but nowhere near the whole industry.

• 9:36Speaker 00

  I don't know about nowhere near. I think it's, it's not ridiculous to say they're the majority of the, the advertising spend goes through Midroll.

• 9:44David Rosenthal?

  Of independent podcasts, probably, but the largest podcasts are probably

• 9:48Speaker 00

  Ah, good point.

• 9:49David Rosenthal?

  Like NPR.

• 9:50Speaker 00

  This American Life. Yeah, yeah. Good point. There was a, there's a quote by the, um, someone at Midroll saying that a handful of their podcasters gross over a million dollars a year, and they have about a 30% take rate. So actually, factoring back, it looks like Midroll's annual revenue is somewhere in the neighborhood of $2 million a year.

• 10:10David Rosenthal?

  Wow.

• 10:11Ben Gilbert?

  All right, listeners, now is a great time to tell you about a longtime friend of the show, Vanta. AI has scrambled the whole security picture. It used to be that you proved that you were secure once a year on audit or a static PDF, then everyone would nod and you're done. But in an AI-first world, that doesn't hold up anymore.

• 10:30David Rosenthal?

  Yep, your risk surface changes every week now. A vendor turns on an AI feature, or someone writes in a new model without telling IT, and your posture is different than it was last week, let alone at your last audit. Vanta's own research found that around 70% of companies have this quote-unquote "shadow AI" running with no security review at all.

• 10:51Ben Gilbert?

  Right, and that's where Vanta comes in. They're the leading agentic trust platform, meaning they've built the thing that closes the gap. And the way that they close that gap is Vanta Agent. Think of it as a GRC engineer, that's Governance, Risk and Compliance, except that it's software and it doesn't sleep. It finds the issues, drafts the fixes, and cuts the time that you'd spend on vendor assessments in half.

• 11:13David Rosenthal?

  In half? Which is exactly why more than 16,000 companies today run on Vanta. Companies like Ramp, Cursor and Snowflake all stay audit ready and catch the risks that crop up between audits across every vendor, every AI tool, the whole environment.

• 11:31Ben Gilbert?

  And that's the real value. Trust has to be continuous now, which is why Vanta automates your security, your compliance and the work to earn and prove trust. We're huge fans of Vanta over here and literally hundreds of acquired listeners have become Vanta customers at their companies over the years. So you can get $1,000 off Vanta at vanta.com/acquired. That's V A N T A dot com slash acquired for $1,000 off and just tell them that Ben and David sent you.

• 11:59David Rosenthal?

  So, Scripps acquires this company about a year ago, almost exactly a year ago. They operate it for a year, team stays intact. The CEO, the mid-roll had brought in an outside CEO, Adam Sachs. I believe he's still the CEO of the company. And then just a couple weeks ago, the other shoe drops. So, one of the issues, which again, we'll get into, that's been holding the podcasting industry back, again, relative to how much usage and engagement it has as a media platform with, with people and users out there, the amount of advertising spend in it is the, all pillars of the, the platform are basically completely

• 12:43David Rosenthal?

  divorced from one another. So you have the way people listen to and consume, the user experience, consume podcasts via clients or streaming over websites. That's completely divorced from where the podcasts are hosted, where the media is hosted, and that is also completely divorced from the advertising model.

• 13:01Ben Gilbert?

  Yeah. Well, as a quick aside, why don't I give kind of what our stack and process looks like, so people get a sense. And, and this is not unusual. I mean, these parts are swapped in and out, but they are, they're rarely consolidated. Just to start the whole process, .fm domain names are expensive. So you're not going out and getting, you know, an $8 GoDaddy. So you drop 100 bucks on picking up your, your .fm domain, domain name, because that's,

• 13:24Speaker 00

  It's the hotness these days. So you're, you need some way to have a consumer facing website. So we have, we have Squarespace for that. So Squarespace generates our RSS feed and gives us a public facing site. Now, the way that we deliver podcasts over almost any client is by submitting that RSS feed to the iTunes directory. Now iTunes doesn't host anything. They merely have a URL pointing at your RSS feed, which they scan about once a day unless you manually force it. And then they update their directory with where your MP3s are hosted. Now, we need a place to host MP3s. A lot of people use SoundCloud. A lot of people will use something like Podtrack.

• 14:09Speaker 00

  For a while, we were actually hosting them on Squarespace, but you don't get a lot of analytics that way. So then you need a hosting service. So we use Libsyn for that, who's actually been really great. So you pay for a hosting service to host your MP3s, which your RSS feed points.

• 14:23David Rosenthal?

  Yeah. So now we've got, we've got, just to get this, this podcast in the, in the ears of you dear listeners, we have to go through three companies.

• 14:32Speaker 00

  Yep. So then it's in iTunes. And there's a player that ships with, with iOS, obviously, that, or you can use iTunes on the desktop that, that points at the iTunes directory, but it's made available for others to point to also. So Overcast, or Pocket Casts, or there is a variety of players that a lot of you are listening to, mostly on your iOS devices, over 80% on iOS devices. And again, that's completely decoupled from all the other pieces of the ecosystem. So at the end of the day, if you're advertising on a podcast, all you really know is that your name and company was mentioned at an MP3 that got shipped down to potentially an unknown number of people using an unknown number of platforms, and you don't even know if they heard it.

• 15:16David Rosenthal?

  Yeah. And compare and contrast that to Other technology-enabled media platforms like Medium for blogging, or Facebook, which we've talked about a bunch, or Twitter, or Instagram, all of those, the consumption of the content by users, the hosting of the content for the content producers, and the advertising platform are all very tightly coupled into one product.

• 15:40Speaker 00

  Yep, yep. And in fact, it's the reason that those industries, the incredible measurement and the very tight coupling of all those components are the reason why those became dominant advertising platform. I mean, for direct response ads especially, but even brand advertising requires an amount of measurement beyond what's available in podcasting right now.

• 16:03David Rosenthal?

  Yeah, I mean, if somebody were to come along and like, give Ben and me a boatload of money to read their advertisements on our show, we basically could tell them nothing about what happened with that.

• 16:14Speaker 00

  We actually, is this a good time? Should we share what our numbers look like here?

• 16:18David Rosenthal?

  Yeah, yeah, let's do that and then we'll pick the story back up.

• 16:20Speaker 00

  Cool. So here's what we could tell them. We could tell them, I'm looking at our LinkedIn episode, two episodes ago, that we have about 6,400 listeners, which is, you know, unique IPs that have downloaded the URL. We are non-representative. Most of the time, 60 to 70% or higher of listens are going to come through Apple's iOS player. We actually have of that, what'd I say, 6,400? About 4,100 come from Pocket Casts, since they were kind enough to feature us on the homepage. So a lot of you are probably listening through the Pocket Casts app. About 1,000 from Apple, 297 from Mark Arment's Overcast,

• 17:04Speaker 00

  and then trickling on down from there through various browsers of people listening on the website. But we basically could tell them a little bit about geography. You know, we can tell them the IP addresses and cities that people are coming from and the clients. But we have no idea how many people actually got to that point in the episode.

• 17:23David Rosenthal?

  That's one of the critical pieces. We can't tell them how many of you actually heard what we would be being paid to say.

• 17:30Speaker 00

  Right. And everybody, you know, you hear those promo codes in a lot of podcasts that give you that nice 10% off. That is literally the only way that the advertiser has to attribute to that channel. So a lot of the times, you know, you might hear an ad for Squarespace and you go to Squarespace and you sign up, but you don't type in the code. That that never ends up getting attributed to that podcast.

• 17:54David Rosenthal?

  The loop doesn't get closed and then. So, so you get a little bit of the picture of some of the challenges with the industry. So scripts actually, and other people have tried this before, but scripts actually is really brilliant here. Like they see, there's a huge arbitrage right now between the user listener numbers and engagement on podcasts as a whole medium and the complete cluster that is the state of any kind of advertising or analytics analytics on the platform. And so the way you, the only way you can solve this is to own the full stack and bring it together.

• 18:29Speaker 00

  You know, one way to own any sort of advertising on the backend would be to be the hosting and to be the analytics, but you couldn't do the measurement unless you have the the frontend too. So on the web, you could run JavaScript and understand, you know, has an ad been served? Are people clicking it? How long has it been on site? How long has it been showing? Anyway, in a, in a podcast, you'd need to get a player that had a pretty serious market share in order to actually, you know, understand impressions or do anything fancy around, you know, during this part of the podcast, there's going to be something popping up. And if you want to tap that button, it'll take you directly to the site. So you don't have to remember to type it in later.

• 19:09David Rosenthal?

  Or even just passively to know, just like on Instagram, like, did somebody actually see this picture of this app?

• 19:16Speaker 00

  Right.

• 19:16David Rosenthal?

  So a couple of weeks ago, the other shoe drops and scripts acquires a company called Stitcher. We'd say, we suspect many of you know about it and might be listening to us on Stitcher, but our analytics tell us there is one of you.

• 19:32Speaker 00

  Thank you, Jenny.

• 19:34David Rosenthal?

  Jenny is my wife. She loves Stitcher. So Stitcher is a podcast client for mobile devices. And it was kind of.

• 19:45David Rosenthal?

  An interesting story. It was founded in 2008 by three guys Noah Shank, Peter Deverode, and Mike Gaffrey. And just like now, in 2008, podcasts were also experiencing a torrid growth pace. And Stitcher managed to raise quite a bit of venture money to go after this vision of creating, creating the front door, the aggregated user experience client to become the dominant podcast, podcasting client. So they raised about $25 million over three rounds, first from New Atlantic Ventures, and then from Benchmark, and then from NEA.

• 20:26David Rosenthal?

  And unfortunately, it didn't work. So in 2014, about the same time that Midroll was getting launched, Stitcher actually ends up getting acquired by the French music streaming company Deezer, the sort of Spotify competitor. And that didn't work out too great either. It sort of languishes within, within Deezer. And then last month, Scripps bought Stitcher back from Deezer. And we don't know how much Deezer acquired it for, but we do know it was an aqua hire, so probably not much. And so Scripps buys Stitcher for the princely sum of $4.5 million in cash.

• 21:05Speaker 00

  Yeah, that's...

• 21:07David Rosenthal?

  So this is a company that had raised $25 million as a venture-backed startup, failed, been aqua hired by another venture-backed startup, and then now is being bought by Scripps for $4.5 million.

• 21:20Speaker 00

  Yeah. And so, you know, the, the strategy makes a lot of sense. All of a sudden, you're coupling the ability to really turn on the ad sales funnel with, with Midroll, with the ability to have a front-end client that you could instrument and do some creative things around to do, do advertising. At the end of the day, iOS is still the dominant platform that people listen to their podcasts on, and it ships with a podcast client. So the challenge ahead is to be able to figure out a way to make Stitcher appealing to people, that they would actually go and seek out another way to listen to podcasts rather than use the built-in Apple one.

• 21:57David Rosenthal?

  And again, like Scripps gets this. Like, this is the play that you would run if you want to actually unlock the value in the podcasting ecosystem. So Adam Sisman, who's the chief digital officer at Scripps, who led the acquisition, he was quoted in the press release as basically saying just what Ben said. You know, "We certainly have the ad sales force and the connections that make us a leader in the space, but today we depend almost exclusively on distribution into other channels. This puts in place with a very strong brand," arguably with Stitcher, "a very strong brand, another piece of the puzzle in the ecosystem play."

• 22:31Speaker 00

  Yeah, I'm just gonna throw out, I don't know if it's a bias, or if it's a, well, whatever. I think Stitcher is garbage. Like, every time I open the thing, it is, is...

• 22:39David Rosenthal?

  Yeah, so let's get into why Stitcher is garbage. So the, um, the tech industry, and especially the corner of the tech industry that is concerned with podcasts, or have podcasts of their own, basically like erupted in and outcry when this happens. John Gruber, who hosts the talk show, which might be the largest, most influential technology podcast, he wrote a blog post saying, "Midroll owning Stitcher is not good for the podcast ecosystem. Stitcher is popular, but my show is not on Stitcher because Stitcher re-hosts the audio, compresses it to hell, and unless you opt out, inserts their own, inserts their own ads. That's not how podcasting is supposed to work. I firmly believe podcasting should be open like the web."

• 23:22Speaker 00

  Yeah, so Gruber is a grumpy old man on this one. I mean, I think that there's a lot of things where I don't believe that the user experience delivered by, by Stitcher is very good, and I don't think the fact that they're compressing the audios is great. You know, you wanna let podcasters kind of have creative freedom on that. I think the way they currently deliver ads is kind of garbagey. The list goes on. However, is publishing worse than it was when you had to purchase your own rack mounted web server and install your own blogging software? Like, are we in a place where if somebody creates the blogger, or Medium, or the worst

• 24:05Speaker 00

  case scenario on everyone's mind is the Facebook, yeah, of podcasting, is the world worse? I think there's a very valuable business to be made there, and I think you can provide potentially podcasting to more people than here today because you can come up with a real sustainable business around it. There's definitely some sacrifices that would have to be made there, because I think that ultimately it would be a programmatic ad network with, you know, a full bidding system the way that AdWords is, or the way that Facebook ads are. And, you know, maybe that upsets a lot of people and changes the way that it works a little bit, but I think it makes podcasting a more sustainable business.

• 24:43David Rosenthal?

  Yes, I totally agree. I completely agree. Gruber's being a grumpy old man here. The problem isn't what Stitcher is doing, it's that they're doing a really crappy job of it. And like, the parallels here, and I actually, I completely agree. I think the opportunity is huge to create, as terrified as Gruber and Ben Thompson, you know, another one of our folks we talk about on the show a lot, he has a blog post about this on Strategery and talks about it on his podcast, which is excellent, exponent, that he does with James Allworth. They're terrified of the Facebook-ization of podcasts, but the difference between Facebook and Stitcher is, like we talked about in the Instant Articles episode, Facebook cares

• 25:27David Rosenthal?

  a lot about the user experience and about making things beautiful. And the analogy is exact between Instant Articles, where they're taking content that publishers have created, they're re-hosting it within Facebook, and then they are serving ads that they are inserting into it, and then sharing that ad revenue with the publishers. It's the exact same dynamics. The difference is, Facebook acquired Push Pop Press to do this very, very beautifully, and Stitcher is a piece of crap.

• 25:59Speaker 00

  Yeah, and Stitcher's under new management now, so I'm very curious if Midroll... Midroll strikes me as a very... Very tasteful company and you know, Midroll might do really good things with Stitcher. I worry about it in its current state, but.

• 26:14David Rosenthal?

  The question is, there are a bunch of questions that we'll dive into. The first question is, what can Stitcher become as part of Midroll and as part of scripts? And that's interesting, you know, talking about in the context of our show. We've never really seen something like this, at least on our show, go successfully before. We're acquiring a product that, you know, again, we're hating on Stitcher here. Apologies to all of the one Stitcher fans listening to us. But you know, we've never really seen it, a product be acquired that isn't fundamentally like a good product. And then so they're sort of like betting on hope here.

• 26:52Speaker 00

  LinkedIn.

• 26:54David Rosenthal?

  Okay. Well, that was a little different. But, but you know, like that isn't like a technology company with a great team behind it. And the capability within the company to at least deliver, you know, the minimum viable product. Here they're, they're, it's a small subscale technology company that's part of an old school media company. Acquiring another vastly subscale technology company. And what they need to do is build an incredible technology-enabled user interface.

• 27:23Speaker 00

  Yeah. And have we seen an example? I don't think we've done an example on the show yet where a company does. Actually, I take that back. We sort of saw it with Office, but that where I was going is a company does multiple acquisitions and sort of combines them in a kind of a classic conglomerate way to build a new product from combining existing ones. And the, the example I'm thinking of there is, is with the Accomplice acquisition, building Sunrise Calendar into Accomplice. But we, you know, we have yet to see if that is a product success or market success yet.

• 27:56David Rosenthal?

  Yep. Yep. Well, and they were, you know, the difference there too, is like the parent company acquiring them all was Microsoft. And you know, you can say whatever you want about Microsoft, but they're a lot more, their technology chops are a lot better than scripts.

• 28:09Speaker 00

  Yeah, for sure.

• 28:10David Rosenthal?

  So we're, uh, we're obviously biased by being part of the startup ecosystem, but I'm.

• 28:17David Rosenthal?

  I'm very excited to see what entrepreneurs come up with with new de novo businesses to tackle this problem.

• 28:24Speaker 00

  Yeah. And so, you know, we're talking about all the weird forces at play in podcasting right now and kind of the weirdness of the ecosystem. There's sort of secret meetings going on with Apple and and some of the bigger, bigger publishers and existing podcasters to understand, you know, should we make this something where it's actually a monetizable platform and they own the ecosystem top to bottom. And one of the things that's sort of playing into that, why the reason everyone's making a big deal is because the cost per thousand impressions or the CPMs that podcasting commands, at least right now, and maybe attributable to the audience that it has, being a very high value audience, but they have $100 CPMs.

• 29:06Speaker 00

  And for anyone in sort of advertising or who's done online advertising.

• 29:12David Rosenthal?

  It's pretty unreal.

• 29:12Speaker 00

  Yeah, the the average YouTube CPM in 2014 was $14. Web display ads can get anywhere from $10, $5, you know, podcasting is like total breakout. And you know, that's, that's the ceiling with $100 CPMs. And I think for this show, we'd be somewhere between 25 and $50. But the people that are making their living as sort of independent podcasters right now are doing great.

• 29:35David Rosenthal?

  Doing great. If you have an audience and you're an independent podcaster, you can do great.

• 29:41Speaker 00

  Yep. And actually, Ben Thompson makes a good case a while ago, before The Ringer started, about how Bill Simmons could move to solely podcasting, how it's much more economical, actually, if you're a writer, but you're also someone who could do a show, to write for free and publish that as your lead gen and then monetize your podcast audience.

• 30:02Ben Gilbert?

  All right, listeners, now is a great time to thank our longtime friend of the show, ServiceNow. If you are running a large enterprise, AI agents are likely spread across every team and deploying them is no longer the hard part.

• 30:16David Rosenthal?

  Yeah, the hard part is knowing what permissions they have, what employees are using them for, or what decisions AI is making. AI security for an enterprise at scale is not a small concern. Like, the risks are real.

• 30:30Speaker 00

  Exactly. And the challenge with AI is governing it, securing it, measuring it, and making sure that it actually delivers value. That is why ServiceNow built the AI control tower.

• 30:40David Rosenthal?

  Yep. AI Control Tower gives enterprises a single place to see, manage, govern, and optimize AI across the entire business. And it works with any AI, not just theirs. Every device on your network, every permission across every system, every AI agent, visible and secure in one place.

• 30:57Speaker 00

  And ServiceNow can do this because they've spent more than 20 years building the operational backbone of the enterprise. The workflows, governance, approvals, security controls, and institutional knowledge that power how work actually gets done across IT, HR, customer service, finance, and security.

• 31:14David Rosenthal?

  ServiceNow already runs more than 100 billion workflows annually and trillions of transactions for more than 85% of the Fortune 500. So when companies need a place to govern AI at enterprise scale, they're building on a platform at the center of how their business already operates.

• 31:30Speaker 00

  And in a future that isn't going to be one AI, it's going to be thousands of AI agents working across every function of the company. But the question is, who's managing them all?

• 31:39David Rosenthal?

  So if you're trying to turn AI ambition into real business outcomes and make it work safely, securely, at scale, go check out servicenow.com/acquired and tell them that Ben and David sent you. All right, let's, um, let's maybe jump into acquisition category.

• 31:54Speaker 00

  Yeah.

• 31:56David Rosenthal?

  So, I mean, I think it's pretty clear here. This is a product acquisition that is getting rolled into this suite of products.

• 32:02Speaker 00

  Yep, yep, gotta be. If they can daisy chain these things together correctly, there's a bunch of money to be made. I think, um, I think it involves having exclusive content. It's hard for me to imagine a reason to go download a podcast player to play. Well, it's hard for me to imagine going and downloading Stitcher to listen to content that I could get otherwise. But if it became sort of a Netflix type thing where they're producing original content and signing exclusive artists and, you know, maybe it doesn't quite use that model where I'm paying a subscription fee, but it does use the model where I have to be listening on the very place where I can be advertised to, then they might be able to create a real business there.

• 32:39David Rosenthal?

  Yeah. And this is Very explicitly, they've said so. This is their plan. And so, Midroll was already had two pieces of the ecosystem together with the Content Network and the Advertising Network. In a news article, in an interview after the acquisition of Stitcher, you know, this kind of came that Midroll has just come out with a new premium service called Howl, which offers original shows and ad-free archives of popular podcasts. So they're clearly moving into this kind of Netflix-type category. And they interviewed the president of the VP of Business Development at Midroll, Eric Dine, and they say, and he says, clearly, at some point, the two will intersect.

• 33:21Speaker 00

  Yeah. Yeah, yeah. Okay, moving on to, do you want to do what would have happened otherwise?

• 33:26David Rosenthal?

  Yeah. I mean, I think in this case, like, this is sort of the first real splash that's been made of somebody trying to do the obvious and bring the three pillars of this medium together. So I think, I think otherwise, like, we would just continue to drift.

• 33:43Speaker 00

  Yeah. Stitcher continues to languish. Midroll continues to grow incrementally and is able to sell to, you know, the, sell ads to some of the big, but not network-big podcasts. And we continue to see a lack of consolidation and no money go to podcasting.

• 34:01David Rosenthal?

  Yep. And what's interesting in the, this is almost the, like, not what would have happened otherwise, but what will happen now. I do wonder if this is like the shot across the bow that wakes up some folks in the entrepreneurial and startup community to realize, man, there's a big opportunity here and build, or attempt to build, you know, what Stitcher tried to in the beginning.

• 34:23Speaker 00

  Yeah. David, it feels like you're teeing me up a little bit. We, we actually gave this a go at Pioneer Square Labs, and we were really interested in podcasting just based on the growth trajectory of the amount of people that have started listening to podcasts in the last couple of years. It's still not a huge number of people, but the growth rate's really good. And One of the reasons, I mean, for all the reasons on this show that we've already talked about, we shied away from it, where you know, it's, there's only, you know, 30 to 40 million dollars spent a year on it. You can't really stick your toe out with an MVP. You have to be the hosting, the analytics. You really have to have a client out there and your client has to have some reason to be better than Apple's client, because you know, shipping with the platform is a huge

• 35:08Speaker 00

  advantage. There was one thing that we really wanted to do, and that was dynamic ad insertion, so that we could sell ads programmatically. And one thing that we felt was super important was for the host to be able to read the ads, because that's been one of the things that commands the really high CPMs in the world today. And one way that we were going to do that is have the host go through and record ahead of time, the ad reads, and then we could insert in the host's own voice anywhere throughout the audio. That's cool. The ads. So, we started, you know, looking at this and we started figuring out, okay, cool, we can make like pretend MP3 URLs and dynamically generate those episodes with the

• 35:53Speaker 00

  appropriate ad for that person at the moment that it gets downloaded by their podcast client and send it specifically to them. We started looking around, there really are some, some people tackling this right now. There's a company called Acast that's doing dynamic ad insertion. And actually, just recently, Panoply launched a company called Megaphone, or I guess a product called megaphone.fm. And they also are doing the dynamic ad insertion. They've got this cool UI where if you're a, an advertiser or a host, you can go in and, select the spots where you want to insert the ad. So, you know, some people are making runs at this. I continue to think that you need to be able to show, show real measurement from the, the client side. But who knows, maybe, maybe something crazy will change

• 36:37Speaker 00

  and Apple have an API to plug into for that. You know, they're, they're suddenly not averse to.

• 36:44David Rosenthal?

  Services revenue?

• 36:45Speaker 00

  Well, yeah, and, and an advertising model as we're seeing with changes in the App Store. And if they can find a way that continues to ensure user privacy, but makes podcasting more valuable, maybe we'll see a way for Apple to open up reporting of, of podcasts to advertisers. I don't know.

• 37:03David Rosenthal?

  Yeah. Two things I want to, I want to mention, one just mention real quick. I feel like we haven't quite sharply pointed out yet. The other dynamic that's really interesting in this industry is Apple. I mean, Apple like created this medium or it was created around Apple.

• 37:20Speaker 00

  Yeah.

• 37:20David Rosenthal?

  They're still the dominant player, but they don't care about it at all.

• 37:23Speaker 00

  It's funny. They just, they, they sort of inherited it too. People were creating podcasts and sending them around ad hoc and they were, people were putting them on their iPods. And then finally, Apple put a podcast section of the iTunes Music Store, which was just a directory and not a hosting service for people to do this. And it's so funny that it's still, you know, even called podcasting, right? Like, nobody has an iPod anymore. And the Apple's just like accidentally had this nascent huge opportunity unfold that they're really not taking advantage of because it's really not an Apple type business.

• 37:56David Rosenthal?

  Yep.

• 37:56Speaker 00

  You know, it's their, Apple classically sells hardware and makes a profit on that hardware and then has software and services to differentiate that experience. And that doesn't sound like what this is at all. But in this new kind of shifting Apple, maybe we'll see this, but my, my bet would still be on Apple letting it.

• 38:13David Rosenthal?

  No, and it also, you know, I want to bring up one thing that we thought about, I've thought about, you know, before and in preparing for this show is like, I bet a lot of listeners are saying, well, well, hey, I mean, like what you guys are talking about already exists. It's called SoundCloud. And like, that's true to a certain extent, but I think, I think SoundCloud and Apple both like, they're very focused on music. I actually just right before we started recording the show, went through the, for some reason, my old SoundCloud account got deleted or something and I went through the onboarding process.

• 38:46Speaker 00

  It's Twitter's investment.

• 38:47David Rosenthal?

  Twitter's investment. And, and, and through the onboarding process, like it's super clear that SoundCloud is about music and that they're pushing people to music, not to podcasting. And, and same with Apple, you know, they're invested, they bought Beats. Maybe we'll cover that in a future show, you know, and redid Apple Music. They're investing a lot in that. But nobody is really doing this, you know, I think you, if you're going to build a really great. Client and consumer experience, like it has to be about podcasts.

• 39:18Speaker 00

  Yeah. Agreed.

• 39:20David Rosenthal?

  Second thing I wanted to mention real quick, you know, Ben, this is a great example, since you were talking about PSL. Like, I'm curious, I bet a lot of our listeners are curious, like, what's your process at PSL? Like, how did you guys, when you were diving into podcasts, like, what did you do to validate the market? Like, how did you look at this?

• 39:36Speaker 00

  Yeah, so a lot of the times, we start with a space that we think is interesting. And that's what we did here. And I really, you know, I'm kind of the guy that buys all of our, our ads on social and search. And in sort of knowing exactly how that world works, it was kind of like blindly obvious to me, like, wait a minute. If I want to buy ads on a podcast, I have to do what? Like manually get in touch with someone at midroll and, you know, there's a minimum spend.

• 40:07David Rosenthal?

  Directly.

• 40:08Speaker 00

  Yeah, it's, it's a, you know, it's a completely immature market. And so we started pushing on that opportunity and trying to figure out, okay, what would it look like if, if we actually pursued this? So we do two things, we do kind of a top down and a bottom up. And from a top down, you know, we look at what is the market today? And what market forces do we think will make, you know, what, what does it look like in five or 10 years? And obviously that's a guess, but we try and make that an educated guess. And we look at things like, you know, and this, Apple could be either a big risk or potentially make this a lot easier. And it, it would be all about timing. So we look at sort of that top down of, okay, how much, how much money could this business really make?

• 40:53Speaker 00

  What's a TAM there? And then we do a bottom up. And I think that if we were a VC firm, we would, we would kind of just do the top down. And if I was an entrepreneur, we would just do the bottom up. But since we're sort of both, you know, that the kind of startup studio is responsible for both sides of the house in the early stages, deciding whether to go after the opportunity and actually doing some of the building. Once it kind of passes that sniff test of this could be a big business, which this one didn't, then we start really validating, can we acquire customers? For significantly less than the lifetime customer value, you know, building as lightweight of stuff as we could. And we really couldn't think of a good way to lightweight test this because again, you'd have to be the the host, the analytics provider, ship the client, get client adoption. It's a years, years long process.

• 41:38Speaker 00

  And it could be an interesting business, just not one that we could do in sort of a a short, early validation timeframe.

• 41:46David Rosenthal?

  Which again, kind of brings us back to this dilemma. And we know we'll see what happens with this set of acquisitions from scripts. But this dilemma that the industry's in where like, it's kind of hard to just start a company to fix this, like to just start Facebook, you know, or just start Instagram. You have to do a lot more heavy lifting than they did upfront. And you have to contend with these players like Apple that are hugely dominant in the industry, but a really complex set of motivations.

• 42:18Speaker 00

  Right, right. You would have to have a lot of confidence there to make a big investment in this that Apple wasn't going to flip some switch because it seems like while it's not in their wheelhouse, huge risk to your business.

• 42:28David Rosenthal?

  Yeah. At the same time, like there is like, let's be clear, like as a VC, I believe, and you probably believe too, Ben, like the numbers don't lie. Like there's a massive opportunity here.

• 42:38Speaker 00

  Yeah, something will happen in podcasting. It's not totally clear how it'll shake out. And the our big question ingrained in this one is do we think it's going to be these guys?

• 42:46David Rosenthal?

  Yeah.

• 42:47Ben Gilbert?

  All right, listeners. Now is a great time to talk about a new partner of ours here on Acquired, Logora, the agentic operating system that is redefining how the world's best legal teams work.

• 43:00David Rosenthal?

  Yep, it's sort of obvious that AI is going to completely change the legal industry. I bet most of you listening have dropped a contract into some sort of AI chatbot out there. Logora took that insight and asked the question, what if you really built something with that power from the ground up for the legal industry?

• 43:17Ben Gilbert?

  So the founders did exactly what great founders do, operate with obsessive customer focus. They embedded inside a massive law firm for months. They sat with the lawyers just watching how the work really gets done.

• 43:32David Rosenthal?

  And that's how you get features that customers love like tabular review, where you drop in a folder of hundreds of contracts and it pulls every key term into a grid a lawyer can actually work with. Legora's bet here is interesting. Since it lets each lawyer handle more complexity, any given person can increase the quality of their work and do higher value work. And this means that the pie can grow even as each individual task takes less time.

• 43:55Ben Gilbert?

  And they recently launched Legora Agent, offering greater intelligence and performance. The agent lets lawyers set an objective. Then it can handle the planning and the execution and delivery of the final product. Legal teams get to maintain full control and transparency since they're still involved where judgment is required.

• 44:14David Rosenthal?

  And Legora works where you already work. You can use it within Microsoft Word while redlining or drafting. The early Legora numbers essentially speak for themselves. When they have a head-to-head pilot with their top competitor, they win 70% of the time. Legora now has over 100,000 lawyers on the platform from 1,200 legal teams in 50 countries. And crazily, they went from 1 million to 100 million in ARR in about 18 months.

• 44:45Ben Gilbert?

  Truly insane numbers. And that is the real test. Plenty of things demo well, but the question is whether a busy associate actually reaches for it during crunch time, or whether a partner trusts it before going into a conversation with a major client. If your legal team wants to check it out, whether you're a law firm or you're in-house at a company, you can learn more at legora.com/acquired and just tell them that Ben and David sent you.

• 45:10David Rosenthal?

  Let's move on to tech themes and cover that. So I feel like we were dancing around this a little bit in talking about how the kind of the distribution of the audience and listeners is across the industry and different podcasts. My tech theme is the power law. And we see this in so many areas of tech, whether it's the App Store and that the top 10 apps are responsible for. Whatever, you know, X 70% or whatever of downloads, you know. And it's the same thing here in the, in the podcasting industry. So Ben, you had some stats on this. I think, was it that the top 10 podcasts are responsible for 40% of listeners in the entire industry?

• 45:47Speaker 00

  Uh, it's the, yeah, the top 10 publishers. Because those top 10 publishers, NPR, This American Life, those sorts, WKYC, I believe, or WNYC. I think WKYC is Cleveland. WNYC, they have, uh, you know, a big portfolio of podcasts and they're sort of just the, the parent publisher. But yeah, the, the top 10 are responsible for 40%.

• 46:11David Rosenthal?

  So, you know, again, here's another, you know, puzzle you have to unlock to, um, to win this industry is you need those top 10 publishers to be on your platform because they represent, you know, by far, or, you know, the top 100 publishers. They represent by far the majority of the market.

• 46:30Speaker 00

  Yeah. Yeah. My, um, my theme is it's really hard to compete with the platform defaults. And, you know, Apple ships a podcast app, even before that, they, they bundled podcasts into iTunes, I believe it's iTunes on, on the phone. And, um, you know, there's, that, that gets someone 90% of the way there. And are they actually going to go the extra mile and go look for a different podcast app? And are they going to look for yours? And is, is yours differentiated enough? And, you know, I think premium content might be the way to do it. But, you know, businesses have won, sometimes even illegally over the years, because they were able to bundle with the platform.

• 47:13Speaker 00

  And you look at how IE achieved dominance on Windows or, um, yeah. Being shipped with the platform is a very clear way to win. And actually, that's, uh, in the, the mobile world, pre iPhone. You know, it was a really difficult to install those Java apps on your flip phone. And the way that those companies used to actually get their, their games and apps distributed was bundling. Because if it's on the platform, it's going to get used.

• 47:41David Rosenthal?

  And you know, it's interesting like the I'm thinking about the blogging space and you know, Google acquired Blogger. And you could argue that that's an example of the platform, Google owning Blogger, owning the owning, having an unfair distribution of the distribution channel owning the platform. But Blogger never had the kind of market share that iTunes does, that Apple does with podcasting.

• 48:08Speaker 00

  Yeah, that's true.

• 48:11David Rosenthal?

  All right.

• 48:11Speaker 00

  Do you want to grade it?

• 48:12David Rosenthal?

  Should we bring this one home?

• 48:14Speaker 00

  Yeah, so I think we should grade them separately. Look at, look at Midroll and then Stitcher. At least that's how I want to break mine down.

• 48:19David Rosenthal?

  I like that.

• 48:20Speaker 00

  Midroll, while, while it is a better company, is really, they're really taking a flyer on spending 50 million on that thing. Their revenues right now are, I think, like one and a half to two million a year. And you, you really got to believe that there's going to be like a, a big change in the way that you can stick these businesses together to make that change meaningfully. And were I a betting man, I'd bet against them. So I'm going to-

• 48:49David Rosenthal?

  On the other hand, though, you know, in defense of Midroll, they do have, you know, they are the, the advertising network for some of the biggest podcasts, which as we were saying, was, was one of the keys to unlocking this.

• 49:03Speaker 00

  Sure, sure. I still don't know if it's 50 million. Like, I don't know. I, this is to me, a old media company that has money lying around, sees their cash pile shrinking, and is concerned about the future and-

• 49:18David Rosenthal?

  And seize the opportunity in podcasts.

• 49:20Speaker 00

  Seize the opportunity, but 50 million dollars for someone that makes, you know, two million a year?

• 49:26David Rosenthal?

  How much did Facebook acquire Push Pop Press for? We don't know, but a lot less than that.

• 49:31Speaker 00

  Yeah, yeah, yeah. Midroll's a D for me. Of the two companies, Midroll is definitely my favorite, but God, that's a high price tag. Stitcher-

• 49:43Speaker 00

  Could they have bought anything else? I mean, like if there's another podcast client out there, I guess Stitcher already has this ad pipeline built in that they wouldn't have to sort of do themselves. But to me, you know, just pointing Midroll's ad sales at Stitcher, I have more faith in that as sort of a small business than I do of them executing the large opportunity of creating the top to bottom ecosystem successfully. So I'd say, you know, I'd go a B on the Stitcher acquisition just because they've already got Midroll and they can, they can, you know, point those ads into Stitcher and I'm sure make some money out of it and get their four and a half million out. But I don't think they're going to pull this big shebang off.

• 50:30David Rosenthal?

  Yeah, the whole, the whole rodeo. Yeah, I think I'm with you. Looking at them separately, you know, I mean, one of the things with Midroll, I'm not going to be as harsh as you, really, even though the company was founded in 2010, like Midroll only started two years ago. So, you know, yes, like that was a very healthy multiple, whatever their revenue was, like it was a healthy multiple that they paid for it. But I'm sure it's growing very quickly. And if they can get, start to get some of the big, big publishers and represent them, maybe there's more to it, you know? I'm not incredibly bullish, but I'd give it maybe a C plus, B minus.

• 51:15David Rosenthal?

  Now, you know, again, the real issue is TAM, right? Like the whole key to this is you have to unlock the TAM, the total addressable market, and you have to do that through an integrated platform, which brings us to Stitcher, right? And we have been hating on Stitcher in this with, probably with good cause in this episode. But again, like, you know, what you were just saying, Ben, I think is interesting. Like who else were they going to buy? Or like, what were they going to do? They knew they had to have a client. And you know, this is scripts that we're talking about and midroll, while you know, great company and a podcasting company, it's not a tech company, it's an ad network. And it's like a low tech ad network, like spoken word, you know, this is a people business,

• 51:57David Rosenthal?

  not a tech business. So they didn't have anybody that they could build this internally. And then who are they going to buy? Like, they're not going to buy Overcast, which I use and love, you know, that's

• 52:06Speaker 00

  It's great.

• 52:06David Rosenthal?

  Margot Armin, it's great. He's not, no way he's going to sell this to anybody, let alone to scripts.

• 52:10Speaker 00

  How many, I wonder how many users

• 52:12David Rosenthal?

  Well, that's what I'm getting to.

• 52:13Speaker 00

  Pocket Cast has.

• 52:14David Rosenthal?

  Oh, Pocket Cast. Oh, I don't know. Pocket Cast could have been a potential one, but Stitcher, for all of its problems, and we don't know how engaged these users are, but they had 8 million registered users. Now, I bet a lot of those were last users. But if you do the math, they paid $4.5 million for 8 million registered users. So they paid just over 50 cents per registered user.

• 52:35Speaker 00

  Yeah.

• 52:36David Rosenthal?

  You know, if, if, big if here, they can magically hire some great people to come in and actually build a really good user experience here, like, that's fairly cheap for like, a pretty big head start. Again, I don't think they're going to pull this off. So I'd give that a B. You know, it's not terrible. They didn't spend much money on Stitcher. But I'm handicapping the odds of this success at low. But again, if they pull it off, right, they're going to look brilliant, right? Like, if they can pull it off. I don't think they will. They will spend, you know, $54.5 million to win this category. I don't think they're going to pull it off.

• 53:15Speaker 00

  Yeah. Hey, I also just figured out in looking at Crunchbase to see if Shifty Jelly, the awesomely named parent company behind Pocket Casts, if they'd raised any money, and according to Crunchbase, they haven't, but they are a, an Australian-based company. So that explains our Australian listeners.

• 53:35David Rosenthal?

  Ah, very cool. Shout out Down Under. Yeah, if you know anything about Pocket Casts, hit us up in the Slack community or by email. We'd love to chat about it. Okay, should we move on to follow-ups?

• 53:48Speaker 00

  I think it's time.

• 53:49David Rosenthal?

  Time. All right. Three quick but super interesting follow-ups this week. First, Twitch, going way back to one of our earlier episodes. We talked a lot in the episode about the massive volume of transactions that are going through the Twitch platform in tipping, which for those that are Unfamiliar with tipping or did not listen to the episode, go back and listen to it. I think it was one of our really, one of our best early episodes. It's raw, but, but it was good. So tipping is very raw. It's this amazing phenomenon on Twitch where people will just give other people money. So like if you're streaming on Twitch and for a variety of reasons, but your audience will just give you money. It's called tipping.

• 54:32David Rosenthal?

  And when Amazon acquired Twitch a couple of years ago, all of this was just happening off the platform through overlays and screen overlays that broadcasters would use, could use Bitcoin or PayPal or stuff to do this. They've now brought this onto the platform and they just launched it with a feature called cheering on Twitch. And, and it uses a virtual currency called bits and super interesting. This is gonna potentially unlock a massive revenue potential for Twitch, the company that was already happening in the ecosystem. And, and also want to give a tip of the hat to our Slack community member, James Kay, who brought this to our attention in the, in the Slack group. I had not seen it. So that's one. Two, follow up to Facebook Instant Articles, Paper, RIP.

• 55:18Speaker 00

  Oh, man. It was the best iOS app ever, period, hands down. That was so good.

• 55:24David Rosenthal?

  High praise from Ben. Facebook Paper is being shut down sadly, but the spirit lives on in Instant Articles within the main, within the main app. So.

• 55:35Speaker 00

  If you've never experienced Paper, you have until the end of July to rush out, download it, play with it.

• 55:40David Rosenthal?

  Yeah. So pour one out this weekend for, for Facebook Paper. And then, and then lastly, super interesting, we posted this in the Slack community. The SEC filing for LinkedIn detailing all of the ins and outs and blow by blow of the acquisition process came out and it is super interesting. So we'll link to this in the show notes and it's also in the Slack group. But turns out there were actually five parties involved in bidding for LinkedIn. So Microsoft, obviously, and then, you know, everybody assumed, you know, and we speculated on the show that Salesforce, it's now come out, Salesforce was heavily involved in the acquisition, but there were three others. Two have been identified as Google and Facebook.

• 56:22David Rosenthal?

  The Facebook story is pretty interesting, apparently, assuming that Facebook is the party that is referred to in the filing. Reid Hoffman had a meeting with the CEO of the company, of Party D, or whoever it was, Mark Zuckerberg, and said, hey, you know, there's actually this acquisition process for LinkedIn going on, like, would Facebook be interested in? And Zuckerberg was like, no.

• 56:48David Rosenthal?

  So that was not a involved process with Facebook. But Google apparently went pretty far down the path. And then so did the mysterious Party C. Nobody knows who Party C is, but they also spent a lot of time looking at LinkedIn. The other interesting thing in this filing is the bidding war. So the first bids, the first bid that Microsoft put in for LinkedIn was $160 a share. And if folks might remember, the deal got done at 196. And so what happened, and I think that was about $5 billion worth of value, that's the difference there. And so it turns out, so Salesforce and Microsoft were bidding against each other, started at 160, deal was on track to happen.

• 57:32David Rosenthal?

  Microsoft had won it at 182 per share. The merger agreement was being negotiated, everything was going along. And then Salesforce, or Party A, as it's referred to in the filing, just comes in over the top after, after having essentially pulled out with a $200 per share bid, kind of out of nowhere. But the bid was not all cash, it was mostly stock. And so that kind of threw the process, threw a big wrench in the process. The whole deal with Microsoft had to get renegotiated and ended up getting done at 196, all cash.

• 58:05Speaker 00

  Wow. Great move, Salesforce.

• 58:07David Rosenthal?

  Yeah. I hope that Reid Hoffman and Jeff Weiner wrote a, sent a really nice bottle of wine to Marc Benioff after that.

• 58:17Speaker 00

  And will now compete against him.

• 58:19David Rosenthal?

  Yes.

• 58:21Speaker 00

  Should we do the carve out?

• 58:23David Rosenthal?

  Let's do it.

• 58:24Speaker 00

  All right, nice. I have a quickie this week. We've actually, it's funny, we mentioned The Ringer or twice already on this podcast, and the Ringer itself has been my carve out the week that it launched. But my carve out this week is one of my favorite writers of all time announced this week that he will be starting at The Ringer, and that is Mark Titus.

• 58:42David Rosenthal?

  Cool.

• 58:43Speaker 00

  Mark is a fellow Ohio State alum who was known, or still is known, it's his Twitter handle as Club Trillion, and it's the most awesome name of all time because Mark would ride the bench and would get put in for one minute per game. So his stat line read 1-0-0-0-0-0. And so he started this blog called Club Trillion while he was at Ohio State with the tagline "Views From The End Of The Bench." And he became this phenomenal sports writing personality, and he's just hilarious to follow on Twitter. And he wrote, I think he wrote for Grantland, actually, when Bill Simmons was there. So really excited to see Mark's writing come

• 59:28Speaker 00

  back to life at The Ringer.

• 59:30David Rosenthal?

  That's awesome. I love that. Was he there when you were there?

• 59:33Speaker 00

  He was, yeah. I'd get to watch his few seconds a game when they'd throw him in.

• 59:37David Rosenthal?

  That's awesome. My carve out for the week is actually a concept, a management tool, self-management or of your teams, that probably a lot of you are familiar with called OKRs, Objectives And Key Results. And I bring it up because it's, we just passed the midway point in the year, so I was doing my mid-year sort of self-review and check-in. I've been using OKRs for a couple of years. They're really great. So the idea, there's a cool history behind it. Google uses OKRs, and they were introduced to Google when they were still a tiny startup by John Doerr from Kleiner Perkins, who was on their board. And so there's a great, we'll link to it in the show notes, Rick Klau, who's a partner at

• 1:00:18David Rosenthal?

  Google Ventures and had been at Google and YouTube before that, gives a great kind of hour-long kind of overview about how The the objective and goal setting process works at Google. It's really good. I just use it myself, but it also is great for teams. And the idea is that you set a small, finite number of objectives for yourself in any period. And an objective is a high level thing like so. One of mine is, you know, help my portfolio companies. And then you set KRs or key results under each objective. And the and the key results have to be smart. So specific, measurable, actionable, realistic and time bounded. I think that's it anyway. But so like one like one I have is spend at least 15 hours per quarter

• 1:01:01David Rosenthal?

  face to face with each founder of each portfolio company I work with. So like, has to be super clear. Did you hit this yes or no at the end of the quarter? Anyway, it's a great system. The concept is you should really stretch yourself and achieve half or less of your key results. But anyway, shout out to to OKRs.

• 1:01:20Ben Gilbert?

  Awesome.

• 1:01:21David Rosenthal?

  All right, listeners. Now is a great time to talk about one of our favorite companies, Statsig.

• 1:01:27Ben Gilbert?

  Yes, there is a reason why the best product teams rely on Statsig, whether they are iterating on their core product features or shipping AI powered experiences at scale.

• 1:01:38David Rosenthal?

  Yep. In the crazy speed of today's AI world, shipping fast is just table stakes now. It's basically trivial to build and deploy your app constantly. The real advantage is how quickly you learn what changes actually created value for customers and how fast you can use that signal to guide what you ship next.

• 1:01:58Ben Gilbert?

  This is where Statsig comes in. It brings experimentation, feature flags and product analytics into one unified system. So teams can ship safely, test rigorously and directly link what they changed to how users actually behaved.

• 1:02:11David Rosenthal?

  So if you want to make learning your competitive advantage, whether you're building new AI experiences or just evolving your existing core product, go to statsig.com/ acquired to get started.

• 1:02:22Ben Gilbert?

  Well, that about does it. If if you aren't currently subscribed and would like to hear more, you can subscribe from your favorite podcast client. And if you feel so inclined, we'd love a review on iTunes or to tell your friends on Twitter or Facebook, too. Thanks so much for joining us.

• 1:02:36David Rosenthal?

  Till next time.

• 1:02:37Ben Gilbert?

  Till next time.

• 1:02:41Speaker 03

  Is it you, is it you, is it you? Who got the truth now? Huh?