 Facebook, Amazon, Google, and Apple. These companies are taking over the world here now as NYU Stern Professor Scott Galloway. Professor, full disclosure, I was a student at NYU Stern. Good to see you again. Yeah, good to see you. You wrote a book about these companies called The Four. We have the cover up right there. Which of these companies has the most staying power in your view? So the company that you would argue is turning into the one who's performing the best right now, I think is clearly Amazon. If you look at where Amazon is budding up or budding heads against the other three, it's winning everywhere it touches them. So in search where it competes against Google, 44% share of product led searches in 2015. By 2016, Amazon had a 55% share. Where it competes against Google and Facebook for digital marketing dollars from brands and big advertisers. Amazon Media Group is now growing faster than Facebook or Google. It's a billion and a half in revenue. Triple the size of Snap and creeping up on Twitter. So it's becoming a real contender in the world for digital marketing. And then in computer hardware, it butts up against Apple. The most innovative product of 2015 and 2016 wasn't the Apple Watch or the Apple Pods. It was the Amazon Echo. And then you go on and on, whether it's the cloud fastest growing business and technology with the fattest margins. Amazon has troubled the market share of the number two Microsoft. So everywhere that Amazon is bumping in to another player in the big four, you probably could fairly say it's winning. Why does Amazon have so many sort of non-core businesses? And which of Amazon's businesses are you most excited about? Is it the cloud? Is it now Whole Foods? So Amazon gets to play unfair. Amazon can now borrow money at a lower interest rate than China. And they've been able to change the compact between investors and companies in that they have replaced profits with vision and growth. And as a result, they arguably have access to the cheapest capital in the history of modern business. So the war analogy is at the end of World War II the Germans had better tanks, better officers, but we had 38 gallons of gasoline for every one they had. Amazon is the business that shows up with 38 gallons of gasoline. So they can go into original content and overnight be the number two spender just behind Netflix who increased their original content budget to $2 billion when they heard Amazon's footsteps. So the business I would say I'm most excited about if I were an Amazon shareholder is they now have license to go into the wealthiest refrigerators in America with their purchase of Whole Foods. I think this is gonna be to Amazon what Instagram was to Facebook. I think this is gonna be the best acquisition in the last 20 years in retail. Really, so where does Amazon though go next? Right now they're disrupting grocery. Are there other categories that you're watching? Sure, I think the two areas would be, well three, fulfillment, some very boring non-romantic acquisitions that just take their 20 mile, warehouses that are within 20 miles of 45% of US households, which is misleading because it's probably 80% of disposable income and they build out that infrastructure. But in terms of name brands or more like headline grabbing acquisitions or things they're gonna go after, I think Amazon could go after the closet. They've had trouble getting official distribution from aspirational beauty brands, the L'Oreal, the Estee Lauders or fashion brands, the LVMHs. The logical acquisition or next acquisition for them would be Nordstrom. Because Nordstrom has distribution with those players, is in Seattle, does a fantastic job, very strong online and has bricks and mortar, which by the way is the new black again. A great way to increase your online sales is to open physical outlets, which can oftentimes as Whole Foods will be, be these really well-lit warehouses that give someone a footprint and access to a refrigerator or a closet. So Nordstrom and then the kind of the more, I would say the more dark horse, but just as interesting is that Amazon could begin buying some broadcast cable networks to ramp up their content offering. Because these companies- Some big name ones? Well, an AMC, a Scripps, something like that, because these companies have been beaten down because their advertising-supported businesses don't make sense. But Amazon can monetize these assets in a different way with their access to 60% of US households vis-a-vis prime. So Cable's not dead? Oh, no, Cable's still- Advertising-supported cable, I would say, is in structural decline. But content that resonates with consumers, delivered via cable is still, I think, very strong. Content, if content can increase, if you can buy Mad Men, increase intensity across your prime membership, such that you can sell more paper towels, I think Amazon can monetize it more. And a dollar to Amazon is worth more to Amazon than anybody else because they're playing with cheaper capital. And just quickly, before we move on to some of the other stocks, why does Amazon get a pass from Wall Street? They can go years, decades, without making any money, and investors keep bidding up the stock. That's the most impressive thing about Amazon. People say, well, what is their core confidence? Is it operations? Is it data? Amazon's core confidence is storytelling. And the letter that Jeff Bezos sent to his investors in 1997 about investing across three core areas that are non-perishable and making massive investments was his really compelling vision that he has stayed true to and that they execute against every day. And as a result, their stock keeps getting bid up. So they're effectively fighting on fare with cheaper capital and can try 10 things for every three things the other tech companies can try and every one thing an old economy firm can try. If you play Texas Hold and Poker, at some point when you have the most chips, you can muscle everyone else out of the game. That's Amazon. Again, they're the business with 38 gallons of gasoline. Yeah, it's a good analogy. Let's talk about Google coming under pressure from EU regulators. Same thing with Facebook, though here in the US, lawmakers slamming Facebook over those Russia ads. It seems like big government could be the biggest threat to both Alphabet and Facebook. Would you agree with that? Yeah, the only thing I believe sending in the way of them in a trillion dollar market capitalization given the momentum both those companies have is Washington or Brussels or themselves, if you will. And that is the perception that they're not a good citizen. Regulation is coming. The mother of all fines is coming, but it's not gonna come from where we think it's gonna come from. It's gonna come from Europe. Just as other great wars have usually started or ignited on the continent of Europe, the war against big tech is gonna break out in continental Europe. It'll be Marguerite Vestiger, who's arguably the only regulator in the world whose testicles have descended and is leavening real fines on the big four. She's the only one that's kind of levy these multi-billion dollar fines. And it makes sense. America registers tremendous benefit from these companies in terms of wealth creation. They recruit from my class. The real estate in Palo Alto goes up. There's hospital wings. There are university buildings named after Facebook and Google millionaires. Europe registers much of the downside, the privacy, the job destruction without nearly, without a fraction of the upside. The mother of all fines is gonna come out of Europe. So are US regulators too afraid of some of these tech companies? Yeah, and they also, nobody wants it. The fastest way to put on mom jeans and look 10 or 15 years older is for a regulator to go after one of the big four and pretend that they don't get it, right? The typical congressman as a man in his 50s or 60s who was an insurance salesman who doesn't wanna be seen as not getting it. In addition, the collective IQ around technology and the current administration is no match for the big four. If the White House or the current administration were to go after the big four, that would be a repeat of Mayweather versus McGregor and that is the redhead would get the crap kicked out of him. They do not have the firepower to go after these companies. At the state level it might happen. You might see a state's district attorney who feels that the fastest way to the governor's mansion is to create a populist argument against one or all of these companies. But the mother of all regulation and fines, again, is gonna come out of Europe. Well, we certainly have seen President Trump go after some of these tech companies on Twitter. I wanna ask you about Apple though. What does Apple look like in 10 years? Is the iPhone still king? Is there something else? Apple arguably has the most staying power because its brand just has such a religious fervor to it. And it's been around the longest. And I think there's a built-in reverence and affection for Apple that gives them real staying power. So I don't know what the products will be. I don't know if we'll be using phones in 10 years if it moves on to something else. But Apple's gonna have the most license to go into different categories because of just the sheer affection it has. Having said that, more people in 10 years will likely have a relationship with Amazon Prime than with cable. So more people have Prime than cable. But Apple, all four of these companies will be around in 10 years. And I doubt any of them will be around in 50. Facebook, Alphabet, Amazon, Apple. Which one gets to a trillion dollars first? Apple is the closest. Yeah, so in my view, the fastest, the one that has the bus, the blue line path through a trillion dollars right now is Amazon. Amazon, in my view, and I don't know this, will start something called Prime Squared that says to consumers with artificial intelligence, your purchase history, our fulfillment network, we're gonna start sending you stuff before you know you want it. Zero-click ordering. And you manicure it using this thing in your house that's voice sensitive called Alexa. And you'll say Alexa, different type of beef, Stella Artois, Lagunitas IPA, barbecue for eight people, three quotes for auto insurance for a 2014 Toyota Camry. They'll run a test. They'll show they can take prime households from $1,300 a year to $7,000. The stock will be anti-gravity and we'll have our first trillion dollar market cap company. Well, Wall Street will love that. Finally, in the book, you talk about career advice. Obviously, as a professor, you're working with students all the time. You say don't follow your passion, but follow your talent. What's the difference? So when someone shows up at a lunchtime speech or on TV and tells you, urges you to follow your passion, it means they're already rich. And typically they got wealthy doing something most people would not argue as a true passion. Your job as a young person is to find something you're great at and then invest massively and become the best in the world at it. And the recognition psychologically, emotionally, and financially in the accoutrements of success, then you will become passionate about it. The best tax attorneys in the world didn't grow up passionate about tax law. They grew up passionate about being great at something so they could have a bigger house and meet with people better looking than them. Everyone's passionate about that. Success is intoxicating. Find something you're good at and don't be the best at it. Be the only one in the world who does it. Follow what you're good at. So boring is sexy. It's not boring if you're great at it. Scott Galloway, the book is The Four. Thank you so much for joining us. Thanks for your time. All right, I'm Scott Gamm and you're watching The Street.