BROADCASTS.com

b"

Matt Cost of the firm\\u2019s U.S. Internet team shares his key takeaways from the 2024 Morgan Stanley Technology, Media & Telecom Conference, including the online ad market\\u2019s rebound and the future of property tech.  

----- Transcript -----

Welcome to Thoughts on the Market. I\\u2019m Matt Cost, from the Morgan Stanley US Internet team.

Along with my colleagues bringing you a variety of perspectives, today I\\u2019ll talk about some key trends that emerged in conversations with internet companies at Morgan Stanley\\u2019s 2024 Technology Media and Telecom Conference in San Francisco.

It\\u2019s Monday, Mar 11th at 8am in New York.

So, we had a busy four days at the conference last week. It was our biggest gathering yet for what\\u2019s really the marquee TMT event of the year. And we brought together companies and investors from all over the world for keynotes and meetings and a lot of moments in between to connect with industry insiders about the latest trends in their space.

I want to start with talking about AI. It was a big topic for almost every company we saw. But I\\u2019d say that for me, the video game companies stood out the most. Some C-suite executives that we spoke to talked about how their companies could become up to 30 per cent more efficient, as they leverage new AI tools to build and operate their games. But they also talked about the need to reinvest those efficiencies to make sure their products are the biggest, the best, and the most competitive they can be.

This is against a video game market backdrop that remains more mixed though we did hear about some green shoots in mobile games; since there are a number of newly launched games there that are getting good traction \\u2013 which is actually something we haven\\u2019t seen in a few years at this point. On the M&A front, after a wave of game industry consolidation we\\u2019ve seen over the past few years, we did hear companies acknowledge that scale matters more than ever \\u2013 if you want to compete in this space.

When it comes to the advertising companies, it\\u2019s clear that we\\u2019ve seen a marked improvement in the health of the online ad markets since October and November of [20]23, but there are still pockets of strength and weakness, particularly for smaller players where competition is the most intense.

We\\u2019re also seeing a major focus on privacy, which has been a long-term trend in the space. But in the near term, the industry does expect browser cookies to go away later this year. And investors are trying to decide who that might hurt \\u2013 and in some cases who it might potentially help. And when it comes to AI in the ad space, we\\u2019ve heard a mostly positive story about the potential for more personalized and better targeted ads in the future.

Finally on the property tech side. Despite the fact that the residential real estate market is still pretty subdued in the US, many players in the space feel that two years into higher mortgage rates, they have leaner business models that set them up well to benefit when the market does come back. We also heard greater confidence from companies that they don\\u2019t expect to see major disruption from the ongoing legal disputes around real estate broker commissions. But that does remain one of the uncertainties in the space that investors are the most focused on into 2024 and beyond.

For more on the Morgan Stanley TMT conference, check out the episode tomorrow, where my colleagues will dive deeper into thematic takeaways from this year's event.

Thanks for listening. If you enjoy the show, please leave us a review wherever you listen. And share Thoughts on the Market with a friend or colleague today.