Morning Brew Daily
Can Skims Rescue Nike? & Meta Reveals Globe-Spanning Undersea Cable
Wed, 19 Feb 2025
Episode 522: Neal and Toby discuss the Delta Air Lines plane crash and look into how the plane design may have contributed to the survival of all passengers. Then, Nike’s sales have been slumping, so it’s turned to Kim Kardashian’s Skims to give its business a jolt. Also, Meta announces plans to build an undersea cable across the globe to expand its connectivity. Meanwhile, Toby examines how OpenTable is becoming the one spot to make reservations to hot spots in NYC. Finally, a roundup of the biggest headlines from the day. LinkedIn will even give you a $100 credit on your next campaign so you can try it yourself. Go to LinkedIn.com/MBD Terms and conditions apply. Only on LinkedIn ads. Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Check out https://linkedin.com/MBD for more! Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: How did everyone survive the Delta Airlines crash in Toronto?
Then a move over, Michael Jordan. Kim Kardashian is Nike's newest partner. It's Wednesday, February 19th. Let's ride.
Remember that asteroid they found that has a very small chance of hitting Earth seven years from now? That very small chance is now a small chance. Yesterday, NASA upgraded the probability of a collision by 2032 to 3.1%, or 1 in 32, up from just 1% in January. It's the highest probability given to an asteroid strike since 2004. If If this thing does impact Earth, still a remote possibility.
It could wipe out a city. The asteroid would make impact at 38,000 miles per hour with the equivalent of around 8 million tons of TNT or about 500 times the power of the atomic bomb dropped on Hiroshima. 3.1%, Toby, it keeps climbing.
Geez, Neil, get the heart rates going early in the morning just to put that 3% in perspective. If we were playing poker, Earth currently has aces, the asteroid has the 4-5 of spades, and the flop is ace, 8-9, no spades. So yes, technically... A 6 and a 7 could come out next to give the Asteroid a backdoor straight, but more than likely the set of aces is going to win.
That being said, Tom Brady and the Patriots did come back from 28-3 down when the Falcons had a 99.8% chance of winning based on ESPN's win probability chart. Leicester City did win the Premier League at 5,000-1 odds, which is a 0.02% chance. So, stranger things have happened. Now a word from our sponsor, LinkedIn Ads.
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Chapter 2: How can Kim Kardashian's Skims help Nike's sales?
That being said, though, while all this is happening, while we're seeing just an increased amount of air incidences, you do see the FAA under scrutiny right now for trimming its workforce. And then the other aspect, too, is that SpaceX, Elon Musk's startup, is also coming in trying to look at how to overhaul the FAA's air traffic control systems.
People are seeing that as a conflict of interest, but SpaceX is saying we're trying to modernize these programs. They've been far too heavily leaned on. They haven't been staffed up properly. They're working with outdated technology. So that is just kind of the background context to these accidents that we have been seeing pop up.
And those accidents, I mean, there's been four this year already in United States and Toronto's just across the border. January 29th, that American Airlines regional jet collided with a U.S. Army helicopter, killing 67 people on both aircraft. And then a few days later, there's a medevac plane that crashed in northeast Philadelphia, killing seven people.
And then on February 6th, there was a plane crash in Alaska, killing 10 people. So this is the fourth you know, major incident. So, you know, obviously amazing, remarkable, very thankful that no one, no one ended up dead on this particular crash, but it's certainly been a spooky few months for air travel.
Kim Kardashian is here to save Nike. No, she can't suddenly win a dunk contest or have a VO2 max in the mid-60s, but she does have stretchy, affordable, and fashionable leggings that Nike wants a piece of. Yesterday, this sportswear giant that has been going through a bit of a rough patch recently announced a rare fashion collab with Kim's brand, Skims, called Nike Skims.
The combo marks the first time that Nike has ever joined with an outside existing company to introduce a new brand. The team-up will be geared less towards the everyday wear that Skims currently offers and more towards those sweaty hit sessions or Pilates classes that you drag yourself out of bed for in the morning.
The goal is to position Nike to be more competitive in the active wear category that has been taken over by the likes of Lululemon and Aloe. Nike's struggles are well documented at this point. It reported an 8% drop in sales in its most recent quarter and recently bought its first Super Bowl commercial in 27 years as it tries to regain its mojo.
This collab seems like a step in the right direction, Neil.
I think you missed one word in your intro, Toby. Women. This is absolutely key for Nike to get more customers as women. Right now, 40% of its client base is women. Most apparel brands want that to be way over 50% because women shop more, they spend more money. So if you're an apparel brand and you're seeing 40-60 breakdown and 40 is women, that's not in a position where you want to be.
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Chapter 3: What is Meta's plan for the undersea cable project?
Looks like maybe they could... exit at some point. Kim Kardashian wants to get paid out. She owns 5% of the company. Maybe it's leading to an acquisition by Nike or another company by getting the strategic partner on board, or it's an IPO. We could see a Skims IPO. The leadership team has hinted at it a little bit.
So there's perhaps an end game in sight by getting Nike on board and doing this particular brand partnership with them and saying, look, we've made it. We are a mature company. Now it's time to take that next step.
Chapter 4: Why are undersea cables important for internet connectivity?
Yeah, Skims was valued at $4 billion in 2023. I would imagine after inking this partnership, it's going to be worth a little bit more.
SpongeBob and Squidward are about to get a new neighbor, Mark Zuckerberg. On Friday, Meta announced plans to build the world's longest underwater cable, a 31,000-mile project that aims to connect the U.S., India, South Africa, and other regions across five continents. For context, 31,000 miles of cable is long, longer than the Earth's circumference. Why is Meta building a cable under the sea?
Because that is the foundation of the modern internet. For all the images you might have of cyberspace and digital ones and zeros, there are actual physical cables crisscrossing the globe, think a really long ethernet cord, that allow you to log on. An estimated 95% of the world's internet traffic flows through these undersea data superhighways.
For years, telecom companies built these cables in partnership with tech firms, but that power dynamic has shifted Now it's big tech that's in charge. And this initiative called Project Waterworth is the first subsea cable project Meta is developing on its own without any outside help. Toby, the only thing getting in Zuck's way now is bikini bottom zoning laws.
Meta wants more control over how it kind of manages its own services because TechCrunch found that Meta accounted for 10% of all fix and 22% of all mobile web traffic across the world. You guys are scrolling on Instagram way too much. I know, it truly is. I mean, there are billions and billions of users, so that figure does make sense, especially the mobile figure.
So, of course, it wants more control over how that traffic is being ferried undersea across these cables. But there's a lot of issues with undersea cables, let's be honest. One, there's a lot of damage that can happen. It's the bottom of the ocean. It's a very unforgiving place. But also, geopolitics comes into play a lot more than you'd expect.
We already saw Red Sea cables cut last year by Houthi rebels, and then also the European officials have said Russia's been sabotaging our cables. Taiwan has said similar things about China damaging its undersea cables. So Meta has thought about this. They're trying to get around those issues by, one, maximizing the amount of cables that they lay in.
into deep waters, and we're talking really deep waters, 7,000 meters deep. And they also think that they've cooked up some new burial techniques that they hope will reduce the faults in high-risk areas, whether it's high risk just from ocean geography or high risk from geopolitics. So they think they've thought of everything, but still a lot of cable stretching a lot of miles.
Yeah, undersea cables have become a vulnerability for tech companies, for countries, and they've become flashpoints in geopolitical arenas. I mean, if you look at Tonga, this was not a geopolitical sabotage per se, but Tonga is this island in the Pacific that was hit with this massive underwater volcanic eruption and an ensuing tsunami in 2022.
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