Why Amazon Blocked Meta Muse (and Google Should Be Worried)

Episode Transcript

Chris 00:00:00
Welcome to another episode of Growing Ecommerce. Today we are going to be talking about Meta Muse, and also Dots, Grok-Bot, and AI Mode. Do they still have a place here? What’s going on with AI assistants, and how does this all connect back to ecommerce? Go.

Mike 00:00:19
Not as present. No, not at all, really. I completely agree. But yeah, he called it off. Well, I have to say, at least he was wearing something like a nerdy t-shirt that said “Building is my love language” or something. It’s like, okay, at least he’s not doing the chains, the Gen Z curls, the tan, and stuff.

Chris 00:00:49
He’s looking a bit more like yourself. Yeah, he was somewhere in between. So I mean, from what we read and talked about before, it seems to be a great product.

Mike 00:01:03
Well, by the time… it was launched about a month ago, I guess, in the US.

Mike 00:01:09
US only, yeah. Also, I think they’ll move to other markets as fast as they can. They debuted at the number four spot in the Apple App Store, and within days they were in the number one spot. They’ve been there ever since, which is insane. It got over 5 million users, which is right now trending faster than ChatGPT did, which is a massive statement.

Chris 00:01:40
Yeah, for sure. But by the way, not that big of a surprise because that’s what they’re good at, right? They have an installed client base and know how to distribute the product. So not a big surprise. But can you maybe shed some light on what Meta Muse is? Because when I first looked at it, it took me a while. Also based on the conversations we had, this might be a super disruptive thing. Could you explain at a high level what this thing is?

Mike 00:01:59
Sure. So, you know, we talked in the past that consumers don’t know or care what an agent is. You’re going to lose 90% of the market when you start talking about agents.

Mike 00:02:18
But everyone understands what an assistant is, and this is the way they are really packaging an agentic tool in a very consumer-friendly way, even with a cute mascot. Maybe we can talk about that later.

Chris 00:02:40
That’s the thing, right? The mascots.

Mike 00:02:42
Yeah, it’s a thing right now for sure. I feel like they all use the same focus group, or maybe they all just asked AI how they should market these things and AI gave them all the same answer. But what it is, primarily, it uses a model called Muse Spark and it is a virtual machine. It’s basically using an automated browser, but it’s not using a browser on your computer. This is happening in the cloud.

Chris 00:03:05
Which is very smart, because I wouldn’t let this anywhere near my actual browser or physical hardware for safety reasons. A great move.

Mike 00:03:12
Yeah. And this remains to be seen if we’re right or wrong about this, but I personally think that AI operating machines is not the way that this will all unfold. I think that there can and should be pipes like we see with UCP. But the fact is, AIs are getting much faster and more accurate at operating browsers, and there are now these virtual environments where the risks are much smaller. And so this use case is taking off.

Chris 00:03:31
All right. Before we talk about potential impacts on, let’s say, the home turf, which is digital advertising space, maybe let me ask high level: What is the scope of Meta Muse? Because you dropped the, by the way, way more powerful name from a marketing perspective: assistant compared to an agent. Yeah, when I hear agent, I’m always thinking about The Matrix first, right? But with assistant, what scope are we talking about here? How capable is this Meta Muse assistant?

Mike 00:04:06
Well, yeah, the scope and capability might be two different things, but it’s very broad. You can do things like connect it to your calendar, connect it to your email, connect whatever you want to it. And really, the more things you connect to it, in theory, the better the decisions.

Chris 00:04:26
Yeah, it’s not just reading, it’s also executing.

Mike 00:04:48
Yeah, exactly. So book a table at a restaurant, book my flight or whatever. Yeah, this has been a viral use case. You can tell it to research flights for you or hotels, and you can have it do things too. People find use cases like: “My flight was delayed an hour, I don’t want to deal with customer service, go secure a refund or rebook for me.”

Chris 00:05:12
Yeah, so a hell of a broad scope. And you’re right, between scope and capabilities, sometimes there’s a big difference. What is, Mike, since it’s US-only and you are massively into the network which is already using it, what’s the initial feedback? The stock got an upgrade. I think the feedback in general was very positive, but on a use-case level, what’s the feedback?

Mike 00:05:34
Yeah, so I haven’t personally… I’m here in Europe and I haven’t personally set up a VPN to go do all this stuff. I’m happy right now to just sit and wait. But I see the classic mix of hype and naysayers right now. There are people saying it did all these amazing things for them, like saving them a ton of money on their insurance or whatever, which could well be true. I also upload PDFs of terms and conditions — like when I was shopping for insurance earlier this year, I used AI to help me out with that.

Mike 00:05:53
But other people will say, “I asked it to find me a taxi with certain criteria under a certain price range, and it just gave me completely wrong information,” or “I asked it to research flights or hotels and it returned completely wrong information.” I saw a reviewer from the Wall Street Journal who was using this try some of these email use cases and stuff like that, and every session had at least one grave error.

Mike 00:06:18
So this does reinforce my tendency toward why I think things like UCP are valuable. Because to bring this back around to ecommerce, you can also use it for shopping.

Chris 00:06:52
Yes, and there it’s utilizing UCP under the hood, which might give it way more structure and way more grounded data. The quality of the output will probably be sharper at the end of the day. By the way, before we jump to that question, because this is what I’m super interested in: What does it do to the major competitors with regards to the ads universe — Google, ChatGPT, maybe Microsoft, and Amazon of course? But just for the sake of transparency, since the launch date, I think it was September 8th…

Chris 00:07:21
The stock grew roughly 27%. So yeah, I think they see something, and I think what Wall Street Journal analysts see is that it might be a massive shift in the ads environment if they execute on the vision. Because ultimately, this can also be the one-stop shop for me as an end consumer to do my shopping.

Chris 00:07:41
Yeah, it could be. And if it’s using the Muse app… you told me the revenue model will be ads. So the app is free, and ads are the revenue model. If I were Google, this would be somehow alarming, right?

Mike 00:08:15
Yeah, for sure. I mean, I think Wall Street is relieved that there’s a strategy in place and they’re like, “Oh, they’re actually doing something with this CapEx that makes sense.” The capital expenditures make sense. As we said, they know how to make a product, and they have distribution. If you’re using Instagram in the US, there are huge banner ads or features for Muse and all kinds of stuff they’re pushing.

Mike 00:08:40
But it does open up questions competitively. If we think of both the shopping side, the ecommerce side, and the advertising side, on both of these fronts… You know, Amazon, one of the first things they did within days was start blocking it. They sued Perplexity for their browser and said, “Hey, basically this is a violation of our terms of use, and you can’t do that.” But from a business logic standpoint, it makes so much sense because they get attacked on both fronts.

Mike 00:09:10
First off, they want people discovering or at least purchasing products on Amazon. And second off, they want people coming to Amazon so that they can serve ads to those people, not to a virtual machine in the cloud.

Chris 00:09:37
Which will not fall for a cross-sell ad, let’s face it. So from that perspective, Amazon’s move to block that pretty promptly makes a lot of sense. Like you said, the similarity to other cases is imminent.

Chris 00:10:00
Before we talk more about Amazon, for me the bigger question is, from Google’s perspective, this might be a huge threat. We talked about threats before, and some of them didn’t materialize at all because Google is dictating the whole AI disruption game. But this one feels like, hold on: if they really distribute this product and the product performs, there might be something Google has to be worried about.

Mike 00:10:23
Yeah, it certainly makes what’s happening in AI Mode so far look slow and old-fashioned. They basically come in like: “Step to the side, nerds.” You’ve got OpenAI talking about agents, Google talking… Meta really just says: “Step to the side, we’ll show you how consumer marketing works, the cool kid on the block.”

Mike 00:10:42
Yeah, it really feels like that. And I want to talk about the mascot at some point, but AI Mode just doesn’t feel as capable or as forceful as this, somehow.

Chris 00:11:06
You know what? It doesn’t come across as a product. AI Mode… we talked about how powerful it is and how powerfully it was embedded in the ads ecosystem, but ask 100 people on the street using Google every day, “What is AI Mode?” and they probably won’t know. But Meta Muse is a product.

Mike 00:11:29
Yeah, and AI Mode doesn’t even have a website. You have to go to Google and click on the magnifying glass with the star on it, or get an AI overview and expand it into AI Mode. It drives me insane. But again, they face competition on both fronts because they want discovery and purchases to happen in AI Mode. They don’t want people opening up this completely walled-off app and doing stuff there.

Mike 00:11:55
Additionally, earlier you were talking about advertising. So people have asked, “Hey Mark, what’s the revenue model here?” And in so many words, the answer appears to be ads. A lot of people in ecommerce are actually getting excited about that because they think, “Oh, I need a place to serve more ads.”

Chris 00:12:14
Yeah, and that’s the major threat, right? From the ads perspective, if this is going to be a surface where people are spending time and expressing a lot of intent, it’s just like ChatGPT if intent lives there. But it’s much more capable than ChatGPT currently.

Mike 00:12:38
That’s what I want to say, because if you compare the starting positions, ChatGPT has a massive installed user base, and so does Meta. The big difference is I think Meta is way more capable of building products and building an ads ecosystem. They’ve proven it. They have become probably the number one ads machine on this planet, or at least fighting for the top spot with Google. So if they pull people into this universe and serve ad inventory there…

Mike 00:13:04
Totally. The advertisers are there, the infrastructure is all there, and this just becomes an extension of their owned and operated inventory, just like Google has YouTube. These platforms have proven very effective attacking on owned and operated inventory when they create it. So this will definitely be an add-on to Meta Ads Manager.

Chris 00:13:27
Yeah, and it seems like there’s a chance for incremental revenue. By the way, for all the listeners, we might talk about whether Meta Muse is an owned ad platform or run by… We don’t know as of today, but it seems to be a great thing.

Chris 00:13:45
One last question on mindset, Mike. And I know we briefly touched base on this a couple of days ago. Meta Muse will of course be using the UCP framework for potentially unlimited use cases. UCP is currently expanding to travel and hotel bookings, so that infrastructure could become available. And I’m just asking because we talked about Amazon blocking Meta Muse: If UCP is the technical framework to make Meta Muse even better because of the structure provided by UCP, and Meta Muse uses critical Google functionalities, might there be a case where Google thinks about blocking Meta Muse as well?

Mike 00:14:06
Yeah, okay. I see what you mean. I don’t know what’s going on in that virtual machine. Does it use Google Search? Certainly if people are using Google Calendar and Gmail and telling Muse, “Hey, read my…” That’s what I mean. Yeah, I see what you mean. Maybe Google could try to shut that down, but…

Chris 00:14:28
There’s always risk to that. For me, this is potentially the risk, right? I think it’s more than just losing ad revenue. It’s like: Are people really using Meta Muse end-to-end to a degree that they’re just not on Google anymore in any shape or form?

Mike 00:14:49
Yes, exactly. Because if ads are served there, that could be the vision of Zuck. That’s a scary idea for Google and something they need to evaluate and figure out: How antagonistic can they afford to be? But the adoption is moving really fast.

Mike 00:15:15
Really fast. And again, not to overstate the point, but they know consumer marketing in a way that I’m not convinced OpenAI really gets. I’m not even convinced Google gets this pure B2C flavor that Meta has. You know, there’s Gemini Spark, which was announced at I/O — and it’s funny because Muse Spark seems to have stolen the name — but that’s their 24/7 agent. But again, they’re calling it an agent, not an assistant. It’s very oriented toward nerds and business use cases. Any advantage or head start Google had is just gone now.

Chris 00:15:46
Crazy times we live in.

Chris 00:16:08
Yes. And by the way, do you know who probably suffers the most from it? ChatGPT.

Mike 00:16:15
Yeah, I won’t lose any sleep over that. No, I’m kidding, but that’s the position Meta should be in, to have this revolutionary move. OpenAI did launch Dots a couple of days ago at the time of recording, but that’s the thing: no one is talking about it. Give it time, I guess, but they launched Dots, which is… what a terrible name, I’m sorry. Dots.

Mike 00:16:39
I have to think of those frozen ice cream pellets, Space Dots I think they’re called. And again, this mascot madness — Grok-Bot has a cute little Kirby-type thing, Dots look like little pieces of candy with eyes, and Meta Muse is like a fuzzy Furby from the late 90s.

Chris 00:17:15
Yeah, but this is all part of the effort to consumer-package it.

Mike 00:17:25
Absolutely. But Dots is ChatGPT’s answer, so ChatGPT will not stand silent on this issue. They have Dots, Chris. Dots! You can have all your little dots going and doing your stuff for you. Again, it’s virtual machine-based agentic workflows, and their possible USP here is that people have been building plugins for ChatGPT for years, so they have a library of over 4,000 plugins. That could extend the capability or reliability. Maybe there are things that can be executed more correctly through a plugin rather than browsing a website.

Chris 00:18:30
It could lower hallucinations, right?

Mike 00:18:45
I don’t know, but yeah, what a big move by Meta.

Chris 00:19:01
Before we let them go, I have one more thing, Mike.

Mike 00:19:05
Oh, really? What is it?

Chris 00:19:08
So AI Mode is not standing 100% still either. Shoutout to Google. Native checkout — we’ve talked about this in past episodes of the podcast, but this is basically “Buy on Google” inside of AI Mode. A lot of merchants have been getting emails over the past one or two weeks that this is now up and running, Shopify merchants specifically. It appears to be pretty much a fully plug-and-play thing for Shopify merchants. We did a whole episode about how complicated it is to set this up on bespoke or legacy ecommerce platforms. But mom and dad are not fighting anymore — Shopify and Google have finally delivered something that seems to be pretty plug-and-play here. Now there’s this commerce opt-in inside of Shopify, and this will handle Muse, Microsoft Copilot, Google… it’s all in one place.

Mike 00:20:15
To me, it’s a little too much. I would like more granular controls.

Chris 00:20:22
That’s what I said. I think it’s a great move, but you basically lose control. Literally, it’s an all-in move, right? There’s no control layer.

Mike 00:20:40
Yeah, which is a bit weird. Probably they will be working on that.

Chris 00:21:00
Right now, from my understanding, it is by default enabled for all your products across all of those properties. Before, when we talked about it, it was an opt-in where you had to opt in every single item using a special attribute in your feed called native checkout. I still have to dig more into this, so I don’t want to say something wrong, but I guess Shopify is setting that feed attribute for you automatically. Maybe you can still adjust things, but I’m not 100% sure about it.

Mike 00:22:05
Yeah, maybe a topic for another episode, or what disadvantages it might have to not be part of a native checkout option. But a lot more people are seeing native checkout eligibility working now, so of course they’re pushing this forward.

Chris 00:23:20
Still a great move by Facebook.

Mike 00:23:25
Yeah, I mean, to finish up with that statement: You can never count Zuck out. If this is really working, I think this is classic “move fast and break things” philosophy. We’re seeing it come back right now.

Chris 00:23:40
Stock is doing great as well, so he’s in a good place right now.

Mike 00:23:43
Good for Margaritaville Mark Zuckerberg.

Chris 00:23:44
You don’t like him, do you?

Mike 00:23:45
No, I mean, he’s a weird reptile alien man. He’s a black belt in Jiu-Jitsu, so be careful.

Chris 00:23:50
It’s scary, because he wouldn’t strike you as a guy to be careful with, but I think he can literally rip your arm off.

Mike 00:24:00
I’m very uncomfortable with the idea that Mark Zuckerberg could kick my ass. It’s deeply humiliating to me.

Chris 00:24:06
It’s probably… if it makes it any more bearable for you… Now we ended on a low point again.

Mike 00:24:15
Yes. Yeah. That’s what we love, right? To finish on a low point, on a negative note.

Chris 00:24:20
Ladies and gentlemen, boys and girls: Mark Zuckerberg can kick your ass. And he’s trying very hard to kick Google and Amazon’s as well. So let’s leave it at that. He’s on a roll.

Mike 00:24:25
All right. This has been another episode of Growing Ecommerce brought to you, as always, by Smarter Ecommerce, also known as smec. To learn more, visit us at smarter-ecommerce.com. And as always, please give us a shoutout on LinkedIn or YouTube, or leave us a review or rating — we really appreciate it. Thanks, see you next time.

Chris 00:24:50
See you. Bye-bye.