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tv   Best of Bloomberg Technology  Bloomberg  April 6, 2019 11:00am-12:00pm EDT

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♪ emily: i'm emily chang and this is the "best of bloomberg technology," where we bring you all of our top interviews from this week in tech. coming up, lyft in reverse. shares under pressure post i.p.o. as wall street analysts raise concerns about how fast the ridesharing company can start making money. plus, lifting the curtain at youtube. the video platform faces more controversies. staffers say managers are not listening and the proposal to
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change recommendations and curb conspiracies are being sacrificed for engagement. and twitter co-founder and c.e.o. jack dorsey said rules like europe's gdpr have a positive impact on the tech industry. he speaks in an exclusive interview from toronto. first to our top story. after much fanfare, lyft is losing some steam after going public, falling below its i.p.o. price. among investors' concerns, justifying its evaluation and a timeline for turning a profit, and analysts are striking a cautious tone about the stock with the majority giving it a neutral rating. we discussed the road ahead with jake fuller, managing director at guggenheim securities and bloomberg intelligence's mandeep singh. >> i'm not sure you want to read too much into the short-term trading activity. it is a high multi-story stock. you'd expect to see a little bit of volatility around that. that being said, we did launch with a neutral rating. bottom line for me, you have to look too far out.
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-- look too far out and make big assumptions around things like growth rate, whether or when they can get to a self-driving car future. emily: even when i interviewed the c.e.o., logan green, he said he couldn't give us a date when self-driving cars would be available. you seem to think that the expectations are too high and lyft won't be able to meet those expectations. >> a lot of people were expecting them to trade at the same multiples as the services companies. we don't think that is going to happen. this is still a very rudimentary market. although, it is going to be a disruptive service, but no one knows the long-term profitability potential. it goes to show that we're still in the early stages of this market.
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emily: what do you mike of carl icahn backing out here? the lyft founders own 5% of shares and have almost 50% in voting power. it is not unusual in technology. you see the same thing at facebook. at google. for a company that maybe doesn't have a lot of leverage, what do you make of a big name brand investor backing out? >> i'm not sure we make a lot out of it. he has been in four years. made a lot of money on it. not so surprising. i guess the other question is what about the other large holders? folks like google, fidelity, gm. my guess is those are more long-term holders. to me it would be scary if we saw one of me if we those types leave. emily: lyft investors are backing them up. i sat down with ben horowitz. he is on the board. of course he is biased but he had this to say about what lyft has managed to pull off.
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take a listen. >> all of these founders in silicon valley go, oh, nobody believes in it. everybody had written them off. for them to come back and go from -- i think we were about a 16% share. we're about 39% now. that's an amazing, really thrilling thing. emily: going from 16% to 39% market share in the united states in a matter of years, do you not think that is impressive enough? >> i think it is impressive but it is built on a lot of subsidies. like i said, this market is still rudimentary. when you look at ride hailing and the ancillary services they are offering on the bikes and scooter sites. if you offer subsidies and you know you're burning a lot of cash, you can gain market share. at the end of the day, you have retain the subscribers. you have to show steady upsell. that is much harder.
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i would wait for at least a few quarters to see that steady growth and active riders and rider pricing and stuff like that. >> from my vantage point, the key question here is not what you have done but what you are going to do. profit potential is one of them. you only have four ways to get there. cut driver pay. you can cut incentives that you have been running. you can bring insurance costs down. or you can get self-driving cars. none of those things are immediately obvious. emily: do you have the same concerns about uber even though it is a much bigger business? >> we don't know as much about uber yet. we don't have the public filings. but it is a bit of a different animal. number one it is a market leader. number two, they have a big international business. number three, they have a large food delivery business so a bit of a different story there. emily: number three, they have a large food delivery business
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that they are pouring a lot of money into and they have other bets. lyft pitched itself as focused. uber has a number of bets spread around. does that make lyft a better case than uber? >> one of the things we have to figure out here is what does the financial profile of some of those other businesses look like? we just don't have the details for uber yet. hard to say. the food delivery business stands out. companies like grub hub where the profit margins are quite high. emily: uber has released some financial data for the last several quarters which show that uber's revenue is much bigger than lyft but also losses much bigger than lyft. have you done any preliminary work on how they actually compare? >> they are about five times bigger in revenue and booking
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and you know, it just goes to show that they are obviously diversified, but at the end of the day, their top sideline is drivenr top line more by kind of international growth as well as u.s. growth. it is a very balanced top line whereas lyft is more u.s. focused and lyft has higher takeaways. lyft has take rates of about 28% now and they have grown impressively over the last two years. if i compare them to the online travel guides looking at expedia, they are much better. so it is really for lyft and uber, their take rates are very good. i think that applies to both of them. emily: guggenheim's jake fuller and bloomberg's mandeep singh. just last month, apple held a glitzy star-studded event to announce a slew of new subscription services, but the event prompted more questions than answers.
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while the iphone maker brought in a parade of celebrities to introduce its new tv plus streaming service, the company was light on some key details including pricing and subscription models and it has left investors and analysts questioning just how it plans to compete. dan ives and dallas lawrence joined us monday to weigh in. >> i think the biggest thing we saw on the survey was that a majority of u.s. adults are now streamers and they have a heavy appetite for more than one content provider. on average they use three different content providers for streaming. we use the 15-100 rule. it is interesting how it is similar across. u.s. adults are able to watch, want to watch about 15 channels and they are willing to spend about $100 on cable and also want to watch about 15 streaming channels and spend $100 with a maximum of $24 per subscription. that's about twice what netflix charges. sayingrage consumer is
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we are willing to spend about $100 a month for streaming. we want to own how what that device come with us wherever we go. emily: apple hasn't said how much it is going to cost. i would assume a higher price point wouldn't be good for your models. right? >> i think that is a great point that dallas makes. initially, we see $1 or $2 less than netflix. right now for them it is a market shaker arms race they need to get to. right now, if you look at the event, the big issue is obviously detals. it comes down to then billing themselves more as a distribution platform than original content. spending $1 billion a year relative to the $20 billion that netflix, disney, and amazon are spending. we do believe that a large content acquisition will finally happen at apple in 2019.
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emily: but apple rarely makes big acquisitions. what content acquisition, what kind of acquisition are you looking at? >> the clock struck 12 in our opinion for them. obviously beats the last one in terms of m&a, $3 billion. we look at sony pictures lion's , gate, m.g.m. we talked about cbs viacom as a potential acquisition candidate and the long shot is netflix. right now, when you look at that services business, the $50 billion per year, in our opinion, the evaluation, $450 billion in services, they cannot trip over their shoelaces on services. specifically on the content piece. now they need to put more fuel in the engine from content. we see them do that with m & a. emily: you believe content is
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not necessarily king. the fact that they don't have all the original content in the world is not necessarily a game changer? >> distribution is king. the biggest news apple made is they are moving away from the device and hardware strategy and letting viewers access apple plus on their smart televisions this year. that's game changer for apple to really become the portal through which they are accessing their streaming content or billing their individual skin bundles. emily: apple has to have shows that people want to watch. >> they have a billion subscribers and a billion device. the majority of o.t.t. subscribers are watching more streaming content on their smart phone than they are on the device. as far as content, netflix does not have a single top 10 show. not a single netflix, amazon or google show is in the top 10. the number one show is "friends"
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for which they paid $100 million this year. i think there is a way to get the content but the key is that distribution model. i agree with dan. emily: "friends" reruns are never going to die. what do you think about that? maybe content doesn't matter so much or that apple is so far behind? >> i couldn't agree more with dallas in terms of distribution. it comes down to 1.4 billion active devices, which is why we believe the key here how we get to 100 million potential subscribers over the next three to five years is distribution. that continues to be their position of strength. although content definitely playing from behind the 8 ball , but right now it is going to be distribution first and then content. that is going to be the focus for cook and company. both their backs are against the wall. this is in our opinion going to be the most defining period for cook and apple in the history of the company and right now their future will be defined by their success on services and monetized and install base over the next decade. emily: interesting. dallas, quickly, you also found
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that users have a bit of content fatigue. they are overwhelmed. >> they are overwhelmed with too many choices. disorganized choices. emily: i feel like i spend 30 minutes a night just trying to figure out what to watch. >> i think that is what apple does really well. they organize content in a way that is user friendly. that's what they said at their announcement last week. that was a real key. make sure were -- make sure whatever skin bundle you want, if you want hbo now in that one segment, you have it wrapped up. emily: dan ives and dallas lawrence. coming up, bloomberg technology investigates how youtube let objectionable videos flourish on the site. we'll bring you to key takeaways next. if like bloomberg news, check us out on the radio. you can listen on bloomberg app or or in the u.s. on sirius xm. this is bloomberg. ♪
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emily: a new bloomberg investigation reveals managers
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at google's youtube are not doing everything they can to curb toxic and misleading videos on the platform. staffers tell us instead, it is all about increasing engagement, the primary measures of views, time spent and interactions with online videos. multiple current and former employees say executives and were givenojcicki suggestions how to deal with malicious content. they said they were not to rock the boat. bloomberg tech's mark bergen wrote the piece and joined us on tuesday. >> there is a series of events getting back to maybe 2012 or so. that was when youtube put in an internal goal to get to a billion hours of watch time. they rejiggered their technical infrastructure based on optimizing how long people watch videos. over the years, particularly since the 2016 election, a lot of people bringing up the downsides of that where they are optimized for outrage. you see people on the political fringes going viral on the site.
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what you saw with kids' content, channels like toy freaks, these really aggressive, violent pranks that flourished in part because of the algorithms. -- the algorithms favored the engagements over and over again. emily: so youtube gave us a statement saying our primary focus has been tackling some of the platform's toughest content challenges. we have taken a number of significant steps to prevent the spread of harmful misinformation, improving the experience on youtube bringing , the number of people focused on content issues across google to 10,000 to be able to more quickly and find and remove the violent content. youtube has made some changes. are employees saying it is not enough? >> yeah. in the past few years, they have made a series of changes and fairly radical ones. if you look at them historically. recently they eliminated comments on a lot of videos aimed at kids.
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people at youtube say this is a huge shift. there has been a debate about comments for a long time. he kept comments in tact because they wanted youtube to be a social media platform. the key issue here is that the company has been shifting around for what they call responsible growth. that is a metric where they are using things like user surveys to see how people feel after they watch videos. that is a really tricky thing to deal with. they have not exactly told investors, the public, and a lot of their employees what that looks like. emily: youtube on twitter has released follow-up statement saying susan wojcicki specifically has made this a priority. but in your story, employees are saying that she personally is not making this a priority. what exactly are employees telling you? >> consistently, the thing i have heard for people who worked under susan was not that she does not care about these issues, especially around the
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kids content which was an eye-opening moment for her and her leadership team. the consistency was more paralysis for a number of reasons. whether it is concern about being seen as anti-conservative or the changes they would make to youtube's advertising platform. and the concern that paralysis has led to them stalling inertia. we look at the anti-vaccination, we have new data. the number of videos promoting anti-vaccination, youtube has been aware of it for a long time. there is a series of eventualities where they have become a publicity nightmare and they are forced to take action. they recently started categorizing these videos as what they call borderline content and will no longer be recommended. they have not shared externally if those changes on the recommendation engine, and a lot of the changes that wojcicki has made an impact on their business, their engagement and
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the metrics for the business, employees, and for the company. emily: coming up, it was national equal payday in the united states. we'll tell you how the biggest tech companies made out next. this is bloomberg. ♪
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emily: in the u.s., april 2 is known as equal payday. it is a day to recognize the push, or lack thereof for pay parity among men and women in corporate america. they had the second gender annual pay scorecard of the world's largest companies on pay based on race and gender. this year, the scorecard gave in -- gave an a rating to only one company, citigroup. they also passed out failing grades of the companies -- failing grades to half the companies surveyed. where did the tech land? >> if you recall in january, citigroup was literally the
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first company in the world to reveal its median gender pay gap and its u.s. median racial pay gap. what that means is it did not use an adjusted number, which is what are the disclosures we have gone from company so far. which is equal pay for equal work number. most of those numbers we have seen from companies have been adjusted, they are around 99 cents to parity. if you and i were in the same position, we would make the same is if i was a man and you were a woman. what citigroup did further was to publish their median number. if you take all the men and women, you take the middle person and say what are they making? what is the man making versus the woman? there is a much bigger gap. that is how equal pay is measured in the united states when we talk about equal payday. women are paid $.80 on the dollar. that is the median earning. citigroup, in response to a proposal, came out with this data and stepped up as a leader in really setting the standard.
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emily: not only are they releasing more data and being more transparent, the data looks good? is that what you're saying? natasha: the data does not look great. those median numbers don't look great for most companies. it was a 29% median pay gap as compared to their $.99 equal pay gap. right? for minorities in the u.s., it was $.93 on the dollar. it does not look great, they squeaked out an a. they got 86 out of 100, that they are the only company to receive an a on the scorecard. emily: apple and intel, you gave them a b. you gave several tech companies failing grades. oracle and hp. why? natasha: some of those companies were a or a minuses last year. emily: so they got worse? natasha: no, we added one new criteria. we are ranking across 10 different quantitative factors, it is very transparent. and we added the median racial
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pay gap. that is the statistic that citigroup put out and that no other companies put out. it set a new standard. we added that to the next -- to the mix. some of those companies that were getting a minuses are now getting b's. they have made some improvements. they have the equal pay for equal work numbers. their global coverage of how many employees are reporting on. and the companies that failed, it was half of the list. emily: oracle, hp, marriott, mcdonald's, walmart. why did they fail? natasha: because they are not disclosing. if they are it is because of regulatory mandate in the u.k. some of those companies, like mcdonald's, have to report in the u.k. those numbers look ok, but those are only two out of 10 data points that we are looking for. emily: we are seeing some steam in momentum behind equal pay regulation in the united states. do you think we need laws?
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natasha: i think it has been very slow. it has been more of a ground game. states like new york and california have started to improve their state laws. recently we saw a judge in the u.s. overturn a freeze that had been put on by the trump administration that was going to require companies with over 100 employees to report their gender and racial pay data to the government. that is promising. that is similar to what is happening in europe. a recent study shows that even when companies are referring to the government, they actually improve on -- they narrow the gender pay gap, they hire more women in positions of leadership, and that is where you see the performance benefits. emily: new surveymonkey pullout shows that 50% of men believe that the pay gap, the gender pay
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gap is made up. how do we deal with that when men are still running most of these companies? natasha: i think that is sad. i think there is a lot of misinformation. you can look at it on an equal pay for equal work basis. even in my industry, finance, i'm a financial advisor, the gap for financial advisors for equal pay for equal work is $.62 on the dollar. that is pretty remarkable. even if men and women are being paid the same, there is still a median gap. because there are no opportunities for women and minorities at these companies and there should be. emily: coming up, bring on the regulation so says mark , zuckerberg. we break down the facebook c.e.o.'s plan for the government to set new internet laws. that's next.
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live streaming on twitter. check us out at technology and follow us on tictoc on twitter. this is bloomberg. ♪
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emily: welcome back to the best of bloomberg technology. i am emily chang. back in april last year, mark zuckerberg told congress the writing was on the wall when it comes to policing social media. >> i think it's inevitable that there will be regulation. next is that not that there should not be regulation, but i think you have to be careful but what regulation you put in place. emily: we got some more insight into what he thinks those rules should be. zuckerberg made the call for global regulation from a facebook post. he wrote, i believe it we need
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an active role in regulation, by updating. with freedom for people to express themselves and for entrepreneurs to build new things while protecting society from broader harm. about thiswe talked with two guests. >> the sentiment here is that mark zuckerberg is time to get in front of any rules or regulations that come. it is really in facebook's self-interest to have a strong voice in this discourse. whatever comes, it will have a big impact on facebook. he is calling for new global internet regime. he touches on four key areas. content, about abusive election integrity, that covers political advertising, privacy, called bird data portability, which talks about allowing users to take
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information from one network to another. emily: is this something you support? >> i think it's very silly for zuckerberg to be out there, promoting regulations to fix problems of his business model is causing. he has the power to fix these problems by changing his business model. the targeted advertising business model is the reason why fake news and harmful content is being amplified by facebook's algorithms. this is why it is easier to target on a social media platform. they are able to target us. he can fix these problems. he doesn't need a regulator to fix them for him. emily: there has been a lot of criticism of his plan. we have one lawmaker saying rule number five should be mark zuckerberg doesn't get to make the rules anymore. facebook is under criminal and civil investigation. cannot regulate
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itself, does anyone even want his advice? >> he is not saying facebook should regulate itself. he is saying that it can't. >> i think the criticism around this is's in amount to anything more than just a glorified public relations document that punt off any of the responsibility or criticism. for example, when he talks about harmful content, this is beneficial to facebook. mistakes are going to happen. now, when they happen, they can say we were just following the line. gdpr.her thing is around it has been argued that it actually helps these larger players and smaller players because it is very cumbersome for a small company cap to comply with these roles. and by making this a global standard, it could increase facebook's wherewithal. in addition, some of facebook's behaviors have been counter to
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what they are saying. in toample, back integration with what they are doing with facebook messenger, it actually increases its power over user data and brings into question data privacy and makes it harder for regulations regulators to moderate what is going on. if they are encrypted, they don't have access to what is actually being said. emily: is there a possibility that these things could be helpful here or that facebook could do more to regulate should governments around the world do more to cooperate and regulate facebook? >> i think they will definitely regulate facebook. i think there are other things that could open up competition much more effectively than the data portability he proposes. i also think these half measures will not be affected, like the has not been in
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effective in accomplishing his goal. he is proposing things that he the problemot fix or require facebook a change the way it does its business, and will not impact their profitability, but also just want work. yes, regulators need to get involved, but they don't need to take advice from mark zuckerberg. emily: what will fix the problem? >> i think interoperability would be a big way to allow entry into competition, which would be things like, for example, your verizon wireless phone can communicate with an at&t wireless phone, so allowing communication between networks could allow competition to open up. data portability will not do that because if i take my data, where will i take it to? i need to be were all of my friends are. that is my interoperability is a better solution. also, opening up competitors in a secure way is another proposal that's been made. i do believe the integration of
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whatsapp and instagram and messenger should be prohibited by the ftc. and those deals should be unwound. criminal -- emily: criminal and civil investigation as mentioned, and there have been questions on the oversight of the backend of facebook messenger, instagram, whatsapp, how are we expecting these investigations to play out? it will likely be years. >> it can be difficult to keep up with the number of global investigations going on. and at what stage of the process they are at. the fcc is looking into these issues, intentionally unwinding parts of facebook, but that will be complex, difficult, and drawn out. many experts at integrating the backend makes it harder for regulators to be able to separate the data. there is also concern that section 230 may be under pressure. thatis part of the law exempts the social platforms from being liable for the content on their platforms, and that was rolled back, that
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would have a big impact on facebook. we are already seeing other governments move ahead with regulations as the u.s. stalls. we just reported that singapore is coming out with new laws that would hold companies like facebook liable for false information, kforce them to take them down, and show the corrections they are making. emily: are the governments outside of the united states you feel are getting it right or have a good model that other countries could follow when it comes to creating a framework to better deal with big tech, given that big tech is clearly not doing a good job of regulating itself, even though you, and many people, think they should? >> i think the gdpr had promise. unfortunately, i don't think it is being adhered to or enforced properly. i think there are things you can learn from the gdpr. i think the california privacy measure also has promise. i am concerned big tech is out there promoting other laws in other states with
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the goal of getting a weaker privacy law at the federal level to preempt the stronger california law. from the antitrust perspective, the german authorities adjusted an innovative case, where they said facebook abused its dominance by violating the gdpr and collecting too much data from consumers. they have a good clue of where things are going. and the european commission has and forced its antitrust laws against tech platforms, although it hasn't done a great job of following up on the remedies in its decision. coming up, the twitter ceo weighing in on one of the biggest issues for tech in 2019. he says regulation is a good thing. more from mark's post of, next. later, who hacked jeff bezos? the amazon's ceo top security point man has a new theory. it's a bombshell.
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we will discuss. this is bloomberg. ♪
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emily: twitter cofounder jack dorsey is echoing mark zuckerberg's comments, calling for a heavy regulatory hand when it comes to the tech giants. many social media companies have competitive -- have pivoted to focus on healthier conversations after drawing criticism for issues like the canoes and harmful speech. in an exclusive video interview, jack dorsey said he would welcome more regulation. take a listen. jack: we have seen abuse and harassment. we have seen people leave our platform because of it. we see voices being silenced because of what is happening on the service. and that is number we can't one. build a platform of speech, a platform of conversation, on a service that will remain relevant to people if people don't feel safe. for all of those who believe in free expression and free speech,
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it's critical that we are not utilizing technology like twitter to shut down voices and to silence others. a lot of our policies and enforcement and technology is aimed at addressing those problems. it's never going to be fully solved because it's one of those things where you have to constantly iterate. perfection is not a goal, but we need to give people much better controls over their experience, and we need to do more of the work for them. we need to take away the burden of reporting harassment or abuse. we need to utilize technology better to identify where it's happening or where there is a high probability of it happening automatically, so people don't necessarily need to see it when they didn't ask to get into the fray. >> how much of it is twitter
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focusing on that? how much of it is inviting more conversation from outside parties? i ask that because for the last few days, there have been a lot of headlines about mark zuckerberg's piece in the washington post, more regulation of the internet. you do have a chance to see those comments? do they align with your general views? you haven't talked about this issue before. jack: generally, i think regulation is a good thing. it's a positive. i think our role as a company is that of an educator, helping regulators and legislators understand what is happening with technology. the secular trends we are aware of, how are system works, the regulators ensure protection of the individual and a level playing field. as long as we are working together on that, that has good outcomes. i haven't looked at all of the
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specific feedback to mark's post. i generally think there are things like gdpr that have been positive for our platform and the industry in general. and specifically, has a lot more clarity around privacy and how data is being used. typically, a service like ours, our terms of service are hard to read and follow. they are not necessarily the most customer focused things. gdpr put a stake in the ground to at least bring out some elements that you have more control over. sohink that is a positive, if there is more room for that, then, yes, absolutely, but we also -- there is not going to be any party responsible for one fixing this. i think putting too much of that weight on any one entity, whether it be a corporation, individual, or a government,
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it's not going to work. we have to think about it differently. we have to think about it as a desire. we have a desire. our purpose is public conversation. our desire is to incentivize and increase healthy conversation. for that, we can look much deeper. we can look at what we are incentivizing. we can look at the very foundational nature of the service, and make sure we are not incentivizing behaviors that would take away from health. there are areas where i think we are. those are questions we are asking. it will lead to some fundamental shifts and how the service work and how it people experience it. emily: that was twitter ceo jack dorsey. now for reaction, we spoke to selina wang, who covers the company. take a listen. it is very far from the grand manifesto zuckerberg had. when we wrote about that on facebook regulation, twitter
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declined to comment. you don't hear dorsey specifically addressing the four points laid out, but he does say regulation as a whole is a positive thing, and gdpr has been beneficial. he also admits that twitter's terms of service are notoriously difficult to read, and that has brought forth how it is used. i think it's worth mentioning that twitter has less of an incentive to play a strong role in the discourse around regulation. it's in their benefit to let facebook set the tone, to let facebook take the heat and any regulation that eventually comes will impact facebook and google much more than a smaller platform like twitter. emily: i wonder if some of these tech ceos are tired of being blamed for all of these problems, and would like to shift the responsibility to somebody else. an interestingas situation, where he had the ceos who go out and try to improve the public relations or
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messaging around the company, but at the end of the day, we have to see the results within the company. jack dorsey loves to have idealistic visions about the future of what healthy conversation will be like on twitter, but we haven't seen how that's going to change in the product. they have started iterating a beta app. they are looking at ways to maybe deemphasize the follower count, or the number of likes and responses people have. but to increase the encouragement of healthy conversation that is not toxic, that is still in testing phases. in has been more than a year since he talked about the initiative, and we still haven't seen the results. emily: i want to ask you about softbank. they're trying to raise another $15 billion. $100 billion is not enough. what is driving this? $100 billion is not enough until you start looking at the pace of dealmaking. just about two years, they have invested $70 billion in startups like dog walking companies.
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they don't want to slow down, and if that is the case, they need to capitalize. they are seeking to add another $15 billion to $100 billion. they are looking at a variety of options, including asking existing backers to raise more capital, wave debt repayments, all sorts of options. we don't know the timeline for when this may close. it's possible a deal could not be struck. emily: where the going to put this money? selina: they want to continue on this grand vision of ai and groups of number one. they have been very clear about wanting to back the leading company in every industry that is critically impacting and disrupting that sector, whether that the dog walking or cancer detection. he said every two years to three years, he wants to raise another $100 billion fund. we are just about getting to that point. emily: softbank is a small investor in lyft, and a big investor in uber. do we know if they're going to make money on the uber ipo?
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do we expect them to? selina: we don't know yet. when you talk to softbank, they are talking about the long-term vision. they say their repayments are very attractive and the investors are interested in doubling down and recapitalizing. there is not a lot of transparency at this point on those numbers, but they are hoping it is a positive one. emily: that was selina wang. still ahead, all the riches in the world could not keep jeff bezos from getting hacked. was it the national inquirer? or was it a foreign power? we will break down what his security team thinks, next. this is bloomberg. ♪
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emily: finally, it was under two months ago that washington post owner and amazon ceo jeff bezos took to the mediatech use the parent company of the national enquirer of trying to blackmail him with his own private text messages. the washington post coverage
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covered the murder of journalist in a saudi arabian consulate seem to have hit a nerve. things have taken up to another level. security bezos' consultant made the accusation saying, we concluded with high confidence that the saudi's had access to raise us' phone, and gained private information. as of today, it is unclear to what degree, if any, ami was aware of the details. we discussed it with brad stone. used to steering the consensus about this episode. which is that lauren sanchez' brother -- in line emily: lauren sanchez, a woman he allegedly had an affair with. brad: yes, and the consensus was that her brother, michael
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sanchez, provided all the text messages in the fall of last year to the national enquirer. i think they are frustrated with that explanation. they believe, and this has been clear since the media post, that saudi arabia and its leader were involved. they see some discrepancies with the solution. and michael sanchez claims that when he was contacted first by the national enquirer's chief content officer, that they already had some text messages. so he is pointing to these other forces who may or may not be at work. the national enquirer's chief content officer said he turned over information about this to law enforcement. emily: he makes these proclamations, but doesn't provide evidence. does that undermine the argument at all? o'er the point he is trying to make? brad: absolutely. at this point, we just don't know if bezos is buying the narrative, or if it is up his
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choosing or they have evidence to back up the claims. all the claims he put in his conspiracy theory, it's circumstantial. it's all interesting and intriguing. show us the goods. emily: it certainly is intriguing. why? brad: one thing that has changed, i believe one or two weeks ago, the new york times had a fascinating story about these companies, many former law enforcement secret private security folks from israel, and now united arab emirates, who now have companies. they mentioned a couple. i think ms so was one, and dark matter is another. that they were sluicing on behalf of governments and basically stealing communications, and gavin to becker points to the story and says, this is possible. we know this contributed to the murder of jamal khashoggi, and perhaps bezos is also targeted. why are they doing this?
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i think the first or do with this sadistic narrative that has taken hold. emily: and now they are saying, despite the unsubstantiated claims, american media reviews the unsubstantiated claims that we acquired, with the help of anyone, other than the single source who brought them to us, which is lauren sanchez's brother. when that story broke, it seemed most of the text messages that republican that story seem to be from her side. how do we explain that? spencer: i'm sorry, how do we explain that all the text we have seen so far are from bezos? emily: right. spencer: right, well, that is an interesting thing. if the saudi government had axis to his phone, is this the best they could come up with? that is a good question because by the nature of what has been revealed so far, it does look
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to theperson with access messages with someone potentially close to lauren sanchez. emily: brad? brad it's a great point. :but michael sanchez does not deny he provided some of the texts. the question is where did it originate? michael sanchez says the national inquirer already knew about it. gavin isertainly what proposing, the more complex theory. it is almost coming off as juvenile. who started it? emily: and what is the point? brad: right, and what is the point? who knows? amazon spends $1.6 million on jeff bezos' personal security. and that is in the financial disclosures. either way, it is kind of amazing that a lot of people paid very well to do their jobs and protect this executive, clearly did not do their jobs properly in this case.
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emily: another story we are following, amazon says they will lower the price of goods at whole foods across the board. what do we know about this? spencer: we know hundreds of products are a small fraction of their inventory. we know that whole foods is a lot more expensive than most other places to buy groceries, like walmart, target, etc. emily: jeff bezos still has a job. what do you make of this in the context of the larger amazon narrative? brad: the whole foods price lowering, you know that groceries remain a 10 year plus work in progress. they've been trying their own services, they acquired whole foods. they don't have much to show for it. sales have been basically flat and a little down last year, so they continue to try new things, innovate new kinds of store formats, and now lowering the prices to try to juice that are together business segment. brad stonemberg's and spencer's poker. that does it for this edition of the best of bloomberg
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>> coming up, the stories that shaped the week in business and around the world. >> the no's have it. >> deadlocked at the deadline, the u.k. government pulls out all the stops to get brexit through parliament. >> today, i am taking action. >> the likelihood of a longer extension has risen quite a lot in the last week. >> data from china surprises to the upside, while prospects brighten for a trade deal with the u.s. president trump: this is the grand daddy of them all. >> let's not think this is all done. there are issues remaining. >> bitcoin show signs of a


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