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tv   Bloomberg Technology  Bloomberg  October 26, 2021 5:00pm-6:00pm EDT

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>> from the heart of where innovation, money and power collide, in silicon valley and beyond, this is "bloomberg technology" with emily chang. emily: here's what's ahead for the rest of the week.
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texas instruments and amd both out with earnings in the wake of a chip shortage. went -- what their reports signal about how supplies will meet holiday demand. social media and kids. that was the focus of the latest committee hearing focused on cyber bullying and tech addiction among children. executives from youtube, snapchat and tiktok testified. we will get to that in a moment. let's take a look at market action. investors digesting tech results. >> it is shaking out a mixed picture when it comes to big tech earnings. let's get out of the way what happened during the session today. the s&p 500 once again, record highs and closing and the green. what didn't do so well, chinese tech down a whopping 4%. you can see the tug-of-war anticipating those earnings stories today, but getting pulled down by the china exposure. slightly risk off, slightly defensive bid for the tech
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outperformance but you saw the crypto index lower. the big tech earnings, i want to start with microsoft because blockbuster earnings beating those estimates. that was bolstered by their cloud business. google also beat estimates but they are down. alphabet i should say, ads, e-commerce fueling that growth. the fact that they are paying partners so much is offsetting some of the ad revenue. that is weighing on the stock right now. then you have twitter, results in line with estimates, no massive outperformance but here's the thing. the impact they were expecting apple tracking to have on their bottom line, wasn't so bad. you see shares outperforming in after hours. we have more earnings stories. let's get ed ludlow. >> robinhood down 8.5% after hours, the platform sold -- the platform, this is the big story on the debut earnings quarter.
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cryptocurrency trading down 78% from the prior quarter. that had an impact on the overall picture, revenue 364 $.9 million. the estimate was around $424 million. robinhood said this year's revenue will be less than $1.8 billion, looking for more than $2 billion. sounds like trading activity has slowed down and the second half of the year. you remember there was a frenzy from retail investors in the for six months, but we are getting off our phones and going back to normal life. chipmakers, amd and texas instruments reporting after the bell, amd higher, now basically flat in after-hours trading, saying fourth-quarter revenues will be between 4.4 and $4.6 billion higher. the full year revenue will grow by 65%, upgrading a forecast of 60%. the datacenter sales, doubling from a year earlier.
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there are signs especially in the texas instruments case that there is concern about what the demand is really like. texas down 4.5%, it gave a forecast that was in line with estimates for the coming quarter but it has experienced growth. the question is whether that slows down. if you look at the stocks side-by-side, there are two different stories with amd and texas. texas is the white line. trading pre-much in lockstep with the philadelphia semiconductor index. the blue line come outperformance from amd when it comes to micro devices. eventually taking market shares from -- potentially taking market shares from intel. intel had a weaker earlier earnings season, amd coming out strong. we will look at that later. we need to dig into the demand picture. people placing orders for semiconductors, leadtimes were extended but what happens if there is a slow to demand? emily: thanks for that. lots of questions coming in.
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we will bring in dan, the founding partner and principal analyst at future and research. great to have you with us. looking at alphabet, pretty strong across the board. i just got off a call from alphabet's cfo and she reemphasized the recovery they have seen is broad-based, not particular to any industry. she said the pivot to digital is real. people want more choice, more information and the online to off-line world will continue to be relevant. she remains positive. what are your takeaways? >> the numbers themselves are positive for the company. the earnings outpaced the revenue, youtube was a little slow and the crowd business -- the cloud business grow that much but it did grow. everybody seemed worried the privacy and apple id changes would make a big difference to the social and digital players,
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but i felt google was going to be more robust. it has a more dedicated user base. it has more properties that people are engaged on and the numbers show that ruth is correct and having that bullish sentiment. emily: the question remains how much of the apple ad tracking changes will affect google longer-term. she didn't want to get into that, but i'm looking forward to hearing more on the call. we talked about supply chain issues and whether there is concern among alphabet executives that that will translate into advertising. she focused on the broader supply chain challenges, saying they are risk managing the challenges. they are working closely with suppliers and logistics partners to pivot where they need. they believe there will be supply constraints when it comes to the pixel six but nothing specific to advertising. do you think the supply issues will trickle down to advertising or lead advertisers to pull back? >> i think there is a little of that going on in different parts
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of the market. automakers may not want to spend as much on advertising to get people into showrooms over the holidays if they don't have any supply. same with retail electoral -- electronics providers. if you don't have any play stations to sell, will you want to spend as much money to try to drive traffic to the web? you have to balance that with increased inflation and all the dollars that are out there and companies are investing in growth. based on the number, even facebook's near miss, seems the smaller social platforms are being hit hardest, snap, because facebook was close, google outside. the smaller business level, there will be a little bit of pain, maybe a little pullback if there is no supply for these companies to be selling. at the same time, we continue to see big tech companies outpace expectations and google did that in a big way. so did microsoft. emily: i want to move on to amd's because chip supply is a key issue that will affect the
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broader supply chain especially when apple has to cut production of the new iphone. when you look at texas instruments and amd, what you see? >> amd was on a tear over the past several quarters. despite the shortages and despite the issues with supply, amd continued to grow old will faster and the -- that will show up in market change -- market share on the client side and the datacenter side or amd. if you look at this quarter, in terms of outsized earnings per share and revenue, it wasn't the same blowout numbers amd has had and it has enjoyed the past several quarters. use our revenue coming in above 4.2 percent, earnings just over expectations. i think that is tied to the supply, that didn't grow as fast. you are looking at what he 4% on processors, 69 percent on custom and high and datacenter, which is significant growth. i believe last week intel's
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numbers were something like 10% on the datacenter and a 2% contraction on the client side. amd continues to show strong numbers. it is still encouraging but i think the supply issue is causing these companies, you hear from every ceo, if we had more we would sell more. i think chipmakers and device makers are feeling this so even if it is slowing, it hasn't slowed that much. emily: i want to end on microsoft because microsoft is seeing a strong quarter in part because of the cloud and demand for azure. google cloud numbers were light. what is or take away? >> the demand for azure continues to be strong. every quarter i continue to look for the number to fall below 50% and it has been similar with a ws and looking for the number to fall below 30%, but it continues to meet the 50% growth number. after last quarter, when microsoft enjoyed one of its largest growth on a quarter over quarter basis, another 22%
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quarter, 50% on azure that it had strength in -- but it had strength in other areas. even the devices business looked good. surface only grew 1% and i continue to be a bit puzzled, when most of the pc makers, despite slower this quarter, so robust growth through the pandemic but surface, and the products are solid, has grown at a slower pace. i'm wondering if that is tied to the slower oleum numbers. -- volume numbers. microsoft continues to deliver great results on the top and bottom line to give investors a lot to be encouraged by. emily: down, -- dan, thank you for weighing in. tune in wednesday where we will dig into twitter results as well. the cfo will join us on bloomberg television 10:30 a.m. wall street time. developing news, the fda
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advisory committee backed the use of the pfizer biontech shot for children. they voted 17-0 in favor of the immunization intended for kids 5-11. it gives one third of the dose currently given to those 12 and older. if the fda issues and emergency authorization, which is expected, it could pave the way for shots to be administered around the united states in a matter of weeks. coming up, social media in the spotlight again. we will have the details from the grilling of executives from tiktok, snap and youtube on capitol hill. this is bloomberg. ♪ >> do you support this or not? >> i think senator, we would love to talk to you more about -- >> no, no. this is what drives us crazy. we want to talk, we want to talk. this bill has been out there for years and you still don't have a
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view on it. ♪
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>> we want to make sure we are doing what we can to be responsible with kids in every way possible. that is one of the reasons that we actually have worked hard to get parents as many options as possible for them to decide what is important for them and their families. >> i want to recognize it is important for any organization to protect people particularly children. emily: the ceo of youtube and head of instagram talk about the need to protect children online.
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tiktok, youtube and snap are the latest to testify before congress, answering questions about what they do and don't do to protect kids on the internet and what needs to change to keep them safe. this was the first time executives from tiktok and snap have been called to testify. all the companies tried to distance themselves from facebook in their opening statements. senator blumenthal had to say this. >> being different from facebook is not a defense. that bar is in the gutter. it is not a defense to say that you are different. what we want is not a race to the bottom, but really, a race to the top. emily: let's dig into this with a ucla professor and a founder. curious to what your thoughts are on blumenthal's commentary. >> it is true that comparing those companies to facebook makes them generally look good. so he had to say that right now,
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given the extraordinary onslaught of criticism that facebook is receiving for good reason. i think generally, these companies for the most part are doing a better job than facebook. doesn't mean they couldn't do better. emily: when it comes to kids, do you see any of these companies being better than the other? or are they all at a low bar? >> i think the bar is quite low for all of them. we have evidence of the entire industry being so unregulated, so little oversight over what happens in the kind of predatory surveillance oriented marketing project that these companies are, that i think we need to look at the long-standing research we have had for more than a decade in the ways in which youtube has contributed significantly to right-wing radicalization of people in this country, and around the world.
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the role that instagram has played in generating feelings of despair and depression among young women and girls. i think the -- that facebook isn't the only company that has a tremendous amount of work to do, and i think congress and many different agencies need to have a much more profound kind of regulatory framework over these companies, given that their reason for existing is in fact to create extremist feelings and sentiments among the public, and we see, unfortunately, the consequences, whether it is the january 6 white supremacist insurrection, or the anti-muslim, anti--lgbtq kinds of violence that are growing around the world. all of that is happening on
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these platforms, not just facebook. emily: who should be building these products for children? the head of instagram said kids are on technology platforms whether we like it or not. somebody, what do you make of that argument? if you believe somebody has to do it, is it instagram or tiktok or snap? or none of the above? david: the fact is they are doing it. these companies for the most part have proceeded heedlessly, not really trying to, for the gestation of their services really, although snap might be a little bit of an exception, not to have really thought about the way they are structured might affect people's emotions, and in fact, people's political and social behavior. they have focused on page views, on what platform, how the platform would -- best work to
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show advertising. what is interesting now, with all this extraordinary attention on the revelations from facebook, even though the revelations are all negative, they are coming out of work facebook did to try to understand how to get better and what was going wrong, even if they didn't implement those changes. it does raise the bar for those other companies, because in general the other companies aren't doing nearly as much research, even to find out what they should do. emily: are you focused on algorithms? do you see the algorithm-based companies being problematic for children? safiya: absolutely. we know the algorithms are not just computer code that is encoded to generate the most engagement, which typically is correlated to the most inflammatory, racist, sexist, homophobic, vitriol.
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because that is incredibly profitable. we know the algorithms are certainly attuned so they can maximize public engagement and consumer engagement with different kinds of material. we also know that the human beings, the people who moderate content come are also training the algorithms. we know that there is a symbiotic relationship between what we engage with on these platforms, what moderators allowed to stand or take down, and how the machine learning algorithms work to accelerate what they learn from that process. emily: we are anticipating facebook might change its name later this week to emphasize this idea, the ambition to move into the meta-verse. what do you think about facebook sam version -- ambitions in the meta-verse? is that intriguing or terrifying? safiya: it is a terrible
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distraction, and an opportunity for them to re-narrate the terms, what we should anticipate is facebook trying to offload its problems and consolidate its power under a new company. obviously, we have the department of justice and the securities exchange commission, the federal trade commission, all these agencies coming after it and investigating facebook so we should watch to see whether they are dumping stock, the shareholders are dumping stock, where they are dumping it from and how they are re-consolidating under another company. the strategy was used for google as well, without the bet, but i think google still has the problems it has. so these shell businesses that are created to on view skate -- to obfuscate the problems, i think the public is sophisticated enough to realize what is happening here.
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emily: so much to debate. safiya noble, david kirkpatrick, thank you. coming up, more earnings after the break, focusing on tiktok and what happens if there is no more demand for the product ships go into. this is bloomberg. ♪
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emily: let's get back to earnings and take a closer look at and d and texas instruments come out with our own ed ludlow. walk us through the results. >> two different fortunes. amd gave a strong forecast for the fourth quarter and said revenues for 2021 will be up 65%, operating the previous forecast. for texas they gave a forecast for the coming quarter that is
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more in line with expectations. they indicate perhaps that kind of surging demand we talked about with the pandemic for electronics, that might be starting to fade. what they both agree on is the supply still seems to be tight. we know for example, the time remains stretched, from ordering a semiconductor to the time you need it. for amd, this was the barnstormers, the take away stock because they are making games it seems and taking to market shares, seeing really high double-digit growth at a time when intel's pc unit is seeing sales decline. emily: what can we expect over the holidays? the big concern is, will we be able to get what we want? if not, does that mean demand for chips drops? and does that mean demand for advertising drops? >> when you thing about gaming consoles, amd says that is one area of demand, playstation, xbox, and they are ramping up
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supply to meet the demand. texas instruments is different in that it has its own manufacturing capacity. names like amd rely on a third-party to manufacture chips for them. texas instruments has been able to be more nimble and is saying while inventory levels, the number of chips they have in stock, is not ideal, they are working to get rid of the backlog. emily: what's next? what will we be following next quarter? >> for the pandemic, this -- before the pandemic, this was a cyclical industry where you would see consumers of semiconductors, electronic makers, stockpile chips. the worry is we have seen people overwater, so when demand drops, there will be less of a backlog of chips. that is not ideal for anyone. emily: the concern is oversupply . thank you for raising that point. we are halfway through this busy
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week of tech results. many more to come, including ebay. apple on -- and amazon thursday. we will have the details next. this is bloomberg. ♪ this halloween,
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emily: welcome back. i'm emily chang in san francisco. let's get to the markets. kriti: the question is, how do you play it? you can buy bitcoin through an exchange and by -- reap the profits but how do you do it if you don't want to be exposed to volatility? bitcoin futures etfs away to do that. not getting those monster gains. the debut, proshares etf has been down 4.5%, the valkyrie
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offering up 1.4%, bitcoin up by much larger. one of the big stories and it comes to the stock market and crypto, this company went public last week. this company helps create bitcoin futures contracts, expanding the digital assets and asset -- access to digital assets, making it easier for banks to offer crypto rewards in for credit and debit cardholders to reap those rewards. you can see this massive surge in the last four buying days, 191 percent for that company. some of the major ways people can play the repo surge, many thought robinhood would be that method especially with the massive crypto source they have with the retail crowd but year-to-date, 14% gain for bitcoin and 4% for robinhood. the best bet you can make when the -- when it comes to the
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stock market. this is about as close as you will get to the cryptocurrency itself. emily: thanks for the roundup. let's check on robinhood's third-quarter revenue, falling short of estimates as crypto transactions tumble from the prior quarter. walk us through revenue in q4 and guidance. >> the revenue falling short of expectations was a big deal. enough to send the stock lower after trading, the close of regular trading. you also have the revenue guidance for the fourth quarter. that is the current quarter we are in. very rare to see a company this type do something like this where they say they expect quarterly revenues no greater than $325 million and a four year revenue of less than $1.8 million. they are coming in short of expectations. when you look at the monthly active users, this is an
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important chart on page seven of their investor presentation. you see a jump from last year, but you see a drop off from a quarter earlier, from more than 20 million to just under 19 million monthly active users for robinhood. you saw them report a drop off quarter over quarter in crypto activity led by fewer new funded accounts. they are getting lots of questions about their crypto offerings, like whether they would offer a shiba inu coin that is getting interest, and a crypto wallet they are looking at offering. but kriti mentioned you see the coinbase runoff compared to robinhood and you see where people are flocking for their wallets. emily: when robinhood reported last quarter, we were surprised at how much of the pie crypto was picking up. now we see this crypto drop-off. what should we read into that? sonali: when tanev, who is
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speaking to investors right now, robinhood took questions from retail investors and say they are evaluating these currencies in a way that complies with regulatory guidelines. there were lots of run-ins with regulators with robinhood. we also today, we heard from david rubenstein talking to the sec chair about order flow and issues there. so regulatory compliance will be a big deal for robinhood as they look to expand in crypto, especially as clearly there at -- their clients are asking for more. emily: talking about crypto trading, take a quick listen. >> we are keeping a close eye on crypto as the regulatory landscape is increasingly uncertain. we are aiming to deliver great new crypto features for customers while being mindful of
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keeping our platform safe and introducing products that comply with requirements. crypto is very early and we are excited to be investing in our platform. emily: that is interesting, given that when robinhood went public he talked a lot about how he wanted crypto to be a bigger part of the company. now he is talking about the regulatory issues associated with it. is the growth still going to come from crypto or somewhere else? sonali: when you look at their transactional base revenue, this is another regulatory issue because we are talking payment for order flow. it is 73% of their total net revenue that they are reporting today. no matter where the growth area is coming from, you still see their major business having an overhang. they did announce a few things that they are trying to expand on, ipo access for example, 12 companies have been working with robinhood to make their ipos more available.
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obviously, they acquired say connect, which is helping companies reach that daytrading and retail audience. it looks like they are seeing some growth there. but nothing like crypto. and certainly nothing like their traditional business, which is day-to-day trading and equities decreased from a year ago. emily: thank you. speaking with -- speaking of crypto, bitcoin's popularity hasn't changed one of its original attributes. the ownership is concentrated in a few hands. according to the national bureau of economic research, the top 10,000 investors in bitcoin control about one third of the crypto in circulation. that makes bitcoin susceptible to systemic risk. spencer, what is your reaction to these robinhood results and the drop-off in crypto users? what does that signify?
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is that a robinhood problem or a broader crypto bent? >> reading between the lines, the regulatory situation has been very frustrating. historically, the u.s. has been so unfriendly to innovation in the crypto space that most platforms are forced to ban americans alongside opec sanctioned countries, which to me is a disgrace. for a company founded on principles of freedom and innovation, to see the u.s. on the short list of countries that these emerging platforms can't service alongside syria, sudan and north korea, it is not just a disgrace, it is it a service to the american people who should be able to access this technology. what is going on within robinhood, i'm not sure but i believe his comments that he has to stay attuned to the regulatory situation where there isn't much clarity. i think the good news is we are starting to see the tide turn. emily: one issue is that crypto
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organizations are having a hard time retaining talent because there are so many of them, and obviously tech talent is always in short supply. what do you make of this brain drain? what impact is it having on the industry? >> there is a very real brain drain. it is coming from i would say wall street, and big tech, into crypto. at the forefront, we have a compelling mission to build new tools for the greater economy, to build a parallel financial system enter creative financial system that is more inclusive, always available, and provides better functionality than anything else we are using. it would be hard-pressed to believe that anyone is actually satisfied by the service from their bank. going to the bank is rarely better than going to the dmv these days. when i think about what is compelling the brightest minds to go into crypto, it is this opportunity for open innovation and -- in a mission driven organization.
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i think when there are companies like robin hood or other large banks, when they set out to build a new list of crypto products, what they will end up doing is partnering with crypto native companies. ultimately, they form those teams, those teams build up more conviction over what crypto is and what it means, and they can't retain that talent. those keep -- people tend to join a startup or start a company in the space where they have more opportunity and flexibility and they are not stuck within a larger organization that drags its feet to get simple products like row grid out the door. -- brokerage out the door. emily: what's going on? >> i don't know what's going on with shiba. the most interesting thing is the price movement. i don't hear about anything going on about that network. there is nobody building on it. of all the interesting things that is happening in crypto, and you know i can talk about this for three hours, sheba -- shiba
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is not in the top 100. emily: what is the most interesting thing happening in crypto? >> for me, it is defined. i come -- it is defi. so seeing the capabilities of what new innovators in this ecosystem, the parallel financial system, our building is truly mind blowing. people are taking this framework where anybody can build him a they have open source software so they don't need to re-create the wheel for everything new they build, and people are stacking together on a it is an industry with open source software. when somebody builds a decentralized exchange, anybody can build on top of it. we are seeing a pace of innovation in financial services that we have never seen before. to me, that is the most exciting part. if i asked my colleagues some would say in fts and the creator economy might be as interesting. emily: spencer, thank you for not holding back. always appreciate it.
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gary gensler on a collision course with some of wall street's biggest names as his plans for overhauling wall street take shape. elaborating on a report scrutinizing january's meme stock craziness, he said using adler is then's to boost trading hurts returns. he spoke on an interview for the david rubin seen show -- rubenstein show recorded monday. >> whether it is a robo advisor or a brokerage app, they figure out by giving you, david rubenstein, a certain signal, a color, a behavior prompt, that you might trade more or you might buy a higher revenue product for them. therein lies the potential conflict. what do we do when the digital algorithms are maximizing for the company's revenues rather than our returns? emily: you can watch the david rubenstein show wednesdays 9:30
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new york time. coming up, mark zuckerberg responds to comments made on bloomberg technology by an early facebook investor. what he had to say, next. this is bloomberg. ♪
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emily: two of the world's most valuable fintech startups are joining forces. strike will allow retailers to add corn a bank's buy now pay later service as a purchasing tool. this comes at a time when rivals are striking deals to win a share of the repayment industry.
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amazon has struck a deal to use verizon's network to link up its thousand strong satellites. this sets up a rivalry with star link. jeff bezos has committed $10 million to the satellite subsidiary. it plans to launch more than 3000 satellites into low-earth orbit to provide broadband internet. two weeks ago we were joined on the show by an early facebook investor, reid hoffman. he spoke candidate -- candidly about how the social network lost people's trust especially over handling of claims leveled against the company by whistleblower frances haugen. take a listen to what he had to say. >> what we should hear from the company is, here is when we saw these reports, here's the stuff we started doing, here is the way we started making trade-offs against what might otherwise be our engagement, in order to solve these problems. that is what you want to see from companies in leadership.
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>> you are disappointed? >> i am disappointed. emily: those comments got the attention of mark zuckerberg. i spoke with hoffman as part of the bloomberg equality summit, where he shared their exchange. >> to his credit he reached out immediately after our broadcast and said, i'm concerned. why did you say the things you said, let me inform you more about what we are doing. i hear your call on transparency and i think we are doing a good job, but maybe we need to do better. let me talk to you. i thought that was, the kind of thing where i am supportive, very supportive of him as a learning person and ceo. he didn't go, he said something, i'm going to ignore him. he reached out. i do think we are still as a body politic, as a public society, saying it is great you have been doing this research about, what are the negative impacts?
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that is good, responsible corporateering. given that it is unclear what you were doing, be more transparent about how you are investing. be more transparent about what your theory is about how you improve on the social impacts. now that we are seeing this credible whistleblower come forward, you need to tell us more. i'm looking forward to that still. >> we are expecting facebook to change its name to convey the idea of the meta-verse. do you think the company should charge ahead with this new vision when it still has these problems and still has a lot of issues to work out? >> potentially. i don't have any inside information on the new meta-verse decision. i have been thinking about meta-verse for a long time. one of my earliest jobs was product manager on this product called worlds away, so virtual worlds are something i have had a long personal interest in.
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it is a question of, is that transition a transition that will help on these issues? you say here is the way we are not thinking of individual rights, which are very important, and freedom of speech, but -- which is important, but also how we elevate the fabric of society and how we make discourse better, how we make information sharing better, how we get voices heard across -- in dialogue, with respect. if they say that is part of what we are doing, that will be great. if it is like we are ignoring it, you are like -- tell us more about that. emily: given this complex continuing dynamic, do you think zuckerberg could still be -- should still be in charge? >> yes, because i think he is smart and committed and a learner. i look forward to look -- to see what that path looks like. emily: early facebook investor
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reid hoffman at the bloomberg live equality summit. coming up, we will recap the big tech results and dig into alphabet, twitter, microsoft, and don't forget chipmakers. that is next. this is bloomberg. ♪
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>> apple has put the pro back in mac pro. after five years of criticism towards the laptop from professional users, apple has revamped the computer and restored several key features that pro users clamor for. the new computers are the opposite of the prior version. the previous 2016 design focused on thin and light, reduced force and added high-tech features like the touch bar. this time, apple is focused on performance and usability. the touch bar is gone in favor
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of more useful function keys. thin and light is out the door in favor of slightly thicker and heavier frames that allow for better performance, and the confusing focus on removing ports is gone in favor of the return of magsafe magnetic charging and and hdi -- hdmi port. the thunderbolt and usb ports remain. in many ways, the new macbook pro is a me a cuppa -- mea culpa for apple. al -- apple surely has a hit on its hands for most pro users. you can sign up for the power on column on emily: mark right there. don't forget, we will get results from apple later this week. tuesday, it was all about alphabet. twitter, microsoft, texas instruments and amd. recapping headlines with mandy
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and add -- and ed ludlow, it is striking to see the difference between alphabet and facebook results. alphabet seems to be weathering the advertising industry issues far better than its competitor. >> you are right. the social media companies have been impacted before by all the apple id changes, and that is why we saw facebook kind of talking about ad growth slowing down. in the case about the bet -- of alphabet, search is strong. the overall impact is much muted compared to what facebook told us yesterday. the other thing that stands out to me is, facebook talked about increasing their capex 60%, 70%, spending over $30 billion on capex. if alphabet spends about early billion dollars in capex, they have a cloud business that is
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generating $20 billion in revenue, and that is built around the data center investments they have made over the years. i am surprised by facebook really going that big in the meta-verse and nobody else among the large tech kind of trying to expand in that market. that to me is the most striking aspect. emily: the big question remains, how will these supply chain issues impact the holidays and how will they impact advertising? what are you pulling out here? when i tried to pin her down, the executive didn't give me an answer on advertising. >> microsoft has its cloud enterprise and google has the advertising business. for microsoft, the personal computing came in better than expected, and that includes xbox but there are supply constraints , taking on semiconductors when it comes to consoles going into the holiday.
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with the google pixel, supply chain constraints, they are working with partners. there are other areas where google is exposed. they cited automakers, which i thought was interesting, the idea being carmakers don't have the inventory so why bother spending on advertising? that was one area of potential weakness. makes me think how exposed names like alphabet and microsoft and facebook to the economic recovery we are seeing, think about different customers. is this contingent on a cyclical recovery? how are uss ang this as the world goes back to normal? mandeep: alphabet has a broader exposure to reopening's in our view. the ad revenue is more diversified in terms of vertical exposure so with reopening, you are going to see alphabet benefit more. facebook is more e-commerce, business focused and that is why we saw them benefiting more last year during covid. at the end of the day,
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advertising companies will continue to do well. there is this share from linear tv to digital as well as connected tv. don't underestimate you to. the numbers were slightly off this quarter when it comes to expectations but we think that will be the fastest growing area for the next couple years in terms of ad spending. emily: themes you will be watching for the rest of the year? ed: investors have come to depend on the tech sector verrilli top -- really high top and bottom line growth. we have seen impressive numbers from facebook, microsoft, alphabet. amazon and apple, how can they keep stocks going higher? how safe is it to invest when the world is changing? yields are rising, the economy is changing, consumer psychology is changing. will this be the go to part of the market? or do investors go into more of a reopening trade? emily: a lot of open questions.
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appreciate you helping us break it down. that does it for this edition of "bloomberg technology." join us tomorrow when i am joined by twitter's cfo. this is bloomberg. ♪
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♪ >> very good morning and welcome to "daybreak: australia." i am haidi stroud-watts in disney. >> from bloomberg world headquarters in new york, i am kathleen hays. u.s. stocks hit record highs as corporate earnings estimate but results from the tech sector get a mixed reaction from wall street. haidi: the u.s. raises tensions with b


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