Transcripts For BLOOMBERG Bloomberg Technology 20180117

On his sons out at the time you murdoch is recuperating at an alley hospital. Global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. Bloomberg. I am emily chang, and this is bloomberg technology. All about fighting online extremism. The lawmakers get the answers they were after. Plus the cryptocurrency crunch. The court. 10,000. As the bubble burst . And it is a payday for apple employees. Apple plans to bring calm billions of dollars in overseas cash to the united states. We have the story. But first, to our lead. Representatives from facebook, google, and facebook and extremism. E online there were before the congress committee, and a lot of the same topics that came up investors hearings on russian interference and the election we are there heads once again. Perhaps the most higher warning came from senator john from montana. This is an important issue. From a terrorist that point, and all the questions asked before. Our democracy is at risk here and went to get it done right, and very quickly, or we will not have a democracy to have you here. Emily out to bring selina wang who covers the story for bloomberg. Who was there in person. Anchors what your impression was today, the general sentiment among lawmakers and how they responded. You heard solid questions from both democrats and republicans. You heard the Tech Companies on the defense, making the claims have been making, that they have made incremental improvements, but you heard there were some gaps, and lawmakers were pressing them. Andking to a terrorist use the wide range of issues of nefarious acts on these platforms. The general take away from the hearings is that while there have been some incremental measures taken by the Tech Companies in response to ssure from capitol hill there are still a lot more there is still a lot more to be done both on the terrorist fought and other actors interfering in the midterm elections. That came up in the hearing as well. Child sex trafficking has been an issue and there is a need to step up. There is questioning on resource allocations on these issues, why arent there more dollars and more people . They have wrapped them up, but given the size of these companies, there is more they could be doing. One last thing, a lot of companies were talking about problematic content quicker and faster. Allowed to beeven uploaded again in the first place . Why are they not preventing uploads, something that they have been pushing them to do. , and thed pornography manchester bobbing and others, which are following up on those platforms and were brought up at the hearing today. Emily you talk about the manchester bobbing. How did the tech representatives respond . Defensive. E on the lawmakers are wondering why dont have the executives and ditto have Mark Zuckerberg or jack dorsey on the stand. On just about questions terrorism but the russian manipulation. Lawmakers are asking why these powerful companies not allocating enough in these issues . There were several tense issues, particularly with the hawaiian senator and twitter, as in them why did so many resources to this, why there were still fake russian accounts, bot accounts. Take a listen here to it yet the safety twitter. Based on results, you are not where you need to be for us to be reassured that your securing you are securing our policies. Vote and our adversaries are participating in your platform, how can we know that you are going to get this right before the midterms . Said itts part, twitter is going to be verified candidates in the upcoming midterm elections. The bottom line from lawmakers is that this is not enough. Going over the problems with moderation, what are some longerterm solutions . Would be a constructive way to keep these videos off the site and to keep these bots from wreaking havoc . Few issues. A you can prevent videos from the uploaded once they have been mark and flagged as problematic. Theres technology that exist that can flag it to a database and prevent uploads. The bond video that we see resurfacing if that happened flagged to a database, and technology can be used to prevent uploads as a post that scanning it and finding it once it is already up there, that would prevent some of this content from being up there in a continuous loop, and a cat and mouse, and a whack and mold problem. The second problem is bots. There is cap verification, and whether or not theres a human behind the account. These are all policy changes that if twitter wants to take action on, they can. There different numbers on percentages of how many accounts are bots. Did, and whoer really knows. The bottom line is they can really crackdown on it if they wanted to. The other problem is transparency. Havepanies has not not been transparent in terms of how the are moving this content as far as the numbers. It is great to hear how many has been taking down in a week, but if it is going up in a faster really ahat is not sustainable solution. Severalnsparency, account authentication measures, and lastly, more resources can be devoted to this issue. These are Huge Companies with a lot of money, and if the public is aggravated enough by these issues, and theres enough pressure, your goal is that this will hurt their bottom line. Should be smart this is for them to put more dollars in these problems to back up the rhetoric. Emily this is a continuation of the hearings from last year, what is next . Twitter came up with a big announcement that they will notify accounts who have seen ira or russian backed accounts. That is a big deal because they have been slammed for not being more transparent about who may have been targeted. This is something facebook said before they will try to do. Google for its part has not come up with an indication of this, and a senator said they were disappointed in googles response. Yre still waiting for twitters transparency center. In terms of terrorism, company say they have been collaborating or some time to come up with a digitalatabase of fingerprints that could collaborate and more quickly catch these videos. They cite significant numbers ort they are capturing 99 98 of this content before it is flagged. Google said they have 10,000 people dedicated to this issue. Facebook wants to up that from 10,000 to 20,000. There are so many instances where these videos are still being uploaded and reupload it. Until lawmakers can see that this is stopping the question is that there is more to be done. Emily selina wang who covers twitter for us, and facebook. And for the counter extremism project. Thank you, tara, for your input. Emily how to fix social media is one of Mark Zuckerbergs mentors. He shook his ideas on what can be done. Upcomingsten for our bloomberg studio 1. 0 interview. Is it not enough, it is completely irrelevant. You cannot fix this damage after the fact with people policing it. These things are embedded in the outdoor rhythms. Hytythms algor you can only fix thisms. Problem by fixing the outdoor algorithms. And fear are not the predominant ways that people are motivated to act on facebook. Without advertising, if you dont depend on advertising or not as dependent on advertising, you dont need people to be addicted. Youll need to make them angry. Need to make them fearful. Person to pay a subscription. Saying,king at this and name the price. My point is, if you want to have asked for certain people, fine, give me the option of having a different thing. Theyre doing now is the lazy way out. People are smarter than that. Emily you can catch more of our full interview that theres later this month. Bring up, apple plans to back billions. All of the details of the tech titans repeat traded cash. Next. Bloomberg technology is livestreaming on twitter, check us out on weekdays. This is bloomberg. Emily lumberton news is reporting that apple will return hundreds of billions of dollars of cash the united states. Bloomberg news is reporting that apple will be returning hundreds of billions of dollars of cash to the united states. Manufacturing and data centers in the coming years and the ploys will get a 2500 bonus. Joining us now with apples latest announcement is alex webb who covers all things apple. This 30hey spend billion . It will spend on a new campus for technical support. They have one of these in austin. So it has to be done in the u. S. Emily how many jobs will that be . Hundred thousand jobs, which is good news for a political perspective. It is quite a big bump, but it is one caveat. Emily what else does this mean . The numbers, the big number that everyone is going to talk about is that there want to spend three to 50 350 billion in the u. S. If you subtract that from the 252 billion that they have offshore, they have a huge pile of cash, and that is a big shareholders are going to be excited about in terms of buybacks. Emily what happens to the rest of that cash that remains overseas . There are three ways they can use it. Buybacks from shareholders, and repayment of debt. Debt a hundred billion dollars in debt. There are spending a lot of dollars on their m a. , broadly speaking, the expectation that a lot of money is going to shareholders. Emily what is the expectation of the m a technology . We have seen them make some moves in music streaming, they bought shazam, we think they are leaning towards making more acquisitions, and if so, what kind . Generally, they look at people like microsoft, because massive deals require that direct on the whole thing. Apple says they have a lot of money, and we can use it to spend on r d, and anything anyone can do, we can do internally. Cemented semi conductors chips. There are certain moves they have made which indicate they have those interests. The wider climate and what is happening with the administration . There hasnt been a response from truck yet, which we are waiting on. Im sure he will jump on this as a sort of way of underscoring his Huge Campaign plans of the new jobs to the u. S. Apple employs several thousand people in china, indirectly through its supply chain. Bringing jobs here is a plot point for the political ledger. Alex, think you so much for that update. Sticking with apple, analysts who cover apple cant agree with the fate of the company. Sean harrington downgraded the stock to neutral. That is a new street high target for the company. Shares closing at over 1 . Coins plungee continues, tumbling below 10,000. What is weighing down the Worlds Largest cryptocurrency area this is bloomberg. Foxconn says there and the investigation from u. S. Trust officials for potentially anticompetitive conduct. The chipmaker says that the problem i the federal trade commission is a material to its business. Broadcomne of the make a hostile bid to buy rival qualcomm. Bitcoin continues to tumble, this time below 10,000, previous loss to 50 from a. Ecord set over a month ago embrace more trauma to the digital coin market has lost more than 300 alien dollars in value in just days. Comes after a dizzying rally that pushed the corn higher than bitcoin more than percent. So, but this in the context for us. What is happening . Market is down 50 from alltime highs, and another way to bring this is it is up over a thousand percent from last year. When we talk about a correction here, we look at the alltime highs that was set six weeks ago, so there hasnt been a correction yet. Emily you to take a look at the chart which shows the perspective on bitcoins lights. Slides. In where do you think this is going . Are we going back to earth, or is this reality . About whaty to think is going on in the market today, it makes sense in the context that there was speculative activity in the launch of these derivatives and futures products that should lead to the institutionalization of bitcoin. Driving price a bit lower that said, people were expecting these institutions in the market to come bulging out of the gate. And rihanna, as the visions move in years, not days, so i think that story will materialize and push the corn higher, but it might take months. Emily you think the bitcoin bubble is popping right now . If price goes lower from here, then we certainly will call it a bubble. But, i think we could see it higher than three years from now, and we will say it wasnt much of a bubble. Emily you invest in blockchain companies. How is it impacting is a changing your level of enthusiasm . We have a Long Duration in all of our positions. We have to be patient with this market. You have taken a little bit of and weff the table can always buy back in some of the positions we like at cheaper prices, and will do that when the time is right. Emily what positions do you like what now . What are you optimistic about . Bitcoin is the most resilient of all the assets out there. It doesnt rotate all the way to it stays trapped in the ecosystem, and their flight to safety is bitcoin. In the wristled spectrum, and within the bitcoin currency, this is considered the safe haven. Emily what are you most excited about . I believe some of the smaller assets have the potential to go further down. Explain those types of valuations . We cant. Emily you cant. I think we can. It has been romanticized for the last couple of decades, people hearing of these investors in uber. It is something investors have not had access to. All of a sudden, in the crypto Retail Investors who will participate for the investors who will participate for the first time, and are like kids in the candy store going wild. And now they learned the lesson that failure rates are very high, and where saying seeing the flipside of that. Emily i waking up in the morning and reacting . Init that type of volatile your workplace . Tied are not emotionally to it because we are longterm investors. Emily but this is a big move in a matter of weeks. In the ecosystem, forced fires are healthy, and that is what we are seeing here. A lot of people rushed in and the last three months because they got was easy money free money in this market. I think it is a healthy reminder that it is a painful lesson of risk in these markets. Spencer, thanks for sharing the ins and outs. Coming up, facebook had a lot to answer about on capitol hill. It still has much more to come clean about. That is next. You can listen to Bloomberg Radio on bloomberg. Com. This is bloomberg. You are watching bloomberg technology. Heres a check of first world news. Dont wantlawmakers to force a shutdown to force their demands on immigration reform. Friday marks the deadline for shortterm spending bill agreements while House Speaker paul ryan told reporters earlier today that a longterm solution on undocumented immigrants must be reached by march faith march 5. Theyn coast guard say rescued migrants of different nationalities today. They managed to save everyone on board. Two boards in the stress off the coast of libya. The people were sent to a naval base where they received humanitarian and medical assistance. Believes russia is helping north korea get around international sanctions. Interview with reuters, he says russia is filling in the china to fill in the gaps. North korea and south korea will have their athletes parade together for the first time in 11 years during the opening ceremonies and south korea. Global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. Bloomberg. 0 ins just after 5 3 washington. There are joined by sophie who will take a look at the markets. A blockbuster session on wall street. We are hoping we can take that baton and run with it. E have a busy day and asia ahead of that, we have futures and korea working higher. This thursday we are waiting policy decisions from south korea and indonesia both expected to stand pat. Gdp, them, fourthquarter plus we learn chinese holdings of u. S. Holdings fell to a fourmonth low. The Australian Dollar smiley weaker. A dollar. Ove as volatility picks up as concerns, it felt below 10k for the first time in six weeks. In hong kong, more bloomberg technology. Emily this is bloomberg technology. Back to our top stories. Fighting online extremism. Facebook, google, and twitter all had efforts. Take a listen area. We have people reviewing content and other violations. We have 100 and 80 people who are focused specifically on countering terrorism. Emily facebooks efforts against online extremism isnt the only think the company is defending lately. The very nature of their business is being questioned. It is called a living, reathing, crime scene is the closest thing to Silicon Valley has to a conscience. Joining us now in the studio, it is great to have you here. What you here today that makes you think things are any worse or better than you thought . What this company say they want to do, they have unleashed pandoras box. Citing through the Network Every day, there is no way to check what 5 million and advertisers get matched with that hyper targeted characteristics to each individual users. There are channels on the new tv, and there is no way to know or be accountable for that complexity area they have. They have unleashed this machine. As roger likes to say, 2 billion people use facebook, that is more followers than christianity. That is more than the followers of islam, and they have so much daily influence on peoples thoughts. Emily would you think of the changes that facebook announced focusing on friends and content from family in the newsfeed as opposed to use . It is a step in the right direction, and zuckerberg titled that we arepost refocusing. That concept came from myself and my colleague of time well spent and calling up problems of time spending economy for the last five years. Ares great that they embracing the content, but the real challenge goes against the advertising based Business Model. You cant as someone whos stock price is dependent on wall that this many minutes and the average at great, you get the revenue. Saying how much time theyre going to cut about how much time people spend. When they willing to reexamine the Business Model . You call facebook a living, breathing, crime scene. What do you mean . The point is that nobody has access to what happened to the election. Only facebook has that data, and the question becomes, can we trust facebook for telling us the truth . Ago, marka year zuckerberg slide that was a crazy idea. He delayed and deferred the release of information. As roger and i, and many other the lots of Background Research and found that the Russian Campaign had wondered 50 million people. Facebook did not admit that until the day of the november one hearing november 1 hearing. They have not and our trust, so in that way, it is a living, breathing crime scene. Emily you worked there from 2012 to 2016. What the first google memo, and said something within the company. Overview raising alarms about, and was the response . The memo in 2013, i was a product manager, and i didnt think were taking our responsibility seriously. Never before in history has 50 engineers, 20 to 30 years old living in San Francisco influenced what a billion people are thinking and what theyre doing with their time and attention. We have a channel that is exploiting with people targeting were exploiting people psychology. Nonsmall starts are going to fix the problem, but google and other Large Companies have a moral responsibility of addressing this problem area the presentation went viral and spread to 20,000 people, and it. Ecame a meme in the culture i had been talking about this in awareness that these Technology Companies have influence on culture, election, Childrens Development more than any other political actor. How do we start to have that conversation ethically, and be careful with how we are steering peoples thoughts . Across the company, there is a real seriousness of taking to heart the message google is an Ethical Company and have great attentions, and the elephant in the room is the Business Model. The advertising based business snapchat,outube, twitter, facebook, theyre all in the business of keeping peoples attention. Hours onbillions of this product as possible. Emily do they sympathize with your views . I dont recall with my meeting with larry. Getersation likes to avoided because it is an uncomfortable thing to look at. It is an innocuous thing. How much time people spend in the web browser, because they wanted to know how much time people were spending on the web versus an in app. It is useful to know, but as soon as you measure how much time people spend in a browser, certainly these 20yearolds try to maximize how much time people spend on the web. So, you manage what you measure. Have to ask ourselves, what do we actually care about . Are these products designed for addiction . Fore are huge consequences children. Emily there really isnt a lot of research on how tech impacts children, shockingly. We actually dont know. Theres an article that gave talksof traction that about the many cultural and social impact of how addiction to smartphones has changed our relationship changed childrens dynamics and relationships. When are they having sex. When are they going out. If you look at snapchat, it puts the number of days in a row that you sent a message to all of your friends. Persuasive, manipulative idea they start tossing the ball back and forth, and kids start to find the currency of their friendship based on whether they are sending this empty message back and forth. That is the number one way for teenagers in the u. S. To communicate. You have 100 million teenagers out there throwing empty messages back and forth. Is any of this designed to help us . Mentioned, i remember rating that, there was no stand taken. It is, fairly, in my opinion, neutral. We dont have a lot of answers here. What we can know is the motivations. Of engineerssands going to work to do every . Do they go to work saying gosh, how can we say cannot the Public Square . No. Drive up onerk to number. How much people are engaging with and how much time is spent on the surfaces. I want to live in a world where the Tech Industry is helping humanity, and there a lot of ways we can do that. Basically it is about changing and we are Lighting Technology why willn values, and we not have it be that way . Emily have you heard from facebook . I have had lots of conversations, and these people industry are my friends. My friend started instagram and i think the has been a reluctance to admit the extent of the scope of the problem and the Business Model is the problem. I think there is a lot of good intentions, but until we get clear Business Model that advertising is fundamentally misaligned with democracy at the Business Model has to capture your attention, then it is better for me to give you things that you agree with them to show you things that you disagree. If i show that reality is more complicated are different than how you think it. Well facebook eliminate all these contexts . The net thousands of engineers who go to work every day, and who are they working for . Theyre working for us, for people who pay. Emily what about people who cant afford a subscription to level the Playing Field . I think the challenge is that the advertising Business Model has indebted us were whole change in culture. How much do those culture action now these cost us in terms of extra data plan usage . Costs add up all of the to society and your data plans half of the stuff that we download on our phone is probably adds. If you cut that out, and actually have these people we would save money as consumers as well. We have to figure out what is that price point and what we are willing to pay for it. Reason roger and i are doing this, Mark Zuckerbergs mentor and i met on the show. Emily i know, you and roger met here and started this big project. Crusade. I think we have to get clear on what it will cost us. The reason he and i are doing think we we dont can survive for a four to live on this model as is. We cant going down this road. Emily how do you think the danger compares to what google or apple or twitter presents . About facebook is that it is the product that reaches the most amount of people. It is the primary surface area for disinformation campaigns, bad actors to manipulate the public area if the scale of facebook that makes it the predominant source of the problem. Obviously, twitter and youtube are also influencing the global leaves and radicalizing people with more conspiracy theories. I do think that facebook deserves the most because of the luence, whether they know they want to or not. Anything they do will negatively and positively impact people. That is what i mean by pandoras box, and now they have unleashed this machine that has automated thoughts. Wally,oing it indonesia, and genocides in certain cultures in the world bali. Politics andng culture. Here, we have fake we have free press where we can talk about fake news. Now facebook is the number one way where we can communicate, and crossing over the border to bangladesh. If you get over to protect the Public Square, not just your in the west, but around the world. Emily how do you think youre going to make this change happen . The first thing is to create a cultural awakening. The first thing is going out there and making sure that people understand that the misalignment of incentives. We did that with 60 minutes. The second thing is engaging employees. Employees of these companies, not feeling satisfied with their leadership not taking issues seriously, is going to be the number one driver in change. Killber campaign didnt revenues or their business, but it did change their culture. Nobody wanted to work at uber. There was a huge exodus of employees, and change had happened. The same thing will happen at facebook. It will be hard to attract the best people in the world if you dont take this seriously. Emily it is hard to walk away from. What roger and i found is a lot of people from facebook we did make a lot of money and actually agree with roger and i. This is not opinion, it is the truth. It is hard to come up against the source. He said we built a mind controlled machine. Shotblocker said that we cant believe what were doing to children. Tristan harris, former design at google, and now with crusade. Peggy so much. Great to have you. He is optimistic about a backup fix daca fix. They believe they want to fix this, but they want to keep the pressure on so we hold them accountable area. Regulators to protect the internet with regulations. Well talk to one company that has petitioned the courts. This is bloomberg. This is twitter, andok, google told lawmakers that they support a legislative effort to restore Net Neutrality rules. This as the legal fight repeal of the regulations. Many have been filed on behalf of 21 state attorney generals and protection groups like free press and public knowledge, and one by the company mozilla. Ning us now from mozilla wrote the block post about this about thisblog post lawsuit. Deking the internet we would like to reinstate those internet principles that we all work and live under since the inception of the internet, and so we can get that as consumers to have this Global Resource available to us. Emily others have complained in some ways it is one we have not seen stronger action from tech giants. Says that youflix shall out the is not a priority right now. What you think of that . I think that most tech throughs support, alliances. That is what it is important for us to make a statement as a plaintiff, so we can control the litigation. We want to be a party here. Emily you said that you shall out he can and the internet as we know it. Why is that such a bad thing . I had a lot long conversation about the internet being imperfect. The way it is set up is that we all have access to information that we want. I want to be alarmist, but think anut politics and what if isp believed a certain way on political issues and a throttled so no one can get access to it . It can impact not just the way people think, but our democracy. It could impact the way the global world sees the u. S. As well. The internet is an issue where no one country should regulate, and certainly no private entity should determine what private access you get in your home. Emily what are the next steps . The litigations will continue, and wept to see how it plays out. It is a longer process in litigation. There is a vote in congress to repeal and rollback those orders. We can see legislators themselves to be able to principles. Ified emily are you talking to organizations were planning on filing lawsuits of their own . We have colleagues who believes strongly in this and some of them have joined and will be intervenors in an litigation. Theyre going to fight just like we are. Emily becky so much for joining us. We will be watching. Well also hear from California Attorney tomorrow on the show. Coming up, another tech company said to be exploring a Public Offering in 2018 details on that next. Feature iture a want to bring to you on our interactive tv function. Can watch us live, you can go back to it, and you can play of the charts on the air. This is for bloomberg said scribers only. This is bloomberg. Emily his story where are watching. Surveymonkey is accelerating conversations with banks to go public this year. The company is expected to be closely watching how other companies fare in the market. Surveymonkey is considering making a lastminute acquisition of another company in the space to enhance value. And the Weinstein Company could have a better in miramax, which by the weinsteins. It could allow the brothers to keep a role in the business. The Weinstein Company has been seeking a buyer since the october dismissal of Harvey Weinstein after Sexual Assault allegations. That does it for this addition of bloomberg technology. A reminder that we are lifesaving on twitter. Chickasaw on weekdays. That is all for now. This is bloomberg. It is 7 00 a. M. Here in hong kong and where life from the asian headquarters. Welcome to daybreak asia is. The top stories this thursday. Are falling higher as optimism over tax cuts. Apple promises took off up 38 billion in taxes and files 30 billion into u. S. Jobs and manufacturing. And from bloombergs global headquarters, it is just 6 00 a. M. On thursday. Goldman sachs finishing with a new low in that training, and how sneakers are helping kick prices at an alltime high