tv Bloomberg Technology Bloomberg March 27, 2019 5:00pm-6:00pm EDT
emily: i'm emily chang in san francisco when this is "bloomberg technology." lyft is scheduled to boost their ipo. demand is strong. meets withs ceo trump facing tough questions about google censorship and relationship with the chinese military and accusations of conservative voices. we will get the latest. facebook attempting to curb racism.
how they are cracking down on white nationalism and hate speech. boosteding company lyft the price for its ipo. it will offer 30.7 7 million , upes at 72 dollars a piece from the $68 per share in the original filing. they are aiming to raise as much as $2.2 billion. eric is in new york. i assume this suggests demand was strong. >> we already reported that lyft was telling investors they were oversubscribed at the original price range, there was plenty of appetite. it's sort of follows if you have too many people at the lower price, you raise the price and squeeze some of them out and get more money out of them. moving the price range up, good news for lyft. your conversations
with investors, have they expressed concerns about the revenue situation? it is clearly a momentum story. revenue doubling as the focus. $911 million annual loss last focus.s been less of a people talked about amazon, a company that lost a lot of money at one point. it has gained a lot of market share, is eating into uber's position in the united states, and i think there is hope that the u.s. will rationalize. but it is a risk to bet him a company that loses so much money -- on a company that loses so much money. emily: these things can be controlled, the number of shares, the price. you think uber is watching every step lyft is taking and taking
notes? is definitely cheering for lyft. they think if lyft is worth this, take what they are wet -- what they are worth, add that to the food delivery and autonomous projects, and you add that together and that is the value of uber. good valuation for lyft is great for uber. the calculations people will do will be obvious to figure out their favorite estimate, giving advantage to being the leader because you can take more money from that and coming up with a valuation for uber. it is only good news for uber. emily: at $72 per share, that billiont above the $23
market cap potential, right? >> to the going to commit exact calculation. there is a technical distinction between the shares trading on the valuation, which will include these irs use and dilution that is not happening. translating the share price to the exact valuation and market cap, i don't have the answer. emily: eric, appreciate you being careful about your math. newcomer, going to get back to the road and lyft. president trump met with google ceo pichai, who was visiting the capital to meet with joseph dunford, chair of the joint chiefs of staff, to talk about concerns over googles ai in china. he met with the president, as well. trump tweeted, just met with the president of google, who is doing quite well. he stated he is committed to the
u.s. military, not the chinese military. dismissed political fairness and there he is things google can do for our country. the meeting and did very well. , not thef google president of google. alphabet.ed not quiet -- not quite calling google like he did tim apple, but what do you think about the meeting with the president? >> impromptu. google hasn't told us that they were expecting this or not but the president mislabeled him. didn't seem like it was well choreographed. this is a sensitive issue, something google has dealt with this summer when reports came about that effort around dragonfly, the search engine in china.
pulling back them from the military contract. you had a lot of republicans and the president accusing them of hypocrisy, not being willing to work with the u.s. military but proceeding with plans in china. this is part of google's large cloud push. this is their next venture in sales growth after advertising. their two biggest competitors, amazon and microsoft come are working with the u.s. military and have operations in china. emily: the pentagon and the chinese military could be potential customers for googles business. walk us through some of the nuances. the president has in the past accused google of favoring the chinese military over the u.s. military. the thingsone of that is important to understand meeting withes
veterans. there was a meeting that sundar pichai was supposed to attend ofk in the fall but in terms some of the political fairness stuff the president talked about, lots of people i have talked to said the recent accusations that have bubbled up now and had bubbled up in the fall, that is a way to get the base out. what they are worried about is, you are going to see action on something in washington may be in six months or a year and it may go after something like that platform immunity people like google and facebook enjoy where they can post something or users can post something on youtube and aren't responsible for it. those are the nuances people are looking at. emily: google says, we are pleased to have productive conversations about investing in the future of the american workforce, the growth of technology and our commitment to working with the u.s.
government. i want to talk about the meeting with general dunford. google pulled out of some work with the pentagon and has opened an ai lab in china, which was one of the focuses of the general's conversation. >> i think what is happening is that the department of defense has been worried for a while. they have talked about the arms race around ai with china, and the pentagon wants to have the best tech. they see china and russia invent in this. in this. google spent a decade telling the world the have the best ai and the clear signal is that they weren't in jedi, the $10 billion defense contract. it is unclear if they are bidding will for more work in the military. be signaling, it will interesting to see if google tries to accelerate and bid for more contract as the dod moves
to cloud computing ai or if they retreat. general dunford says it is about looking at second or third order affects of u.s. business ventures in china, which i suppose is a point if you are concerned about the u.s.'s position in ai vis-a-vis's china. >> this has been described as a cult or clash. liberals silicon valley versus the conservative military. dunfordple like general are looking at is the larger trend of trying to understand, how do we look at these innovative companies yet of they are headquartered in the u.s. but they are global. that is how they have to structure themselves and pursue opportunities. how should the u.s. be dealing with these u.s.-based companies that aren't really quite american? quite ask them to
pursue business in a way that exports american values when there is so much opportunity to be had in china. i think what dunford is saying when he says it is not about google is that he is looking at a broader way, what it means to be having an innovative military of thoses to keep some things out of chinese hands while leveraging the commercial side. another story about google's efforts in china, the intercept reports google executives are carrying out secret work, a secret internal of launching a search engine in china. google repeatedly denied this. they have a statement out saying this is inaccurate, we have no plans to launch search in china, there is no work on such a project, team members moved on to new projects. what is true? it is clear, and the intercept did a good job with
their central point, google is not being transparent with its employee base. emily: is that what you believe? to say.nk that is fair google made a decision in years past, they had radical transparency, and there has been an inflection point where they decided not to tell their employees every decision they make around sensitive issues like military and china. in my reporting about china, google sees a trend which everybody is seeing, china, if you look at the innovation coming out of china, they are pushing past u.s. in many respects. .t is a huge market google has been thinking about this for years. people say that google thinks in the long term. even if they are not going to launch a search engine this year our next year, they are thinking about, what are we going to do 10, 20 years from now? is no google says there
work undertaken on such a project. is that a lie? >> i'm not sure. they are thinking a lot about google, they are thinking a lot about china and google is a search company. they are not giving up on china. the dragonfly, the adoration they were working on, may be dead but not google's efforts in china. thank you both. was very close to a software fix for the 737 max 8 when an ethiopian airline jet crashed on march 10. the plane maker spent months refining the software. flight data from the october crash of a jet in indonesia showed the system repeatedly tipped the nose down before pilots lost control. boeing says the upgrade proved more complicated than the manufacturer estimated. facebook is attempting to crack
emily: facebook has taken a hard to whiteosts relating supremacy and is applying the same approach to white nationalism, or attempting to. they announced they are banning expressions of white nationalism and separatism on the platform starting next week. after an investigation by motherboard in conversations, they concluded the concepts cannot be meaningfully separated
from white supremacy and hate. what is facebook doing differently? policy is a pretty major shift. activists have been calling for them to make the change prolonged time. facebook for a long time has banned white supremacy but they nationalismwhite and white separatism. the argument on facebook's part these are different and nationalism and separatism are oft of the rudder concept nationalism, like american pride. but when it was reported in motherboard this is how facebook views the issues, there was an uproar. terms, said these other separatism and nationalism, are euphemisms for white supremacy same.ey are one in the after months of talking to civil rights groups, experts, advocacy groups, facebook came to the conclusion that they are right.
they are banning all of these ideological terms. take so longd it to come to that conclusion? >> great question. many groups say it is very late. this is more than a year after many of these tragic events am a the recent new zealand shootings , which was live streamed on facebook. we have seen these social media problems create great policies that are stricter than before, good aslicy is only as its enforcement mechanism so we will see how they will improve enforcement. facebook executives admit they need to get better and faster at finding offensive contact -- content. emily: how successful have they been on cracking down on weiss to privacy -- white supremacy? the end of lacey p claims facebook doesn't do it well enough. p claims facebook
doesn't do it well enough. >> the new zealand shooting was shared across many platforms before facebook clamped down. whitely are they banning nationalism and white separatism, if someone posts or searches something related to the topic, they will be redirected to a nonprofit group that tries to get people to leave these hate groups. the advocacy nonprofit group was founded by a group of extremists that changed their behavior. emily: our civil rights groups happy with the changes? them say this is great news and other platforms like twitter and youtube should immediately implement stricter policies. twitter has never called out these groups specifically, but they upgraded their policies at the end of 2017 to include a ban against groups that conduct this conduct and you can't be
affiliated with a group that uses violence to further their cause. aren't the only hateful issues on facebook. what about everything else? the idea of abuse of the idea of abusive hateful misinformation, this is what has been the issue, the core issue these services have been dealing with. the key question is, how do they balance proactively getting rid of the content while maintaining free speech? change will become commercial among politicians who have been on the right, criticizing these platforms for having an anti-conservative bias. some people will look at the policy and think it is infringing on free speech, but advocacy groups are optimistic this is at least a step in the right direction, although it comes rather late. emily: what's next? facebook talks about using technology and human recesses --
resources. in the new zealand shooting, it didn't work. his facebook hiring more people, trying to improve technology? applying whate they did before, using computer systems and algorithms to basically proactively find misinformation, as well as when content is flagged, it will go to one of facebook's more than 15,000 moderators who will review the information and if it file it's a policy, they will remove the content. they need to get better and faster at this. the core issue is that the manipulators are always able to move faster than hate -- then facebook is able to react. how can they get better at that? thank you so much for bringing the update. facebook has a lot of work to do. apple is opening its video app to other platforms, but google's android is notably missing. the latest in a patent infringement saga, next.
emily: breaking news out of the u.k., the results of the latest vote on changing, the regulation changing brexit. they are in. mp's supported i-4 hundred 41-105 -- supported it by 441-105. arliament have been voting on way to gauge sentiment. we are waiting for the votes to come in. we will bring you them when we get them. apple debuted a slew of new services including the updated tv app with video streaming. tois opening the services other platforms, including devices from amazon, roku and samsung.
but still not android. apple music remains the only service supported by android ofpite it being 85% smartphones. mark, is it surprising that apple decided to open to any of these other device makers and not android? >> it is surprising in one respect and en route -- unsurprising and the other. apple's positioning themselves as a services company and when companies do this, like google, amazon, or microsoft, if you want to get software and services on every device platform possible, google obviously has 85% of the smartphone operating system market globally. apple holding out is surprising. but if you look at the metrics as to where people watch their look atou take a netflix last year, they are
saying 70% of people watch their video on tv. what apple has done is, it struck a deal with the major market shareholders for tv environments, whether that is roku, amazon fire tv, devices from sony and lg and visio. in that respect it is not surprising. emily: are any of the other to beservice is going available on non-apple devices, apple news, apple arcade? >> good question. from the looks of things, it appears those are going to the apple exclusives. apple news, i don't know how well that would do one other platforms given that it would not be preinstalled. the major benefit for apple news at $10 per month is that it is pre-built-in. apple is able to promoted to new iphone buyers. people will know it is there every time they open up their phone, whereas it won't be
preinstalled and android. how many people are going to subscribe to the service if it is not pushed in front of your eyes on a non-apple device? emily: presumably anybody could use it, the apple card. do you need to be an apple device user? >> good question. i say yes. unless they opened a website to apply for it, because right now you need the apple pay app which is exclusive to the iphone to order the physical card. emily: i know you will continue to follow that for us. mark, appreciate the update. coming up, salesforce hit with a lawsuit by 50 women claiming trafficking on backpage.com. we have the details next. this is bloomberg. ♪
this is bloomberg technology. salesforce is being accused of profiting off of ads for sex workers. it is said the comforter -- company knowingly supported database tools to promote prostitution. as women describe themselves victims of self -- sex trafficking. what are these women accusing salesforce of? >> they are saying that salesforce has been providing technology and software to back
page to help them rejuvenate their business. that effectively was to help get attract new users to customers and traffickers to come back to their site to traffic and purchase women for sex slavery. they are 50 of those women who are claiming that they have evidence of what is happening but that salesforce was doing it knowingly also. salesforce said they are committed to the ethical use of take thisuct and they seriously. with the san francisco police department and they walked me through back page. it was very clear that there was illegal things happening there. things not good for women and children.
how does salesforce defend itself? >> salesforce makes tools that help companies get new customers or hold onto existing ones. it is able to track information about customers and market to them. as of 2008, it is clear that there was scrutiny about back page and there were allegations that it was being used for trafficking. it was five years later when salesforce began a relationship with the company. about theteresting timing is that simultaneously, talking about the importance of combating human trafficking. salesforcething that highlighted. salesforceroups and said their technology could be used against it. the most recent billing
statement that we saw in this lawsuit shows that the company anda relationship and 2016 that would have gone until 2018. if back page was not shut down, it is unclear if salesforce would have stopped doing business. >> what are these attorneys for these women -- what do they have to prove to prevent there was some sort of nefarious behavior by salesforce? what they would have to show that not only did salesforce have a relationship with back page, but that the trafficking was supported by these contracts and that salesforce knew exactly what they were getting into when they signed these agreements. when they were customizing tools for salesforce, they had to know explicitly that retaining customers went retaining traffickers.
that is exactly what the plaintiff's attorney is saying. how could they not know? congress was investigating back page. attorneys general said back porch -- back patient is to be shut down. said more than 90% of back pages of revenue was coming from sex trafficking. how is it possible that they did not know -- that will be difficult for them to defend in court. >> i think for salesforce, this could be a situation in which the left hand was not talking to the right hand. i know from sources that there is a lot of pressure in the sales organization. it is a company that projects a warm and progressive image in terms of corporate values. ultimately it is a $13 billion business that has grown by putting pressure on sales reps
to start new deals with companies or to expand existing deals each quarter. salesforce may be arguing that ultimately they did not know what was happening. it comes in the context of another example when salesforce did business with an organization that ended up being controversial. emily: didn't they do something around immigration? >> last summer we reported that salesforce had a contract with customs and border protection. specifically, employees within salesforce were upset when they were thinking about this contract. sayinggned a letter please reconsider this contract. at the time, the trump administration was apprehending emily's crossing the border and separating them. salesforce employees like the company's values said this is
not something they should be remotely close to. they did hire an executive to pay attention to these types of deals going forward. something we are talking about more broadly with other tech companies. what makes the fact that this is involving sex trafficking different? this isn't just another business that salesforce decided to give software tools to. >> that is the bottom line. facebook inave sued court over sex trafficking. the distinction is, are these are they able -- to draw a line between profit and social responsibility? thatttorney concedes salesforce has its priorities right.
they don't support sex trafficking. that is not the allegation. does the left hand know what the right hand is doing? emily: have those other cases succeeded against facebook? >> they are being argued in court in three states right now. they have not been litigated through and through. statement froma salesforce. what are your sources telling you about how this is being received internally? marc benioff is saying facebook is the new cigarette and it's important to be mission driven and social conscious. what is happening? >> salesforce -- this is not landing well within the company. i think that there really are going to be serious questions asked of the company at this point. what will the controls be?
it is one thing for the company to have a philanthropic arm for him to care about philanthropy and other causes. it is another thing for it to be clear across the organization including to the sales team -- be careful who you do business with. tech companies can argue that these are just tools we are providing. if someone is using our tools maliciously, we don't have culpability. we have seen in recent years that line of move closer to tech companies having culpability which led to the shutdown of back page in the first place. emily: what's next? >> the company will probably respond in court in the next 45 to 60 days. there will be a motion to dismiss. it is not something that is going to go to trial this year. , possibly we will find resolution. emily: thank you both so much.
again against a no deal brexit. they have been voting on eight different alternatives. this is on the back of theresa may saying she would resign if they voted for her deal. i am bringing in caroline hyde. what is at stake right now? >> how long brexit might take. what options are left on the table and when we might see the resignation of theresa may. the current speaker is saying that the parliament has rejected a norway style brexit option. basically there are eight different options being debated and voting on. this is a nonbinding vote. they are known as indicative of. we are finding out what if any can garner a majority in the house of commons instead of theresa may's own withdrawal she has beench
building a little bit of momentum on. boris johnson said he would back it. part saying they would reject her agreement. we look at these options, they are rejecting the soft brexit proposal. they also rejected an emergency brake to stop a new deal brexit. they are rejecting everything. this is also -- this is exactly what he who proposed it wanted. to show there is no majority in parliament therefore they must back theresa may's agreement. the question is whether this man speaking now will allow it back for a third vote. parliament has rejected a referendum on the brexit deal. that is important because we were wondering if they would be a second referendum. millions have been marching over that in london over the course of the weekend. all intricately worded
types of votes but generally speaking, we can see that there is no majority for any brexit options. does this mean that theresa may's own agreement will be allowed to come back to the house? emily: the deadline to vote on theresa may's deal will be on friday. will that happen in time? i want to bring and guy johnson. it seems like parliament is rejecting everything. where does that leave the u.k.? >> in a very tricky place. we have also seen the dup coming out saying this will not back theresa may's deal which scuffles her deal. everything has been rejected. may's deal.eresa she doesn't have the numbers to
get it across the line. everything has been rejected. maybe this is what they were hoping for. prove that heard it should have a chance. without the dup, it doesn't. it will be interesting to see how we proceed from here. the idea was that we would circle back and bring the ideas back that have been more well-received back on monday. it seems that now everything has been rejected. work through the mathematics of it all to see who has abstained and who has not. moment, we're still in the possession where nobody within the house of commons is prepared to vote for anything but they are prepared to vote against everything. thus far, this process is not yielding results. it seems the one thing they can agree on is they don't want to leave without a deal but they can't agree on what the deal
looks like. do you think that this deal will be voted on by friday? that's the eu deadline. there is a number of things that stand against it. the speaker of the house has made it difficult for theresa may to bring the deal back to the house of commons. without significant changes. she could get around that if she was so minded. however, she would have to believe that she has the numbers to make it happen. the meeting of the drg, the brexit caucus that took place earlier this evening did generate some good news for her. boris johnston said that they would back her deal. i wonder whether there were some backtracking as a result that the dup would not back the deal
from him. some of the heavyweight brexiteers have said that they would back her. which props up, her government, she is going to have an incredibly difficult time getting her deal across the line. at this point in time, unless something changes to get that done. if we don't get it done by friday, it looks like we are heading for a long brexit extension period in theory, wicked have more votes early on next week. she will definitely struggle right now. she is still in a difficult position. brexiteers over the last several days seem to have been turning back toward her. what or how does her agreement --resign when brexit happens how does that change opinions? >> it brings some key political voices back toward her side.
seeing an option to take her role. we know that's what boris johnston wants. many feel that he would like the role of prime minister. why he was willing to back her deal as well as -- as long as she was willing to take the exit. they would renegotiate it with a new prime minister in place when someone else takes the helm. this is why certain brexiteers like the fact that theresa may is willing to hang up her cap and call it quits once she has finished the deal -- bound a divorce deal and handed over the reins of power to someone else. the british pound the sinking on the fact that we could have no sort of majority.
clearly they cannot find any clear path for brexit. this reflects the mood of the whole country. andivides the country families and friends in somebody different ways. no wonder the elected people that represent them cannot find any sort of majority either. at u.k.ou are looking parliament. the vote showing no majority for any of these brexit options. we are continuing to follow this story. this is indicative of the gridlock among the british people as well. we will be back with more of bloomberg technology after this break. ♪
emily: employees at kickstarter announced plans to unionize. kickstarter says the move is a pivotal moment for tech and hopes to set the standard for the entire industry. discuss this is our guest. what do you think is happening here? >> what you are really seeing is a maturing and growing pains of the tech industry. companies that were once startups are now fortune 500 companies with hundreds or thousands of employees. you see employees beginning to or like theyized don't have a voice. emily: what do you make of the fact that the first tech company to do this is kickstarter?
not google or facebook. why kickstarter? >> i don't know the reasons behind why they are unionizing. i have seen the memos. it looks like employees are looking to have a voice. i think the real question is what do they want? a union can only do so much. they can help negotiate wages, terms and conditions of employment, benefits. if they are happy like that is the strategy or where the funding is coming from, that is something the union cannot negotiate for them. they will not have a seat at the table for that. effortsnionization among white-collar tech companies is rare. why? laborause the national relations act is a 20th century betute that is trying to applied to a 21st century business model. it was an active back in the 1930's to help low-paid workers
and their working conditions. now, you have companies that have campuses with free food. it is all different now. it will be interesting to see how the law applies to this new model. there are executives within the company reportedly arguing against unionization. i assume that is not uncommon. how does that generally play out? >> it is not uncommon. it plays out in the sense that companies and executives, they want the chance to correct whatever employees are saying is wrong. they want to make things right. they want a chance to see what the problems are. why the employees are unhappy and rectify the situation before a union would come in and negotiate on behalf of the
employees individually. >> with this become a trend? will we see other companies doing this? >> other companies are looking closely at this. they will want to know why the employees are trying to unionize and if they do unionize, what the employees will ask for. are they asking for wages or other things? that a unionngs might not result for employees. emily: that was my next question. in general, are the employees who unionize happy with the result? do they feel that life is better than it was before? >> i think it depends on the employee you ask. some employees prefer a union negotiating on their behalf. others might want to exceed more and merit rather than seniority. they are frustrated that they
cannot succeed quickly aced on their merit as opposed to seniority. emily: thank you so much for joining us. we will continue to follow this. a sleepy start to u.s. ipos is about to get a good bounce. lyft ipo is expected to be followed by over. one says it is the most exciting ipo year since 2012. >> i think 2019 is setting up to be the most exciting ipo year since 2012. you have wonderful companies. airbnb.t,
on the enterprise software who areou have others highly anticipated next-generation software companies. you have to go back to 2012 when facebook went public and introduced investors to the social media space. also, we had a great crop of cloud software companies. the other thing about the ipo market that we have observed is that when you have a constructive equity market combined with moderate volatility, the market is not too hot not too cold, that creates the best conditions for an ipo. think lyft will be successful. we will be following this every step of the way.
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