tv Bloomberg Technology Bloomberg August 13, 2019 5:00pm-6:00pm EDT
♪ emily: i'm emily chang in san francisco and this is "bloomberg technology." the shine is back on the apple. shares in the tech giants bike after the u.s. announces -- tech giant spike after the u.s. announces it will delay tariffs. facebook has said they have been paying hundreds of outside contractors to transcribe clips of audio from its users. and, move over, oprah.
redstone cements her status as the most powerful woman in u.s. media as cbs agrees to join with viacom. shares of apple and chipmakers sword in tuesday trading after the u.s. delayed tariffs on certain imports including smartphones as well as laptops. trump said, "is to case they might have an impact on people, what we have done is delay it so they won't be relevant during the christmas shopping season." to discuss in washington, the president of the u.s.-china business council. sarah, do we have any idea what the motivation is for the change of heart? sarah: we do know that the news
gave a bump to the stock market. we sell retail and technology stocks go up today. there have been some declines in share prices in recent weeks. of course, that is an immediate cheer from the market. what we don't know what was discussed between officials of the china and the u.s. on the phone call. they were waiting on purchases from china on agricultural goods and other promises. really the continuation of trade talks. we don't know what kind of promises were given in exchange for this delay. as you said, it is about $110 billion of goods that will still be at in september. december, about $160 billion of goods. it is not that these tariffs aren't going to happen, it is just a staggered timeline. emily: we are learning that the
chinese vice premier had a phone conversation with robert lighthizer and secretary mnuchin. one step forward, two steps back. how optimistic are you that they will come to an agreement? >> there is a little bit of a cycle here. talks, hiatus, more sanctions. talks, hiatus, more sanctions. we have seen repeat of this times.6, 7, 8 are we at the end of the process or in the middle of the process? it is difficult to say. these tariffs will have a severe impact for many people including sporting goods, apparel, and other goods such as toys. while some sectors have been temporarily let off the hook, others are looking at a much
more immediate effect, and this will have an effect on the economy. emily: sarah, walk us through what is on the list, what is not on the list. some products getting hit on september 1, then a new raft of products in december. you have some apple products on both list. as an example of the uncertainty and chaos, for a company like apple, the airpods are on the list for september 1 but the apple iphone for december 15. some companies have said that it messes with their planning. they have already told their clients, the people they sell to, that the prices will go up and now they have to plan for something different. some of the items from the september 1 list include agriculture products, footwear,
some retail items. the december 15 is more your holiday shopping. black friday, cyber monday type of items, things like tv and cell phones. trump acknowledged today that there would be a hit if those tariffs took effect on consumers going into the holiday season. emily: while it is difficult to say what is going to happen in the short term, in the long term, the question is whether this is the beginning of a new normal. what do you think? craig: i think we have to remember, at the beginning of the dispute, which was over the 301 sanctions imposed by the united states trade representative on intellectual property rights, market access, cyber force technology transfer and market access, those are issues that can be solved.
if we go to the core of the problem. elli, remember the cause b the source of our original objectives, those can be resolved. we hope there is a resolution of those issues in the near-term because there are other issues piling up on top of this in the trade, technology, and national security area. until we get agreements in a relatively more simple space of trade, those larger issues are going to become more difficult to resolve. emily: near-term, as i understand it, the next step we know of is a phone call between the two sides in two weeks? sarah: absolutely. it can't be stressed enough that today's announcement, there is no indication that the two sides are any closer to a deal. there were talks scheduled to
happen in early september. the chinese were supposed to come to washington. we haven't heard that those were canceled. if those move forward, more chances for progress. if the december 15 date comes and the two sides have come up with an agreement, there's a chance the tariffs could be delayed. there's really no indication today that anyone is closer to a deal on these really big issues , any ofressing ip theft the tariffs that have been put in place. know: sarah mcgregor, i you will keep us posted. craig, we are going to switch gears to hong kong. protesters at the hong kong international airport, one of the busiest global hubs in the
world, brought it to a standstill. the chaos escalating as police officers began confronting and arresting traders. -- arresting demonstrators. a lot of complicated situations in this chaos. first of all, what is your reaction to just how quickly this has escalated in the last 48 hours and the impact on the global business and tech community? many companies obviously have and at -- have hubs there lot of travelers in and out. craig: i am very concerned that beijing has started to use the word terrorism to describe the situation. that word has great meaning. change in the hong kong situation if this continues. i am hopeful that the
demonstrators understand the import of that word and that there is a bit of a backing off. at this stage, the less than that we need is more violence -- the last thing that we need is more violence. hong kong's status as a center of asian commerce and culture is at risk. emily: there has been violence allegedly on both sides. there was a video widely circulated on twitter of a chinese police officer who was trying to confront a protester. the baton was stolen and protesters started hitting the officer with the baton. on the other hand, there are reports of other officers dressed as protesters, trying to apprehend protesters. what do you take from the chinese reaction so far? you have security forces doing demonstrations in shenzhen, just across the border.
at the same time, hasn't escalated to broad scale violence. craig: i think that the use of the word terrorism is indeed a step change. it worries me greatly that that provides an excuse for the pla or others in the chinese government to go in. if there is "terrorism" in hong kong, clearly beijing would be concerned. i think most would argue this is not terrorism. it is a riot. up ang is clearly going escalatory ladder, and i hope that the violence stops before acts are committed that cannot be taken back and change hong kong's status forever. emily: president trump tweeted earlier, "our intelligence as reported that china is moving
troops to the border at hong kong. everyone should be calm." it is unclear what information the president has, if any. what do you make of his response here? that he is initiating and how it is impacting u.s. business in tech companies and u.s. consumers? craig: the u.s.-china relationship is incredibly complex. i think the president's use of the word riot, which is the same word that the chinese have been using, indicates a degree of empathy with beijing. presidenthe understands that this is a situation that needs to calm down. the violence does need to stop.
the u.s.-china bilateral relationship has multiple tension points, fragmentation points, and there is a great deal of conflict. let us hope that the pla stays out of hong kong so as not to add to that tension, and that the violence subsides as quickly as possible. we should be looking for a peaceful way out of this situation rather than further escalatory actions on either side. emily: alright, well, we will continue to follow this as it evolves. the u.s.-china business council, thank you. meanwhile, the ftc striking another blow to regulators in the crypto community. two bitcoinroval of
funds. the chair said it is unlikely they will be approved anytime soon. coming up, facebook has been paying hundreds of outside contractors to transcribe clips of audio from its users. the details, next. if you like bloomberg news, check us out on the radio, the bloomberg app, bloomberg.com, and in the u.s., on sirius xm. this is bloomberg. ♪ this is bloomberg. ♪
to come under fire. apple, amazon, and google have also been in the hot seat. first of all, say what? instance of --n it is really intense right now because lots of people have heard facebook come out and say that they don't listen to their users' conversations. however, there is a subset of facebook users who use the transcription service on their facebook messenger chance. memof i send you a voice company would have the option to transcribe that memo. facebook has done, in order to make sure that the ai is transcribing that correctly, they have also sent those clips to hundreds of outside contractors who are listening to these people's conversations and
judging the human transcription against the ai. emily: it is also not just to determine accuracy but also if they are violating standards. sarah: it is unclear about why but facebook says yes, they have doing this. they put in the same bucket as what google and apple and amazon have to in trying to use human -- have done in trying to use humans to make the ai more functional. if you ask facebook to transcribe your messages, you probably aren't thinking there is a person transcribing these. it is kind of the same if you have this message on your phone -- have a voice message on your phone that gets transcribed automatically. it is obviously from a bot, and they are trying to make that
higher-quality by using these humans. emily: how would you differentiate between what facebook is doing and what apple, amazon, and google have also been accused of? google, and amazon are all doing what they are doing for the voice assistants. oryou say, "hey, alexa," "ok, google," they are getting command. you are communicating with the company. this is people talking to each other. this is me saying, emily, do you mind calling this source on my behalf because i think you have a better relationship with them. somebody would be able to say that. i do think it crosses a different kind of life. -- kind of line. emily: facebook putting themselves in the same boat as apple and google.
they said, like apple and google, they paused this more than a week ago. they say they stop this now before your story broke. kind of convenient. what do you make of their reaction in the midst of everything else going on with facebook? not having transparency about why exactly they are doing this. does that lack of transparency mean that facebook knew there was something -- sarah: contractors who have spoken to me say they are very concerned that this is an ethical violation. the facebook data use policy says nothing about audio. trying to circulate ads. but it doesn't say there may be people transcribing your audio. on the flipside, we are in a different place with facebook
than with other companies. facebook came off a settlement sase won't do it -- settlement anything they won't do without consent. told that the program to transcribe what these messenger people are saying to each other, is a recent program that started in the last few weeks. even though they stopped in recently, it is also something they started even after amazon was getting critiqued. emily: thank you. i know you will continue to pull that thread. thank you for that great scoop. long-awaited,a cbs and viacom finally announced the $11.7 billion deal. we are livestreaming on twitter. nology. there @tech this is bloomberg.
emily: cbs agreed to merge with viacom in an $11.7 billion transaction. it unites the most-watched network with the parent of paramount pictures and channels like nickelodeon. it followed a marathon session sides cut to a price. what clinched the deal? >> i think they finally realized that after 2, 3 years of going back and forth, that whatever misgivings they had, that they just needed to get yourself they could compete in this streaming war. for the past two years, we have seen time warner sell out to at&t. we have seen fox and the murdochs sell a lot of their
assets to disney. million, worth $100 $200 million. cbs and viacom come even combined, they are worth only about $30 billion. but by coming together, they that willp library get much stronger. emily: how does this position this now combined entity against all of the other newly merged now larger video companies? -- larger media companies? >> most investors would tell you there are probably more deals to be made. i spoke to the ceo of the combined company and he acknowledged that more m&a is likely. they have been linked to companies like lionsgate,
discovery. it is also possible that the red thee family, who will own combined company, say it is time to cash out. it might be able to entice some larger company to scoop it up. emily: take us on a little trip down memory lane, how hard it was to get to this point for these two sides. >> this dates back to when the patriarch of the redstone family was very much in control. he decided to split them, which he thought would unlock a lot of value for viacom. this is a time when the cable tv business is booming. he thinks cbs was kind of dragging viacom down. . then youtube, netflix. looks all of a sudden
weaker. old, incapacitated, how involved he was in the decision-making was of dispute. what we do know is that shari redstone, his daughter, thought it would be better for the company to get together. first, she fought for control of viacom. as ends up installing bob the ceo. then she tries to get les moon ves, ceo of cbs, to merge them. he resists but he ends up having to leave the job because of sexual harassment. then, we have an agreement to do it. now without a lot of fighting and handwriting along the way. handwringing along the way. emily: thank you very much. coming up, stopping the spread of online extremism.
emily: this is "bloomberg technology." a topic we're continuing to follow, the rise of online hate speech and extremism. a site was suspended after incorrect media reports claimed the perpetrator over terror attack in norway had posted on the site before. beeng the website has off-line voluntarily for the last week. to discuss in washington we have the executive director of the institute for constitutional advocacy at georgetown law and
ben brody. obviously there has been a lot of agitation around gun laws and what to do about gun legislation in the midst of this spate of violence, but also a new campaign among lawmakers about writing online extremism. what is the latest? ben: the problem is there's not necessarily a lot that lawmakers can force the companies to do. you had companies like twitter coming to the white house last week and supposedly having a conversation about this sort of online extremism. but what sort of came away from it was we're going to work hard with federal agencies and trade information better. this is something that has been ongoing really for several years now. in some ways we have run up to the limits of those kinds of cooperation and it is not necessarily stopping these kinds of attacks. what you get then is lawmakers looking to other kinds of things like platform liability, do you
need to force these companies to take down gun sales? those would involve legal changes, but it's something folks are looking at here in washington. emily: the problem is even if the site is down, you have potential perpetrators going to other sites, like another that came up in connection to this an alleged where government posted not a manifesto, but a link to a facebook stream. how do you even begin to combat this? >> it's hard, but i do think there is progress, when you push hate, and especially the sort of hate speech that contributes to violence, into places where fewer people see it. -- all there are bigger platforms do a better job over time of policing their site, of enforcing their terms of service, keeping this material off those sites, it does show up
elsewhere, but ultimately it shows up in places where there are few people seeing it and reading it. ideally, fewer people responding to it, with violence in the real world. that still strikes me as progress overall. emily: the owner said he is deliberately keeping the site off-line for now. one of the service providers 8chan.topped working with in the youtube video the owner said he's going to be talking with homeland security. has he been called to testify? what do we know about that process? ben: the house homeland security committee, the chairman is for mississippi and the top republican, mike rogers, have said they want him to come in and discuss with them. they did not say whether it would be public testimony or a conversation with staff, but it would be a continuation of efforts that this committee has
been engaging in for the last several months, especially as they look at the rise of online domestic terrorism and white nationalist here in the united states. they had facebook and twitter and other companies in in the last couple of months and now they will be pushing forward on that. as the chairman talked about that a couple of months, he said we are not sure exactly where it is going to go. there are first amendment concerns but we can't simply let this proliferate, even if the solution is just putting pressure on the companies to do more internally. we just can't let this keep going. a piece withote the five-step process to be taken by tech companies. walk us through that process, in a nutshell. >> it begins with opening channels between the government and the tech sector, as well as within the tech sector, to share information, better, faster, more effectively on these issues. those channels have been open
now, but they have been focus on international terrorism, content linked to al qaeda and isis and groups like that. more fulsomeo be exchange of information about these types of threats that often get called domestic terrorism. there also needs to be strengthening by the companies of how they approach this issue. that's where there is a bit of a that's where there is a bit of a political trap, because companies in my view should do more to take down not just graphic violence itself, but the hate filled rhetoric that seems to contribute to and fuel violence in the real world. , if they ramp up their algorithms to take down the sort of messaging that is anti-immigrant and otherwise far right wing, they will automatically take down some rhetoric from those on the very far right. that's what they were taken to
task for by the same white house just a few weeks before friday's summit. so it's a bit of a political trap, but it's also where to go if we're going to protect people from the sort of violence we have been seeing. emily: rumors have been flying about the death of jeffrey news broke 40 minutes before it even hit mainstream media. it goes to show how powerful some of these fringe sites are. now even the president of the united states reach weeding conspiracy theories about how tweetingwas killed -- re conspiracy theories. it so hard fors people in government to try to tackle these issues. there are well-intentioned people working hard and government to try to do just that, but ultimately it's a commander-in-chief is
contributing to the problem, rather than helping to solve it, that undermines credibility with tech companies, with foreign partners, and it plain old aggravates the problem. that being said, there are those who continue to have credibility in this country with the public and with the tech sector. for them to try to have a conversation that almost puts the president to the side, it seems urgent and it raises the stakes for who this president will nominate as a full-time, not just acting, director of national intelligence. they are among the issues need to think hard about. to have someone who is a straight shooter rather than someone who is contribute into the noise is critical. continue much to discussing. thank you both. coming up, argentina is moving toward yet another economic crisis after this weekend's election. how it will impact the country's growing tech industry, next.
extendedgentina assets losses following the shocking election defeat. a record low against u.s. dollar in monday session. it set off a shockwave with argentina stockmarket plunging as much as 48% in the second biggest one-day route globally since 1950. what does it mean for argentina's burgeoning tech sector?
lisa joins us. despite the fact that you are in , first of all, what kind of impact do you expect is to have on the tech ecosystem there? lisa: it's a very big challenge. there is a lot of uncertainty happening in argentina at the moment, especially with foreign investment. , we don't know what is going on. as you mentioned, the peso devalued by 30%, inflation is that an all-time high, about 55%. i would like to say i'm cautiously optimistic that we can continue with the current administration because this administration has been enacting a lot of policy initiatives and programs in argentina. what kind of policies
have supported the tech sector in argentina the scar? lisa: a cup -- in argentina thus far? it created tax breaks for investors and is a huge step forward in terms of how the and bets onorks entrepreneurs to increase and improve the local economy. it invest between 10000 and 30,000, money for startups and entrepreneurs. policy lots of different and programs and innovations to serve the entrepreneurial market because the president knows it will save argentina.
emily: what happens if these policies do not remain in place or if they are upset as well? lisa: what we need right now is policy continuity, in order to avoid a macroeconomic crisis. we are all hoping that the current administration does stay on course and we do remain a country that is looking toward being part of the global capital market. , it'st doesn't happen going to be a big challenge for argentina, the future of its economy. we could be potentially facing another crisis like what happened in 2001, and it will not just be an economic crisis, it will be a cultural crisis. emily: talk about the kind of startups and companies that have thrived thus far. you have an emerging act tech sector and crypto. tell us more. anybody can tell you that
government isnk challenging. [indiscernible] cryptocurrency, argentines were when the first to embrace cryptocurrency. also a lot of software development is coming into the region. new outsourcing hub for offshore and technology sources. reviewvard business ranked argentina as number one in technology scaled locally. emily: we will continue to follow the situation as it unfolds there.
lisa best sermon, thank you so much for joining us -- lisa besserman. spectacle three will allow users to record with two cameras instead of one. $380 a pair. to man it haded to write down almost $40 million in inventory in his earlier versions of glasses in 2017. and ipo this week. we will talk about how much is worth as we wait. this is bloomberg. ♪
the major league soccer team. they acquired the stake on by a hollywood producer, joe ross. ipo could come as early as this week. said in april it has filed paperwork for the initial ugly offering confidentially with the sec. equities in is an online shares fromfor ipo privately held companies. what would you be looking for when this process -- when this process? >> i will be looking for the softbank ownership stake in the s1. the second part i will look at is non-gap financials, which is a euphemism for fuzzy math that wework has used to describe its financial health. those are the two areas we will
be focusing on. math: what kind of fuzzy has been a concern when it comes to wework? accountesn't take into a lot of the costs and expenses that come with running a real estate company. that's one thing investors will be focused on because it's knotting the thing that can compare to a traditional technology company. emily: how popular have wework shares been on the market? >> despite the brand awareness for wework publicly, in the private market there has been relatively tepid demand for the company. it may not bode as well for the company to become a public entity. emily: how does it compare to other names that we might know? inwe saw pretty active markets like spotify.
they have pretty high awareness even while they are private. we would have expected to see something similar for wework, but it's been a little more tepid, as i mention. the founder himself has sold off something like 700 room dollars worth of shares is the founder, which will be one question he will have to answer over and over again in the investor days before the ipo. an issueere's been with several companies that have recently gone public about founder control, whether a founder can take money off the table before the ipo. this one in particular definitely raises some eyebrows. >> if i had more than two eyebrows, i would raise all of them. you have an opportunity for the founders of some of the early investors to get a 7% haircut on their taxes, but it's pretty rare out there. that will prevent the company from being in the s&p 500 for years to come. you have a founder selling a lot of liquidity pre-ipo.
you have a bit of a narrative -- narrative change for the company, if you recall in december or january the company was planning to raise $10 million from softbank that internet the upcoming $1 billion from softbank. is awe will look for company to have a founder heavy voting structure. have one voters per share compared to the founders. emily: the company experiment with different lines of business that may not be as well understood as the core business. >> that's right. two areas to focus on, wework has expanded from catering smaller businesses and startups and moved up the chain more to moreprise offers -- conglomerates and building a morgan enterprise offering.
the benefit to investors is the they have locked them into longer term leases and there. the company's made three acquisitions in the past year or 2, 1 as recently as last week. trying to solve the office admin function you might have as a business and trying to take that away from you to save you a lot of money, they are focusing investors on that area which they have to, because with the company valued at $47 billion and 26 times their last 12 months revenue, multiple relatir real estate comps tha 1.5 times revenue instead. emily: we will have all the headlines is that crosses. thanks so much for sharing that insight there. thent to return to apple, smartphone maker getting a nice
reprieve from u.s.-china trade tensions. apple shares soaring after the trumpet ministration delayed the next round of tariffs until mid-september, including a 10% levy on mobile phones and laptops. apple has said it will affect all its -- products made in china including iphone, ipad and mac. it's a little bit complicated. there are number of apple products that will still have tariffs in september 1 and several that have been delayed until september 15 if they going to act. walk us through this. >> like you said, there are two sets of lists. the big one is december 15. that's when the iphone, the ipad, the ipod touch, that's when they will get hit. you might want to know why that is such a big deal that it happens december 15 instead of september 1. we are about a month away from
the next iphone launching in the next-- two months from the ipad pro. those product lines are some of the most profitable and highest revenue generating products for apple. the iphone year, even though they've been shifting off of services, still makes up half the company's revenues. new iphones is when a lot of them are sold annually. so they will get a reprieve for at least two months with the new iphones and ipads going on sale. the other list or the lower selling products, people are talking about them. they don't make apple as much money as the other products, the apple watch, home pod, and things like battery cases and apple watchband and imac. emily: so do we know how much will be passed on to consumers? nexttially in the
performance, the iphone. >> we've been talking about tariffs and what the impact will be on consumers. the impact on apple for months now. my thinking is that the impact already happened. apple saw this coming. there has been discussions about this for the past two years or look at the price hike they made to the iphone x a couple of years ago. you look at how high the storage prices are bringing up the prices last year. you look at the $200 pricing .reece in the -- price increase you look at the premium for the new air pods to get the wireless charging case. my take is that these price increases, whoever will be impacted, it is already built into the price and consumers have already been paying for the last year. emily: so the run-up in apple shares, could it just be a short-term bump?
we have no idea what will happen with the trade talks. it could be a new normal between the u.s. and china. >> i would say if were talking about january and february for the reprieve, let's say they were supposed to go into effect in january and then moved into march, investors would be overreacting. midmove from september 1 to december specifically for the iphone, ipad and macbook align. it significant because a lot of new phones will be sold between theember 21-22 and holidays. december 15 is the in when people are going to shell out a ton of money for holiday gifts. so that is really important for apple. emily: thanks so much, mark. that does it for this edition of "bloomberg technology." find us on twitter and follow us
paul: welcome to "daybreak: australia." sophie: i'm sophie kamaruddin in hong kong. counting down to the major market open. stephen: i'm stephen engle at the hong kong airport. demonstrators are being worn they have crossed the line. paul: markets rally as president trump delays additional tariffs on china. consumer stocks lead the way with apple surging 4%. from huaweiand