>> it is wednesday. these are the top stories. was compared to the estimates of profits and they blamed rising costs and competition with rivals. it is the worst performer on the global airlines index. optimism about ties the chinese and investment created one million in u.s. jobs last year.

the taxes of president trump are backed in the news. the white house says that he paid 38 million in tax. a writes down that year. by 2600ews is powered journalists and analysts. bloomberg. andhang seng index is down shanghai is up.

>> i am caroline hyde. plunge on the market help or ahis be a hindrance? will this be enough to dominate the fast-growing market? the companyp shakeup the film industry? first, the aftermath of a volatile debut. looking toames are capitalize on the expanding markets. going public and boosted the share range. that this could

signal a boom this year or that the market is just right for the software giant. the group president joins us now. also with us is the vice president. thank you for joining us. you have written a piece and marketf you do not get a that is better than right now. >> the market has a supply opened and it has been and has all the makings of a mrs. goingarket and to be good for other technology companies and other companies going public.

up and there have been good companies coming are upand the markets and the volatilities are at a historic low and have stayed that way. you have all of the ingredients for a more robust market. this have the charts of and tech was leading the way. about the range and the billions of dollars we saw in the evaluation. will we see a big one,?

problem.is a supply not a demand problem. strongket has been very and it is hard to say how long this will last. if i were at the head of a small company, i would wonder how long the window would be open. >> the ceo said he was halfway through the lineup and that they would come live in 2018 and come a bit higher. the privated markets have capped out. >> it is getting a little more nuanced. it is a real bellwether and they could go public and dictate

their own timing. universe ofder unicorns and companies getting valuations, we are at the end of these stages with the public they are taking they want pause and to see the returns on this and get public. seeeneral, they want to more evidence that this is supportable. >> not quite so juggernaut. >> yes. thatnk part of this is there are companies with

there is not a strong business case for the revenue to justify some of this. cisco came in and we has seen this and the voting power taken away from shareholders with a lot of control by companies. will we see this? there was going to be the demand, whether they had the full voting rights or not and i think it is unique for them and others. it is not to the extent that snap did. in at the last

minute, they were about to launch a successful ipo and they were at that pricing table and really paid a price that was double what the ipo would have been. they are buying up dynamics. >> thank you very much. .hat was carter thank you for sticking with us. there is a story we are watching for you. -- book the punishment would apply to if the company refused to add illegal content. this would be the steepest penalty facebook faces. this comes as the merkel

government faces pressure to curb the spread of fake news. dig into the cycle of volatility affecting public tech companies. a reminder that we are on twitter. right here in san francisco. this is bloomberg.

16% to $83 billion, according to the forecast. the forecast will increase for google and facebook. startingus growth is

jockeying fort advertiser dollars? reach over 2 billion in 2019. with a relatively downbeat day for stocks and following with the lows, let's bring in abigail too little. thisis behind some of selling off? >> investors could be taking a hit of a pause. the s&p 500 was down and the were led by stocks intel, who was down with the kleins and intel actually recovered and microsoft was another loser on the day and

paypal had its worst day since the end of february, after google said there is an apt that will allow users to send money. on the year, it is a different story. you hop and take a look at this #space tag and that is the technology sector and it is up. in orange, down 9%. tech is the top and it is really helped by the big names. sincere is the volatility the volatilityd is low across the board. how is it playing into this? >> there is lots of talk about record lows.

the nasdaq is at a record low and we have another great chart of the nasdaq and it is in yellow and at a nine-month low. there is not a lot of volatility there and you could see the complacency behind this with the s&p up andnd the out-performing. out there forear investors. >> who are the big performers on the year? >> it is the big technology names. these are some of the top tech stocks and this is a last chart. pink chart and that

up with00 and it is facebook and all of these bank stocks trading higher and they have to do with the expectations of the trump tax cuts and it will be interesting to see how this plays out. index relative strength has been overbought for months. that is when my favorites. bloombergto that terminal and everything else for us. how they are taking it on.

>> microsoft was joining the chat world. this program has been in preview mode. it is available in 181 markets. they look to challenge slack and google hangout for corporate customers. ofhave the senior director modern collaboration. >> absolutely. there excited about microsoft and it brings together the teams need to get work done. organizations are using it.

can you give numbers? have organizations that were gamutit and that runs the from the small customer to the large customer. we have large customers across the americas and into europe and africa. here is the demand. there are facts like accenture. and the demand in response seems to be impressive. and he saysto i.t. that he is using it and loving it. it does not seem to be phased out. are they slowly pushing them

out? there is one onto teams and the customers tell us is excel powerpoint and they love the security and compliance manageability. again, really excited and we think we have a compelling offer for our customers. that how you have such great integrated products and they will go with what they know? >> customers are looking for one less window and they are looking for things that were together it is designed to be this

for customers and address a broad range across companies. >> do you think that slack will exist? i have to offer and bring this to the table. i'm excited for what the future holds. >> you are also working and looking to integrate other withesses and passages elements of things. zen effects, is this a thing? >> what our customers expected was the integration with microsoft and being in open

platform. people the ability to customize team's and that's what people are working from outside microsoft. it shows the way they need to copy for the better word. did you always have this in your mind? >> we have been working on customer demand and they have been telling us about a place where a teaching come together and stay on the same page. it is not in response to any particular competitor. it is in response to the demand we see in our customers. we think it is a great cost -- a great complements to email. this requires in male and we had to receive in mail from people

from inside and outside of the organization. tools thatther people only to get work done. >> there are lots of works with customer tools and one of them has received a lot of hype. people are slow to adopt these, why question mark with spring in our guest for the hour. you have done some digging and great analysis. very few companies are adopting it. there is the facebook messenger and you go and look at the fortune 500 companies that onlyargeting consumers and so many have told chatbots and

-- and there seems to be a person working with my questions and it is a person working with this in immediate way. is this manner and it is a speed the hype would have dictated. >> it is hard to build a chatbought. it looks at the status and this lets me becoming that is very simple. they are pushing out content and they had a very narrow conversation window.

is beingmmon mistake too ambitious. >> ambitious and optimistic. they can'tto do and you have tot and teach how to learn and is hard to do. wire do i stop grabbing the low hanging fruit? >> the first thing you do is you you can see that it is

not as easy to catch up and your firm has to teach the team how to respond to consumers. platforms and do they want to use the technologies? i would look at my call logs and this.sk is catching it. up, could the company looked alternate routes? this is bloomberg.

>> i have an update on the top stories. shares are down almost 4%. andshortfall is $74 million it compares to a $50 million profit. sources are telling us the united states is planning to issue indictments at yahoo! and we're told that for people are accused of being in the breaches that comprised hundreds of millions of user accounts. presidenta's former

will be summoned by former prosecutor's next week. a widening investigation into undue influence and corrupt links between government and big business. pushing the boundaries of talents by the latest offer. they said the union does not want negotiations to advance and has given up hope that that is happening. this is bloomberg. let's get a check on how the markets have been trading in the asia-pacific. they australian share market

and the takes surge in the iron ore prices lifting a lot of those mining stocks and you see date andhe year to dropping out the energy players. the region is down and you see 114.ikkei at in terms of other currency, it is looking strong with the dollar stabilizing in the rally up 2%u can see that is and the koran on. you have seen shares and toshiba is coming under pressure and can

through with the news conference in the australian session and is stored on the upgrade. this is bloomberg. debut, it is this unclear if the unicorns will follow. slideares continued to and access to capital appears available. joining us now is the general partner and the ceo. everything just closed in the funding.

thank you for joining us. you about this and it is not meant that way. we ares amazing and making an investment and they and anda on top of that there is a strong belief and conviction in this. there are millions of them and is it gross? there are about 3.5 trillion

isthe world and there invisibility with the digital thing. manyission is to manage as of these as we can. what about where the growth sectors are? in the next five years, there trillionto half $1 around the internet of things and you take that out and there is somewhere between 70 billion and 80 billion and, from our standpoint, investing in this it is something we we have believe in and

andand data aggregation there is competition. continues tot grow, there is room for successful companies. investorsre original of you have this face actors. >> we have been a global isanization here and it evolving as a digital echo system -- ecosystem. consumes thed products and it is important that we center on this as the

digital ecosystem. >> talk to me about what we see. this round. is money still coming in? are they looking to go public? are,dependent of where we i think the great companies get access to capital and it goes and to highlights earlier we see the stock is on the climb this is an accomplishment

and we will continue to see more of that from companies around the world. >> what is the outlook? have you thought about the dynamics? on being aisting bigger player in a few years time? open-minded.o be obviously, is a large moment seepportunity and we will where it takes us. about what this is, at this point. the have to ask you about debacle they have been having on thethis is something

right road. >> as you said, they have not had a great start, to say the least. i can count things that have gone wrong and we take this very seriously and we stand behind the company and it is about the and went components in great companyin a that will continue to grow. can in theo it they last few months. thank you for coming in live. have the founding general

partner, bill malloy. >> bill marist had a change of and they will now proceed he said, whynd scrap the plants? calledd this crazy thing , changing my mind. millions ofeds of dollars. announcements of new funds and there may be other ways to have a bigger impact. >> changing his mind again and he will have the same focus. it is expected to close later this month.

toshiba is up, considering a big move and the tech giant will grapple with massive write-downs. we will explain why next. and diedatch us live into any of the functions we talk about. you could be part of the conversation by sending us instant messengers. this is bloomberg.

withe latest tech news

technical expertise during the apple standoff during the san bernardino shooting. fbi and hegainst the is known as nerve gas and he is companyfor a secretive and his account has been disabled. the just announced it just announced was a change to the microsoft board. up addition takes the board to 12 members. sale inis considering a the massive write-downs. there is a delay in release in third-quarter earnings and it could be written down. it has been in the center of

problems with cost overruns and bones bring in bloomberg's editor. it is painful. they need to get over to the assets. >> it is amazing. a -- plant that is a nuclear plant. by toshiba a few years ago and there was a big problem of accounting involved and the cost of this plan has spiraled.

they will go all the way until the construction is supposed to end. soma concluded that this was they had anand accounting problem a year ago. the stock fell and toshiba is still trying to uncover the problems and how far they go. they figured out the fourth quarter but do not know if it impacts the previous and will go back and do that. it will take until april to figure out. >> they need to study the shift and bring in the money. >> this business could get the most and it is the one they do not want to sell. the problem is that these

costs wouldve 10% georgia electric and the costs battleen rising in a over how much they can increase the price. one of the most expensive pieces is in a resolution where they said you cannot increase this cost anymore and cybersecurity was singled out as part of this. it is interesting. >> if they are going to take on snakes, would it be chinese or japanese buyers? with theunlikely

chinese companies here and the results is a lot of companies who are willing to take this and it is a tough business. when the accounting is phony, it is really disastrous. what more is there with tech? >> they will have to figure out how big the fundamental problems requirementill be a after they figure out the depth of the problem. they have made guarantees about the credit ratings. if it is lower, they will get additional credit to do this work and they are really in a mess. >> where going to bring in steve mcqueen.

thank you. now, a program note. wednesday will have full coverage of the fed decision and the janet yellen news conference. on coverage begins at 1:00 -- in new york. netflix has a strategy to outdo the movie business. withhey are joining forces the industry outsiders. this is bloomberg.

>> amazon is trying to attract shoppers. this is part of an effort to sell more merchandise across asia. they had a simplified version to cater to meet demand.

than 6 billion cars and it makes them eight she rival. down onis doubling their plans to shakeup the movie industry. micro-budgetease the television offerings will be more than 6 billion and, joining us from word and ias has the have urged people to go and see this. big names and big budget. why is netflix focusing on the industry? >> they want to be the most popular online entertainment very place it was

that you heard about and did not have time to see in theaters and on live television and they shows andto the tv they made house of cards and orange is the new black. all the while, movies are popular. they are now moving forcefully and you movie business will see them move into their biggest yet. >> they focused on will smith coming and you have brad pitt. you have big budget. what about what they are not doing. is that really putting off hollywood?

you have theater owners and there are some movies that appear on the same day at home. to go to the theater for a long span of time. movie theaters want to condense that, but they need theater owners to show up. amazon has partnered with traditional movie distributors and manchester by the sea was in theaters for a long time. i remember checking and it was not there. people usingout netflix.

they will not release the netflix movie. >> do you think that this is a wise place to be splashing the cash? >> look at the reason consumers cut the cord and attraction to the content is a reason why. it has doubled in the past six years. >> d think this is the right way theaters?he >> i think it is a dated model that the film industry has. as consumers, half of us own three connected devices and we want this option to watch it on the tablet and the smartphone.

andanies have adapted responded to what the consumers want. to lucas.ake this out you did reporting about industry veterans. can you talk about that? our story, we had a ary experienced producer and production company was based at isversal pictures and he someone who has been around all would a few decades and will be charged with bringing in more talent. >> we will see how that goes. my guest post for the hour, thank you for being here.

that does it for this edition of bloomberg technology. seen -- all this is bloomberg.

anna: the fed prepares for its second policy division -- decision. sure bet.see it as a going dutch. election day in the netherlands. populistng the latest battleground. putting the brakes on brexit. theresa may said she is on track to trigger article 50 by the end of march. the eu signals a good make written wait till june to start negotiations. under fire. the french presidential candidate is charged with misuse of public funds. can he stay in the race?