♪ emily: i am emily chang. this is "best of bloomberg technology" where we bring you our top interviews from the week in tech. our exclusive interview with ceo of apple, tim cook. our one-on-one with meg whitman, the hewlett-packard ceo to give a report on their turnaround in the age of the cloud. another bombshell at uber, the company fires more than 20

employees after investigation into sexual harassment claims. first, to our lead, our exclusive interview with tim cook from the apple worldwide developers conference in san jose, california. the conference sets the stage for the hardware and software that will hit the stage in the next 18 months. this year, they introduced a major overhaul of the apple watch operating system among other products. the big answer is there product to combat the amazon eccho and google home. >> what we have tried to do is to build something that is a breakthrough speaker first. music is deep and our dna, dating back to itunes and ipod. we wanted something, that number one, sounded unbelievable. i think when people listen to it, they will be shocked about

the quality of the sound. of course, it does a lot of other things. we wanted a really high quality audio experience as well. emily: you are very focused on how this could reinvent music in the home. what about these other things? can you do things lik call for a car or order groceries? >> there are a lot of things you can do with it. one advantage we have is there are a lot of things that siri knows how to do from the phone. so, we will start with a patch of those, as phil show during the keynote, then there is a nice follow-on activity as well. emily: let's talk about

e-commerce. e-commerce is very important to these devices. i can order paper towels on my amazon echo. can you tell us about some of apple aspirations in detail? >> what i would read into it is a company that deeply cares about music and wants to deliver a great audio experience in the home. we felt like we reinvented it in the portable player area, and we feel we can reinvent it in the home as well. we know people want a speaker to do more than that. and, obviously, we want a speaker to do more than that. so, we are combining what has thought to be 2 distinctly -- been thought to be 2 distinctly different things from that. i think people are going to be kind of blown away with the experience. emily: how long have you been working on this? >> multiple years. multiple years. the underlying technology in here is something to behold. to get the experience that we

wanted at the quality that we wanted -- like apple products, in general, take a number of years to do. starting from the court technology and building to the product. dutch court technology and building to the product -- core technology and building to the product. emily: you have people out there saying finally. what took so long? >> for us, it is never about being first to anything. if you think back, we did not have the first mp3 player or smartphone or tablet. there was a tablet shipping a decade before. very few people used it. arguably, we ship the first modern mp3 player, smartphone, tablet, but we were not first in any of those. for us, it is not about being first, it is about being the best. giving the user an experience that delights them every time. we do not let that impatience result in shipping something that is just not great.

emily: it is the 10th anniversary of the iphone, and you have unveiled the new ios 11. what does that tell us about what is next? >> i can tell you that ios 11 is unbelievable. both for iphone and ipad. there are incredible things in it from peer-to-peer payments and it is the biggest ipad release ever. i'm incredibly excited about all of it and im -- im incredibly excited about a.r. you saw the demos done today. i think this is profound, and i think we today, as we get this developer release out in the hands of the developers, we will have the largest augmented reality platform in the world. i think we have launched a.r. in a large way to large numbers of people. i'm incredibly excited to see

what developers will come up with in our a.r. kit. emily: more of our exclusive interview with tim cook coming up. how he says apple fights terror threats while protecting consumer privacy. if you like bloomberg news, check us out on the radio. you can listen to us on the bloomberg radio app and in the americas on sirius xm. this is bloomberg. ♪

emily: california is the home to tech giants that bring home -- bring in millions in tax revenue and jobs to the state. governor jerry brown spoke with john mckenzie in beijing. he said america cannot rest on its laurels as competitive pressure from china grows. >> the competitive game is getting more intense. america cannot rest on its laurels. if we are going to spend more time trying to reduce taxes on the rich rather than more

investment in the private and public sector, we are going to lose out. that is kind of where i think washington is going right now. emily: now back to our exclusive interview with apple ceo tim cook. we moved on to politics. remember, tim cook called the president to urge him not to pullout of the paris climate accord. trump decided differently. tim cook disagrees with the president's decision, saying that the global warming crisis requires worldwide cooperation. >> i think he did listen to me and he didn't decide what i wanted him to decide. but i think he decided wrong. i think it is not in the best interest of the united states what he decided. but in terms of the way that i look at this thing and do you interact with politicians or do you not? my view is, first and foremost,

things are about, can you help your country? if you can help your country and do that by interacting, then you do it. that country eclipses politics. emily: you have other people leaving the table like bob iger and elon musk. is the president jeopardizing one of itsnship with key constituencies, the business community? >> i would differentiate leaving a council and advising in a way that you think can help our country. i think the first one is a judgment call that people make. i did not join a council. and so, it is not a decision i had to make, but i understand both sides of that. advising on something that you believe will help america, i

think is a requirement as a ceo. you definitely do that. honestly, if i get the chance to pitch the paris agreement again, i am going to do it again, because i think it is very important that we engage to fight climate change on a global basis. this is not something where you can solve it country by country, it requires a global action. emissions created by one country affect another. it is something we feel very strongly about and i wanted to do every single thing that we could do to tell how important it was to stay in the agreement. unfortunately, he decided something different.

emily: why didn't you join a council? >> why didn't i? two reasons, one is that my primary job is being the ceo of the company. i spend the bulk of my waking hours doing that, and i do so willingly because i love the company and the people in it. so, traveling back east is not something i look forward to doing except for when i need to. secondly, i do not find these councils, in general, and committees to be terribly productive. it was not about not wanting to advise on something where i thought that we could help or that we had a point of view that should be heard. i am doing the latter. i cannot imagine a situation where i would not do the latter, because i think it is in the best interest of america to do it. i am first and foremost an american. emily: we then moved on to

terrorism and cybersecurity. this week u.k. authorities put , more pressure on tech companies to prevent their products and services from being used by violent extremists after a third attack in the u.k. in as many months. apple has taken a stance on user privately in the past in their standoff against the fbi over unlocking the suspect's iphone in the shooting in san bernardino, california. we spoke exclusively with tim cook about what the company is doing to combat terror threats while balancing privacy insecurity. >> these terrorist attacks, first of all, our hearts go out to everyone affected by them. they are horrendous. the u.k., for us, we have been in the u.k. pretty much the whole length of time for our company, and it feels like they are a neighbor. we have thousands of employees there.

so, our heart goes out. what to do we do from helping with this? one thing we have done since the beginning of the app store is that we curate the app store. and so we don't want hate speech , on there, or these recruiting things on there. we have tried to be very careful since the beginning about not having those things on there. we may make some mistakes, but i do not know of anything getting through in that perspective. we are very vigilant on what happens from that point of view. we also, we have been cooperating with the u.k. government in not only law enforcement matters, but on some of the attacks, and i can't

speak in detail about the debt. but in cases where we have information and they have gone through the lawful process -- we do not just give it, but we do it very promptly. i think, i would hope, that they would say we have been cooperating well. i think it is some valuable information. there is, i think, a misunderstanding about -- encryption does not mean there is no information. likely, meta-data exists. and metadata when you are , putting together a profile, meta-data is very important. emily: can we assume that apple is always working to make encryption even stronger? >> the reality is that these cyberattacks on people and governments, it is happening left and right everywhere, these

affect your safety and security. it is not just privacy. it is not privacy versus security. it is privacy and security versus security. so, we are always working to try to stay one step ahead of these hackers who, frankly speaking, have gone from the guy in the basement that is kind of a hobbyist, to a sophisticated enterprise. it takes all that we can do to do it, and we do not think our users should have to think through all this stuff. it is not practical for people. so we tried to stand up for users and stay one step ahead of these guys. emily: coming up, a surprising

bar that it passed. the block ceo joins us. this is bloomberg. ♪

emily: now to a bloomberg scoop. the fallout from uber's investigation into sexual-harassment claims has led to the firing of more than 20 employees. the probe into other employees is ongoing. this investigation is being led by former u.s. attorney general, eric holder. >> these are human resources problems, some of them sexual-harassment. potential gender discrimination and retaliation and more. of those, 20 or more have been fired. some are still ongoing, so there are more firings that could occur. a few of those are senior executives. and i know you want to know who. we don't know yet. uber has to be careful about facing lawsuit from the employees based week out against. there's a lot of sensitivity about who they are. we saw executives leave without statements of why they left.

we are reading the tea leaves. emily bank -- emily: what is happening about the investigation that former u.s. attorney general eric holder is handling? crooks that has gone to a subcommittee of the board and is being very tightly held. that has gone to a subcommittee of the board and is being very tightly held. we expect sometime next week to find out some public version of what they found. really, importantly, what he is recommending. the fact element, hopefully we will find out more about these incidents and also find out holder's recommendation on what the company should do. emily: 20 people have been fired. could more firings occur? >> no one has ruled it out. a lot of people expect to be executives like it is held accountable explicitly. it will be interesting to see what happens with the holder report. emily: in the meantime, there have been other executives who have left.

the head of finance left. >> yes, the head of finance left. the head of growth left, and there was resignations on a result of the sexual-harassment allegations. he denies them. there are a lot of top executives that left the company. emily: in the meantime, there have been two, key hires. both of them are women. tell us about them. >> an executive from apple who will be the chief brand manager, and frances fray who will come in as the harvard business school guru who will come in and give advice to the company on how it can turn the corner. emily: the bloomberg invest conference kicked off in new york. in attendance was john chanos. scarlet fu asked him about one of his big shorts, tesla, and what would stop him from

shorting it. take a listen. >> i think i would have to see the company actually making money selling products. i should point out, we were also short solar city that he bought into, and that worked out better than tesla. the fact of the matter is, this is a company that burns a lot of cash. we think they are going to be burning close to $1 billion a quarter for the next handful of quarters. they have not finished its giga-factory. the batteries are made by panasonic. most importantly, it has the big test ahead of it, the model 3. losing money selling $125,000 cars. they hope to make money by selling a $35,000 car, which we think will be a lot more than that. you have an executive departure list and the only one i have , seen longer i think is valiant. people are leaving left, right, and center. >> a brain drain?

>> well, something. they are not waiting around to see the company's future. the stock price notwithstanding, so we will see. the car is supposed to go into reduction in july. they will be competing with real companies in 2018. i noted with some interest as i got here the opening remarks by mr. musk. told about transforming into in energy company, energy solution company or something like that. he is trying to reposition the company is something more than an automobile company, but it is an automobile company. a money-losing solar roof company subsidiary. in addition, he is going to have to raise a lot of money. rule of thumb is it takes $.50 in capital for every $1 of auto revenue. if he is going to be doing 500,000 model 3's and 100,000 of

the model s and x's, then he is going to need something on the order that will be $30 billion in revenue. he is going to need another $10 billion in capital. he is going to need it soon. teslarians should brace themselves as they will get a chance to buy more stock in the coming months. >> what is the most likely way in your view is the way that tesla story likely ends? is it something in their story that the model 3 does not live up to the hype? >> he will start making money. >> in terms of your thesis becoming validated, would it be more of a sort of investor strike where conditions change, there is a market downturn? >> if the model 3 is not popular, that is going to hurt. that is the one everyone is waiting for. lemon, thats a

would be a problem. the story will have morphed onto autonomous vehicles. at the end of the day, he have to make a car for the masses that is successful. that is what we are going to watch. ♪ emily: crypto currencies hit a new milestone that would have been unfathomable a couple of years ago. the value of the asset class is $100 billion and is up tenfold in a year. getting that 12 digit threshold is largely due to bitcoin which is the largest digital currency. one company that has believed in the category is a platform for digital aspects that is backed by vcs like steve ventures. we spoke with ceo peter smith from richard reid and started about asking what he sees as the -- from the dread -- madrid and

asked about what he sees as the driving force behind crypto currencies. >> i think we are seeing strong demand across a couple of key markets. we are also seeing levels of macro instability across the world. i think that is driving a lot of growth. i think it would be a mistake on focusing too much on that instead of the huge innovation in the space, particularly across the creation of assets. >> when you say a huge surge of innovation, we going to see some instability? we have seen plenty of volatility when looking at the prices. is that volatility here to stay? >> i think it is here to stay, in the sense that the price is going to move a lot. this is a very new industry. bitcoin is pretty established, and trades at a pretty low volatility, relative. the other assets like some of the ico's you are seeing from the newer assets, i think those are going to remain really volatile until they mature and build market depth.

>> talk to us about the trend of ico's? we are starting to see companies , many of them start ups themselves launching their own , crypto currencies. their own token and financing themselves. what is the trend there that you are seeing at block chain in particular? >> i think it is better to think of these as tokens rather than initial coins. these tokens represent some sort of value to these products. or an investment value and the "cold. i think what you are seeing is both established tech companies and new tech companies doing it, but also established companies doing this. you are seeing kik issuing their own new token. you are seeing it across the tech space with both new and established products, and i think that is very interesting. emily: still ahead, another exclusive interview. this time with hpe's meg whitman, why she is looking at profit margins to improve in the

fourth quarter. that is next. a reminder, all episodes of "bloomberg technology" are live streaming on twitter. this is bloomberg. ♪

emily: welcome back to "the best of bloomberg technology." i am emily chang. the annual hp discover conference took place this week, the company outline how it will continue to grow and stay competitive in the age of cloud computing. meg whitman joined us for exclusive interview from the discover conference in las vegas. meg: i think there are two very important messages, first as we believe the world is going to be hybrid. our objective is to make hybrid i.t. simple. what to do i mean by that? applications will be in the cloud and each customer has to find the right mix for them. a lot of customers are rethinking do they want to put as many applications in the

cloud as they originally thought for reasons of price and control, it may be better to keep it on prem. another big opportunity for customers is the edge, when you think about campus, grant, factory floors. the edge, everything other than your data center, is exploding in terms of the need to collect the data and store it. emily: there have been questions about margins, why is the environment so difficult now? meg: our margin in enterprise group, which is a major part of the company, was down a little bit in q2. the reason is, we had stranded costs from our divestitures, we had done some acquisitions that will initially the diluted, significant commodity cost increases. we anticipate that margin will go back up to historic levels by q4. if we continue to grow our high-margin products, growth products like aruba, all flash

storage arrays, our new server that is the most secure in the world, you will see nice financial performance from us as we finish the year. emily: what is the strategy to get costs down to help with the margin issue? meg: we have to -- we have a much smaller, much more focused company. i am probably the only ceo in america that enjoys running a smaller company rather than a bigger company because it's so much simpler. we have an overhead cost structure that we have to get down to be in line with the new company we run. we have to reengineer to make things simple. that is going to lead us i , think, to be able to take up more cost and be even more cost competitive in a very competitive market. volume servers, very competitive business. we need to have a more competitive cost structure. note when wet , spoke last year, you said that dell was making a big mistake merging with emc. that said, hpe stock and growth has been under pressure.

has any of that led you to consider if smaller is really smarter? meg: we are proud of our financial performance and stock performance since the split with hp inc. to hewlett-packard enterprise. if you think of the stock price of the company as a whole, which reached the low of $11.62, if you add up hp inc. hewlett-packard, our share of dxe, and our share of the software company, that is close between $48 and $50 a share. our stock has done really well since we had split off from hp inc. almost 18 months ago. emily: when it comes to m&a, can dell play hardball better because they are private? meg: there are some advantages to being private but actually because their debt is publicly traded, we have a window into

financials much in the same way as a financials public company. they don't get the scrutiny we do. we really like our hand. we have no debt on the company, in fact, we have $6 billion in net cash. we are more strategic. we are smaller, and we are nimbler. we have dry powder to make acquisitions, investments. we can turn on a dime now, which is a different strategy from dell. we are getting smaller, we are deleveraging, and we are leaning into new technology. everything software defined and they are doubling down on old technology and a cost take-out play. it is a different strategy. i like our hand. emily: when it comes to m&a, how reasonable are valuations right now? meg: they have become a lot more reasonable in the last six months. we have made an aquisition, almost one a month for the last six months. venture capital is getting a little tighter in silicon

valley. the willingness to fund ongoing losses for indeterminate amounts of time, that is shrinking a little. we bought nimble right, cloud cruiser right, and they are dead on to the strategy of making hybrid i.t. simple, powering the intelligent edge, the services we need to make it happen. we are feeling good about the opportunity to make reasonably priced acquisitions that fit our strategy. emily: what are the attractive targets? what are the areas of interest targets? on your radar? meg: first, it is the software defined data center. think about simplivity. that is more of a software company then and infrastructure company, but it's all about deploying applications easily in a hyper converged environment. we are very interested in software defined. nimble is software defined. all flash storage for entry-level and mid-tier. we are also interested in the

edge. aruba was incredible acquisition for us, growing 33% in the last quarter. we are super excited about that. we bought basically a machine learning for security on the edge network. we continue to look at acquisitions at the edge. emily: you have spun off your enterprise services business, but you are still in services with point next. how does the service business evolve? meg: services will be an important part of the mix. every company is trying to take their data center on a transformation journey from an older, brittle, high cost, not particularly flexible or agile environment, to a new environment that is essential for their competitiveness with their ability to win in the market. services, people need help on that journey. while we will not do ito, i.t. outsourcing, business process outsourcing, apps maintenance, we will do advise and transform, and that is what pointed next is. we think it is an important part of the business. the other part of our business

is the ecosystem of partners. here at discover in las vegas we have the biggest presence of partners, si's, that we have had in many years. we have got a lot of folks that are anxious to do business with us because they don't view us as having an asset that is competitive to what they do. we are still very focused on the technology we have a whole bunch , of players who are really interested in doing business with us now, and that is great. emily: there is always great fascination around what your future holds. how long do you plan to continue running things at hpe? meg: i love what i'm doing, i have to say, now being ahead of a smaller, more nimble, faster moving company makes this a lot of fun. i love what i am doing. i have more work to do. we still have another phase in our journey to make hpe on that it -- hpe everything it can be. i am here until my work is done. emily: what is it that will work

do you feel you have to do? -- what is that more work that you feel you have to do? meg: we now have to take this very focused company called hewlett-packard enterprise and we have to make sure we have a cost structure that allows us to compete in the marketplace. we still have a little too much overhead. we had overhead that oversaw a $110 billion company. we have to redesign some of our systems, redesign some of our processes to be more appropriate for a smaller, more nimble company. we have some cost take-out to do, a lot of innovation coming to market. i want to make sure that lands well, like our gen 10 server. it is getting rave reviews. it is the most secure server in the world. everyone knows security is one of the big issues facing every i.t. department. emily: you urged president trump not to pull out of the paris climate accord, along with other business leaders. hours later, he pulled out. how does that impact our relationship with the president? meg: as you know, i was on the other side.

as a lifelong republican, i endorsed hillary clinton. but once president trump won, i said to our employees, i wrote a note that said, president trump has we need to give him the one, benefit of the doubt. so we are giving him the benefit of the doubt. but when we think there is something that is not in our best interest, the country's best interest, i will speak out. i said i thought we ought to stay in the paris climate accord. the next generation of industries around clean energy and others is an important thing for the united states of america. it doesn't impact our relationship. people can disagree. we happen to disagree on this issue. emily: tim cook also told me that he thinks the president decided wrong on paris but plans to keep an open dialogue because he thinks it is important for america and for the company. what is your strategy, what is the number one thing on your priority list when it comes to discussions with the white house?

meg: we are in favor of tax reform. we think the ability to repatriate cash overseas at a much lower tax rate is important, we think a lower corporate tax rate would spur growth in the united states. on the other hand, we are not for the border adjustment tax. that is very difficult for companies that import a high degree of their goods. the retailers, technology companies, we think that is not in our best interest, and by extension, in the best interest of the united states. we just make it clear where we stand on issues, very respectful, civil discussions. that is what this country was built on, the ability to disagree without being angry. emily: we will bring q more of -- we will bring to you more more of that exclusive conversation with meg whitman next. the hpe ceo updates us on the partnership with microsoft. and authorities in the u.k. are calling for greater regulation of the internet following the recent terrorist attacks but tech firms are pushing back. this is bloomberg. ♪

emily: now back to our exclusive interview with meg whitman. she hit the stage at the annual hpe discover conference saying that hpe is seeing a slowdown in the public cloud. we asked whether businesses are really rethinking their move to the cloud and what that means for hpe going forward. take a listen. meg: the way we see the world, it is around hybrid i.t. you have to start with your apps and your data. what do you want locked down in your data center, only touched by your employees' hands? what might you want in a private cloud with public economics, what do you want in a managed service? there is a role for public cloud but we are seeing for reasons of cost, security, control, people are beginning to say i wonder if i have gone too far in putting workloads into the public cloud as then what to bring the workloads back. emily: what does that mean for hpe?

meg: it means we have to do what is in our customer's best interest, and their interest is all around creating a multi-cloud environment, hybrid i.t. environment where they can have the right landing spot for their applications and their workload. we make sure they don't end up with vendor lock-in. a lot of people say once you move something to the cloud it is difficult to move it back and very expensive. we want to give customers choice and make sure we do what is best for them. emily: there have been questions about your cloud partnership with microsoft. how is that actually going? meg: it is really going well, we have done a lot of business with microsoft for many years. they are our public cloud partner. when we work with a customer and they say these are the workloads i would like to have in the public cloud, we say azur is a great opportunity. if you want azure cloud functionality on-prem, you do azure stack which runs on hp inc. year.

i think microsoft has a very good strategy, we are great partners with them. it's about giving customers choice. where do they want their workloads, where do they want their data? if they want a public cloud partner, we recommend azur. emily: if they start making their own data center equipment, what does that mean for hpe? meg: this is a dynamic industry. it is interesting. for a long time infrastructure was not in fashion but we see all kinds of people getting into the infrastructure business. if that is what microsoft does, we will try to figure out how to have a relationship around cooperation-competition. sometimes we cooperate, sometimes we compete. we admire the company a lot, we will figure it out. emily: tech stocks have been on a tear since the election despite political uncertainty. what are the market dynamics that you see helping or hurting hpe? meg: it's a challenging global environment right now, there are some countries doing very well and then there is uncertainty in a number of countries, and

uncertainty is not good for business. our strongest market in europe is germany. germany is doing incredibly well. we see a lot of business is -- in germany. but the u.k. is challenged, public sector spending is down, u.k. firms, people investing are holding back because of brexit. it doesn't mean they won't spend, but there is a pause. i don't know what is going to happen here, maybe i should take some time to think it through. japan is pretty strong for us right now, australia is coming back. latin america is doing very well. the u.s. continues to be a little uneven. one quarter is strong and then we see a little bit of weakness. it is a mixed environment. we have to make it work in every environment, so we sell as hard as we can and give customers as much choice, no matter what is going on in the backdrop. emily: you have led several high-profile technology companies. i'm curious what you think about the unicorn startups, what you see them doing well, what you see them doing poorly?

meg: the startup scene in silicon valley and elsewhere is alive and well. it is a renaissance of innovation. think about what you are seeing. there is a lot of very innovative companies that are unicorn valuations. what we are seeing is the ability of venture capital money to keep funding money-losing startups, we are starting to see a pullback there. one of the reasons we were able to buy simplivity, it was not clear if they were going to be able to raise a next round and they needed to be tucked into a big company. nimble had a great fundraising round but felt they needed to be tucked into a bigger company. we think there will always be unicorns, new companies, but we think it does present an opportunity for us as we think about our m&a strategy and innovation strategy. emily: hpe is heavily investing in what you call the machine or , your vision for the future of computing. how will this help customers in

the future and how is that vision evolving? meg: one of the big challenges our industry faces is the demand to build data centers, the demand for safe, and the demand for energy is unsustainable. we work in parts of the world where there is no more energy on the grid. that caused us a number of years ago to think through the fundamental model of compute. it has always been a cpu centric model. we turned it on its head and make it a memory-centric compute, instead of through copper wires data is moved, it is moving photonics through a smaller space with more energy efficiency. we are pleased with the progress of the machine. we are already embedding parts of the technology into our next generation server storage. we are super excited about the amount of data that can be processed with very low power utilization and in a small form factor. it is right on track. it has had its ups and downs, but we are super excited about it.

emily: our exclusive interview with hpe ceo meg whitman. coming up, u.k. authorities calling out the tech community after the attacks in london, saying the industry should do more to stop the threat of terror online. we will discuss what could come next. this is bloomberg. ♪

emily: social media platforms are under heavy scrutiny following the terror attacks in london. u.k. authorities went directly after the tech industry saying it needs to step up its work to fight terror. but tech firms say they are already fighting terror and need to come up with ways to flag things for removal. what should be done next? caroline hyde caught up with the institute of strategic dialogue's ceo in london. and in new york, paul quigley. >> we have been working to combat extremism of all varieties for over a decade now both off-line, and now more and

more online and have done a lot of work with the internet companies also with the government on the issue. there is a challenge. we see terrorists, extremists, deploying incredibly professionally online. and they got a head start. we have seen too little done to compete with that message of hatred online. we see too little professionalization of the civic voices that can do a lot to counter voices in that space. in many ways, this is where tech companies can be the most effective and support scaled professional, upscaled endeavors in this space. there is more they can do, they had admitted that is themselves. they have committed to setting up an industry body to drive not only counter speech in this space, which is really important, and education, because that is important, too, but also technological innovation. there is more that can be done

to identify and get rid of the most egregious content swiftly. the thing we need to be worried about, always, is the overstepping of those lines. there is a lot of gray area content. very difficult to identify what in all cases should and should not come down. that expertise does not sit with internet companies. i don't think anyone wants them to take on a full editorial role. caroline: where do you think the battle of the moment is between tech versus government? do you have a view on how the response has been so far? >> what we have seen is when these kind of problems have emerged before, the platforms have responded very quickly. the sharing of different forms of content online, quantifies the data very exactly. what we saw in the u.s. election, a large amount of fake or hyper partisan news spreading online. we saw much less in the french

election and even less again in the run-up to the u.k. election. i think the tech companies don't want governments to come in, they will race in and try to solve the problems through technological means themselves before the laws get drafted. and hopefully, be successful in doing that. i think that is the strategy that we will see deployed again here. >> the u.k. government and theresa may is talking tough on this, but the u.k. government would also prefer an industry- led solution. they have the best wherewithal to dry the technological response, no question about that. they are putting pressure on now to make sure internet companies follow through on the promises and they had made. but there is also something to be said for engaging, for letting certain types of accounts stay up online. we do a lot of work monitoring and identifying extremists prior to that law enforcement phase, prior to them crossing the threshold to terrorism.

there are ways in which we can engage further upstream, those sorts of individuals and make a change. caroline: you cannot then target them. >> the issue is whether we drive them underground too far. there are constituencies that we want to be able to watch and engage with successfully. those engagements have to be done very carefully and done by people who have an intimate knowledge with the issue, we work with former extremists who reach out to them online, use peer-to-peer engagement. the internet companies have been very much behind those sort of activities. facebook has launched a major initiative to support counter speech. so has google supported such initiatives and worked on digital literacy, digital citizenships. it has been a major thing. how do we get young people understanding how quickly they can fall into the rabbit hole of

extremist thoughts of communications online. caroline: paul, firstly, are you optimistic that we can see some sort of an internet, internally bred from the technology side of things, help us spread of extremism online? >> i agree there will always be a gray zone. twitter took the step of removing 300,000 some accounts, facebook has described it as a hotbed of terrorism. facebook is doubling its moderators. there will always be the gray zone. at what point does supporting a political cause in the middle east bleed into expressing an extreme view? this discussion will not go away. >> which is why i would say this has to be a partnership between private sector, between the tech companies, and civil society. ultimately, that is the private partnership needed to really

respond to the challenge publicly. emily: that was caroline hyde. a new report out by nielsen shows ratings do not equal social engagement. the company conducted its first social media rating study that includes data from twitter and facebook to find what shows were getting the most attention. for example "the walking dead" , was by far the most viral show on social media, but was only the eighth watched show over the last tv season. trailing behind that show is "empire" and the abc "bachelor" franchise. that does it for the best of bloomberg technology. we will bring you the latest in tech throughout the week, including our coverage of the e3 conference in l.a. we will be hearing from the take two ceo. that is wednesday, 5:00 in new york. 2:00 p.m. in san francisco. remember all episodes are live

, streaming on twitter. check us out. that is all for now. this is bloomberg. ♪

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