♪ mark: i am mark crumpton and you are watching "bloomberg technology". and you today president trump warned penalties to drug dealers don't go far enough and the

scourge of opioid addiction will end under his watch. >> it is terrible and we have to get tough on those people -- we can have all the blue ribbon we can have, but if we don't get tough on drug dealers, we are wasting our time. that toughness includes the death penalty. mark: authorities say a serial number could be to blame for four explosions in austin this month, two men were wounded on sunday after explosions went off when they were riding bikes, and police say the explosives were detonated by a trip wire and show a different level of skill. in new york, i am mark crumpton. "bloomberg technology" is maxed. next. ♪

caroline: i am caroline hyde, emily chang is off today, and tech driven still off in stocks, and facebook is leading the tech route, and reported misuse. we will be you the latest on this developing story. and uber halts its autonomous car's after a pedestrian in arizona is killed. first to our lead, facebook turning and its worst a wipeout after the social network giant faces new pressure from the u.s. and europe amid officials demanding that reports of a advertising data on 50 million

users without consent. the selloff in facebook spark pressure in stocks today. let's check in with abigail doolittle for more. >> it is pretty amazing, backing up to the major averages, it was an extraordinary day considering we open lower, but midmorning we were sharply lower. it felt like it came out of nowhere come at the morning starting off slow, and then midmorning at midday those losses accelerated. 500 with itsd s&p worst day since february 8, and if you recall that was during the other period of volatility that came out of nowhere. relative to the day selloff, facebook is one of the triggers, the data breach of user data by , andidge analytics

facebook is going to be set off a-- and it talk for other tech names. facebook had its worst day since march of 2014, down more than 2012,e worst day since and a risk off tone. alphabet, and cisco, among many others. these high-tech names have been very well, but there could be some more pain to come. if you look at the technicals on #btvook -- let's look at g 1506. the buyers have been mainly in control but with the volatility a have a seeping coil, and gap lower with lots of black

friday's lows and today's open tells us the buyers were blindsided and sellers are stepping in. the 200 day moving average, all of this suggests we could see more bearish action for facebook. more bearishest action could be ahead, not just for technology but for major averages. it certainly is leading into stocks.- bleeding into caroline: many say this is a buying opportunity. will discontinue? in termstime will tell of what is coming next, investors hate uncertainty, so if there is any real issue here, any sort of fault on the part of facebook, you could see a stock selloff and those technicals -- the stock can go below its low.

-- points to a decline of one or $40, so that would certainly suggest the selling and lead will continue but time will- tell. caroline: abigail doolittle, brilliant as ever. to continue the discussion on facebook and we begin sarah frier with more. and david kirkpatrick, friend of the show. the facebook, " effect." let's talk about the timeline because the data misuse was known and cambridge analytic a -- they thought they got rid of it. facebook put out this

long post on friday saying it received new information that leads them to believe that cambridge and an x -- what they were referring to was a new support that was supposed to come out the next year, and the next day we got this bombshell report from the new york times and the guardian that explained that this data is still in the hands of cambridge analytics and so it aller, unraveled from their. today facebook came out and said we don't know if cambridge analytics has the data and we have to do and not it. , abridge agreed to a audit digital forensics specialist came in to their servers to check whether or not they deleted this data. this is unraveling as lawmakers in the u.s. and britain call for

mark zuckerberg, somebody from facebook to come out and face responsibility and explain what happened here. caroline: fascinating in terms of the company reaction. david talk about how you feel facebook in and of itself is responding at the moment. they have been bombarded with the realization how powerful have gotten. david: often it is the cover-up and not the crime, and it really is a crime on facebook spark. -- facebook's part. it could be that it may end of being the case they shouldn't have disclosed to many of the that aometime ago commercial organization acquired their personal eta that was supposedly for academic use. these are complicated questions, and what is not complicated is that in this dispute and so many

recent other controversies surrounding facebook, we have not heard the voice of mark zuckerberg at all, and barely that of sharon sandberg. my opinion is that it is a strategic error of the highest proportions that they seriously underestimated the degree of which people are upset. they are basically hiding their heads in the sand. voices,: talking about you are saying we are not hearing from facebook leadership, but we're hearing from cambridge analytics ceo saint that i can emphatically state that cambridge analytics does not condone or engage in an entrapment by haidi traps and does not use unsure materials for any purpose. do you expect mark zuckerberg to be called up in front of u.s. government lawmakers in front of europeans? will he take to the stand? i want to clarify that

the quote from cambridge analytics is a channel for news undercover operation where they spent time with cambridge analytics and reported that the use of methods. in terms of if we will see mark zuckerberg testified in front of lawmakers, certainly if they ask you may have to. zuckerberg's strategy seems to have shifted over the last few months in the beginning of last year if you recall, it was being open ofn it to be taking user questions about traveling to different parts of the country and try to understand facebook concerns. now we see him very much to himself. they have not come out and talk about this issue in the public eye and for this particular issue, i think one of the reasons may be that facebook hasn't confirmed on its own

whether these reports are true based on its own data. the report they put out or the blog post they sent out on friday sort of lends weight to news reports -- and later they had to say they weren't sure were true. the company is bungling the response right now. i think they will have to take on a higher level of response was to get facts clear on their end. seen an: we have emphatic voice in the market and the selloff we see in facebook. i want to dig into the bloomberg #btv in, and go to g your terminal, nbc facebook shares are down more than 8%. not only facebook, but you also have amazon and netflix and google, all they drag slow on this day. you think the size and influence

that facebook is being realized in and of itself -- will this be a turning point? you have written the book on them. the way you asked the question is exactly right company -- does the company realized? even to this day they still internalize themselves as a scrappy startup. they think we are still struggling for success, they don't realize they are bigger than most governments and their influence in the world. they are completely unregulated transparent,y on the world is worried of how their system works and does not have information to access how problematic they are. that is for facebook to remedy. they are only starting to realize that, and the fact they do hide behind facebook pages and a occasional tweet is

indicative that they don't want to engage with questions that are being asked seriously by us and every media. beenine: and they have working with regulators before and we'll see how they will continue to do so. thank you david kirkpatrick and sarah frier. stock we are watching other than facebook is oracle. third quarter earnings is in line with analyst estimates. this is the company's transitions to competing products. this but recent years trying to transform itself from a traditional information technology vendor in take-out contender and oracle has been at its future on a database software that automates functions and is growing a suite of applications. fromare facing competition other vendors like amazon, and

they are saying that operating margins will continue to expand. we continue to bring you all the headlines. a self driving uber kills a civilian. we discuss. this is bloomberg. ♪

caroline: a story we continue to watch, a self driving car from uber has killed a pedestrian and what a be the first death due to a autonomous vehicle. the woman was crossing a road, and the car struck her and she died from her injuries at the hospital. uber has suspended all more wess cars, and for

begin "bloomberg technology" reporter in san francisco. any clarity of exactly what happened and uber's swift reaction? yet, we don't have the police report but we know the tragedy occurred last night at 10:00 p.m., the one was not at a crosswalk, the car was an economist mode and we don't know if the car identified the pedestrian and then stop in time or if the car didn't identify the pedestrian. there is a lot of unknowns. at this point companies like uber and waymo and gm are waiting to see what leaders and the public response. caroline: and you cover off the bat significantly, you think gm and waymo take similar steps in reaction to what happened to a uber,? the city ofunclear, chandler -- they are not restricting waymo, waymo is

testing without a safety driver in the front seat. with bloomberg, there was a safety driver in the vehicle last night and all test vehicles have someone sit behind the wheel to take over if they need to go to manual mode. when mo is the most aggressive, it is not care if they said anything today or changing lance, but at this point they are going to roll out a commercial product to customers this year. caroline: what about consumer confidence? this is what many advocacy groups are going to be highlighting, concerns about the safety of these vehicles, but in the longer term the hope this technology can drive safety. mark: that is what every company is working on and they firmly believe the safer alternative to human driving. don'ts income consumers have knowledge on self driving cars and they don't know how they work necessarily. there's the issue of public trust we don't have a great sense of.

cyber security concerns and safety concerns are paramount. there was a incident two years ago with the tesla autopilot software, and it hasn't set the industry back in a meaningful way so it is unclear how this will change things. caroline: we will cover closely with your help. ai a realitym made with watson. so what is the company predicting the next five years in tech? find out next. this is bloomberg. ♪

caroline: ibm is getting ready to make its addiction -- big prediction impact, monitoring the pollution to our oceans and the ever-expanding cloud ecosystem -- it is all going down in las vegas at the ibm conference, and that's welcome the idea senior vp of cloud and

research with standing by in las vegas. welcome to the show and thank you for joining us. i have to look at your five technology focuses and trends in the next five years and you are talking about crypto and quantum computing and blockchain -- could this add to ibm's bottom line in the next five years? good to talkine, to you again. solutions being built for helping double-shifting or safety, these are solutions we are absolutely going to add to the top line and bottom line. cryptou think of computing, it implies it will be a commercial entity, and when we think about ai, it is are ready a business for us and will keep expanding as we go around. all of these predictions are part of our strategy. they are challenges but the technology that underlies them

is already contributing, and in the case of quantum it will contribute to our bottom line. caroline: you are world renowned for the watson, will the ai platform be able to work across cup computing or will it have to be with ibm? -- you talk about accessing the service, the works on our public cloud, but you can have applications from other clouds, salesforce -- examples of companies who have their own clouds to call out to watson service and give the answer back to their application. use itnking customers for their premise come and not just in the cop, so you see a multi-cloud journey that plays out and watson laissez role in plays aney -- watson role in the journey. caroline: i am thinking of aws

working with vmware, is this something you are having to respond to? we have many partnerships of our own. -- ibm has been in a car journey for years, and we have 1400 clients who work on our public cloud. in addition to which we have thousands more on our private cloud. becomes a aspect of a hybrid cloud. many are going to run private clouds and run public clouds and will run multiple public clouds and the agri-environment has to work together. will find others also does it becomes a world of cooperation. caroline: and the players are big and hefty when you like at the competition.

yet microsoft as well, big player's in comparison to yourself. how do you try to win over a startup who is looking at the multitude of offerings? what makes you different? it is different based on how much regulation is in the industry based on sensitive data and what your cloud is good for. if you are a startup that wants to work in blockchain or to work on iot, or a startup that is wanting to make sure the data is always encrypted -- if you look at those aspects but i would say we come out ahead compared to anybody else. at the end of the date engineering also matters. the quality and resilience and overall security and disaster recovery as well as data our cloud centers give more flexibility in terms of which geography the data

resonates. thatine: we will see how competition continues. wonderful to speak to you. thank you for joining us from los angeles. up, launching a new credit card without plastic. will hear from max levchin next. into the bloomberg terminal now, and you type in g #btv 1535, you will see what i am seeing right now with technical indicators saying the selloff can continue. facebook trading below its 200 day moving average. this is bloomberg. ♪

mark: here is a check of first world news. authorities in austin are urging residents to be vigilant after a fourth bombing by a potential serial bomber in the texas

capital this month. >> we want to talk to him because it is unclear what message he is trying to send, we sent out for numbers and it is unfortunate there is another bombing after our press conference yesterday we asked him to contact us. we have people here to talk to him. mark: sunday night blast set off men,trip wire wounded two two people were killed in previous bombings. the british by minister says russia's capabilities and intent to carry out military grade nerve gas agent of a former russian double agent and his daughter -- she double down on accusations that the attack murders a pattern of behavior by russia. the syrian government released a video today showing president assad visiting troops on the front line of the newly captured areas near the capital of damascus. he said that today you are conducting the battle of the

world. students return to classes at florida international university following last week's bridge collapse that killed six people and attorneys announced the filing of a lawsuit. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. it is just after 5:30 p.m. in new york, and my colleague will allen is here with a look at the markets. paul, good morning. >> trading is up underweight in new zealand and the index is off about a third of 1%, and this is of course we saw all the major indexes in the u.s. finish weaker, particularly the nasdaq slipping 2% and facebook posting the steepest fall since 2015 and trading below its 200 day week average. we take a look at futures here byaustralia, we are weaker

6/10 of 1% and the nikkei futures out of chicago is weaker at 1.3%, we also see weakness in the aussie dollar. we wait on minutes of the reserve bank of australia's march meeting. they yen also unchanged on the greenback, and a quick look at commodities. oil is down for the first time in four sessions and iron continues to weaker with stockpiles and chinese sports. in the finance minister meeting. i am paul allen in sydney. more from "bloomberg technology" next. ♪ ♪ this is "bloomberg technology" and i am caroline hyde. our top story, facebook shares

plunging, after it was reported that the political data firm got a hold of private information of millions of facebook thousand ahead of the residential election, and this selloff is a big buying opportunity for investors. joining us now from new york, ivan, why the by? uy? have the are going to issues like this with data and the things people post, but when the stock sells off, i have said many times it is a buying opportunity first. this specific problem is with cambridge analytica and not specifically with facebook. it was not a data breach, it was a misuse of data by a vendor. i think facebook may have recourse to that vendor. caroline: it seems that many analysts out there agree with you as we dive into the facebook page on bloomberg and type in

anr, analyst recommendations. you have two sells out there, a small block in the red, and the prices going down in the yellow line but you see the price target remaining lofty. i want your take in these price targets. is regulatory reaction potentially a oversight break into those price targets? ivan: we don't use price targets, but i believe the stock is cheap and there is many things that facebook can continue to do and is doing to further monetize. business is selling advertising to their user base to find what their user base is interested in and likes and provides targeted ads in things of interest to them to further engage them. the one thing about facebook, if you don't know what the product is and the product is you -- facebook offers the user based to advertisers and helps their advertisers to better target

people that would be most interested in buying their products. there is a huge aggression of advertisers going away from a traditional media, which is broadcast to a broad audience, and using tools like facebook and facebook's analytic tools to better target customers don't be most interested in their products. caroline: we see a backlash with regards to instagram. many philly they didn't like the algorithm and the way of which adverts were targeting them. we see other startup social malia companies do well. you think we'll see slow down with that business model? ivan: the growth will slow down over time because they have a huge penetration into the population. they have over 2 billion users on facebook overall, and facebook will continue to figure out how to better engage those users. at some point facebook could

have a tiered service offering that offers a free service to the basic users and then offers more deluxe service with more features that they start to charge for. too in the click through's the ads, there could be opportunity for facebook users to pay for their subscription with click through's. there is many things they could do, and one of the things they are doing is using artificial intelligence to better find the more likely customer for a specific product and better tailor things that you may be interested in. people do like to see things they are just up in. caroline: ivan, great to have you here and why maybe now is a buying opportunity for facebook. and our next guest, i am talking about max levchin, you know him as the cofounder of paypal and

yelled chairman andy has helped many businesses. max, thank you for joining us. you advise companies and put the transparency at the heart of your ethos. how do we see companies like facebook also have to look at transparency. i think that is exactly the core lesson to be learned here. privacy information disclos ure, or the lack thereof. what does the wishes a good one for my bad one is if a company is clear to users of what their data is used for. if you borrow money for a firm ask for personal pieces of information. ber bank account data can used for a pricing credit, and our goal is to protect that data and to make it very clear what that data we collect from the user will be used for and who it could be shared with. i think as we move forward,

every company be held to an increasingly higher standard. and some of them will be painful. at your: i was looking twitter profile and recent tweets you put out on march 1 all regarding a study put out for 2018 showing trust in the u.s. has fallen away. in particular you noted that technology companies and the tech industry is the most trusted out there, whereas financial services the least. you think tech companies will become less trusted? max: i think the rumors of the mice of trust has been greatly exaggerated -- the demise of trust has been greatly exaggerated. we can rely on observations from polls and surveys or try to lead the way and do the right thing. i am focused on making sure our

firm remains interested in highly regarded and honest company. i hope other companies and ceos take these lessons to heart try to push the envelope forward as opposed to hide behind statistics. caroline: let's talk about pushing forward, you make a announcement, a new firm in the store. you are going into bricks and mortar. rivals like tackle the actual credit card because you will be a credit card without plastic, and you will be up against other loan providers such as the likes of lemon club. in-store androduct online is very specific and we lend money to create a honest and transparent loan specific to the purchase. many companies like the ones you mentioned are fundamentally about personal loans and refinancing debts. those are viable ways, but we are focused on making sure you don't get yourself into trouble or at least understand clearly

what you will pay and what it will cost you if you choose to use a firm to finance it. one thing that is important in retail is that it is changing. the rumors of retail staff is greatly exaggerated and it is not going from off-line to online, but it is changing in a very big way. ways to be a separate set of experiences when you shop off-line have been blending rapidly, and the company began as a way of offering credit to folks shopping online and letting them take something that they would have a hard time affording cash and splitting it into a clear set of payments. over time we have become clear that people with research and go to anline would physical retail location and by their or the other way around and start off-line, maybe consider buying it, go home, maybe their mind --

consider buying it. we have gotten a clear message from retail partners that we have to be in both places, left to be everywhere their customers are if we are to be partners to retail, so the product today really answers the question, are we were the customer wants to buy. i believe we answered that. caroline: talking about being everywhere, you mentioned amazon is perhaps eating at the heels of retailers. and looks as though financial services could be amazoned as well. is is a competitor you have your eyes on? i spent most of my time on my company, i think amazon is a great company with a lot of fish to fry and we are a tiny company like quickly and we have many tech is where try to accomplish. i think what we can do for

customers and how it can be better partners for merchants. caroline: what about being better for the investor base? peter teal back your company and he says he doesn't like san francisco. would you think about moving from san francisco? max: my company and employees and friends are in san francisco and i am pretty well-established here. i have my gripes of the city and its management and i tried to contribute what i can when time allows, by trying to solve some local problems which are certainly not zero, we have one of the most worst homeless problems that i am concerned with, the at the moment i am planning to stay in san francisco. it is difficult to hire here, i have to say that. caroline: the competition is fierce. some financial companies wanting what about fintech, american express offering loans that perhaps you have been

cooking your teeth with and showing how to do it may start up world. are they coming into your space and can older ones reinvent themselves? max: that is a great question, differentiations with us and the old guard, we built our pockets on the solution that we are aligned with customers and we don't money with customers being late pay, weomers getting to don't make money from customers noticing, it is transparent and honest and a lot of traditional financial service companies business models are fundamentally built on this idea of what you don't notice, we can pocket. i think it is really difficult for a lot of incumbents to say, we are going to take what amounts to have of our profit line and voluntarily give that up because there is this new wave of thinking of transparency and honesty. it is too hard, especially for publicly traded companies saying it is ok, we don't have to make money on hidden fees.

it is a difficult step to take, siam not overly concerned with the traditional financial institutions deciding airport to fundamentally we aligned themselves with their customers. it has not been the case for a long time now. caroline: and it seems to want change its tune. great to have you in the studio with us. thank you very much. not a developing story for you. mullings reportedly like some of toys "r" us toy stores. the spaces to create amazon branded locations and will follow amazon's pushed into bricks and mortar grocery stores, bookstores, and cashierless stores. and another headline to bring you, the washington post reports president trump is preparing $60 billion in china tariffs by friday. we continue to monitor the

story. this is bloomberg. ♪

caroline: back to our top story on facebook. sintered dianne feinstein called the center of the judiciary committee to hold a hearing of reports that a firm that worked for donald trump the 2016 presidential election and properly obtained and retained the facebook data of more than even afteramericans, facebook asked cambridge analytica to delete the information. what does this mean for the very thing that makes facebook attractive to investors? the 12th of specific information it has on each of its users worldwide. douglas, the ceo

of a cloud-based marketing company that is also a partner of facebook. are you worried about the ways of which facebook looks after data? i wouldn't say i am worried. facebook is actually very effective of the data. they have apis for integrating with whom the application interfaces, and they are strict about what you can access. fascinating. in the moment you are not worried and you think they have a high bar, and interestingly this dates back to 2015 and they changed their own rules but it seems they learned that a company, cambridge analytica, is able to harvest 50 million user data, all from a at that started with 270,000 users.

do you think this could have occurred at another time to this significant degree? have i think from what i learned about the story and the weight of which this app obtained his information is that you go into a app and you want a convenient way to register a login. you see it with a lot of apps where you register through a facebook login or you login through facebook and they often ask you and it tells you what that information is going to be used for. occasionally you will see the app is going to be used for information to see france. iends. a good example of that is the iphone, and we see pictures of your friends, the apple mobile app has basically gotten permission from you to get that information. this is a convenience to users and is generally -- it seems

like the firm misused that and like to the users and got around facebook's security provisions. i think ultimately cap link the a role inbook plays that but it wasn't something that was a data breach or facebook handed them information. the information they do obtain is limited but that example of getting photos to show you your phone calls, that is one of the prime examples how that data is used. this is how the story needs to be told more freely, it would seem to address the specific targets. i want to know from you as a ad partner, are you worried about the regulatory backlash and d rate latest change the business model for you? there is a lot of talk about that and that at industry

is regulated and largely regulated through the industry itself. agreeing to certain rules enforced by firms like bloomberg -- and companies google, still house, it is faster and more effective than government relations would try to respond to rapid shifts in technology, and i do think you will still see a focus on even more preventing these kind of things. one thing you will notice on facebook is that facebook prevents and regulates -- no one ever sees that, so i think self-regulation works and the government is obviously very interested in this topic right now. caroline: mark douglas, wonderful to have your perspective today. coming up, facebook's slide is

costing zuckerberg is only how much is he seeing his fortune drop? that is next. this is bloomberg. ♪

caroline: back to our top story of the day facebook posting its worst day of trading since 2014. u.s. and european officials demand answers that a political advertising from retained information of said millions of users without their consent. meanwhile, facebook ceo arc zuckerberg is definitely feeling the pain as well and his fortune got by $4.9 billion, and currently sitting as the fifth richest person, falling one spot from earlier in the day. story, andidely read -- we saw aally significant drop-off, how has this played out?

the biggest loser was seen as the tech community. >> he was $4.9 billion down today, and he basically -- jeff bezos was the second-biggest decline or by 2 billion and i was led by the sentiment that the story around facebook brought most tech stocks down, say it bezos and zuckerberg and the google family down a couple of million each. 71 .5 billion left to go, but, what about going forward? what does this mean for him? what you think it means in the mind of a billionaire? he is out there saying hey, 99% of my fortune is going to charity, so when facebook aterperforms, looking ahead this money going into his foundation and the initiatives behind their.

has 71rop, but he billion, so he has a bit of wiggle room. thereforeand he is out of the top four and is number five. tom: exactly. thank you very much, indeed, and that does it for this edition of "bloomberg technology" and will have more of the font from facebook data story on tuesday's show. is calling on mark zuckerberg to answer questions before lawmakers and he will be joining us. and a reminder we are live streaming on twitter and check us out on weekdays at 5 p.m. in new york and 2 p.m. in san francisco. that is all for now. this is bloomberg. ♪

haidi: faced it plunges in the firm is accused of mishandling information coming it could influence elections. mark zuckerberg has lots $5 billion so far and both sides of the atlantic want answers. haidi: