♪ mark: you're watching "bloomberg technology." let's begin with a check of first word news. a british health officials says a former russian spy who was left fighting for his life after exposure to a rare nerve agent is no longer in critical condition. the poisoning of sergei skripal and his daughter, whose condition is improving, triggered a crisis between moscow and the west. the eu says facebook told it up to 2.7 million people in the 28-nation bloc has been affected by the data privacy crisis. in e.u. spokesman says facebook confirmed that number in a letter. >> it is already clear that they -- that this will need further follow-up discussions with

facebook on implemented changes. the context on the already mentioned updated european data protection rules and questions on the democratic process. mark: facebook announced changes to its advertising policies that it says will make it harder for rope operatives to set up fake accounts and push divisive points of view. in south korea, the former president park geun-hye has been sentenced to 24 years in prison. she was impeached last year over an influenced meddling scandal and was convicted of fines from bribery to the leaking of state secrets. in new york, i am mark crumpton. "bloomberg technology" is next. ♪

emily: i am emily chang, and this is "bloomberg technology." coming up, markets are sinking again, and investors are worried that the trump administration will not back down on their trade confrontation with china. plus, one of the most famous investors in the world could be changing his tune on bitcoin. could the cryptocurrency get a new wave of support after falling dramatically this year? facebook is working to regain the public's trust, rolling out new rules for advertisers. the move comes as ceo mark zuckerberg is set to testify before congress next week. first to our lead, u.s. stocks continue to slide friday, marking another week of losses after president trump ordered a review of additional tariffs against china. all three major averages finished the day down over 2% with the dow seeing the biggest amon, falling more than 500 points. i want to bring in romaine

bostick. and our guest host, tech economy ceo and author, david kilpatrick. romaine, i want to start with you. walk us through the day and the week at the end of a few not so great weeks. romaine: this is not a week for the squeamish with a wild swings today. we had a 1% move in both elections, all throughout the week. five days this week, the s&p and the nasdaq have moved 1% or more intraday and closing up or down 1% or more this week. to put this into perspective, 27 times this year so far we had the s&p 500 move 1% or more. we have had 31 times we have seen that for the nasdaq. keep in mind, last year for the entire year, that only happened eight times for the s&p 500. it is a lot of the same story here. we're seeing a lot of the mega-cap, large tech names move lower as people are making a reevaluation of what is going on out there in the market. trade concerns weighing on the

market, as well as concerns with the fed and the pace of rate hikes. if you want to look to where some of the biggest action was, if you look at the nasdaq biotech index, the philadelphia semiconductor index. in semis, we saw it fall. a lot was due to violence in chipmakers because of a lot of competition coming out of china. for the biotech index, this week we had insight pharmaceuticals announced earlier today that one of their biggest drugs to treat melanoma failed in a late stage trial. of a lot of pressure not only on the stock split the entire sector because there were a lot of companies in the sector hoping to see gains from that drug and potentially pick up m&a activity surrounding the drug. that weight a lot on the index. emily: let us dig deeper into the trade discussion.

we had a tweet from the president saying china, which is a great economic power, is considered -- they get tremendous perks and advantages, especially over the u.s. does anyone think this is there? we were badly represented. the wto is unfair to the united states. meantime, you have the president's topic -- the president's top economic adviser larry kudlow saying this. larry: this is not a trade war. there is no war here. all we are trying to do is defend american technology, which is crucial to american economic growth. emily: david, obviously these mixed messages are having an impact on the market. there is still a lot of uncertainty. the president talking tough and other people in the administration indicating more diplomatic solutions here. what is your take? david: maybe i missed something, but i'm not sure why kudlow says all they're doing is trying to save american technology.

they are putting in all kinds of new rules on all kinds of other products. i will say, as a technology journalist, it is one area where i understand trump's motivations , because over decades, china has taken an attitude toward ip that they can take whatever they wanted and they did it in many cases in ways that we would say are illegal and unethical. certainly, they did things like hacking into google's corporate email or the gsa employee database. i think we have sort of sat around and let china do things to us as a country that one has to ask was that right. i still have huge admiration for china as a country, a tech power, as an economy. they have done miraculous things. we should be happy they have developed their economy as well as they have. i think they have been changing. in some way, maybe trump is

reacting in some way to stuff a little bit in the past, but i do understand why the white house would feel china has not played by the rules and wanted to give them a message they have to start. emily: in the meantime, we have been watching facebook and the market reaction given the cambridge analytica, etc. data controversy. facebook shares ending the day down. we did speak to sheryl sandberg yesterday just before the market closed. she indicated a few advertisers have paused their spending. mark zuckerberg says there has not been meaningful impact on usage. walk us through what you thought was facebook today. romaine: the surprising part was, for the early part of the day, there was a big bid on facebook stocks. that ended up disappearing later into the day. that was largely because of a broader move in the market. we are seeing people over the last few days come back into the stock. a lot of it just boils down to valuation. there are a lot of folks that think this at some point will blow over.

there might be something in the ad space and user base, but from the initial messages we're getting from sheryl sandberg and zuckerberg as well as some reports that are out, it does not appear that will will have -- that it will have a huge and lasting effect, at least not now. and for some investors, they are looking at the price and saying maybe it is worth taking another gamble on this. emily: romaine bostick, thank you so much. david kirkpatrick, we will be talking about facebook later in the show and looking forward to your thoughts on the conversation we had yesterday sheryl sandberg. softbank is borrowing $8 million backed by its stake in alibaba. the japanese tech giant is seeking to bolster its financial flexibility, according to people familiar with the matter. the loan will not be requested in a group setting and will help shield against a rating downgrade. the new financing may also remove an obstacle to the listing of its telecom unit. that division has been used as

collateral for softbank's earlier debt. coming up, george soros apparently had a change of heart. after calling cryptocurrencies a bubble in january, soros decided it is time to trade. more on that next. if you like bloomberg news, check us out on the radio, listen on the radio app, bloomberg.com, and on sirius xm. this is bloomberg. ♪ ♪

emily: facebook's chief technology officer will speak to u.k. lawmakers in late april. this comes in the wake of allegations that information on millions of its users was misused. according to a statement from the u.k. government friday, they this comes in the wake of

will give evidence on april 26 following appearances earlier in the month from alexander nix, the former ceo of cambridge analytica, and aleksandr kogan, the senior associate at cambridge university, both embroiled in the scandal. george soros is planning to trade cryptocurrencies after calling it a bubble in january. according to people familiar, the family office approved trading of virtual coins in recent months. this is investors face a growing possibility of government intervention. bitcoin has fallen significantly since its december highs. bloomberg has reached for comment, but the spokesperson declined. why the sudden change of heart? here with more, caroline hyde live in london. david kirkpatrick with us. caroline, soros not always a fan. by the change of heart? -- why the change of heart? caroline: maybe the bubble has burst. he called it back in january saying it was in a bubble territory and now we're up by 60% or 70% when you are looking

at the coin, but also looking at litecoin, ethereum. maybe the time is right to get going in terms of trading this particular asset class. we know he has apparently not yet made a trade, for the time could be right. we also know this is a contrarian guy. we know george soros bet against the pound. he is a contrarian. he makes different calls. maybe with all the concerns about the hacking of $500 million going on with some particular exchanges. maybe you take the bull by the horns and start to dabble. he would not be the first institution or the manager to be doing so. they also whet the appetite withholding the overstock. -- with the holding in overstock. this is the e-commerce company that started taking payments and digital currency. overstock is being invested by the sec because they wanted to become an exchange in the and i

-- exchange and do an ico. emily: david, obviously there has been a lot of volatility, but bitcoin has been come way down from a type would you be expecting more institutional investors to try to get in on it? david: i thought caroline's analysis was true. let us face it, soros' genius is timing. buy low and sell high. he's really good at it. it is interesting that so many u.s. investors who said they would get into this in a big way basically have pulled back and have not yet made that decision. i do think the general, cryptocurrencies are here to stay. they will become an intrinsic and fundamental class wall street investors generally. i do not necessarily think bitcoin will be the primary thing they're buying and selling. it probably will be part of it. one thing i think is important to remember is that blockchain

that is so closely associated with bitcoin, the kind of system will be used in many other cases outside of the bitcoin one. in any one of them, will be cryptocurrency most likely involved in many cases. a tradable asset that goes along with it. they could be a lot of stuff to trade, maybe a good way to make money. emily: tell us about the other institutional investors were -- investors who are here already. caroline: it is fascinating who has actually gotten involved. we have seen fidelity not just looking to buy, but they have already been mining with likes of etheruem and bitcoin using their own computers. they are dabbling in this area. very early on. we have been a loss of big players. some really big names in the funds management area. particularly adam howard. he was putting his own personal money. he has been putting the money into crypto. interestingly, one hedge fund manager that wound down from previous hedge funds of the likes of john burbank, he made his billions by betting against subprime.

he now has two funds back in january to get into crypto. his 2017 that we saw 150 funds launched at least into the crypto space. now, we're seeing a bit of a pullback. now we're seeing the nervousness trust, the mike nova guy from fortress who has been in bitcoin and blockchain 2014. he has not launched to the front he was talking about. he has gone into other areas of infrastructure space of blockchain and bitcoin. he is looking into perhaps setting up the likes of merchant banks and other areas of investment. we are starting to see a cooling of that excitement, but there are still some big-name starting to jump on the bandwagon ever since we saw the likes of poly chain do well. emily: walk us through the selling pressure we are seeing now. caroline: this is interesting. we're seeing selling pressure. we have not seen a spike higher,

and some are calling it because of the tax year. it is april. many have made a bit too much money in 2015 particular thing american households have a more than $19 billion worth of crypto in 2017, and alley have to -- and now they have to settle their taxes. how do you do that that? liquidate your crypto holdings. some are hypothesizing the selling pressure could ease off after april 15. some are cynical about that. emily: all right. caroline hyde in london. david kirkpatrick, ceo of economy, you're sticking with me for the hour. in the meantime, another well-known investor, mark cuban spoke to amend the length of to bloomberg in toronto. he is leaning in to possibility of run for office saying he would be a better option than president trump. he also said the u.s. is falling behind the push for ai technology. take a listen. mark: china and russia have said

whoever wins ai will be the dominant military force in the future. yet, our office of science and technology is empty. our three letter acronym -- emily: coming up, protecting your online personal data is one thing. we will look at what happens when a major metropolitan city gets held for ransom by hackers. that is next. this is bloomberg. ♪ ♪

emily: apple is weighing in on the epa's plans to reverse an obama era plan to curb

greenhouse gases. the tech giant saying it opposes any repeal of the clean power plant. apple added this would threaten investments in clean energy, especially when it comes to competing with china in the arena. apple says it runs completely on renewable energy at its u.s. facility. safeguarding your digital dna has been a collective concern long before the news that nearly all of 2 million facebook users may have had their public data scraped. but what happens when it is a city that is at risk? that is what the city of atlanta was dealing with recently, as hackers hijacked much of its digital backbone. files were encrypted, the city couldn't process court cases, warrants, and more. what did the rent summer's demand? ransomersd the demand? $50,000 worth of bitcoin. i will bring in a former chief data scientist for the nsa. this is not the kind of hacking

you normally hear about, but we can imagine that pretty much any city anywhere would be just as vulnerable. what happened here? >> what happened to the city of atlanta is what is happening to businesses and government organizations for the last several years. they are finding they have not taken the necessary steps to be prepared for these types of cyber incidents, and they're having critical services taken off-line. they are jeopardizing the data of citizens and employees. they are not knowing how to respond effectively. emily: how could they have protected themselves? is it any different than how the company would protect itself? oren: fundamentally, it is not that different. we find increasingly that in over 95% of the time when an organization suffers this type of event, there is some sort of phishing attack that would be at the root cause of it. organizations of various sizes

and industries and levels are. just not taking the steps necessary. the technology the technologies they are relying on are not offering the types of accountability mechanisms that are required to be effective. emily: is there anything in particular about atlanta that made it a more attractive target? why atlanta? find --day, weight we today, what we find is that the economics of being a bad guy on the internet is a good business. you can wake up and sunny building hold an entire town hostage for $50,000. the consequences of what we're thing happened to him in his ability, they are not -- the consequences of what we are seeing happen to a municipality, they are not specifically very from large organizations around the world. it does drive the needle a lot of us as individuals and the impact we're having. emily: let's move on to facebook. in addition to knowledge that

this data scandal could have impacted as many as 87 million facebook users, facebook at the same time said all of its 2 billion plus users could have had their public profiles scraped. of course, it is a public profile, so it is out there, but they could have systematically been taken from the social network. what do you make of that revelation? oren: i think it is really very troubling to learn about this. i think when you use the turn -- use the term public profile, i am not sure the users of facebook felt the information they were making public perhaps to their friends or within the platform was going to be used in the nefarious ways that it has been used. it is very difficult to put the genie back in the bottle this -- model, but this comes down to checkout ability. the genie back in the bottle,

but this comes down to accountability. what is a response ability of the firms in protecting our data? are people really taking the actions and putting themselves forward to prevent damage? what is troubling about losing the sense of information through a social network is that it is often the launching point for more attacks. not just that there has been a loss of privacy, but it can be used to create lures and phishing campaigns that go after the businesses we are part of and it is troubling when organizations are not being forward with protecting our information. emily: you are saying any particular facebook user right now is more vulnerable to other kinds of attacks because it could have had their public profile scraped from facebook? explain what this means to me, an average facebook user, with a private profile on facebook, some of which is public facing. oren: what i am saying is every time we lose some insight or some critical piece of authenticity about ourselves, it can be used by others in more nefarious ways that are

seemingly unknown to us at the outset. what is challenging for technology companies today is that posture has been over this the last several years. trust us, we're idealistic, we have important missions of bringing people together, but we find time and time again they have not considered the consequences about their business models and what might become of the information when it goes out to the wild. it is almost impossible to reel that back in it will be dealing -- to reel that back in now, and we will be dealing with the consequences of that for the near future for some time. emily: security ceo and cofounder. thank you so much. we'll talk more later in the show. coming up, after flying high last year, it has been an ugly start for the tech sector in 2018. where does the market go from here? we will discuss. this is bloomberg. ♪ welcome to the xfinity store.

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you are watching "bloomberg technology." let's start with first world news. the trump administration has imposed economic sanctions on two dozen russians, including government officials and 12 companies. they are being punished under a law aimed at retaliating over election-meddling. vladimir putin says that nato was growing near our borders. he made the comments during a meeting of the russian security council where he pointed out the importance of strengthening security measures on the russian border. white house economic advisor larry kudlow is trying to calm concerns that the u.s. and china are headed to a trade war. he spoke to reporters hours after china promised to retaliate if the u.s. goes ahead

with new tariffs. >> this is not a trade war. there is no war here. all we are trying to do is to save and defend american technology, which is crucial to american economic growth. mark: he says it will be two months before tariffs are imposed on china, if it happens at all. there is no doubt in mario monti's mind that a trade war has begun, and the former prime minister spoke with francine lacqua. >> yes, i think we are in a trade war. people speak about a looming trade war. i think it is there. possibly a looming expansion of that trade war. of course, the consequences will be very negative throughout the world. mark: the trump administration has given europe a waiver on steel and aluminum tariffs, but the waiver expires on may 1.

a fema administrator says it will take up $50 billion to help rebuild puerto rico following hurricane maria. he said the goal is to make the islands bridges and electrical grid as strong as possible, but he noted officials are running out of time, because the next hurricane season begins june 1. more than 50,000 people remain in the dark six months after maria slammed puerto rico. international donors and financial organizations have pledged to provide over $11 billion in loans and grants to help lebanon. the conference in paris also aimed at ensuring the money is well spent in a country hit hard by the syrian war next door. french president emmanuel macron praised the international community's mobilization for lebanon is crucial to building the conditions for a sustainable peace in the middle east. lebanon's prime minister warned that a collapse of his country would have effects that could be

felt around the world. a republican congressman of texas is resigning before his term ends. in december, he said he would run again after reports he used taxpayer money to settle a sexual harassment claim. ♪ emily: welcome back to "bloomberg technology." let's return to our top story, stocks ending the week with a deep selloff. all 30 dow stocks closing in the red. cap the tech sector turn things around after the rough start to the year or has the outlook from investors officially soured? let's bring in heather loomis from blackrock. great to have you on the show. heather: so good to see you. officially things soured? what is your take? heather: that is the first question investors have to ask, are they still investors in the

market, before they even get to the tech piece. to be an investor today, you are owning 5% tech. it is everywhere. you need to see if you're comfortable with that. we still are. once you get into -- what sector, if you are going to be investing in the market. i was sitting with some of our institutional clients in seattle , large family offices. there is a sentiment across the entire country that if you're going to be invested in equity markets, you would like to be more defensive here. not just because of volatility in february. it is because we are in the later stages. emily: what does that mean? being defensive. heather: it is a great question because defensive used to mean high dividend stocks and utilities, but when you think about that today, those sectors of the market are highly sensitive to interest rates rising. in this particular bout of volatility, it is coming with interest rates rising.

albeit not today, but throughout this period. those are not what the best ploy. in our view, the best defense is a good offense in today's market. you want companies which are high-quality, running at lower leverage, and have good growth potential. a lot of that still is tech. emily: despite the last few weeks? heather: despite the last few weeks. that is not to say that there isn't going to be noise. that is not to say we are in any way dismissing the regulatory concerns or the concerns around trade. those are real, but the reality earn stillability to exists in tech. emily: i know you can't speak to specific names, but when you look at facebook and amazon and companies like that, are they going to weather the storm and is this just a blip? heather: where we are focused as of today and right now and tech -- right now in tech markets is those enterprise technology companies, which could sell

directly to corporations. as we look at what is going on in corporations today, it is distinct from what is going on in the consumer. corporations are looking for a windfall from the recent tax bill. as we analyze the text from corporate conference calls across the industry, you are looking at across the united states, a huge round of tech spending. it has been put off for years at this point and it is now coming in. those companies, which are selling to other companies are the best to see sales growth into this. emily: not necessarily a facebook, but amazon potentially because of their businesses there? heather: yes. absolutely, when you look at companies who are augmenting their tech. very outdated right now across the board. emily: what is happening in the private markets? you have exposure across the board, whether it is venture

capital, private market startups. i know blackrock has a holding in uber. talk to us about the activity there. heather: from our family office clients, they run with semipermanent capital below the radar and don't need to be doing what the herd is doing in terms of keeping up with peers. they can be very specific and they are continuing to hold private investments and look for private investments. i would say that has backed off from years past when you were looking at vc investments, and investments of the companies that aren't necessarily technology but are willing to utilize technology in their businesses. those are poised to advance. there is still a very strong interest in private investments, partially because as you see in central banks, they create wealth to the extent they create money to put into public markets.

those private markets have not been a recipient as great of an extent. we could still see pockets of opportunity and people looking for things that are a little bit idiosyncratic. they don't necessarily go down when the broader market goes down. when it comes to the potential trade war, tariffs, regulations these big companies can be facing. how are you taking that into consideration? heather: it is very hard to price that in, to predict the next move from a policy or regulation standpoint has traditionally been very hard and it is the case today. if i weren't just if i were an investor and what we have been talking to investors about, perhaps look beyond the borders of our own country. if you think about it, the tech sector is a global sector and u.s. tech companies are running

at forward earnings of 17 and it is, which is not very, not too far off five-year average for the broader market. in emerging asian tax, it is 14 times forward earnings, which still is a very different than the broader market. yet they are leaving in interesting segments in the market. from regulatory perspective, they are not seeing regulatory changes because they are under a , different regulatory regime since the beginning. it is more status quo over there. i would raise a little bit of caution because you are against high comps, specially with chinese earnings cycle. they have incredible earning cycles. some caution, potentially in the near-term around choppiness, but long-term it looks great. emily: heather loomis of blackrock, thank you for joining us. heather: thank you. emily: coming up, just five days

after applications opened for visas, how it will impact tech. this is bloomberg. ♪ emily: on monday the visa

lottery opened, and five days later, the cap was met. this citizenship services reached the 65,000 visa cap for highly skilled foreign workers on friday, and this is the sixth year in a row that the h-1b cap has been reached. however, that may never happen due to continuous policy changes under the current administration. joining us now is brynne kennedy.

also our guest host for the hour, david kirkpatrick. there was a lot of noise about the visa issue a few months ago, and it died down. what is happening? brynne: tech companies are facing big talent shortages, and you see this run-up to the h1-b lottery every single year. the cap has been met with in the first week, and you see the government fostering some dialogue that is concerning around h-1b. emily: given the rhetoric out of the administration, where do you think it is going? brynne: i can't speak to the policy aspect, but what i will say with our customer base we are seeing a couple of different things. firstly, employees are nervous. people are much more nervous to move to the u.s. than they have ever been. it is challenging for companies in terms of recruiting, and that is happening day in and day out.

what we are also seeing our companies do is leverage short-term mobility to the u.s., some people coming for a month on a different visa type, people traveling frequently as they try to figure out where the policy is going. emily: a lot of issues at play, and of course, many of these foreign workers are part of the backbone of silicon valley and the tech industry. what you make of the fact that every year, very quickly, all of these visas are gone? david: it is connected to what mark cuban said earlier, we have a government that doesn't seem to appreciate to the degree that we live in a technology august economy, and the policies -- in a technological economy, and the policies we adopted a national level are not really appropriate for the nature of where we are. certainly the fact that we would have so many openings in tech related jobs as as brynne

mentioned, and we have a miniscule number of people being allowed into the united states, combined with the fact we don't have appropriate education training to create the new core of trained tech centric workers that we need, it is like are shooting ourselves in the foot as a country. emily: i am interested in the diversity issues in the tech industry, and someone suggested to me perhaps the governor -- the government could award h1-b . most of the visas are awarded to men. what you think of the idea that the u.s. can roll them out equally and combat gender diversity issues in silicon valley? brynne: we know there is a huge gender imbalance and there is a pipeline issue. i would talk about it more broadly, across the world there are less women who were mobile than men in jobs. we know there is some

unconscious bias that goes into selecting women to take a work opportunity at a different location. quite frankly, employers often assume that a woman is not going to want to create -- going to and is not going to want to move because of family reasons. i encourage companies to be the starter of that and encourage female employees to take mobility opportunities. we know there is a direct link with mobility and leadership, and it is a way to make your leadership pipeline much more diverse by moving more women into mobility opportunities. emily: it is impossible to predict the implications here, but how do you see what we are seeing right now, and i know this is short-term, impacting the talent flow in silicon valley over the longer term? brynne: i think it is going to affect it. people feel a different tone in the u.s. and are looking at other markets. i lived in london for seven years and we saw similar dynamics in the u.k. our engineering team had a lot

of it in london, and at the time we saw the pipeline of applications from outside of the u.k. plummet dramatically overnight with brexit. i have a concern that there will be a similar effect happening in the valley of people wanting to come, applying for jobs and that , could be crippling for the technology industry. emily: brynne kennedy, thank you so much. david kirkpatrick, you're sticking with me. we will talk about facebook next. fighting fake news. facebook has a new plans to keep political ads truthful, will that work? that is next. this is bloomberg. ♪ emily: facebook is adding a new

feature to its messenger app, the ability to unsend messages. the rollout was spurred by a report that users some messages from ceo mark zuckerberg disappearing from their inboxes. facebook says it created the future after the sonar data hack, but it was only available to executives. the social media giant also announced a new plan to battle fake advertisements. facebook will no longer require more disclosures for advertisers who want to push a political viewpoint. this means verifying your identity and location if you are buying such a net. facebook will now require disclosures, i should say. i want to bring back david kirkpatrick. david, i have been dying to talk to you about what is going on with facebook. david: let's do it on the air.

emily: absolutely. the news keeps piling up. i can't believe the story i read about facebook executives able to unsend messages. it seems to be one thing after another, just adding up to more reason why we shouldn't trust this company. david: it goes contrary to the way mark has been talking about this company this week that he should have deleted his side. he did that in a string that involved me, by the way. i think, unfortunately, they still don't really have a clear message of how they are responding to this set of crises. i think it is pretty sad and it is not getting them out of trouble at the rate they would like. i am afraid it is not going to get them out of trouble at any speed at all. the trouble is likely to be long-term, and there is a number of very disturbing signs in my

opinion. this is a big problem that is unresolved. emily: let's talk about how they are responding to it. they admitted they are slow but now executives are out there. mark zuckerberg did in our blog -- did an hour-long call with reporters where he took unfiltered questions. i sat down with sheryl sandberg yesterday, and i said how personally responsible you feel? she said she feels deeply personally responsible and i am sorry. we make mistakes. i made mistakes. take a look at what she had to say about what she didn't do enough of. sheryl: we also didn't build our operations fast enough, and that is on me. we had 10,000 people working on security at the beginning of the year, and at the end of the year will double to 20,000. we're massively investing in smart technology.

and we are doing all of this to make sure that we get to a place where we can proactively protect people's data. emily: david, what do you make of what sandberg is saying? -- of what sandberg and zuckerberg are seeing now? david: it is interesting and great they want to proactively protect people's data now. it is great that mark zuckerberg even said it was a "huge mistake" that he had done it earlier. the key question is, why didn't they do it earlier? i have to say one reason is the profits have been flowing in so gushingly for so long that they got confused about why they were at this whole game. they said two things this week that i was distressed by. when mark said, basically and -- basically in that very good press conference. it is good and he had that. i don't think he has ever done a

press conference like that before. emily: i think that was a first. david: it is great that he did that in response to crisis, too bad he didn't do it before. one thing he said is he was impressed by a reporter. he says your business is targeting people based on personal data. he said, our business is connecting the world and building global community, and the ads are a way to pay for it. and cheryl in her interview with you yesterday made a major faux pas when she said we never optimize for profitability. as a shareholder, i would have been appalled if she said that. i don't think any business executive should ever say that. it should not be the case. the fact she is saying that mark -- saying that and mark is saying the thing about important being more than the ad targeting business -- it says to me that they aren't being honest with themselves about why this all happened. it happened because they were focusing too much on the profit and not enough on the security.

it is as simple as that. it is self evident to all outside observers. they can't seem to confront it, and that is a painful reality to them and they have to confront it. emily: where does the buck stop here? a lot of people are upset. i tweeted the sandberg interview and i got a ton of replies from angry users. mark zuckerberg is testifying before congress next week. it doesn't seem like leadership is going to change. mark thinks he's the right person to lead the company. cheryl still believes in mark's leadership. what is next? what can the company do to repair its reputation, or is this going to blow over and people are going to forget? david: i don't think it will blow over, i think this is a long-term readjustment that is going to take years, and probably never end. the thing that worries me from a macro point of view is the company faces challenges two sides. even the announcement mark made

today about the checking of political and policy ads. he talked in that note about hiring thousands of new people to implement that. the costs are going up in order to do a lot of the wonderful things they said they are going to do. i want to make clear they said they are going to do a lot of great things, and i am that they -- and i am glad they are doing that. on the other hand, one thing we don't know is the impact and what it is going to be on the dt -- on the ad targeting business of the large number of changes they made to the way personal data is managed and flows inside the system. we haven't gotten any real analysis of what all those changes are going to mean for for the ability for advertisers to get the exact targeting that has been the primary reason they advertise on facebook. it is the most targetable medium in the history of media for advertising. that is why it has made all that money. emily: david kirkpatrick, we can go on and on.

thank you as always, appreciate your thoughts. we will be in washington d.c. covering mark zuckerberg's testimony next week, and i will speak with the newly minted ceo of sofi on monday. this is bloomberg. ♪ retail.

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