♪ emily: i'm emily chang in this is the best of bloomberg technology. coming up, mark zuckerberg speaks to the press. the company now says 87 million users could have been impacted in the most recent data scandal and that they are learning from mistakes. our extended interview with cheryl spent -- with sheryl sandberg. tesla tumbles on monday. elon takes to twitter multiple times. why investors seem to be shrugging them off.

plus, spotify's trading debut. first to our lead. facebook revealed that 37 million more users may have had their data improperly accessed by cambridge analytica appeared that would bring the total affected to 87 million people. the news became before mark zuckerberg spoke to reporters on wednesday. he said it is clear facebook didn't focus enough on preventing data from being abused, but that he is confident they are making progress insecurity. he added he is still the right person to be running facebook. >> and the first to admit we didn't take a broad enough view of what our responsibilities were, but i think it's important to keep in mind there are billions of people who love the services we are building, because they're getting value in being able to connect and build relationships. that is something i'm proud of our company for doing, and i know we will keep on doing that. emily: facebook revealed that

all of its 2 billion users could have had their public profile scraped from the platform. on thursday, we sat down for an interview with sheryl sandberg. we had a feature or you could look up people by name or email. they'll is important for finding people. direct they a shouldn't have with that information. to be clear, all of that was public information. that was information that was already publicly available on facebook. to your broader question. we. -- we know that we did not do a good enough job of protecting people's data. i'm really sorry for that and mark is sorry for that. we are taking strong action. monday we will be starting the process of rolling out to people all around the world at the top of their news feed all of the

apps they are connected to and an easy way to delete them. we will tell anyone who might have had their data affected or accessed i cambridge analytica who they are. we are taking strong steps to that appsore data historically have had access to, and were looking beyond that. stepsounced we are taking to shut down certain use cases and groups, pages, searches, and events. these are the latest steps. this is going to be a long process. we are systematically looking at all of the ways facebook data is used. identifying more things. we will tell you about them, shut them down. this is a forever process. security is an arms race. you build, someone tries to misuse. we are committed to this for the long run. mark has take responsibility. he said we didn't take a broad in a few of our responsibility. that was a huge mistake. that was my mistake. how much do you feel personally responsible? sheryl: i feel deeply personally

responsible. there are mistakes we made and i made. if you think about what has happened, what has -- has happened, we were focused on building social experiences for a long time. a lot of good happened because of those. when we found problems, we would shut down the problem. analytica case was shut down in 2015. what we didn't do until recently and what we are doing now is take a broader view, looking to be more restrictive in ways data could be misused. we didn't build our operations fast enough, and that is on me. we had 10,000 people working in security at the beginning of the year. at the end of this year, we will more than double to 20,000. we are massively investing in smart technology, and we are doing this to make sure we get to a place where we can proactively protect people's

data. emily: facebook has constructed a model that leverages personal data that users share with facebook. you're the chief architect of that. assuming the model will evolve as a result of these changes, how will that impact the bottom line and profitability? thisl: we have never run company for short-term gains and we have never run this company to maximize profits. we have run this company for the long-term health of our company in business. -- of our community and business. these investments are big and they will impact profitability, and that's ok with us as it's the right thing to do. we will update at the next quarter. you mentioned a few advertisers have paused to their spending of the result of this. how big is that paul's? e?at's how big is that paus theyl: what matters is question they're asking. advertisers are people, people who use facebook, so are

investors. everyone wants to tell are you protecting people's data? andink the advertisers people who use facebook also what to know the good things will continue. those are important as well. earlier this week i was in houston. i met this incredible man and went to his local taco store. when hurricane harvey happened, he lost his space. a competitor who had a taco truck and teamed up with him and than they used facebook to drive around and find people. those people were publicly sharing their location on facebook. what people want to know from us is, are we going to take steps to be more protective and more proactive? the answer is a firm yes. we are also going to take steps to make sure that the good that happens on facebook can still happen. emily: with all we know now, do you believe facebook played a decisive role in electing donald trump? sheryl: there is a lot of concern about what happened in

this election. we are concerned about the foreign interference on our platform. here, iall picture don't think anyone knows yet, but it's an important question. it's one that is going to be studied for years to come. taking're focused now is the lessons of the past in making sure they are applied going forward. for an interference, you may have seen we took strong steps earlier this week to take russian ira content off of our site. that was content that was in the u.s. election that we did not find quickly enough. now we are analyzing ahead, and we found 270 pages and accounts linked to them that were deceptive, in russian, targeted mostly at russians. our message is clear, there is no place for this deceptive content anywhere in the world. we took this down in russia. we're looking for others and we will take them down. emily: marcus when asked if he

is the right person to lead facebook. do you believe he is? he says he is. do you agree? sheryl: i believe deeply -- i believe deeply in mark. he has a vision for what social services and sharing could be a man that remains important. mark remains with me and all of us, takes full responsibility for what is happening and were making an important shift. we're going to keep building social products, because sharing is important. we are going to be more proactive. emily, i'm not going to sit here and say we won't find more problems. we will. we will continue to find problems. we are going to continue to shut down situations when we find them. this is a forever thing. security is an arms race. this is something we are signed up for, not just now, but on an ongoing basis. be sure to tune in as bloomberg technology has to washington next week for full

coverage as mark zuckerberg testifies before congress. in the meantime, the fda is calling on twitter and facebook to be more proactive in stopping all my opioid sales. need toedia companies root out ads for the addictive painkillers, which contribute to hundreds of thousands of fatal overdoses in the u.s. withare planning a summit internet ceos to identify technology gaps. coming up, spotify's debut. how did its approach to going public fair? we will talk to a key investor, next. check us out on the radio. this is bloomberg. ♪

emily: alibaba is stepping up efforts to expand into china's food and delivery market. move signals the desire to

compete with tencent in that market. sony stands to reap almost $1 billion from its stake in spotify. the amount reflects the stock sale on tuesday and a higher value of sony's estate after spotify's listing. -- of sony's stake after spotify's listing. servicec streaming kicking up trading as a publicly listed company with a share price under $166. it has more than 70 million subscribers valued at $28.7 billion. caroline hyde spoke with an early investor a day after it

started trading. >> the company has a few competitive advantages that is hard for the others to replicate. entireally reaches device ecosystem, not just apple products or within the u.s., which is the case with amazon. iso, the business model largely a function that the entire music industry is now moving towards a very well idea of a trading marketplace. largely the brainchild of daniel and his team. they can thereby this intermediate significant part of the industry and significantly improve the margins. you mentionedine: we have seen a bit of a selloff in the share price. i'm looking at my bloomberg index -- at my bloomberg and

will explain to you what i see. you can look at how spotify is trailing his peers. it rallied a little bit at the end of trade. pandora, serious today. what about the direct listing and the volatility we see in the share? do you feel a direct listing was the best way to go rather than a public offering? toi think it's a really really draw any firm conclusions about that. it's clear that the company may be decision to do a direct listing because there was little point in having the cost of an underwriter to rate capital or sell secondary shares were there was no interest in either raising capital or selling secondaries in a more conventional matter. i think the downside is that you don't have the kind of investment banking methodology propping up the share price a anddays after the listing,

i think that was a part of the expectations with them, including us, that there would be and will probably be some volatility going forward until the market has fully understood the qualities on the company and another quarter oh so, that they have their business in great order. caroline: what about you going forward? be the i understand to single biggest ever return for vc fund.or european what will you invest in next? >> we see a lot of interesting things going on in europe and also in the united states. with thehe difference venture industry right now, 20 years from when i started, we are addressing huge markets, fundamental market shifts, like

entire multitrillion dollar financial institutions industry. it is ripe for creative destruction, and you see there is a lot of venture capital money going into that space, so we are quite excited about that. ideas ofiously the destructing the traditional way of selling stuff, typically through stores, and this is the direct consumers trend is here to stay and will build over time. emily: that was pj person speaking with caroline hyde. coming up, keeping the internet safe from extremist content. the man helping to stop that content from ever being uploaded. that is next. later, amazon under presidential fire. the president ramps up his war america'sgainst biggest online retailer. this is bloomberg. ♪

emily: we were live on air tuesday as reports came in about the shooting at google's youtube headquarters. the shooter was identified as a video creator who was upset with policies that she claimed limited her content. she killed herself after wounding three people at the campus. the victim remains in serious condition all to others were released from the hospital tuesday night. since the shooting, we have heard from google. other tech leaders spoke out. tim cook tweeting --

emily: jack dorsey tweeted -- emily: i spoke with mark bergen the day after the shooting to talk about the larger implications. they say she was upset at youtube's policies, and we have seen from some of her videos that were taken down yesterday, her website, she was a strong vegan rights activist. she posted a lot of videos about animal rights, some of them looked like protest images of animals being poor -- being tortured. youtube creators have been seeing less and less ad inventory, some claim youtube is

earning their livelihoods. that is the point she has made. it is an extreme example and it seems like this response was probably driven by mental health issues. emily: what about how google and youtube are responding to this, given that she got into a private patio at you to pay quarters, which presumably somebody with a gun shouldn't have been able to get inside? mark: we don't know if they're changing their policy. it's likely they will. companies like youtube, google, are structured like college campuses. they were meant to have this open and free environment. this may change that. the storyt about about the big policy changes that youtube has been making and we talk about the obvious , theors michael logan paul

once people recognize, but there are so many craters that use youtube and they are making decisions that are dramatically impacting how creators are paid, how creators, the rules about what content can be uploaded. issues -- one the youtube has made a series of policies that have been reactive and not proactive. there is a tug-of-war between advertisers and lawmakers and the general public who say you're not doing enough to moderate content, some of the offensive content on the website. in response, they have limited the number of ads. you have craters saying you're doing too much. ,oth parties are saying youtube you're not communicating well with us what the changes are. emily: these are the kinds of videos that perhaps shouldn't have been uploaded in the first place come right -- first place, right?

then they are changing the policy. mark: that is the basis youtube has had for years. it was broadcast yourself. they are dedicated to this revolutionary idea that anybody can upload any video editing time. -- can upload any video at any time. they haven't put enough rules and bumpers in place to prevent these kinds of issues. bergen, thanks so much. i know you will continue to report on this story and we will hear more from you. reports that the youtube shooter posted online rants about the company have people asking if that should've raised a red flag. nextxt guest had met -- guest has made a career of trucking illicit content online. -- of tracking illicit content online.

it is the focus of our latest installment. i want to bring in a senior advisor to the contrary extremism technology project. he has worked with companies like microsoft. his work has led to the detection of child per narcos the an extremist videos. i want to hear your reaction to this shooting. at the being of the situation, we didn't know what happened. now we have a full or picture. what is your take on this? >> there is no doubt there are complex issues when you deal with platforms of the size of facebook and youtube. youtube has hundreds of hours uploaded every minute. there will be complex issues. we know that i have tried to contend with that. our point has been that while there are gray areas, there are

areas that are unambiguous. when we have videos of child pornography, videos of beheading, glorification of violence, those are clearly ranging from legal to clear and violations -- from legal to clear violations of the terms of service. my gut is they have been more reactive than proactive. if you will have policy in place, which we all agree you argue let's, i argue about the policy, what we want on our social media platforms, but then we have to be transparent. we have to have due process, and we have to be consistent in the application of those rules. that is something technology companies have not been good at. they can do better to avoid the types of confusion and

misunderstandings and being tugged in both directions. they: you suggested establishment of a cyber ethics commission to counter the lives of technology. can you explain this as it relates to this discussion? dr. farid: sure. for the last two decades or so we have seen somewhat of a mild west -- somewhat of a wild west in silicon valley. it has led to amazing growth and wonderful things in our lives, but i think we all agree over the last year and a half or so we have seen the dark side of that from the data privacy issues to the election tampering to the child pornography to the almighty extremism -- to online extremism. i think we have entered an continue to enter a complex and digital age. i don't think we are thinking about these things have really and carefully as we have. i think often we are being

reactive versus proactive. in the same way we had a committee established 20 or 30 years ago to deal with the complexities of modern medicine and biology, i think we should bring some of the best minds together and start thinking about how we live in this very connected, complex, digital world. everything from the social media issues we are talking about to the self driving cars. we have seen complex and troubling things over the last few weeks. i don't think we are prepared to think about them at a technological, legal, philosophical, moral and economic level. i think we have to give more thought to that before we run headfirst and create enormous platforms we don't know how to control, and then trying to back our way out of that. i don't think that's the right way to do business. emily: that was dr. farid. up, president trump ramping up his critiques of amazon, but will be

administration take action against the tech giant and will it have an impact? all episodes of bloomberg technology are livestreaming on twitter. this is bloomberg. ♪

♪ emily: welcome back to the "best of bloomberg technology." i'm emily chang. president trump's criticism of amazon have come into focus is weak. speaking tuesday, he said the post office renegotiated -- needs to renegotiated deal with amazon. on wednesday, we learned oracle processzed the bidding for a cloud contract were oracle and amazon are competing. the ceo complained to president trump that it seemed designed to amazon to win. president trump was receptive. we went to washington to get the details. wast's interesting that it an effort -- an invitation from

trump. capitalist brought along a guest, and she apparently returned to the overct several times dinner, the competition to win this pentagon cloud computing contract. it is worth billions of dollars, big business, and oracle is afraid the amazon is in the position to win the contract. the with the pentagon wants to do it is to award the entire business to a single company. amazon is the leading company in the world and cloud computing. their competitors are trying to get the pentagon to split the business up among multiple companies, and they have got members of congress on their side. that is the only way they can hope to defeat amazon in this competition. so the president was receptive, as we understand it, but could he really interfere, or are there any actual plans to interfere? question,teresting

given the fire amazon has taken from the president over twitter. alex: we asked sarah huckabee sanders about this. she said the president did not intend to interfere, but he did hear out catz during the dinner and he told her that he wants the competition to be fair. to put hise could do thumb on the skill slightly without looking like he is dipping the contract against or away from amazon is to tell jim mattis that he thinks the business should be split up among multiple companies. of amazon have been under pressure ever shows the president began tweeting about the company. the selling slowed down wednesday after bloomberg reporter -- bloomberg reported -- several analysts reiterated their bullish calls on amazon. we spoke with tom forte.

tom: when you look at president trump and his intent, i think he has a strong feeling against jeff bezos to the extent that jeff bezos, he is ceo and founder of amazon, also owns the washington post. i feel like a lot of these tweets are directed at amazon, but the real target is the washington post. for amazon the company, given he is the president, you have to take these tweets seriously. in the case of the postal service, i think amazon is getting a bit of a sweetheart deal. in that regard, the president is accurate. emily: one of the president's --ets we have done the math at bloomberg and we have learned the post office does make money on their relationship with amazon. perhaps they should be making more money on that.

how do you think this will actually affect amazon in the near-term? tom: first and foremost, all the tweets from the president basically convinced me that the second headquarters from amazon will be in his backyard. if you look at the 20 finalists for the second headquarters, three or near washington, d.c. or a suburb of it. of pickinghe process a second headquarters is about influence, and where else could amazon have more influence than being next door to washington, d.c.? why is that important? having influence with the policymakers, including the president is very important. as far as implications for the postal service, it's possible they could pai your rate. why i say sweetheart deal is that amazon could not probably get the same economics with fedex, ups, or any of the regional players.

good news for amazon's they are increasing their first party logistics asset. they have air freights, trucking. with whole foods locations and bookstores, they now have a physical presence that they can also leverage to work on their logistics. myexample, when i go to local whole foods, i'm greeted with an amazon mocker. it's another place i can pick up products i order on amazon or return them. while there is potential that the disruption to amazon from losing the postal service in the most are manic scenario, i think the impact would not be as significant as some may fear. emily: what about the bigger picture regulatory issues? we were talking about the cloud computing contract.

catz complained about it to the president. he was receptive. there is no evidence the white house would interfere, but on a broader regulatory level, there's concern about how big amazon is becoming and how many industries they are getting their hands into. is that something that president can stand in the way of? what amazon does increases competition, lowers the price to the consumer, therefore at this point, i don't think antitrust is a significant risk. on cloud computing, to that end, amazon strategy has been the early leader in the space in passing on lower costs to its customers. netflix is a great example of that. frank, when with less time anyone ever talked about oracle in lowering prices? never. it is an opportune -- it is opportune for competitors of aws to have the president's ear. in this instance but it comes to

this large federal contract. if he wants what is in the best interest of the country, the lower cost provider to the federal government, it is likely aws and amazon. emily: thanks to tom forte. a new stream service is debuting . plus will offer live sports and live games. it will debut on april 12. the company says subscription video-on-demand of disney, pixar, and marble and lucasfilm movies will launch in late 2019. still ahead, tesla's production goals get more elusive after it misses quarter targets for the model three. investors shrug it off. that'll story, and had. this is bloomberg. ♪ ♪

emily: fitbit tumbling in monday's session after the stock was downgraded to underweight. the company continues to struggle with bringing in revenue and is burning cash. tesla also took a tumble this reportlunging after the that the ceo told employees in an email the carmaker may exceed a weekly production rate of three model -- of model three sedans. with craig, who beats are automotive coverage from detroit and another reporter. this conversation took place monday before tesla stocks came back from its low. i have been sleeping at the terminal moving all of these headlines.

yuan is sleeping at the assembly line. you mentioned the report. that tesla maybe was approaching 2000 model three is a week as of today. that spurred a little bit of a relief rally. the shares were down as much as 8% earlier today. a ton of negative headlines. the most important from a financial perspective being the ongoing problems with model three getting that car ramped up. that is supposed to be there mass-market sedan. they have not been able to get many -- get manufacturing going from the beginning, so tesla needs to figure that out and help explain these issues with elon sending angry tweets to reporters. one of his most recent ones was i need to build more cars. that sums up the predicament the company is in. emily: let's talk about some of

the tweets that have rolled in over the last 24 hours. one to the wall street journal about the model s recall. bloomberg responded saying, here is a new reason to be de-risk about tesla. -- to be nervous about tesla. musk wrote back not criticizing, just asking question. should he stop tweeting and start focusing on the cars? >> it's a fair point. i think we are in a twitter era. obviously the importance for tesla is ramping the model three. it has everything to do with

what investors are focused on and the cash burn story. they can't get this ramped by quarter two, i think they will have to go to the market and raise capital in quarter three. that is a charge for them, because they usually come to market with good news. -- that is a challenge for them, because the usually come to the market with good news. if they are going to the market because they are in a cash bind, it is going to be a first-time they go in that challenged position. emily: you have a -- rating, why? >> they are in a tight cash position, and that's not a desirable position. when they get on the other side of this, i estimate working capital benefit, you still have to worry about the underlying profitability of the model three. at the low price point we think it might eventually celek, it's going to be challenging to have

a white profit margin on that vehicle. lastly, to think about competition coming down the pipeline. jaguar, porsche, a lot of competition coming that will cut into the opportunity. we have seen reports of quality issues with the model three. not only just ramping but making sure products are up the quality level the customers expect for what is going to be, even for the lower model, a luxury price point for that vehicle. emily: we can't forget about the tweet about the ntsb. the spokesperson reportedly saying they were concerned about the investigative information they are getting from tesla. musk tweeting -- safety is the ultimate priority here.

should we be concerned about the safety, given the rest that appears to be happening behind-the-scenes? craig: i think it may be unfair to link the rush behind-the-scenes to this accident that the ntsb is investigating, but it is definitely a fair question to actingther tesla was inappropriately and putting up several blog posts, the most recent of which was critical of the driver involved in the seattle crash. the company tried -- in the fatal crash. the company tried to walk a fine line saying it is tragic what happened and it's sorry this occurred, but the company came out and during an active ntsb investigation talked about the driver not having his hands for a period of time leading up to the crash. ntsb,s a no-no, and the when it looks into accidents like this, it requires that the

companies that are the subject of the investigation to cooperate but also to keep quiet of the investigation is going on. -- quite as the investigation is going on. emily: that was colin langan and craig trudell. tweetlso fired a celebrating spacex. there was another successful launch from florida. it carried supplies for the international space station. spacex is starting roughly 30 total missions this year. monday's launch brings the tally to seven. coming up, while your next iphone may look radically different. this is bloomberg. ♪

emily: in the latest tech revolving door, apple has hired an executive to help the iphone maker catch rivals in one of the most important fields of modern technology. he report to ceo tim cook and has a lot of work to do. -- he will report to ceo tim cook and has a lot of work to do. i once to make sure future iphones will stand out in a crowded market. ishave learned the company working on touchless gesture can stroll and curved screens for nextgen devices. yet another bloomberg school -- bloomberg scoop on apple, apple is delving further in the chips business. the move will replace intel chips currently in the hardware. the news was a blow to the chipmaker with shares plunging.

we spoke to the reporters who broke this story. we reported that for the first time apple is now designing and planning to use it on processors in its computers. itsse its own processors in computers. emily: why is this such a big blow to intel? --about 5% noit shows intel's chips are longer the leading technology that no one can live without, then it becomes a major issue. emily: what is the likelihood of that? has time and time again tried to get into the pc industry. no one has made any impact, but if apple can do it, then people

will look. emily: how does this fit into what we know about apple's plans? >> apple's strategy over the past six or seven years is to increasingly bring more features from the mac to the ipad and iphone. time, the mac has languished. it has taken a step back from prominence from ios, given how much money that generates for the company. what apple will start this year and will announce in june is a big push to bring the software platforms of the mac and iphone and ipad together. they will start flowing users to run iphone and ipad apps on your mac. the list -- the next step is to move to the hardware speeds, and that is what we are seeing. they run the same processor,

lower-level functionality, then they can run the same features and get new enhancements at the same time. emily: intel is weathering this. and already bad year after the chip flaw that you reported on earlier this year. how does this fit into the bigger intel story? is riskier for apple. if you were saying we don't need intel anymore, then you are saying we trust samsung and others to make these chips. we trust them to catch up with intel if not surpass intel. in the past, those bets have been made and it -- been made and haven't panned out. this could be a major us a major test. -- this could be a major test. emily: apple certainly doesn't want to make any mistakes. mark: this decision is 10 years in the making.

company thatbout a was a u.k.-based manufacturer in developer of low-power chip sets. a few years later, they turned that into the main processor, which was the chip behind the first ipad and iphone 4. now, we have chips were everything. -- we have chips for everything. israel is a big hug for chipmaking and other tech endeavors. they have been working towards this for a while. leavesu can read the tea and see everything come together. we have the hardware portion, what we reported on today, we have the softer portion i reported on in december, merging ios and mac app stores, and all we are waiting for is to get to the final point, the plateau where they bring everything

together and do a complete merger of the hardware and software. also, maintaining what is good about the mac and what is good about the iphone. i don't think he will do touchscreen max. macs.chscreen they have always had to walk a fine line. there is really no chance apple messes with that. they will not do something that will really need the customer base. emily: that was ian king and mark gurman. that does it for this edition of the "best of bloomberg technology." a reminder will be heading to washington next week for full coverage of mark zuckerberg as he testifies before the senate judiciary and house commerce committee's. .une in every day remember, all episodes of bloomberg technology are livestreaming on twitter. check us out. that is all for now. this is bloomberg. ♪ this wi-fi is fast.

i know! i know! i know! i know! when did brian move back in? brian's back? he doesn't get my room. he's only going to be here for like a week. like a month, tops. oh boy. wi-fi fast enough for the whole family is simple, easy, awesome. in many cultures, young men would stay with their families until their 40's. ♪

nejra: exchange acquisition, we speak to the ceo as they take over the irish stock exchange. is it a bet on dublin as a financial center? what does he make of mifid ii? brexit and regulation. the one-year countdown to brexit begins. a stop on the mark zuckerberg apology tour. the facebook ceo snubs u.k. parliament, but decides to testify on capitol hill. the company announces new privacy measures. what new rules will that social network have to abide by? welcome to "bloomberg markets: rules and returns."