>> i'm mark crumpton in new york. you're watching "bloomberg technology." here's a check of first word news. the dnc is suing russia and wikileaks, saying they interfered with the 2016 election. it also claims russia launched "a brazen attack on american democracy that begin with the cyberattack on the committee." some frightening moments at another florida school today when a gunman opened fire wounding one student before being taken into custody. the wounded student was shot and the ankle. in parkland, florida, the scene of the february high school massacre, students led a nationwide walk out on this, the 19th anniversary of the columbine high school shooting which left 13 people dead in littleton, colorado.

final preparations are underway in houston, texas for saturday's funeral for first lady barbara bush. mrs. bush died on tuesday at the age of 92. federal aviation regular leaders are planning to make emergency inspections mandatory for one of the world's most popular jet engines. people familiar with the matter say the move is in response to the fatal accident on i southwest airlines plane this week. southwest announced it would provide thousand dollars checks and $1000 vouchers to the planes passengers. global news, 24 hours a day powered by more than 27 journalists and analysts in over 120 countries. i'm mark crumpton in new york. "bloomberg technology" is next. ♪

>> i'm a caroline hyde in london, in for emily chang. this is "bloomberg technology." apple's downturn and chipmaker volatility going down, down, down. plus, while one giant advertiser returns to the full, others face extremist problems. and ericsson shares so the most in a decade as they proved cuts are taking effect. first to our lead markets, finishing the day lower it is the second day in a row pairing the weekly gain and the nasdaq. behind much of the weakness, tech. abigail doolittle has more for us. talk to us about what was tugging the indices lower. abigail: it turned out to be a bearish day for the major averages. following yesterday's drop, all

shedding quite a bit today. the tech heavy nasdaq down white and more. underperforming down 1.3% and that points to the big drag, tech. funny enough, that was the worst sector from a percentage standpoint, but technology is a 20% weight and 50% weighting to the nasdaq. with tech down, that has really caused the major averages to slide. still higher on the wii, but really paring those gains in a big way. behind this, it appears jittery ahead of next week's slew of earnings for some of the big tech companies including microsoft, paypal, intel, facebook, pretty big declines there. investors nervous about what all of this could bring your dive was mentioning the weekly moves for the major averages, if we hop in, we can take a look at how this appears on a weekly basis. this can be used in the gtb library. we are looking at the weekly

moods for the averages. the dow in blue and the s&p 500 in green. this is the second of we can erode for the major averages. but, on the drop today and yesterday in the s&p 500 and the dow, they are down on the year. earlier this week with there was quite a bit of a bullish deal and now toward the end of the week, it is a bit bearish. caroline: fascinating. this was a trend we are seeing some volatility on the side of the atlantic. i'm looking in the bloomberg, if you tie can looking for the stoxx 600, mrr which shows you what the biggest gains and losers are on the day. notably, we're seeing some of the big chip makers in particular feeling the pain. asm off by 8% on the bottom. infineon and germany down by more than 1.5%. the chipmakers, was a big theme in the u.s. as well. abigail: you're really getting

to the heart of the matter. the stoxx, down more than 4% and taking a big hit as less of the chipmakers slide. taiwan, semiconductors, broadcom, qualcomm, lots of weakness there and those are apple suppliers. midweek, taiwan semiconductor came up with its earnings report. the guide disappointing. they are a supplier to apple. jpmorgan saying the weakness for taiwan semiconductor definitely has to do with weaker demand for the iphone and many analysts coming out this week with similar goals on apple suggesting that either the march quarter could be a little bit weak, based on china checks fall most analysts are focused on the

guidance for the june quarter including morgan stanley which cut iphone shipments and analysts saying this likely the consensus for the third quarter will have to come down so the stock correcting. pulling back on these reports. it will be interesting to see what comes out of their earnings report. not next week but the following week on may 1. jitters around the upcoming, pressuring on these tech companies. it will be interesting to see how those reports come in and perhaps it will soothe some of the nerves we are seeing prayed to some degree. as this week comes to an end. caroline: thank you very much indeed. as we were just hearing, the tech giant stock down. it has lost $60 billion worth. what actually is hitting the world's most valuable company? i would like to welcome bloomberg technology's market

durban. talk to us, we have heard from abigail. we're seeing fewer iphone deliveries? mark: right now apple is facing a lot of different headwinds. their stock is down over four dollars per share. over 4%, and they have earnings coming up on may 1. apple guidance for q2 came in at about three to $5 billion less than any list expectations. starting from there, the earnings reports over the past few days indicating slowing demand. those are basically chips for

communication devices for smart phones. the soc's which indicates iphone sales are lower than expected. a lot going on combined with some analyst reports. indicating that the iphone x might be discontinued. i think investors are reading too much into it and alice playing it up. the iphone x will be discontinued because it is being replaced by another device this fall, just a small update to the iphone x so, obviously it is being discontinued to make room for the new one. that is not such a big deal. caroline: not such a big deal as well when you've got them saying if the #quite what we hope, by the dip and you've also got other analysts saying in the end, we will focus less and less on the iphone numbers and more and more on services. should we be shrugging this off a bit more? mark: service is an interesting

world. we will be looking for a strong quarter over quarter growth or something close to the 8.5 billion reported last two quarters from apple and services. the have their ambitions in news and tv and video. we are seeing a shift toward them being a services giant. caroline: let's look a little bit with you at the moment on another area of expertise. you are a man who knows everything about phones and what ties us into them. at&t and verizon medications under investigation by antitrust individuals. a possible coordination by the two companies. as industry standards group, according to a person familiar with the matter, the doj claims that the companies try to hinder consumers to switching other wireless carriers. both at&t and verizon dropping on their session lows after their month. talk to us about how important

this is and how much this might have constrained movement between wireless carriers and new phones. mark: absolutely constraints. now, this collusion does not allow that. caroline: so could this therefore going forward be an unraveling? at&t has got to be worried because they have the doj looking at their deal with time warner. how much are we likely to see this draghi going forward and how much could this embroil gms gmsa? they put out a lot of big events that you and i attend. mark: it will drag on quite a while. lawmakers want to be more independent. this is a real problem and it will be interesting to watch. caroline: it will be fascinating indeed to see how the stocks

continue to suffer. thank you for joining us on apple, at&t, and verizon. coming up, youtube's advertising problem. the online video giant continues to struggle with extreme it. if you like bloomberg news, check us out on the radio. you can listen on the bloomberg radio app, bloomberg.com, and on sirius xm. this is bloomberg. ♪

♪ caroline: let's talk ads.

one of the world's biggest advertisers is ending its long boycott of you do. bloomberg has learned that proctor and gamble, told its brands that they can once again buy at spots on youtube. this comes as a cnn report says more than 300 advertisers unknowingly ran ads on youtube videos that endorsed extremist content like white nationalism, pedophilia, and nazis and more. in d.c., senior policy advisor for the counter extremism project. they have been tracking and fighting this it of extremist content. mark, to you first. it was fascinating. they are coming back, but there certainly bringing in some provisos? mark: they are. that cnn story came out as i was communicating with png.

they said this proves our point. what png is doing is coming on videos they have reviewed come a set of 10,000 youtube channels. they're much more selective than they were before. there at will end up anywhere. what we saw yesterday with cnn is that there are a lot of red advertisers placing ads on youtube. they have extremist content even though youtube says they fix the issues as soon as possible. it has been a long systematic problem. >> a long problems that you try to help offset. how difficult is it to ensure that these extremist content don't keep on reappearing on social media and don't have the wrong companies endorsing them? >> there are two problems here. there the advertisers who have their as run on content that is problematic in and of itself, terrorist content or extremist content, anti-semitic comment,

that is the first content. much of the content violates youtube's own terms of service. they have not been doing a good job of getting it down and taking it down. counterterrorism world, we have seen problematic content resurface. this year, the cnn report showed you are seeing the same problem continue on all sorts of horrific content in some cases that violate terms and services. other cases just marked problematic and offensive. they are relying on algorithms. obviously, 75 disney and amazon, they don't want their ads running on channels that are completely antithetical to the message they are trying to promote in their ads, which in some cases, the ads often emphasize enough empowerment yet running on sexist youtube channels. with disney, ads emphasizing diversity running on racist channels.

i hope they take action. hopefully if enough do that you will see the tech companies like youtube and others cracking down on some of this content and revising their policies. they have made changes but clearly the changes have not been enough. caroline: to those changes, how much can you tube and its owner alphabet do this? how much could they be hurt if we see advertisers kick in their heels and leave? mark: the irony of the cnn news as this might actually help you to. in january they announced that they have as premium inventory. they charge advertisers more for top shelf. starting in january, they have been a promise to review everything will video. now they will tell advertisers, if you want to ensure this never happens, we run video every minute, buy into google preferred but we guarantee you

will never have problems like this. youtube will be educated. the clean version for advertisers and the rest wild west where they don't have as many policing structures, but they won't have as many problems with major brands being called out like the cnn story. caroline: well. it looks as though there could the business when. what about your institution? what are they trying to do to ensure this content is coming down in a speedy manner? >> it has been an issue across all the major platforms, not just youtube. we have been extremely active in pushing for solutions on this front. in the realm of child pornography, they use special technology that is good at combating that. we have been pushing for them to take a similar approach on the

counterterrorism front. we have been very active and involved on cap to death on capitol hill. we have been in with lawmakers looking at ways that congress can put pressure on the company spirit i think you saw in those hearings that facebook is coming to the realization that it is not going to be a question of if there is going to be regulation but a question, and mark zuckerberg said this himself up what the regulation will look like. similarly, you are also having a lot of pressure building in the european union. not just on counterterrorism but data privacy issues and a number of issues across the board. caroline: new tough regulation coming in may 25. general data protection regulation. tell us about potentially on capitol hill. soon we could see other tech leaders.

mark: earlier this morning my calix reported that some senators are saying they want to see the ceo of google and the ceo of twitter. so far as i know, the senators have not called in the ceos they have just suggested it would be nice of them to come. these tech companies don't want what happened with facebook. twitter doesn't want jack dorsey in front of congress. it's mostly just a bad pr situation for them. caroline: certainly. we will see how this returns to unfold. we hope you join us again. thank you and a great scoop earlier today. sticking with online ads, twitter is banning ads from russia's qatar ski labs. the cybersecurity's firms business model conflicts with twitter's advertising rules. the company has ties to russian intelligence.

the ceo fired back on twitter saying no matter how the situation develops, we want be doing any more advertising on twitter this year. the whole of it will be donated to the electronic frontier foundation. they do a lot to fight censorship online. twitter says they will still be allowed to use his account on the site. coming up, ericsson recovery plan seems to be working. shares fall. we'll take a look at the numbers. ♪

♪ caroline: now an update on the carrier collusion case we talked

to you about earlier. we are now learning apple is said to be behind the investigation that has at&t and verizon under the investec -- investigation under antitrust. that being the gsm eight. these two companies potential he made it tougher for consumers to easily switch mobile phone carriers. apple currently saying indeed they are behind this and they have complained to the department of justice about switching issues. meanwhile, ericsson in europe is making progress in a attempt to reverse fortunes. posting first world earnings better than expected. the company still facing a week market, but cost cuts and a new product line are helping. joining us now, you have put out some great work on this. what is behind the margin improvement? where they think the cost cuts work?

>> there are a lot of moving parts. for erikson it has to do with their services business where for years they were booking all of these contracts that at the end of the day turned out to be unprofitable for them. they are circling back in a methodical manner and they are renegotiating all of those contracts. we are starting to see that flow through in the bottom line. it will hit the margins. the other payment is ericsson cut 17,000 people off their workforce last year. that is a big component of sg and a. together, if i had to decide the two biggest factors those would be the big two that stood out to me. caroline: the ceo must be pretty

please. i'm looking at the rsi and bloomberg. if you type in on the ericsson stock, it is chilling we saw the stock surged past the 50 day moving averages. we are even seeing that we are now in overboard territory. are we likely to hold onto these? what needs to be proof now but ericsson that this is the path they are likely to take the company? >> if you listen to what mr. ekholm had to say, ericsson is managing into the future. i credit them with being a bit patient because we still haven't yet seen the uptick in carrier. the move from 4g lte to 5g. we will see that flow through to the top line by the end of the year. in the meantime, it is a bit of a waiting game for erikson.

caroline: john butler, fantastic research. coming up, we talk bitcoin bouncing back. this is bloomberg. ♪ retail.

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mark: you are watching bloomberg technology and here's a check of first world news. president trump has indicated he will travel to moscow in vladimir putin visits the white house. russian foreign minister sergey lavrov says president trump make the offer when he called president putin last month to congratulate him on his reelection. france is suggesting that syria and russia may be covering up evidence of chemical weapons attacks. the country's foreign minister said today two weeks of obstruction by russia and syria is hurting the investigation. inspectors of the organization for the prohibition of chemical weapons are in syria, but unable to visit. during talks at the pentagon

with his japanese counterpart, jim mattis had this morning for syria president assad. >> there is full support for the regrettable but necessary attack on his research and engineering part of his weapons program. he would be ill-advised to ignore the international community's statement. mark: south africa's president has left the commonwealth summit in london to return home and you with violent protests over alleged corruption. rum poser who took that office in february after the removal of former president jacob zuma is calling on the police to show restraint after a state broadcaster short footage of police firing rubber bullets to disperse protesters. the palestinian ambassador to the united nations is calling on the un's human rights council to look into the recent use of force israeli officers on

palestinian protesters. he says he has spoken with his colleague in geneva. >> he will be beginning the consultations with members of the human rights council so that the council can show its responsibility with the possibility of moving in the direction of independent and transparent investigations. mark: israel is closely guarding a border fence and warns it won't tolerate attempts to damage the fence or breach it and enter its territory. the south korean official confirmed that a successful test always conducted on the hot link between the two countries. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. i am mark crumpton. "bloomberg technology" is next.

♪ ♪ caroline: this is bloomberg technology and i am caroline hyde. the world's biggest cryptocurrency has backers cheering once again, gaining 3% on friday, and bitcoin is poised to do somebody hasn't done all year. post back to back gains in 2018. if you look at gtv , we see the mini rally. joining me now to talk the coin and blockchain and much more is managing director at venture capitalist has made investments

and snap, and much more. there are many out there who say, i don't like crypto but i like blockchain. what about the new protocols out there and ipo's? has anything caught your eye? >> is all really early. the analogy we often talk about in silicon valley is like the early 90's of the internet. there are lots of particles tried, but the technologies are not mature yet. which is exciting for us is the developer community in the valley that is going after confuses technologies and build expenses with them. it looks promising. caroline: i'm assuming you were

overwhelmed with blockchain in the headlines, but what is the main application that you think so far has shown the most interest? >> i think a lot of the early work has been in the financial services infrastructure. payments, you think globally of how commerce is done. there is of teams working on health care, and areas like music and so on that we are starting to see. again, it is early. these protocols are not technically much enough to create great expenses yet. the long-term promise is exciting, but i caution it will take a wild that these become great companies. caroline: some of the caution of the ebbs and flows of the cryptocurrency prices is regulatory issues. and one of the big tech giants, we have seen so much in the headlines when it is mark zuckerberg on capitol hill talking about revelatory environment in general.

the book you have written is a guideline for our trip nurse looking at the new era of regulation and technology -- the book you have written is a guideline for a look at the new era of regulation and technology. >> a lot of the dialect around facebook and social meetup tough firms today is that we have this purist view and we are running into issues that we have to solve for. start applying those technologies to sectors like health care and education where data is more profound, how are we going to access the data and used the data and do with privacy and other issues? it all needs to be thought through before we start adopting those mainstream sectors. caroline: how are you advising the likes of snap, which is a key investor of years? a company that could win out to focus on facebook but equally might be under some regulatory clout as well?

>> i think snap has an incredible opportunity is when you think about it from a product perspective, they took principles of how to operate online and how we communicate each other versus media versus news. is a very young company and has lots of execution in order to become a fast-growing and viable business. but, i do think snap and companies like that will have the opportunity to take advantage of some the issues we are seeing in the first-generation social media companies today. caroline: what about going forward -- your book recently launched, a new generation of upstarts, let's talk about a yeah, because it was a big week in the u k and we saw lawmakers studying the application of artificial intelligence. and became out saying we are worried about the key u.s.

monopolies like google and facebook, and may be having too much of a monopoly on data going forward in ai, but it is not enough of a fear toward a watchdog or overarching oversight over ai. you think that is wise? >> i think we need a public-private partnership in how we use ai. is in the early days of ai, but issues like transparency and to explain ability of how algorithms are used best a need to be clear of how companies are using them. are they respecting the core values of society? either benefiting and not taking advantage of bias and discrimination? i think looking into it is important. in my opinion, the governments and the regulatory framework is antiquated to actually monitor and govern these kinds of new capabilities. the more this dialect can be

enhanced in the more they work collaboratively the festival will get that take advantage of these capabilities. caroline: you see signs of collaboration? i know you have started to lawmakers in the past, today listen to you? >> i think so. if you look in europe, i think that is the beginning of it. there's loved i like happening between silicon valley and folks in d.c.. but getting them to understand what is going on, and then started to think about where are we going to govern? worst the department of artificial intelligence and the government that has a sophistication to make sure these technologies are being used responsibly? that collaboration is next up to make sure we take advantage of these capabilities is possibly over the next few decades. caroline: how does this affect your investment thesis? how do you invest responsibly? >> i look for founders.

we as a from look for founders with a long-term mindset. companies that are built to that have profound responsibilities and areas like health care education and finance -- the need to be building products with the appreciation that they need to make decisions that are long-term and for the benefit of society as a whole, cannot not be focused on things that might be short-term for growing fast. you see a lot of companies run into those kinds of issues over the last three years. leading from those mistakes and learning responsibly is a key area we look for as we get involved with new projects. caroline: managing director at general catalyst, thank you for your perspective. now, nintendo's $30 billion rally in the last year may depend on cardboard. on friday, the japanese company started selling cardboard

add-ons for its tablet console. ticket but let users transform the switch into api no, or a robot -- a piano, or robot. nintendo wants to attract users under the age of 16. coming up, they temperatures continue to make headlines, this time with suntrust bank. we look at cybersecurity next. this is bloomberg. ♪

caroline: china is busting the u.s. government over there been unbind crucial american components.

now the communications equipment maker caught the move extremely unfair and vows to protect its rights by legal means. to validate the terms of a sentient settlement. meanwhile, cybersecurity, and why cyberattacks don't always come from outside actors. most recently, suntrust banks, the largest lender said they're investigating into former employee might have stolen personal data on 1.5 million customers. here to talk about investing in current cybersecurity landscape is max ghaisar. what did you hear, what are the trends, where are the key threats terms of cybersecurity, is it internal or external factors? max: this is probably the most important week in cybersecurity.

this is when every one converges on san francisco and we have a conference and gift vendors to meet products and customers coming in to try to understand what is new. you make a good point about the insider versus outsider threat. i think security has been sensationalized about the outside threat. we have sensationalized the nation's, and the call that the 1% problem. 99% is insider threat and things we have not yet figured out. caroline: what company thrives in this environment of a general patch that that is perhaps internal bad actors? is it the likes of oracle or startups? max: security is an industry that has been fear driven. to the extent you have scary levels of attacks and by actors their comprising systems, the new hot things will always sell. ai is front and center and will

continue to be for good reasons. but the traditional security vendors selling the basic systems will thrive. cybersecurity is one of the most interesting spend areas in i.t. right now,, relative to other sectors because the threat landscape constantly changes. in the old pockets so alongside the hot, new, bus products -- buzz products. caroline: i know cyber i.t. departments -- and what about the hot area of ai helping fight cybersecurity? where d.c. interesting companies coming from and are you looking to invest in them? -- where do you see interesting companies coming from? max: data is an ingredient for ai to work. yet people that are under threat. you have people are in need, therefore they will rely on

machines to take over some of that workers is being defensive about it. and yet the willingness to work with things that are not get 100%. the threat is so real that a lot of times customers are willing to work with products that are not in the startup phase. there is a former cybersecurity team that is working on an ai-based part as the frontline in response. that idea is the ai helps handle the first level of defense. caroline: response software for example, does it end up going public or will it be eaten up by the older guard released to have these exciting new areas of growth internalized? max: we always make our early-stage investments with the are companies that can go very big. i think you pointed out a good trend at cybersecurity is an

industry where there is a lot of m&a. yes and companies being bought by hundreds of millions of dollars and is one of the most liquid markets in i.t. and enterprise software. vendors lots of companies, the space is very fragmented. you will continue to see a lot of m&a. caroline: max, great to have you in town and think you for joining us from the rsa cybersecurity summit. coming up, tech earning season all reporting next week. and share price reaction today. global news, 24 hours a day, on the air, and at tictoc on -- this is bloomberg. ♪

caroline: it is earning season and for the tech sector is shaping up to be one of the most interesting in a while.

global technology giants in the brain could run with the u.s. and china is starkman the global interconnectivity that has helped the industry thrive. and a crisis spreading over how cambridge analytica got access to millions of people's information. and a feud between president trump and jeff bezos. joining us now from new york, and in san francisco -- gentlemen, let's get to it. first of all, i am looking at out of back in particular. with all eyes on costs. >> google pays third parties to run up advertising revenue. and the other thing with alphabet as they can fly under the radar and data and privacy

scandals. facebook ceo mark zuckerberg bearing the brunt of the public and different governments attention on this issue. analysts will be asking off but executives at a are worried about any future impact to their business, which is a relies on collecting the data of millions of users. caroline: will you be looking at some of these companies about the spillover effect of a and whether we will seek more regulatory clouds gathering above the heads of twitter and youtube owner, alphabet? >> absolutely, and that is the biggest thing investors will look out for. it raises compliance costs across the board. not just facebook -- it increases security and things like that, but also the ripple effects. adobe focus on the expense side. feeling at the revenue side, look at the traffic data and the demand for things like mobile advertising and mobile search. they look pretty strong, so

there are numbers that are less at risk, but the expenses going forward and guidance is what is going to make a difference. caroline: let's look deeper into facebook. i am looking on my bloomberg if you dive into facebook and the get analyst recommendations -- a b it is a buying opportunity when you see shares fall off the yellow line. 42 are saying by and only two are saying sell, what are we looking for that could shake these views? is it going to be if we hear more material impact that hasn't arisen yet in terms of spend from advertisers? >> google and facebook are the only games in town for online advertising. advertisers are not running away

and they don't have anywhere else to run to. consumers have yet to #delete facebook even though some have said they want to do that. facebook has indicated damaging major numbers of people losing service. there's no proven that yet. the specific concern is if governments around the world start forcing facebook and other data collection companies to make it much easier for people to voluntarily opt out of those data collection practices, was still using the services. in the eu the lot requires that to be much easier. there's ways for tech companies to still set up their terms of service so people are pushed towards sharing more data, but if regulators continuously and cut down that you need to redo that cometh that is when it could become a problem. caroline: may 25 is a big day in europe because that is when the gdpr comes into play, and it will become a global standard because mark zuckerberg said we will make our updates not only relevant for the new revelation

in eu, but around the world. how much will this affect his models for these companies? >> that is to be seen in the q2 earnings. based on the testimony, facebook is willing to have some light touch regulations. he did bring up gdpr a couple of times, and will see what comes out of it, so there will view the implementation. the regulatory risk could impact revenue growth or user growth this year -- but any guidance around that is what investors are going to be focused on. caroline: talking of revelatory risks -- we keep hearing from donald trump and issues about amazon's jeff bezos.

you think the tweets can turn into a regulatory issue for him? you think there will be changes of how the postal service will work and to this affect amazon going forward? >> is no secret the president has strong feelings about amazon and surrender feelings about jeff bezos, who also owns the washington post newspaper. the tweets never had an impact on amazon until the specific postal service one, which came at the same time as this concern about facebook. i think it was the same week mark zuckerberg was on capitol hill. the market was sensitive, and no one in the white house is going to push the postal service to do anything serious. the postal service by all accounts seems to make money with its contract with amazon. at the end of the day, having the most powerful person in the world attacking you is not a good thing. caroline: great analysis from "bloomberg technology".

we will see you both a lot next week make the earning season. that does it for bloomberg technology. happy weekend. this is bloomberg. ♪ this wi-fi is fast.

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