near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. emily: i'm emily chang in san francisco. this is "bloomberg technology." for the next hour, twitter user numbers declined and they warned it stagnant growth will continue into this quarter. how to the rocky result fit into the rest of the bad news from facebook and more? we talk about whether tech will fall out of favor with investors. and we hear from the ceo from fallout of the

acquisition of them. there's disappointing second-quarter results in twitter. active usersd as declined. take a to the conference call. >> we see health as a growth specter for us over the long-term. as you stated, we don't think this work will necessarily ever be done. does not have an endpoint. is is -- it is one of the things where you have to constantly evolve. emily: we bring in selina wang and the senior analyst analyst -- seating -- senior analyst on this. they tweeted this would not materially affect user growth, but it has. user numbers have declined. >> twitter on a regular basis is

deleting a vast number of accounts and the numbers of tens of millions are only a small ofction of it which are part the user metric. it is impacting the monthly active users. the good news is, after years of criticism, jack dorsey and twitter are prioritizing security and health. that does come at the expense of short-term asterix and while term -- short-term metrics and wall street's happiness. pastue and profit blew expectations. ailey active user growth continued in davie -- daily double user growth in the second quarter. we all know improving safety on the platform is good for growth, but when will it help growth instead of hampering? emily: daily active users up 11% year over year but they do not release the number of active users. ben, what is your take? are you positive or negative? >> we are still pretty cautious.

we downgraded about two weeks ago anticipating these problems. there is health, the sms contracts, gdpr and not a lot of compelling reasons driving users to twitter. that is what we see as the key problem. emily: the irony is you have trump treating multiple times a day. if anything was going to widen twitter to a more general audience, wouldn't that be at? >> one of the things i pointed out -- wouldn't that be it? >> one of the things i pointed out is you have one of the worlds most recognizable people using this as a major communication platform. if you can't have the president who is a polarizing figure one way or another, if he cannot drive more usage, what would. you could do all of these things to clean up the network and do things we think are actually important to do, and i think it helps the users there, but the challenges, why should someone new come to twitter?

we have not seen a lot of compelling reasons and i do not see them for the foreseeable future. >> you talked to several analysts who thinks long-term, it will help twitter's regulation with advertisers who want to reach high-quality users . tell us about that. >> getting in front of the fake news problem, the bot problem, fake account problem is important to tell regulators and show them they have this under control and they do not need stronger regulations that were hamper -- will hamper revenue. executive said these changes would not affect revenue and that it only impacts monthly active users at this point. i spoke to advertisers who are interested in spending more on the platform now that they know the quality of users on the other side are actually seeing the advertising's and are more legitimate. for the long-term, this is a good thing.

we did see user growth verse slow in the united states. we saw a revenue only uptick 10% while, internationally, it grew 44%. twitter is relying on international emerging-market growth to bolster advertising revenue. emily: then, in your view, it is growing. at least on revenue side -- the revenue side. what has twitter become? and we have to think about this as a different kind of stock? >> when the company first went public, everyone positioned it as the big number three player behind google and facebook. i think what is happening is the company is moderating its ambitions quite some. i don't think that is a bad thing. that is probably right for the company. and lessmillion ma use than 70 billion in the u.s.. it is not that big compared to facebook. when you're talking about relative to facebook which has

2.5 billion mau's it is relatively small. getting that much bigger in terms of the total addressable audience. emily: talk to us about how twitter is attempting to reach the broader audience. they are curating content around breaking news and things like -- cup, butp but, it is not attracting new users. >> that is their problem. how do they make it interesting outside of the core base of public figures, politicians, and they have not solved that question. ansaw the world cup draw in extra $30 million in revenue in the second quarter alone, but that has not proved whether they can draw in new users and have consistent user base. investors need to reset their expectations and this is almost

-- always be a niche platform in comparison to google and facebook. twitter's opportunity at this point is probably not to get 300 some million active users. it is to try to get the daily or others that are not currently, to become daily active users. emily: it's hard to deny the twitter has a pretty impactful influence on world conversation. you have bob mueller looking at the president's tweets for evidence in his special investigation. you president trump waiting into the covers are very -- controversy about shadow manning -- banning. does that add value to twitter? >> no one will dispute that twitter is an important property.

i personally use it many times a day. many people do as well. the challenges, can they grow in in gauging more new people. i don't see an answer to how they will do that. right, guys, thank you. eisman tellse bloomberg he is shorting tesla for its negative cash flow and other "execution problems." >> elon musk is a very smart man, but there are a lot of smart people and's world, and being smart is not enough. you have to execute. he has execution problems. i think we will see how is quarter goes, but executive cash flow, as you said, he is building cars in a tent, and is in nowhere -- and is nowhere in

autonomous driving as i can tell. emily: investors and analysts will play -- pay close attention to tesla on wednesday. coming up, no close so far. we will hear from the nxp ceo and what is next for the company after qualcomm pulled the plug on its acquisition of the company. this is bloomberg. ♪

emily: after a two-year saga, qualcomm has pulled the plug on the bid to buy nxp after the

chinese government led a key deadline lapse. but, is the deal officially dead? here's what the president of nxp had to say on bloomberg's balance of power friday. >> the transaction is complete, we have received the break up feed from qualcomm read we are focused on the future. >> we want to focus on the future of where you are going. to this point of view. what killed this deal and what extent do you blame qualcomm because they got involved in the broadcom deal. >> i think that had nothing to do with approval in china. it could've created confusion, but there was nothing about regulations or issues that china could identify the could not be resolved, especially with transaction. it has to be political or another reason. it is not about the transaction

itself. >> sews not about the transaction, it is political and has to do with trade issues, what is that say about any deal going forward? is there any other deal that would get approval? >> i cannot answer that question. that's not something i'm in a position to respond to. it certainly raises questions. there have been a few transactions that have been approved recently. banks purchasing toshiba and others. they chose not to approve this transaction and for us, it is about how we move forward. >> and qualcomm had legal disputes with apple and samsung as well. how does your relationships it now? >> our relationship with qualcomm is fine. there would have been a huge opportunity to create the powerhouse going forward, but we do not have that now. with a bright future. we are the leading -- we have a bright future. we are the leading semiconductor

company. we facilitate the ability to drive connected devices which will be 75 billion by 2025. we provide a unique technology to use machine learning in artificial intelligence. >> how much does it help your future that the president gave zte an important lifeline. >> they are an important customer for us. oflost about $31 billion potential sales previously. it is a customer and one we continue to want to work with. >> so you wouldn't have done the qualcomm deal if you knew the u.s. would grow the company faster, better. that is not going to happen, so how we grow it faster and how $2 billionend the

cash you walk away with. >> we will use it to expand our internal capacity. we are focused on driving growth and leadership positions in automotive. we want to make driving safer and we are in a unique position to do that. our leadership across the board fertility that -- facilitates that. our platforms drive the internet of things. the ability to try to put the internet to use. talks about the cloud which captures information, but our systems allow you to use that information and make it effective. >> what happens to the microcontrollers and the driving revenue if auto tariffs are put in place? the commerce department is investigating auto-parts as national security threats. >> i don't think it is about a

national security threat, it is about balancing trade. we are hopeful free-trade will be the rule that will come out of this. we think there is more opportunity for this. there is demand for automotive production. if you look at growth and where specifically,lace it is in china. they are specifically talking about electric vehicles and we toe moved our technology offer a significant opportunity. >> one of the responsibilities is doing a different deal for nxp as a buyer or seller. you to bebe expecting back in the market as a buyer or seller? >> i think we will do acquisitions that we need for technology to drive solutions. qualcomm would've driven a huge powerhouse, but we are focused on how we can drive the future and how we can make a difference for all of our customers.

>> speaking of driving the future, which may be upon, there is a perception, maybe it is wrong, that we need bigger, scale to move into this world. we have seen it in other industries as a disruption to digital. is that wrong? >> i think it is. it is important to have the technology. that is the critical thing. if you look at the semiconductor content in a car, it will go up next six or seven years. we want to provide those solutions like we are today. so that we can make cars and safer. so that we don't have as many accidents, and reduce the pollution aspects associated with it. then, you provide the security. kreidler's was rick -- rick clemmer's -- that was the nxp ceo. didn'tnese government

approve the deal, but they didn't disapprove of it either. -- they justt the let the deal go. arenow they say they regretful that they pulled the deal. >> they didn't outright lock the deal, but theyhe didn't allow the field to proceed in that time. a statement came out that they said they regret that the two companies decided to walk away from the deal. they said their deadline was later in the fall and they had planned to continue to review it. it is an assertion of power by china in this sphere. it is a very interesting one. one step back, why is china involved in approving this deal? it is an american company buying a european company.

but, the tech supply chain runs through china now. that is the reason china is able to assert its regulatory authority under as like this one worried in this case, -- this one created -- one. case, they are demonstrating they have influence in this area and the could have a chilling effect on chip deals. emily: and it is certainly up to the ceo of nxp to talk about how they have a strong future as an independent company. is the deal officially dead? could this still happen? >> the two companies have been pretty determined. he saw qualcomm say it is time to move on. from nxp's standpoint it is not as clear as they did want this deal. in his comments today, he said they are moving on and have strong futures in independent -- as an independent company.

he made a case for being together in the past and there are opportunities there. chinese regulators have essentially made it impossible for them to proceed. emily: peter, thank you so much for being here. facebook, the social media giant's length of blame at the feet of the european union. we will discuss that next. this is bloomberg. ♪

emily: facebook's lackluster earnings have led to a steep drop in the market value. $100 billion is wiped out in a blink. more than the market cap up goldman sachs and the gdp of slovakia. the company lost about one million of europe's monthly active users in its rough second quarter in the cfo says it is all the fault of the european new strict section laws -- restriction laws called gdpr.

agree?rope for league caroline hyde is standing by to answer that. what do european regulators, lawmakers, and users say? >> they are disagreeing. they say it is not just because of the regulation. they are saying it is because of the mood music that was changed. you lost faith of the regulators, lost faith of the advertisers, and that is why you see people moving away from your product. if you look at it in context, they lost one million active users. to lose them is unheard of. nevertheless, it is a drop in the ocean compared to the 280 million daily active users they have in the whole region. nevertheless, people are saying the fact that this is a full quarter since the scandal of cambridge analytica, and

indeed, the investigations and manipulation of facebook users by russia. this is what is impacting the decision whether or not to use the product. many also think on the flipside that's when you came -- when gdpr came at the place, privacy rules had to be put in place and you had to click through or except and move away from facebook entirely. maybe because of the whole scandal, people thought i know how you are using my data, i have more transparency, and i do not one in. some could not have just been bothered to click through. emily: i spoke with roger mcnamee, in early facebook investor who i'm assuming would agree with europe. he thinks that facebook is putting the blame on gdpr to of skill the fact that users are saturating in the most popular market. they're just not that many more

users that are new. is that true? >> we are seeing growth slowing so to be true. in canada in the u.s., they do not have the same privacy rules. we saw stagnation completely in new users. maybe there at a tipping point. some analysts are saying that this is just a blip. one particular analyst at the tig is saying the dip in users dip in this thing the users is a one-time step down, not the building headwind. i'm cautious about that. i think it is interesting because the gdp are headwind could get worse. that is what bloomberg analysis is saying. bloomberg intelligence says the changes could hurt continually because facebook has said either you accept our new terms of privacy, you accept that when you sign up for facebook your data is just are beaten we can

target ads that you, or get off of our platform. eu says you actually need to accept the terms of service freely. ifit really freely accepted you have to accept them or can't use facebook at all? an important way of socializing and keeping up with friends and getting news. thatfeel that you, come -- the eu, come 2019, isn't right. we could see more nuance. you can find that you could use facebook and then they cannot use their data. what then of targeted advertising and their growth? emily: fascinating. from the outside, it appears google has benefited from gdpr because they were able to expand their resources to get compliant

, hurting smaller competitors. caroline hyde in young than -- in london, thanks. there's one more big tech company you have to watch for, that is apple. we will discuss next. ♪

this is a test. earnings of 12 and 13 times, it is not expensive. dividend yield of two to 3%. that being said we have no signs of anything being derailed. original check showed the legacy iphones are selling very well. by $100 bys down newer phones and older phones.

the funds are getting cheaper and cheaper and more affordable. phones also1000 inserted discounted. and wevaluation support don't see the potential risk that other companies reference. >> apple was cheaper than amazon. >> thank you both. while intel reported stronger results. the company is searching for a new ceo after the resignation. key potential successors and already left company. delayse already facing on new pc chips which can leave an opening. >> we have a set of leadership products through the end of 2018 and the 2019 that we feel very good about.

they're a function of our 14 nanometer product portfolio which we continue to generate more and more performance out of the 14 nanometer node. that we haveith been investing in our 10 nanometer process technology and we are scaling that is because the second half of 18 into 19. we will have products on the shelf second have to thousand 19. through the journey, we feel very good about our leadership product performance at a time when the market was really valuing high-performance compute. we joke about where we are. which of the process we are making -- progress we are making. also said that the pc market is on course to grow for the first time in 2018 area what is driving that? how long will it last? we are seeingowth

is somewhat widespread. particularly on the commercial side. let's -- less on the consumer side more on the commercial side. we are seeing it across all regions of the world. cios are really taking the opportunity to accelerate the refresh of pc products at the enterprise level and in doing that they are looking for high-performance products. it is allowed us to grow the pc business by 6%. we haven't seen that kind of growth rate in a long time. , we the pc business grows generate tremendous profits from that business and we are pretty excited about the demands for pc in the second half of the year. colleague wrote a piece about the extraordinary female candidates in your search for ceo.

you said you don't want the job. is that true? aboutlse can you tell us how fast the search is going? first, i love my day job. i am excited for the progress of the board is making and finding the next ceo for this wonderful company. process, thehe board has not set a timeline. i would say they are moving with quite a sense of urgency. they are looking at highly qualified internal candidates as well as external candidates. they will take the time necessary to make sure we find the ideal candidate and will have a variety of considerations in picking that person. for our company, diversity and inclusion has been a very important part of the makeup of the company so i sure one of the criteria the board will think --

is how important diversity inclusion is for the next leader. it has been a stalwart for intel. i'm sure that will be one of the considerations that the board will evaluate. >> you have some progressive programs which we have reported on. you think the previous leader for his leadership. intel decided that he did something that violated company policy. what are you doing to make sure that doesn't happen again elsewhere in the organization? history ofs a strong values and culture being extremely important. the reality is that it applies to everybody in the organization. we constantly reinforced that on an ongoing basis. the values of the company are extremely high and our employees rally around and did here to the

policies that we have. there are no exceptions in our company about who has to adhere to policy. companystrength of the it always has been and i am confident it always will be. >> the semiconductor industry has been vociferous ins eking out against trump tariffs. on the your position moves the administration is making when some of these chip companies are arguing it is hurting them? industry for a very long time in the u.s. has been a net exporter. the products that we design and build here in this country and export around the world are a significant source of revenues profits and employment for u.s. based semi companies. about oury clear

desires to see free global trade around the world because it is a contributor to our growth, competitiveness, and u.s. jobs. that is important for the industry and for our company. that was intel interim ceo. you can catch the full combo at bloomberg.com. up, insecure and aging voting systems are on the minds of many experts. could be ballot backup the answer. this is bloomberg. ♪

we are almost 100 days out from midterm elections. there are already reports that

russia is trying to hack them again. the u.s. remains the only country to not have a paper backup to its electronic votes. we all remember the problem with paper ballots back in 2000 bush gore. they have been complaints about electronic voting systems going back to 2004. what is the solution? >> the problems of the 2000 election with the two that , let us to move to electronic systems and i think ,he answer is what we need electronic systems whether they are scanners that rebalance or touchscreen machines, they have advantages but we need paper can ensure that

what the software is telling us is accurate. are 21 states that have electronic voting systems and five states that have electronic voting systems with no paper trail at all. new jersey, delaware, south carolina, louisiana. would you say they are the most at risk for being hacked? there are a number of aspects to our elections. registration databases that tell us who can vote. electronic poll books. they allow people to sign into they can vote. those are things we have to worry about also. when it comes to the voting it's notthemselves, that a paperless system is easier to hack. even if you fill out a paper helot, that computer that gets scanned into can be hacked also.

i am worried about in the five states that are all paperless and the eight states that are mostly paperless, that there is no way to check afterwards with something that is independent of the software to make sure the totals are accurate. that is a great concern and why people who work in this space including the department of homeland security have recommended that the systems to replace. we are all focused on the tally because we want to know if the results could have been altered. there is no evidence that we ine heard that the results the 2016 presidential election would be different if the election had not been compromised, but do you buy that? do we know for certain? >> here is the issue. the discussion around the hacking and the interference in the 2016 election.

that all ofhasize the attacks on the infrastructure that we know about were against inflict the ration -- registration databases, attempts to get into officials emails, things like that. i am not aware of any public record of any attempt to get into the voting machines themselves. altering ofof any those totals. of the the effort russians in the 2016 election and in attacks around the world has been to discredit the whole idea of democracy. we will see more of that. that in 2018 and 2020, social media propaganda and other things if there are doubts cast on outcome of the election, particularly in the states where they don't have paper backup and they are not

checking the paper, that you really are leading to potentially a crisis in the confidence in the electoral system and that is dangerous. >> given the congress just voted down a measure that would have provided additional funding for securing the vote, how confident are you about these elections that are just over 100 days away? >> a key thing, congress did provide $380 million a few months ago for upgrading election infrastructure. a key thing for us to focus on is that if there is a successful and that is aems real possibility, that we can make sure people can vote and those votes are counted. so we have paper backup. >> we have to leave it there.

thank you so much for joining us. coming up, a new way to blast off. this is bloomberg. ♪ bloomberg's game changer looks

at how us guard up is looking toward a micro thin chip and the sci-fi sounding thrusters to revolutionize how we moved to the final frontier. >> this tiny little chip could be a better way to explore space. >> in the gold rush to space you can say we are like the shovel. >> once upon a time she had big dreams of working for nasa. >> i would sleep on my trampoline at night and watch the stars and think about aliens and watching the space station pass overhead and i went on to

apply to nasa twice become an and i got up thanks but no thanks postcard from nasa. i will keep flying. >> she had to settle for being a rocket scientist. a founding member of axion systems. chips thatwafer thin are engines. >> orbit is becoming more and more accessible to organizations university hospital -- hobbyists in their garages. are talking about tens of thousands of satellites being launched over the next decade. currently they have no propulsion solution. that's what axion is building is an engine that works on small satellites. >> this is rocket science so here is the bare minimum you need to know. an ion is a charged atomic particle. by pushing ionic liquid which is

basically a molten salt into this chip, billions of ions can be discharged. >> if you can ensure an astronaut sitting on the back of a satellite and she is throwing tennis balls off the back, each time she throws a tennis ball the satellite moves a little bit in the opposite direction. axion's engine, the tennis balls are actually ions. our smallest engine is the size of a pack of cards. >> based still need rockets to escape earth's gravity. this chip willce increase the shelf life of satellites by years. work without any fire or flames are loud noises. they are not quite as visceral as a rocket but they are very efficient.

this is a pleasure. it is our family car. i wanted to be an astronaut and aviation is the next best thing. fortunately i married a pilot. we are raising the youngest pilot here. the first electric propulsion engines were developed in the 50's and 60's. they were largely ignored after that. it seemed to me and college that there was a whole branch of rocket science just waiting to be advanced. at suchtudies advanced a rapid pace, she had to learn

to run a business. being a student of science. does not come naturally to me. i was in a lab at m.i.t. trying andinish up experiments listening to audiobooks on learning how to have a startup business and be a ceo. our long-term customers are people like the department of defense and lockheed martin and boeing. our first flight delivery was to irvine high school. a group of students is going to be watching a chip with our system on it. twofter selling these multiple customers, -- >> shoot for mars or out the centauri. a pretty big hairy audacious goal.

why would you have it any other way? >> that is all for this friday. we will be back next week. this is bloomberg. phones have made our lives effortless.

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