emily: i am emily chang. this is the "best of bloomberg technology." coming up, $120 billion wiped off facebook's market cap in the blink of an eye after earnings disappoint. what has investors nervous, ahead. plus, how the rest of tech faired. we will dig into amazon and alphabet as well. president trump's fight with china chills a merger.

and what to expect from tech m&a ahead. the facebook market cap wiped out this week was the biggest in u.s. history. about $120 billion was wiped off of facebook's valuation, about two thirds the size of 1929's black tuesday market loss. larger than texas instruments, broadcom, and salesforce. this all followed facebook earnings disappointment wednesday when, for the first time since 2015, the tech giant missed analyst estimates on revenue. facebook also missed on monthly and daily active users. daily active users stayed the same in the u.s. and declined in europe to 279 million. we -- we spoke with david melissa parrish, right after the results were announced.

>> facebook has missed for the first time in quite some time. although, in my world, an 11% year over year increase for active users is still a win. so the headline is perhaps a little different than my own interpretation. emily: and look, they missed on all of these metrics, but not by a lot. are investors overreacting? david: well, it is a historic day, beacuse i think it is a sign of a turn. but i agree with melissa. revenue is also up over year. this company is not hurting. but they didn't disappoint vis-a-vis expectations, and that in itself is historic. i think actually, it is probably healthy for the company to see the results get criticized, because it will force them to take these problems they are in the midst of even more seriously and perhaps be more candid with how they are addressing them. because i do not think they have been very candid. although, some of the results suggest they are spending even more than we thought trying to remediate it, which is good.

emily: we have great commentary happening right now on bloomberg's top live blog. my colleague asking the perennial question -- has facebook reached the end of new users? are there just no new users for facebook? melissa, what do you think? melissa: i think that is a very fair question to ask. they are at 30% of the world's population. there will be a ceiling at some point. i do not think they are there quite yet, though, because though we know sentiment and interest among the youngest users has not been as strong as for previous generations, i think there is still a lot of room for growth. there are an awful lot of young people in the world who have yet to get on facebook. emily: david, how much does this have to do, you think, with the scandals, with concerns over data privacy? david: it is funny, as you asked the last question of is growth no longer possible, i think it occurred to me that look, there are still plenty more people to come to facebook.

we know for example in india, people are flocking onto facebook right now. so if in fact growth is slowing globally, it could mean even more people are coming off in some of the more developed countries or slowing their usage, and that could be significant. because those are the users that are the most profitable for facebook at the moment. but there is a massive still unserved community of people in the billions in the developing world that want facebook, will get facebook. growth has not ended for facebook. but, again, this is a historic shift. things are not as good as they were. and that is significant. emily: that was techonomy ceo david kirkpatrick and melissa parrish of forrester research. i also caught up with roger mcnamee of elevation partners. he was one of mark zuckerberg's mentors and an early investor in facebook and has been very critical of the company's privacy issues. take a listen.

roger: investors have been willing to overlook a lot of red flags that have been showing up for the past year. you know, the maturity of north america has been in sight for the last two quarters. there were at least signals that europe was reaching some kind of saturation as well. and those are by far the most profitable parts of the facebook application in terms of generating profits. and so any slowdown there was going to spell trouble for the stock. and to be clear, you know, i look at this thing as, you know, a mixed situation for facebook. if you are an investor, the good news is that facebook has other properties. it has instagram, which is very profitable and growing exceptionally rapidly. it is, in many ways, just as bad a product for users as facebook,

and for teenage users, it is actually much worse. emily: why? roger: they had just begun to monetize whatsapp, which is humongous. and they have not done anything with things like their marketplace. so, there is a lot of growth opportunity. the issue is what pe multiple investors are going to put on that, given that facebook's underlying business model is really based on promoting disinformation and hate speech and things like that. not because facebook approves of disinformation or hate speech, but rather because those are the things that generate the most engagement, the most views of advertising. and therefore, the most economic value. emily: now, mark zuckerberg sort of pitched instagram as the savior on the earnings call, but as you mentioned, it has some of its own problems. you have been very outspoken about some of the privacy issues. do you see some of those same threats with instagram, messenger, and whatsapp?

roger: well, with instagram, the real challenge that is happening today comes in two places. one relates to the impact on teenagers. if you look at girls between, say, the ages of 12 and 15, there are huge issues of bullying relative to body shaming and things like that. for all teens, fear of missing out is, again, a bullying issue that instagram has been -- you know, it didn't invent bullying, it just gave bullies a really effective tool. and any parent of a teenage kid has at least some exposure to this, either directly or indirectly. the second issue for instagram is because it is so dominant among young voters, we would anticipate much more manipulation of voters. it tends to suppress young

voters from going out and voting in this election cycle, and i do not think facebook is prepared for that. and it concerns me enormously. emily: so do you think this is the beginning of some short or long-term pain? you know, will we see this again next quarter, and the quarter after that? given what facebook's cfo said on the call, that this revenue deceleration is going to continue. roger: i believe that, relative to the proportions of the business that are hurting now, which is basically the facebook product in north america and europe, that those issues will persist. and it is now a matter of time to see how long it takes for instagram, whatsapp, marketplace, and the other things that facebook can monetize here, to fill the hole and restore the growth. my sense is that those things

can do that. the larger question for investors is what pe multiple we are going to put on the stock, given that we know now that the business model is so dependent on activities that we would not permit in any other sector of the economy. tech has been given a free ride and been allowed to get away with behaviors that are regulated everywhere else. and until that regulation comes in and makes it safe to be involved, i think these companies are going to carry a stigma. and there will be a huge relative benefit to google, or twitter, or anyone else who can distance themselves from disinformation. can distance themselves from election manipulation. because i do believe facebook is sincere in its efforts to try to limite that kind of stuff. however think the things

they are doing will be effective, because the problems are at the heart of the business model. they are not going to be fixed by adding 20,000 moderators. emily: that was early facebook investor roger mcnamee. still ahead, we will stay on the earnings front. later this hour, we will also talk about qualcomm terminating nxp, bringinguire an end to a two-year saga. we will talk about where the chipmaker, both of them, go from here. and if you like bloomberg news, check us out on the radio. listen on the bloomberg radio app, bloomberg.com, and sirius xm. this is bloomberg. ♪

emily: president trump took aim at two familiar targets in the united states again this week. amazon, and the "washington post."

both are controlled by the richest person in the world, and that is jeff bezos. on monday trump called the "washington post" an expensive lobbyist for amazon and alleged the retailer has a huge antitrust problem. staying on amazon, the company came out with its earnings thursday. we caught up with boomerang ceo and former amazon exec guru hariharan as well as jitendra waral to break down the results. >> if you look at the profit, it was massive. if you look at every segment, retail, margins improved across the board. one key thing that jumped out was if you look at advertising revenue, that last quarter they started reporting it under the new accounting change, it continues to be strong. 130% growth in that segment. so a combination of this advertising, plus the amazon program picking up and private label goods, these are helping margins. and that is driving this monster beat on earnings.

emily: the cfo on the call talked about how the company is improving efficiency basically across the board, even as they are making these investments in alexa, grocery, and prescription drugs. >> yeah, so, right now, amazon is achieving a big snowball effect. they are starting to build momentum. but looking forward, there are three place they have to perfect. number one is they are defensive in the cloud services business. there are competitors coming in like microsoft is making a big acquisition and acquiring github. and then google going big on cloud business. they have to play defense over there. but there are two other areas where they can play massive offense and gain a lot of revenue and margins. number one is a.m.s., the amazon marketing services. and that is a very high profile and high-margin business for amazon. it is growing very rapidly.

it's a measurable technique for consumer package goods getting in front of shoppers. the other is the grocery business, which having acquired whole foods, it is starting to pick up momentum. we saw integrating businesses, even on prime day, that is a big opportunity for revenue. emily: also amazon saying on the call that whole foods is bringing new prime membership, and on prime day they saw more subscriptions and ever, even with that glitch. >> i think the pace is accelerating at a smaller than expected pace, to be honest. but it is actually a very big market. the opportunity is there. they have to build infrastructure aroud it first. emily: are there any red flags? >> i do not see many red flags at this point. even slower revenue growth could be a strategy in terms of starting to capitalize on some

of the profitability levels that amazon is starting to create because of the prime membership and because of their ability to capture a lot of customers in a very sticky way, that allows them to start reinvesting all of that back into r&d. because the r&d expense went up pretty significantly, that allows amazon to create a significant, competitive model in the long run. emily: would you agree? do you not see as many challenges ahead? >> well, we talk about tax challenges. we talk about regulatory challenges. you know, the overarching ones. emily: and this is a quarter in which president trump has taken aim at amazon. >> absolutely. but if you look at the core business, especially the marketing services business, i mean, what we're seeing is google and facebook go after the traditional digital advertising dollars. but amazon can actually go after both. they can go after the traditional retail advertising dollars, but they can also go

for the trade promotions bucket. so basically they can grow without directly competing with google and facebook, in a lot of ways. and if you look at their traffic on their platforms in the u.s., they're getting pretty close to where google and facebook are. so they have the ad inventory, and we have seen alibaba do this successfully in china. so, we see rapid growth coming in profits from advertising. emily: what about international? they talked about improving efficiency in europe, in japan as they continue to invest heavily in india. >> india is a big growth segment for them. and we also saw that the head of india is now the part of the senior team at amazon. having missed the boat in china, they are very serious about india. they announced a big entry into australia. they had some bumps in the road with that. but there is a big market to be had over there. europe continues to be very strong for them, a lot more developed than the other countries. but all of these vehicles that we are talking about in terms of advertising, whether it be

advertising, prime, groceries, these are all significant opportunities, not just the u.s., but international. emily: that was bloomberg's jitendra waral and boomerang's guru hariharan. coming up, alphabet hits a home run its second quarter with google, despite costly regulatory trouble. we will talk about the consumer impact of the eu's action against google. president trump tweets that tariffs are "the greatest." meanwhile, dozens of business leaders travel to washington to argue the policy is cutting into profits and forcing them to raise prices. this is bloomberg. ♪

emily: spacex launched a batch of satellites for long time customer iridium communications

early on wednesday. the falcon nine rocket lifted off from vandenberg air force base on the central california coast. this was the 14th mission of the year for the company. spacex is hoping to launch at least 30 rockets in 2018. executives at google are giving no sign that a costly regulatory crackdown in europe will hurt sales and profits anytime soon. parent company alphabet posted second-quarter results that smashed wall street expectations monday. on the earnings call, the ceo suggested the company would not dramatically alter its android strategy. >> we will always take a constructive approach. we will appeal the commission's decision and take the due process available to us. but we are also looking forward to finding a solution that preserves the enormous benefits of android users and so on. so, there is more work to be done. and i think it will become clearer as we go along. but i am confident that we can

find a way to make sure android is available at scale to users everywhere. emily: so what does this mean for regulation of the tech industry as a whole? we spoke with bloomberg's caroline hyde in london as well as shira ovide in new york. >> the fine from the e.u., the $5 billion fine, was just a week ago. and as i noted this morning, it was literally a footnote in my column yesterday. that is how relatively immaterial it was to the results of the company, at least financially. so that is a pretty interesting thing to note. and the other thing is the issue that had been freaking out alphabet investors for the last few months was its spending. particularly these payments it makes, revenue-sharing payments to its partners like apple and others. and the pace of growth of those payments moderated in the second quarter, is the way they put it. and again, that gave investors in alphabet some relief, although we will see how long

that relief lasts. emily: caroline, google is appealing this ruling, but it has not been appealed yet. and they still face this $5 billion fine, which they will accrue over the second quarter. and the bigger question is, will handset makers now start charging google to preinstall these apps that are in contention? are investors correct in shrugging off these regulatory concerns? caroline: yeah, that's a great question. rbc is saying, look, actually, the size of the fine was the great unknown, and maybe the key regulatory issues are in the back mirror. but $5 billion, put that to one side. i think it is interesting as to whether or not we will see alphabet, google having to start to bid for the real estate it might have to forgo if they don't manage to appeal successfully. they have got just over two months to put in their appeal to the e.u. if they do have to change their model.

if they can't just automatically put google searches into an android device, maybe they will have to start to bid to win that real estate against the app makers. but as many have been noting, look, they still have the deepest pockets around. like, $3 billion in net income they managed to make despite a $5 billion fine. overall, it's a company that can still flash the cash to ensure that google search is where needs to be, and therefore, draw in the key advertisers. emily: now, earlier, we spoke to bill snead, an investor who is warning that participating in this tech euphoria is incredibly dangerous and will permanently damage long-term investor success. this, as google reports 25%-plus revenue growth. what about the bears here? does he have an argument? >> i think he does. and look, it depends a little bit on the company. there is a pretty big difference

in the "euphoria" between a company like netflix or amazon, whose stock prices have grown by leaps and bounds, are trading at valuation multiples that are not normal, and then a company like facebook or google or apple, which are trading at relatively modest valuation multiples for companies of their size and growth rates and profits. so, that is a little bit of the difficulty of making broadbrush arguments about big tech, but there's a pretty big distinction between the maybe unsustainable valuations of companies like netflix and amazon, and the valuations of companies like alphabet and apple. emily: now caroline, what is interesting is that these tougher e.u. privacy laws have, so far, it seems, helped rather than hurt google and they hurt smaller players that have had trouble becoming gdpr compliant.

i asked the alphabet's cfo about this in a phone call before the conference call, and she said it's too early to tell what the real impact from gdpr will be. but from your perch, how does it appear these new regulations will actually impact these companies one way or another? caroline: well, this seems to be the effect the e.u. did not realize it was going to have, when it brought in these tougher privacy laws, when it made sure that key companies, when they do specific advertising that they get an agreement that allow them to be targeted in such a way. suddenly the unknown consequence of this is that it reinforces a duopoly, such as facebook and google. they were compliant. they have the cash ready to be able to invest to make sure they are ahead of the game, they're asking the user base if they did indeed want to receive such targeted ads. they therefore have the trust of those who are looking to buy

advertising, that they can target and be compliant with gdpr. therefore, the companies that are looking to advertise are going through google's services rather than rivals' because they trust them and they ensure they ensure they will not get any fines coming from the e.u. thus far, it looks like it's benefited google's bottom line rather than undermining control of the market, which is exactly what the e.u. generally wants to do. it doesn't want to reinforce duopolies, it wants to ensure that competition is wide and varied. emily: bloomberg's caroline hyde in london and shira ovide in new york. coming up, we will turn to the chipmakers. qualcomm scraps its plans to buy rival nxp amidst u.s.-china trade tension. what it means for dealmaking, ahead. and bloomberg tech is live streaming on twitter. and be sure to follow our global breaking news network on tictoc. this is bloomberg. ♪ phones have made our lives effortless.

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emily: welcome back to the best of bloomberg technology. i'm emily chang. there are bigger forces at play than just us. that is what qualcomm's ceo said after announcing he is abandoning his $44 billion bid to acquire rival nxp. it would have been the largest ever deal in the chip industry. the aborted takeover may be the largest high-profile victim of the trade spat with every other relevant jurisdiction in the world clearing the bid months ago. while china denied its decision had anything to do with trade tensions, qualcomm's ceo seemed to disagree. >> the decision for us to move forward without nxp was a

difficult one. continued uncertainty introduces heightened risk. we weighed that risk against the likelihood of a change in the current geopolitical environment, which we did not believe was a high probability outcome in the near future. emily: the news came as qualcomm released earnings. the company also outlined its plan to buy back $30 billion or so of shares. we were joined by the editor of bloomberg news and in washington we had a senior fellow at the asia society. >> qualcomm had banked a lot of its future on a merger with nxp, and now that that is not happening, there will be questions i think long-term about what the future of qualcomm is and how it is going to grow. as you mentioned, it did cushion the blow today with that stock buyback announcement, but that will probably only get a temporary boost to the stock until we get more clarity about management and what they can do. as far as nxp, it is murky.

no one is quite sure what options they have other than going it alone, particularly in the environment we are in. some of the rhetoric on the u.s. side between the u.s. and china changes in the next few months, unless it changes i think that , both companies are going to sort of have to go on a solo paths, if you will. emily: nxp has an uncertain future ahead. it has a strong future as an independent company. the ceo said today we did not see an end the process and we had to move on. there were probably bigger forces at play than just us. we are still big fans of the deal, still fans of the deal and the logic behind it. so isaac, certainly he is implying the trade tensions between the u.s. and china had something to do with it. chinese regulators, as far as bloomberg has been reporting, were on track to approve the deal, but did not. you know they did not say no , either.

what should we read into it? isaac: the ceo did say, roughly a week ago in the new york times that, yeah i think trade , tensions have something to do with this deal being held up. i have got to say, this is very classic beijing strategy. they did not deny the deal, did not block it, no official statement saying this deal is not going to go forward. they just let the deadline expire. we were six hours away from the deadline, and they said we will just let this one go. it gives them somewhat plausible deniability when they're having this conversation. they can say we did not have enough information from qualcomm. we didn't have this or that. this is not part of the trade tensions. and if they do make the point with the u.s. side, it allows them to say, listen we are , blameless on this. you guys have to make other concessions. emily: how big a shadow does this cast over potential deals in the chip industry this after

, president trump essentially blocked the acquisition of qualcomm by broadcom? romaine: yeah, there is a pretty clear message coming out of the administration here. any sort of mergers, particularly cross-border mergers are going to be scrutinized, not in the context of whether it is good business, but really in the context of whether it is in the trade war and whether it is good politics. you saw some of the comments from qualcomm today sort of alluding to that as a reason they wanted to walk away. i think it is going to give a lot of companies pause going forward because you're not really navigating sort of antitrust issues in some of the more traditional issues you would have to deal with with regulators. this is really about how does your merger fit into sort of the new policy initiative by the united states government, and does it conflict with what they are trying to do in asserting -- exerting their influence over trade partners. emily: the blocking of the

broadcom and qualcomm deal is something qualcomm wanted. isaac, has president trump hurt an american company, qualcomm, as a result of this america first strategy? isaac: it certainly would not be the first time. i think there is a lot of frustration among american companies about the way trade tensions are going and about tariffs on chinese goods making -- goods. it slows down and makes it harder to deliver products to consumers. american companies don't have the same obsession with the trade imbalance that trump does. you know trump, navarro, other , people at the top of the administration feel strongly about rectifying a trade imbalance, but most of the serious economists out there and businesspeople out there do not feel that is a problem in terms of doing business with china. there are more interested in intellectual property issues and market access issues. they don't care about the trade imbalance. emily: now qualcomm, romaine, has some other big problems.

i mean, if stock is on its way to its third year of annual declines, and also it is in a big standoff with apple in various disputes around the world. romaine: yeah that is getting , overshadowed. the stock is down 8% this year before today. you know you consider the rest , of the semiconductor space was up about 9% so far this year. so it has really lagged, and that is because of the fundamental issue that is plaguing this company. something frankly i don't think we saw a lot of discussion about. they could have some questions on the call, but this is something i think once the euphoria over the buyback dies down, investors will have to reassess, is the growth is still there, the group organic -- the organic growth still there for this company? can they resolve the issues that they are having with apple? right now, those questions are still out there. emily: thanks to bloomberg's romaine bostick and isaac stone fish of the asia society.

global trade dominated headlines as the world reacts to president trump's tariffs. on tuesday, he tweeted tariffs are the greatest. either a country that has treated the united states unfairly negotiates a fair deal or gets hit with tariffs. simple as that. and everybody is talking, remember, we are the piggy bank that is being robbed. all will be great. but not everybody agrees with the president including the semiconductor industry. sia in association with the likes of qualcomm and intel said -- submitted comments to the trade hearing tuesday that tariffs are undermining u.s. technological leadership, costing jobs, and adversely impacting u.s. consumers of semiconductor products and the u.s. semiconductor producers. we broke it all down with our chief content officer and visiting san francisco from tokyo, bloomberg's asia tech managing editor. >> the technology industry is

nervous about this because the supply chain from tech stretches between the united states and china in particular. especially for the chips companies, they are shipping a lot of product into china and being assembled and shipped back across the ocean. they are kind of straddling this industry on both sides of the ocean. they are nervous that if this trade war gets out of control, it will cost them business. it could raise prices and cause other kinds of disruptions to the supply chain that is so essential to their business. emily: meantime, we have got new news the trump administration plans to shield farmers from the impact of this trade war. of course, we can assume farmers are larger part of his voting base. but walk us through the conflicting issues at play. marty: well, certainly donald trump feels tariffs are a good strategy to try to repair the damage of three or four decades of globalization. there are a lot of people upset about it. it is true that he is going to try and shield some of the

farmers of the damage obviously, and he is asking for patients. obviously, the semiconductor industry is not a hotbed of trump support. so i doubt you will see aid to the semiconductors producers or tech in general. but this does speak to donald trump's real view that tariffs are the way to go to get people to the table and to strike better deals. emily: so far, the tariffs have been limited. $34 billion in tariffs. they are talking about another $16 billion more today. the president has said he is willing to go the whole hog, all $500 billion. what are the broader implications here? marty: it would be a big issue for tech and well beyond tech. the global tariffs is an opening skirmish. if you are talking about tariffs on $500 billion of products, that is everything that comes out of china into the u.s. that includes apple's iphones in particular.

remember, apple iphones are designed in california but assembled in mainland china and then shipped over here. if they were to levy tariffs on those kinds of products, that would cause damage on both sides. emily: marty, it sounds like he is not just talking about china. when you look at his tweets, today, he is talking about any country. what are the broader implications of this? could this expand? marty: it very well could. europe have juncker from coming tomorrow to truck -- talk to trump and try to diffuse the situation tomorrow to talk to -- watch for the results of those discussions. the longer-term issues as peter explained is the supply chain issues. if you are a company, you have think about about whether you need to permanently disrupt your supply chain plans if this becomes a protracted trade war. emily: several companies said they might have to move out to -- outside the united states. kimbrell electronics, based in indiana, said so recently. peter, you're based in tokyo.

what is the view in tokyo, china, and from the chinese government? peter: generally, they are nervous that this could disrupt a business process that has been very successful with them. china has grown into the manufacturing hub for so much of the technology industry and things beyond that including apparel and automobiles. emily: for them, which is true, but what about for the united states? peter: that is what president trump is calling them out on. they are nervous this could go south. emily: how could they retaliate? we have already seen some retaliatory measures, but we also have not seen them go whole hog either. peter: the disconnect is that they can impose tariffs coming -- on goods coming out of the u.s., but it is not nearly as much. they have other points of leverage, take apple for example. china is a very important market for apple. it is the second largest market for them. they need to be able to sell their phones. they lost some ground against domestic competitors. they also run the apple stores within china. that could be a point of contention. and then you have many other companies depending on china for

growth and opportunities from starbucks to ibm to apple as we mentioned. emily: marty, this is an unpredictable administration, is there any sense of which direction this is going to go in? is it going to get worse before ever getstter if it better? are we at risk of that? is china at risk of the $500 billion of goods ultimately being taxed? marty: i do think that, ultimately, donald trump likes to rescue situations that he sets up himself. and so i, i have contended that in the last minute, there maybe -- there may be conversations on a personal level between trump and world leaders. xi in china for instance to try to resolve the situation. i think it will get worse before it gets better. it will have to be the markets themselves and the economy that will force these issues onto the table. emily: thanks to bloomberg's

marty schenker and peter elstrom. the battle to be china's premier delivery service is heating up. alibaba's platform will spend $433 million trying to win over customers from a rival. their goal is to control over half of the chinese food delivery market. they currently have a 51% market share. valued at $10 billion is seeking $200 billion in funding to bankroll this battle, considered the world's third-biggest startup. macron -- they are said to be starting an ipo this year. they will target a $60 billion valuation. still ahead, spotify successfully fends off competition for now. how the music streaming company is keeping apple and amazon at bay. this is bloomberg. ♪

emily: airbnb received one of the biggest [indiscernible] new york city council required the company to hand over the addresses of its hosts. according to officials, this information is needed to police airbnb host that may be driving up neighborhood rent. sources say the legislation could potentially cut airbnb's new york city bookings in half, raising questions about growth and crackdown on restrictions. airbnb has said the bill is in violation of user privacy, as it prepares for its $140 million in gross bookings to drop by at least half when the legislation goes into effect in january. spotify seems to be overcoming its apple threat. the newly public company was out with earnings thursday and gained more subscribers next to -- thanks to customers in latin america and emerging markets. this eased concerns that competition from apple and amazon will stunt growth. spotify boosted its customer base to 180 million, more than the average 178.5 million forecast by analysts.

paid subscribers hit 83 million, more than any other music service. we caught up with justin patterson on thursday. justin: still in the early phase of secular growth of streaming music. you have got a lot of devices like the amazon echo, google home proliferating right now, and subscription has gained more awareness with customers. it is very early innings. people are shifting from a traditional purchase model to a rental model, and there is a lot of growth across the globe. and spotify is one of the beneficiaries. emily: we talk a lot about the subscription service. but that ad supported free service is also a big driver. how big? justin: it varies for company to company. for spotify, it is about 10% of revenue. they actually missed a little bit this quarter due to some gdpr-related issues. but longer-term, radio is a $25 billion market globally. there is room for spotify. emily: talk about the competition with apple. we are still waiting for apple to report, but this is a company

that obviously has really deep pockets and really long-term relationships with artists that spotify has to compete with. justin: right. it is a great question. apple does have a platform advantage. it can push apple music to all of the iphone owners, ipad owners in the market. that said, if you look at the global market, apple has a small marketshare share relative to android, relative to other devices. that market share further fragments when you factor in that amazon echo is the dominant speaker. so when you look at what will be the winning factor for streaming business, it device ubiquity. every device on and is starting to build up a data advantage that will be difficult for others to compete with. emily: but amazon also has its own music service they are trying to push on users. justin: it does. it does. they are all trying to push you. it will be a unique situation where amazon, google, and apple are competitive. spotify right now is the market

share leader. if i look at each one of those businesses, they do one device well, but not every device well. none of them are really optimized to work on one another's devices. spotify works great on every device in the marketplace. that is one of the reasons it has been growing so rapidly. emily: talk to me about the data spotify has and why it is so valuable. justin: another great question. if i look at the way artists are compensated these days it is , more toward live performances and building up an audience. so what spotify is doing with the spotify for artists initiative is bringing that data back to musicians, helping them grow their audiences. in this past quarter i think spotify increased audience listenership by about 5% per independent artist. that is something that can build up over time and monetize help , artists be more successful. emily: how does that differ from what apple does and amazon and pandora? justin: the data advantage is

basically a function of spotify's scale. with 180 million users around the globe, spotify is multiples bigger than any other player in the market. with that, it consumes substantially more hours listened. apple is still a subset of the market. pandora only looks at the u.s. if you are being a global player, trying to build a global audience, you need spotify's data. emily: what are the trends we should be watching for in emerging markets and international markets? justin: for emerging markets, it is a function of market launches at this point in time. spotify is mostly in developed markets at this time. it was in 65 markets at the end of the past quarter. it is starting to launch in the rest of the world a bit more. its first launch in africa last quarter. i would really be watching what exactly are the app download trends for spotify, is it getting partners to push the application in those markets? and what is the price point? if you do go into the rest of the world, discretionary income

gets a little bit less, and you need to price it accordingly for different markets. emily: that was justin patterson. coming up, we hear from bloom energy ceo as the company hit the public market with shares spiking over 60%. why it is so rare for alternative energy companies to go public. next. this is bloomberg. ♪

emily: bloomberg has learned the trump administration will try to revoke california's authority to regulate car emissions, including its mandate for electric cars. the proposed revision of obama era standards is expected this week. the revamp would put the brakes on federal rules to boost fuel decadency into the next and instead would cap federal

fuel economy requirements at 2020 levels. manhattan office buildings and sprawling data centers can now get power without connecting to a utility grid. bloom energy is making that happen. this $270 million ipo means more cash to fund expansion. it is the first alternative energy ipo the u.s. since -- in the u.s. since october 2016. and the best first date debut of the past five years. shares were up over 66%. our bloomberg deals and ipo reporter alex barinka reports. ♪ alex: imagine a future where anyone can be their own power provider. that is the reality that the bloom energy ceo set out to create 16 years ago. now he is selling that to public market investors. bloom energy just began trading on the new york stock exchange wednesday morning. >> we have a very simple value proposition. number one, we are more reliable and resilient than the grid. number two, we are cleaner than the grid.

number three, we save them money. alex: bloom sells what it calls energy servers. they are customizable systems that generate power for companies like morgan stanley and at&t, without the need to connect to a power plant. these high-tech boxes run on natural gas or biogas 24 hours a day, seven days a week. in the past five years, only 1% of american ipos have been alternative energy companies, and it has been a year-and-a-half since one went public. clean tech has been riding a popularity high, on the tail of more than $100 billion the obama administration piled into the industry. under the trump administration, enthusiasm for the space faded. along with many of the government tax credits and other incentives for clean tech. yet the reinstatement of an investment tax credit for fuel cells in the massive tax overhaul bill worked in bloom energy's favor. the cost of fuel cell projects has also declined as the systems have become more efficient.

for years, bloom had been racking up a huge deficit totaling $2.3 billion. but the company's finances are finally turning a corner. in the first three months of this year, revenue quadrupled compared to the same time in 2017 to $121 million. >> the world needs reliable electricity. we have gone from a mechanical age to a digital age. and we are a solution. alex: an alternative energy company that is inching closer to profitability is something public investors can get comfortable with. emily: with us now bloomberg's , alex barinka with more on bloom energy's ipo. what makes it so unique among other such companies that have going public? goinge had problems public? alex: it is a fuel-cell company. when you think alternative energy, you think solar. solar has been the reason the industry has been dragged down. china is the biggest market for

solar. they ended their initiative in may. that brought down the whole group. fuel cells are unique. it is not the same thing. they are complicated to put together. you saw those big boxes. but as you heard kr sridhar say, the ceo, it does help with costs once customers do get them installed. there is been a gap because the industry is down in a lull. folks may hope that others may follow. emily: will there be more? alex: hopefully. that is the hope. the issue is trump seems to be talking a lot about coal. this investment tax credit they have got reinstated for fuel cells was a bit of luck in lobbying on bloom's part. so we will see if we get more of this part of the clean tech space finally listening. emily: thanks to bloomberg's alex barinka. and that does it for this edition of "best of bloomberg technology" we will bring you all the latest in tech throughout the week. as always tune in at tuesday for full coverage of apple earnings and wednesday for tesla. each day, we are here. 5:00 in new york, 2:00 in san francisco. and remember, all episodes are now live streaming streaming on

twitter. check us out. at technology weekdays. that is all for now. this is bloomberg. ♪

haidi: team trump comes out swinging. mnuchin predicts years of economic growth. andow takes up the baton bashes business. he said ceo's are wrong to blame tariffs for disappointing results. haidi: earnings make headlines. caterpillar will show the strength of the system. it is a big week for banks , the r.b.i., the bank of england, bank of japan.