♪ emily: i'm emily chang, and this is "the best of bloomberg technology," where we bring you the top interviews from this week in tech. coming up next, elon musk's plan to take tesla private. andy controversial delivery of the surprising announcement. your wall street and washington not have the same question for elon -- where is the money? and snap reporting its first-ever drop in daily active users. what is the company doing to stay on the radar? and google wants back in. in china, the search engine left the mainland in 2010 over

beijing's censorship rule, and now is working with the chinese government to do it all over again. but first to our top story, elon musk could be switching lanes. on tuesday, the tesla ceo sent shockwaves down wall street after tweeting that he is considering taking the company private at $420 a share. the board, apparently not surprised. tesla directors said they knew last week about musk's bombshell proposal, but both the board and ceo have a long way to go to convince investors this idea is credible. now wall street and washington are asking the very same question -- where is the money, where is this funding? we caught up with bloomberg's max chafkin and ben bain. the question -- did musk's tweet violate sec fair disclosure rules? max: the sec has been kind of clear that companies or individuals can make announcements about material, nonpublic information through

social media. so on its face, tweeting this out on twitter is not necessarily a violation. but the issue, as you talk to people, is really going to be about if the sec decides to look into this -- and we do not know if they will or are going to -- is whether what he says was actually true. if the funding is secured. that said, funding is secured. so people will be wondering, what does that actually mean, and does he indeed have what that tweet indicates? he doubled down on it a few hours later on tuesday, saying that, indeed, he did have investors. so i guess we're going to have to see how this plays out. but it will come down to how sure was what he said at that time, and how much did that actually reflect what the reality was? emily: he did double down, saying, quote, investor support

is confirmed, but we do not have any evidence from our sources or bankers close to the company that investor support is indeed confirmed. to your point that the sec has decided that it is ok to disseminate information on social media this way, that dates back to a rule the sec made back in 2013 in regards to reed hastings, the ceo of netflix, who announced at the time some pretty important numbers on facebook. the sec decided that that was ok. but to this point of funding, max, what do we know about who could be supporting this, and if indeed they are? max: so, the universe of possible funders is pretty small. we are talking about sort of sovereign wealth funds, and of course the saudis, reports came out just before these tweets started that the saudi public investment fund had up to 5% in tesla, so you could imagine a big sovereign wealth fund, a big tech venture investor like softbank or a big tech company like an apple or a google.

in terms of like a traditional -- normally, this deal would be a leveraged buyout, but companies that are normally targets for leveraged buyouts have profits, and that is not something that tesla has. so it would be more like trying to turn tesla into something like uber, basically a high potential, private company with a very high valuation. emily: meantime, this is a company -- i have this chart in my gtv library showing tesla's free cash flow. this is a company that has never made money and has been burning billions and billions of dollars worth of cash every year, essentially. ben, what are your sources on the regulatory side saying about what happens next? what are they going to look into? ben: look, this may be kind of to the point of why ceo's and corporate executives don't usually announce this kind of stuff on twitter. this is like a long, deliberative process.

so even if this were to move forward, we are talking months here of back and forth where probably the board would have to form some kind of special committee to actually look at this. there's going to be lots of lawyers. there is going to be lots of back and forth -- and don't forget, investors who feel that this isn't the right deal could also take legal action. so what we are basically hearing right now is that we have to see how this is going to play out. the tack that elon musk ultimately takes here will go a long way in also determining how he is going to have to deal with delaware state law, too, because don't forget, tesla is a company that is registered in delaware. so really, we are kind of trying to get a sense here of where this goes and the funding question, i think, is really central to all of that. he says he has funding. where is the funding going to

come from and what does that deal ultimately look like? emily: that was bloomberg businessweek's max chafkin and bloomberg's ben. meanwhile, spacex has launched its 15th mission of the year. elon musk's other company successfully deployed an indonesian satellite into orbit early tuesday. the reusable falcon nine rocket lifted off from cape canaveral in florida. about eight minutes after launch, the first stage landed on a drone ship in the atlantic ocean. spacex is targeting about 30 total missions this year, up from a record 18 in 2017. coming up, snap's second quarter revenue was solid, but its daily active users are on the decline. are snap's best days behind it? we will discuss, next. and if you like bloomberg news, check us out on the radio, listen on the bloomberg app, bloomberg.com, and on serious xm. this is bloomberg. ♪

emily: on tuesday, snap posted quarterly revenue gains that show it can compete in the mobile ad market dominated by facebook and google. the catch, snap also reported its first-ever decline in daily active users. that worried analysts who were looking for rapid growth. but snap did win the endorsement of a key investor, a saudi billionaire, who has taken a $250 million stake. so has snap hit a peak or is this just a bump in the road? we spoke with a guest who has a market perform rating on the stock, along with bloomberg contributing editor david kirkpatrick. >> not a great surprise. they had warned us that the changes they made to the app last year had caused some disruption, and so it is not a great surprise that we saw a little bit of softness.

i think the question from here that investors are asking is can they return to growth and over what time period? they have also been struggling with the android platform. user experience on android is somewhat inferior to the ios. they have been working on re-platforming the app for android, and it is in tests right now. and we will see of that has the impact of growing android users, returning the growth to android users both in the u.s. and globally. but as of now, they did slip sequentially and now the big question is whether this trend continues? emily: right. david, this isn't something we saw at facebook in the early days, or even twitter. i mean, do you think snap's best days could be behind it, given we are seeing a sequential decline fairly early in its lifecycle? david: well, they have a problem that facebook never really had and facebook tried to give to twitter but never successfully gave them, which was they have a head-to-head competitor copying their every move, and that is instagram.

and that i think is slamming them. on the other hand, their ability to withstand that thus far is generally impressive, even though they did show a slight decline in daily active users. the fact that revenue is going up shows that advertisers, which is really the key constituency, are still pretty much happy. emily: so what about the revenue, peter? we are seeing significant revenue growth. we are seeing they are able to compete in a market where it is kind of a duopoly. what do you make of the fact that even though the user trends are not promising, the revenue is? peter: revenue growth in the quarter was over 40% and that is impressive, but when you dig a little deeper and you look at the regions, you see some trends that could signal some alarm. revenue growth in the u.s. was 20%, and the question is whether that decelerates further. revenue per user growth in the

u.s. is only 12%, comparing to much higher growth in europe and the rest of the world. so what investors are looking at is how much more room do they have? keep in mind that snap's business in the u.s. is only 3% the size of facebook. yet facebook last quarter grew almost twice as fast. so really, you have the question here of what is the headroom on monetization per user, and is the actual design of the app an issue here, and is the demographic skew an issue here? that is what we think, that is our thesis. the youth skew of the snap user presents a limiting factor on growth and they have to expand the older users. to david's comment earlier, instagram is a key competitor and they need more older users to open up the categories of advertisers who can spend significant sums on the platform. emily: instagram, certainly a key competitor, also responsible for copying a lot of snap's features and sometimes doing them better than snap has. david, what do you think of that thesis and whether snap can

actually succeed at getting older users? david: well, it is a tough challenge. i mean, they have done a good job with product innovation over time, even if every time they do anything, it is copied by instagram. i would not put it past them, because i think it is a well-managed, very creative company, that they might come up with some way to appeal to older people, but even the brand just sort of shouts teenagers and young people. so to get older people to use it really would be more than a product design change issue, it would be a branding issue and it could turn off the younger people they still depend on. so, that is challenging. the one thing, though, i don't think anybody should ever have any allusions, snap will never be a scale of facebook. it is a good company, it probably still has some potential growth, but don't think it is the next facebook. it is never going to be. emily: twitter ceo jack dorsey continues to defend twitter's refusal to ban conspiracy monger alex jones. on wednesday, dorsey appeared on the sean hannity radio show to

once again reaffirm his stance. jack: i think the first thing is, in the past, we did not communicate why we would take action on tweets, or why we might suspend temporarily or permanently. we want to communicate that -- those reasons to the person who was suspended or the tweets in question, and also the reporters. so simple communication within the product, but broadly, we haven't done a great job of communicating our principles, the guidelines that help us make the decisions in the first place. so, we are getting better and better step by step, but have a lot more work to do there. emily: for reaction, we went to someone intimately familiar with the perils of online hate speech, ellen pao, who was the former interim ceo of reddit. after she resigned from that role, she said "in my eight months as ceo, i have seen the good, the bad, the ugly on reddit. the good has been inspiring and the ugly has made me doubt humanity."

before that she was a client at perkins, when she wanted the firm to invest in twitter back in 2007. the company past, but eventually invested in 2010 and pao later sued for gender discrimination. she lost that case, but has become a vocal activist for equality in tech and is today the ceo of project include. we started with her reaction to dorsey's defense. ellen: it feels like he is standing on his own and he really feels he can change twitter on his own without following what has happened in the past, without seeing what other platforms are experiencing, and without learning. so that is the piece that really surprises me. we have learned so much in the past five years and he is not incorporating any of that, building any empathy for the people who are being harassed on his platform, and instead, he believes that there should still be this free-for-all on twitter that he can somehow control and manage. emily: it also seems to reverse some of the progress that twitter has actually made in the last two months.

ellen: it is confusing to me. it is a surprise that he would not take this opportunity to really protect people on his platform who are being harassed, and i have seen people leaving the platform. and i have not decided for sure that i am to leave, but i am not tweeting -- i have not tweeted for a day and i don't feel like participating anymore. you feel like you are contributing to this site that is allowing harassment, that is allowing these hate speech and harassment that comes from it on the platform and contributing to it if you are participating in it. emily: now, despite the fact that facebook, google, apple, spotify have all taken action against alex jones, the app info wars is rocketing up on the app charts. it is more popular than cnn, the new york times, even fox news. is all this hubub helping him? ellen: we will see, but at least the people at those companies

can feel like they have at least stopped their platforms from spreading it as much as possible. apple was keeping it on its platform. i am not really sure. google -- emily: it is still in the app store, but they took off some of his podcasts. ellen: yeah, you make it a little harder, you put in some friction, that is better than doing nothing, which is what jack is doing. emily: karen fisher wrote a post about how rules won't save twitter, values will. the rules, to be fair, have never been clear at twitter, nor has how they enforce the rules. but forget about where you draw the line. is there a different way to draw the line? how you draw the line? could twitter do that differently? ellen: so, i am empathetic to the problem, because the rules can't address all the changing circumstances. so you have this clear rule, but people are trying to get around and you will make mistakes and it is always a problem, it never seems clear. but here in this case, this is a person who is perpetuating harassment across the internet and your product is being used as a tool for harassment.

and these families who have had to go into hiding, like, where is your empathy for them? is this what you want your platform to contribute to? i don't understand how you can keep this -- encourage this type of information and encourage this use of your platform. emily: so it is also a question of how off-line behavior should be considered. so alex jones, for example, could be potentially guilty of perpetuating violence against these families off the platform. how much should a platform like twitter or facebook consider that? ellen: so, had this horrible experience at reddit in 2013 in april where people were trying to figure out what was happening in the boston marathon bombing, and somebody incorrectly identified poor -- you know, a student as the, as a potential

person who -- the potential bomber. and that person was a missing person. and his family got harassed. they said terrible things about him all over the internet. and what i took from that is that, no, you can't just look at what is going on on your platform and it doesn't matter what people's intents are, they are trying to find the bomber. the frenzy that social media creates and the immediate actions that people take without thinking, and the immense harm that that inflicts on individuals for no apparent reason -- like, that is something you need to take into account. the fact that you are not the only reason does not mean that you are not a contributing factor and doesn't mean that you abdicate all responseability. emily: given the hard choices you made at reddit, if you were running twitter right now, what would you do? ellen: i would take that content off.

i would really look hard at off-line and online and i think del harvey sent out a message saying they are doing that. emily: del harvey, who is running trust and safety right now. ellen: i think she is a very smart person. this is your opportunity to be transparent. like, where are the rules? where do you want people to behave and where are you going to take people off the platform? harassment should be a key thing. talk about free speech -- when people like lindy west, ta'nehese coats, when others are coming off your platform because they don't feel it is safe with them -- for them to share ideas and these are people who have resources, who are out in the public i in general and they don't feel your platform is safe for them, where is the free speech? where are these healthy conversational environments? emily: coming up, a close look at etsy's massive turnaround

with ceo josh silverman. and later this hour, more staffing intrigue on uber. anthony levandowski returns. this is bloomberg. ♪

emily: since taking over as ceo last may, josh silverman has overseen an impressive turnaround at etsy with shares up over 300% in his tenure already. the company has managed to expand its business and eliminated areas that weren't growing. now, etsy has raised its guidance in the year in its earnings results. josh: i think we are at the very beginning of opportunity for etsy. when you look at our total addressable market, if you take just our top six categories in just our top six markets and look at only the online portion, it is a $155 billion market opportunity.

so i think we are just beginning and it is about creating a better buying experience, which translates into more successful sales for our sellers. emily: no pressure, though the share price has increased considerably, up over 300% since you took over as ceo. do you have any concern that investors are being too enthusiastic? josh: my job and the job of my team is to really focus on delivering results for all of our stakeholders, for our sellers and our buyers and our employees and our shareholders, of course, benefit as well. so we will continue to deliver the best results we possibly can. and we are very focused on doing the fewest things we can exceptionally well and we are seeing great gains from that. we think the results of the past

few quarters have been encouraging and we are looking forward to continuing to deliver more. emily: what areas are you exploring that may be new or unexpected? josh: you know, i think that part of where we maybe lost our way was losing focus and trying to turn too quickly to too many new things. if you look at -- let's just take three of our biggest categories. home furnishings, jewelry, and apparel. each of those are multi-hundred billion dollar categories where we have more than $500 million of sales today, but so much room to run. we have got to make it easier for buyers to find the products that they love and to buy those products and then to come back and buy more and more. and i know with over two million sellers selling over 50 million items, items that are beautiful, items that are made with care, there is so much opportunity to do better just in the core categories and core markets we are in today. emily: the supreme court recently made a big decision recently that states can now force retailers to collect sales tax, even without a physical presence there. that means more taxes for online shoppers. how does that impact etsy, the business, how does that impact

your buyers and your sellers? josh: you know, it is not a existential threat to etsy, but it does create more friction for our sellers. there's about 10,000 different tax jurisdictions in the united states alone, and each of those have different classifications for what types of goods are subject to what types of tax. that's very, very difficult for anyone to implement with excellence, so we think it is bad law and we will be working with the congress and the state legislators to try to come to something that is more effective and easier to implement. in the meantime, we will have our sellers' back and are investing in tools to reduce the burden and make sure we comply. emily: you also said at the time this decision was made that you would continue to lobby congress. what actions have you taken? josh: we are engaged in dialogue with congress. the nice thing is that i don't think this is a partisan issue. we are trying to help states achieve their financial goals, but do it in a way where we can succeed, and most importantly, where e-commerce can succeed and

innovation can succeed, because we think that has been a key driver of the u.s. economy. and you know, for us, we have two million sellers, 87% of them are women. they exist in 99% of the counties of the united states. most of them are businesses of one running a global enterprise from their living room. so we think needs of these micro-entrepreneurs are really important and we are making sure their voice is heard. emily: that was etsy ceo josh silverman from new york. still ahead, samsung unveils its priciest phone yet, hoping a larger screen will rejuvenate sales. but is it enough for the struggling flagship line? and bloomberg tech is livestreaming on twitter. check us out, and be sure to follow us and follow our global breaking news network, tictoc, on twitter. this is bloomberg. ♪ this isn't just any moving day.

this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving... simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today.

emily: welcome back to "the best of bloomberg technology." i'm emily chang. samsung unveiled its galaxy note 9 this week at an event in brooklyn, new york. the main takeaways, the phone will be faster and last longer without a recharge, and will also come with some automatic photo editing. but these changes come with a hefty price tag. the 6.4 inch screen note 9 will start at $999.99, maxing out at $1249.99. becoming at about $100 a phone one of the most expensive phones. samsung is banking on the device

to rejuvenate sales and fend off apple's upcoming iphones over the holidays. but will it work? bloomberg tech's mark gurman and bob o'donnell, tech analysis research president went to the , samsung unveiling in brooklyn and came to us with a full report. mark: they are really positioning it as this new big thing for consumers, but the reality is what looks new to consumers in this phone does not look different than its predecessor, the note numeral h. it has a slightly bigger screen, much upgraded stylus, more storage capacity, a bit of a faster processor, but i do not think that it is enough to move the needle to spur upgrades. emily: bob, would you agree? bob: generally i would agree. the difference is i would say people are not upgrading every year for any phone anymore, so the market realities have changed. right? people are upgrading every two years, every two and a half years. when you think it from that perspective people have older , phones, it is nice. look, mark is right. it is incremental at best.

you know, the phone or excuse me the pen technology is kind of interesting. there were more interesting announcements later in the event, and frankly, if you look at the time spent across the entire event, the time spent on the phone was actually relatively modest because it was a relatively modest upgrade. emily: now, mark, you have done the incredible reporting on iphones to come. how does what was revealed today compare to what you expect apple to unveil in the fall? mark: that is very kind of you. it is a team effort. but it fits right into what we were expecting from samsung and apple this year, not really significant upgrades. apple's upgrade is not in on theficant september. feature side it is significant on how many versions of the iphone x they will have, different screen sizes and pricing strategies. it is really going to be an exercise in marketing, and that is the same thing going on with the note 8 given it is not big of a leap. emily: bob, there have been questions about whether customers are going to pay that

$1000 for the iphone x? same question here, do people really want to pay that much for a samsung phone? bob: well look, if samsung has apple fan boy, fan girl equivalent, it is the galaxy note owners. they are the most dedicated, most faithful to the brand folks, and there are people in that group that want the best android phone. i think they will. by the way, the 512 gigabyte model is actually going to be $1249. they are at an even higher price point there. but again this is not the entire market, and samsung knows that. this is their dedicated galaxy note people, the people who like using the pen, which is why the primary focus of the new features were around the pen. and so from that perspective, it makes a lot of sense, but to me, what is more interesting, and mark and i were chatting about this is the spotify news. , to me, that was interesting because it reflects a bigger picture strategy story from samsung across the board, across all their different devices. emily: and how does that, mark, compare with apple, which of

course has apple music? mark: yeah, that is a good question. spotify, at a low level, is not going very much in-house and not building up this streaming music service themselves. they used to have one called "milk." i think they have had a few others over the years and they have terminated their projects. now partnering with spotify, which still has the best brand recognition for any streaming music service it is a smooth , move by samsung. and even spotify investors seem pretty impressed by it. the spotify stock is up 7% this morning. emily: other announcements or revamps, smart watch, a home digital speaker. mark, you have been tweeting about this speaker, one and a half times the home pod which is already quite large. what is your take on these other products? mark: i mean, the galaxy watch is a revamped version of the smart watch strategy they have already had the past few years. i do not think it will move the needle. the market has truly become saturated at the $300 to $800

price point with the apple watch. i am not sure where samsung is going to fit in. on the other hand, the home speaker, it is also coming in extraordinarily late. right? the amazon echo came out three, four years ago, announced in 2014, almost five years ago now. the home pod was late as well. coming out in february. but amazon and google have a handle on that market, so i am not really sure what percentage of the market samsung is going to be able to grab with this device, especially with such few details they are providing on this. i would not be surprised if it is not released until the end of this year or early 2019. so, they are extraordinarily late to the game with the home speaker, and it does not appear they are bringing any new innovative functionality to the table that would inspire anyone to buy one of these. emily: bob, is it too late for samsung and apple in smart speakers? bob: well, it is going to be very challenging. you know as mark pointed out you , have a strong position for both amazon and google.

look, the one thing i will say across the board for the different galaxy products is we are seeing samsung talking about the galaxy brand. it is interesting they changed it to galaxy watch and call it galaxy home. they are trying to build this overall connected device story, which i think is a unique opportunity for samsung, because when you think about all of the appliances they make and all of the other things they do, they are the only company in the world that potentially could do that. but again, the real test is going to be in execution, how bixbyctually -- does actually work on that speaker? having spotify bundle with a smart speaker i think is attractive and a unique opportunity from a general music perspective. but look, it will be an uphill battle. emily: that was bloomberg tech's mark gurman and bob mcdonald. coming up, uber has seen a serious staffing shakeup in the last year. now it is bringing back one of their former employees, but hopefully without the drama he left with. how the auto co-founder will fit into the ride-hailing company, next. this is bloomberg. ♪

emily: new york city council dealt a huge political blow to uber and other app based car companies -- hire this week. it approved a one-year cap on new licenses. it set minimum pay standards for drivers. the passage is sweeping industry regulations, signaled the politicians' changed attitudes toward the so-called gig economy and car hailing services. and another day, another shakeup at uber. but this time, it is a former employee who is returning. the man who cofounded the trucking company with his business partner will return to uber to start the trucking service, uber freight. ron left uber in march after uber settled with alphabet for

$240 million over allegations and had stolen alphabet's trade secrets. now, ron is returning to uber after month-long behind-the-scenes negotiation to , rework the terms of the auto deal, announced almost two years ago. we spoke with a managing partner at green briar, who used to be head of bloomberg communication of the americas, and also eric newcomer who covers all things uber for bloomberg. eric: what seems to have been happening is that behind the scenes there seems to have been the renegotiation of this part of this auto acquisition two years ago so that uber would really invest in uber freight. it is their human, trucking, logistics business. once those negotiations got settled with anthony levandowski and lior ron, and cleared the way for ron to come back. now that he is at peace with the company to sort of leave that -- lead that effort. emily: but is he really at peace? is there a risk of bringing back someone who has some baggage? lane: there are a lot of people

that have worked at uber over the past two or three years that are maybe entertaining coming back now that there's new leadership in place. but the reality is, there is not a lot of people with expertise in this space, so uber doesn't have a deep bench to pick from. emily: let's talk a little bit about the bench, eric, because we have seen the head of hr the midst ofby, in an internal investigation into whether she was ignoring complaints from employees, a very high-profile woman at the company. what really happened there? eric: there is a lot we don't know. i mean, there sort of, there was this investigation. there had been an internal whistleblower that had complained, and those correspondents came out. and you know lawyers basically , told the whistleblower there were some things we can confirm, some things we can't, we are not going to tell you which. and their chief legal officer you know, basically said, you know, trying the sort of issues in the court of public opinion

is not a great idea, and it can be unfair. but then ultimately, liane hornsey resigned right after an all hands meeting. it was sudden and unexpected and it came amidst media scrutiny. but we don't know what particular incident convinced her to resign or uber to push in that direction. emily: meantime, the coo that was brought in to help right the ship, "the new york times" had some reporting of some off-color remarks he made about in that -- he made in an ad campaign featuring mixed race couples. how often do you really see mixed raced couples? lane: the defense is analyzing the ad, trying to understand sort of whether the ad represented the people they were targeting. clearly people in the room felt it was off-color. we don't know sort of exactly what was said. he is certainly soul-searching and trying to sort of get some leadership help around exactly what he should say. it was a sort of terrible moment

for uber to have, you know, the turnaround crew get hit with the same type of allegations that travis kalanick and his leadership team sort of would have faced. very hard for the guy who has sort of left a lot of the day-to-day leadership, so you have this guy doing a lot of the heavy lifting, now is sort of emblematic of the behavior they were trying to leave in the past. emily: now, dara has made some other high-profile hires. tony west, hasn't made high-profile female hires, lane, and also seems to be having trouble getting the ship in order. what do you make of this? lane: i think it is not a question of if but when. dara has a lot of work to do ahead of a hopeful ipo next year. i think he is going to look to the existing bench outside the tech sector. right? so there is a lot of folks in corporate america who have proven themselves in various

capacities. he has got to convince them this is a company that is ok to come to now, and he has to bring them on board. it is not overnight. he has not been in the job long enough to get a full leadership team. emily: i spoke with tony west and he said it was a tough decision making the decision to leave his job at pepsi and join uber. what are you hearing from people who work inside the company as to whether there has been a true culture shift? lane: yeah, that is a great question because i think the culture shift is being felt among the entire team. it is a huge company now. for the folks who have been there long time, four years plus, which is funny because in tech, we say four years is a long time, but in the real world, it is not. folks who have been there for more than four years feel like it is a new day, new company with leadership, and the problems are behind them. they are excited and pretty bold about the future. emily: eric, meantime, regulatory issues continue in new york. we have the city council poised to approve a cap licenses for uber and other ridesharing drivers. eric: terrible for uber, terrible. i mean i think, old guard i'm

, curious what lane thinks. uber beat bill de blasio back and gave it all this room to grow. obviously it sort of locked in some of those gains, but any idea of the cap would be terrible for uber, and then minimum guarantees on drivers would distort the marketplace. so from a business perspective, it is pretty shocking, and you know, definitely sort of travis kalanick crowd asking, did dara invest in sort of the war room-style fight with new york that they had done? i am curious what you were sort of -- emily: how terrible? did dara mess up here? lane: the question of whether or not tech companies need to hire policy people, and this is definitely an example. [speaking simultaneously] but i think most companies are going to need more and this is why. regulations always come back. regulators are always looking for the easy way out, and in this case, this is the easy way out. congestion pricing, actually

changing the price of taxi medallions, helping the people that are most vulnerable in new york, those are easy problems to solve -- those are not easy problems to solve. what is? capping uber. emily: now, got to ask you about one more story. before you came on the show, you sold some of your tesla shares before elon was speaking about making it private. you still have some shares? lane: maybe not enough. [laughter] emily: you missed out. what is your take on this as an investor? lane: i am hopeful the news today means something big is happening, and that it is good for my remaining stock, and you know, on the other hand, i am hoping i really did not screw up this morning. eric: uber preparing to go public next year and now tesla floating going private, it is just such a reversal, you know, just two ships passing in the night. emily: we still not have quite determined how serious elon musk is about this, but does his capriciousness and unpredictability bother you? lane: i mean one of the reasons , i am an investor is not because it is unpredictable, but

you just have to go along for the ride. emily: that was lane kasselman and eric newcomer. coming up, google abandoned china in 2010, taking a moral stand against censorship. now, it wants back in on the world's second-largest economy, but at what cost? we will discuss next. this is bloomberg. ♪

emily: a semiconductor company that makes chips for iphone says it was crippled this week by a cyber virus similar to last year's wannacry ransomware. the outbreak at taiwan semiconductors shut several factories down just as the company was ramping up for the new iphone. ksmc says full operations have resumed. it expects a 2% drop in revenue this quarter. hot off the intercept report, google is secretly trying to get back into china with a censored search engine comes the news that it is working with chinese companies on cloud offerings. google is said to be working

with tencent and others to offer its cloud services in the world's largest economy. second just eight years ago, google abandoned mainland china because it refused to comply with beijing's censorship practices. so, what's changed? to get to the bottom of that, we spoke with our bloomberg opinion columnist shira ovide and bob boorstin. albright stoneridge. before that, he spent seven years as google's director of public policy, and was on the original team that determined google's entry into china in 2006. bob: i think there are three factors in play here. first is economic. they see a market of 770 million plus internet users in china, and i think that is incredibly important to them. they want to be a player. the second thing that they have to look at, and now we go negative, is the political side of this. already, you are seeing senators here in washington asking questions about why they are

doing this, and also, you're seeing a number of human rights groups taking exception. and finally, there is a moral question. part of the reason google pulled out in 2009, 2010 was moral, and certainly, nothing has changed on that front. in fact, chinese internet regulations are now a lot harsher than they were back then. emily: exactly. the laws are even more severe today than they were eight years ago. senator marco rubio did speak to bloomberg thursday about this very issue, speaking of the reaction of lawmakers. take a listen. senator rubio: i am not concerned i am outraged by it. , number one, they will not work for the department of defense because they do not want to be involved with killing people, but on the other hand they work closely with a university in china that provides all the technology to the chinese military. and then here they are in the united states talking about how they stand for free speech, but they are prepared to go into china, and help the chinese government censor information, and deny people access to

information. so it is hypocrisy. it is sickening. emily: you had an excellent piece weighing the pros and cons, mostly the cons, of this. talk to us at what cost this would come to google. first of all there is user trust, and you point out, does second google have a potential to break back into the market at all given the dominance of the chinese services that are there already. shira: that does seem on the commercial front that china has kind of moved on without google for better or for worse. look, it is for people like me , who want the world to come closer together, the internet was supposed to help make that happen. instead i think what we have seen over the last few years is not just in china, but in other countries around the world, where the internet the , government has used the internet as a tool to make the world a more closed place, to crack down on global information, to censor, to shut down dissent, and that is

certainly what we have seen in china to a large extent, without google being there. and now of course, they are trying to make these compromises to potentially come back. emily: so, bob, the economic potential is obvious, 722 million internet users in china. but on the moral side, wasn't it larry page and sergey brin who personally decided to pull out in the first place? they are still at the company. what is different now? you know why has the moral , calculation changed? bob: that is a very good question. i cannot answer that one. but sergei certainly a that argued he did not like the point authoritarian, totalitarian nature of the regime. he had come from the soviet union with his parents, so he clearly took a personal offense to what was going on. also the chinese had essentially invaded google's search engine, and that did not make anyone there happy. what's changed? it has only gotten worse as far

as i can tell. emily: so talk to us about the political atmosphere here. this would certainly not be something that i imagine president trump would be pleased about as he is waging the trade war on china. shira: yeah, the politics are interesting. you had that clip from senator rubio, and i think he has been very clear on how is it that google on the one hand can refuse to do work with the u.s. department of defense on this military drone project, and on the other hand, it is willing to help the chinese government censor information from its own citizens. that is a little bit of a hard sell in some corners of congress. and yet the politics will be very interesting, given the trade tensions, or trade and beyond tensions between the united states and china. it is not even clear to me that google would be permitted by the chinese government to reenter the country with search, or with its other commercial services. emily: well, that is certainly

another question. bob? bob: i would agree with that. and i think one of the things we have to look at very closely is uncertainty, both in terms of what the chinese government will allow, and in terms of what google wants to do. people are treating this as a done deal, and it is by no means a done deal. but the fact that just a beginning of a story about this has enraged so many, should be taken as a pretty serious thing by google. emily: it is anything but a done deal, bob, you are right. and it also sets the standard potentially for a country specific internet. and you ask whenever we ask , alibaba or tencent or baidu executives about censorship that they all abide to, they say they are just following the law in their home country. google could certainly say the same thing. but if this happened, what are the standards it would set for other companies like facebook, for example, which is still blocked in china?

could you see a domino effect, you know, going against freedom and access to information? bob: i would argue that facebook will never get into china, and the reason for that is that its fundamental utility is as an organizing tool that allows people to organize. and that is the last thing the chinese government wants its people to have. google is in a different place here than facebook is. there are already plenty of search engines over there, and one of the big questions the company has to look at is, is it worth it economically when baidu, the chief competition, already has about 75% of the search market? emily: now shira reminds us of a hack attack that originated in china in 2006 on google, where the hackers were trying to access human rights activist

information. bob, what was it like being on the inside of that? bob: i was not there for that exact attack. but it is definitely one of those things you worry about a lot ever since something called -- it was a dissident. yahoo! had a partnership and had to turn over information on that dissident to chinese government. once they did, the chinese put them on trial and put them in jail for 10 years. and a company that is operating in china, their data is fair game for the chinese government. and if so, they could be seen as, and in reality, complicit with that government. that is nothing that most companies want to have on their hands. emily: that was bob boorstin and bloomberg's shira ovide. and that does it for this edition of "the best of bloomberg technology." we will bring you all the latest in tech throughout the week. tune in every day, 5:00 p.m. in new york, 2:00 p.m. in san

francisco. and bloomberg tech is live streaming on twitter. check us out. @technology. and be sure to follow our global breaking news network tictoc on this is bloomberg. ♪

haidi: president erdogan says the u.s. is waging war on the economy and undermining the lira. ramy: the currency suffered its worst week since 2001, but now they are limiting swap transactions. haidi: criminal charges released at the inquiry to australia's finance ministry. ramy: the saudi's sovereign wealth fund may raise its investment and there is a lawsuit.