limited time get 150 dollars off and free shipping too. sale prices are available right now. go to buyleesa.com today. you need this bed. emily chang in san francisco and this is "bloomberg technology." responds to criticism from president trump at its search results favoring the left. fire i working to flag misinformation campaign ahead of midterms tipping off facebook to metal with iran. what else will they see when they talk to the ceo.

hailer will put safety ahead of growth after another passenger is allegedly murdered i a driver. how the company can recover from the campaign. to our stop -- our top stories. president trump railed against social media company saying they are financing millions of people. he is taking aim at putin saying, only the reviewing of fake news media, in other words, to have a rigged for me and others. it -- are bad. fake cnn is prominent. fair media is shut out. illegal, 96 percent of results on trump news are from national, left-wing wing media. very dangerous. will and others are hiding information and news that is good. they are controlling what we can and cannot see. this is a very serious situation and it will be addressed. the president then would -- then deleted those tweets and replace them with slightly modified

versions. google responded saying, when users type queries into the search bar, our job is to make sure they received the most relevant answer within seconds. we do not buy us our results towards any political ideology. to discuss we have cofounder kate mitchell. standby >> some of the new conservative sites are farther on the right arm or conspiracy minded are probably not showing up very much in google search results. news, which ofx course he loves and watches religiously, comes up all the time.

we hear in washington, d.c. here from politicians. you only write the bad things. the answer is that that is kind of what the news media does. it is a critique and it is something we hear a lot from the president. emily: what has been the response from google? mark: we talked to some folks at google who claim that this is outrageous. idea that google does it intentionally. they dealt with it two years ago with the notion they were suppressing negative search results about hillary clinton. they did not come out at that time. thatof the issue here is google, for 20 years has been pretty secretive about its algorithm. that can flame the conspiracy theories. and then they have facebook and thiser and have done a lot past year dealing with criticism. any of the -- in the other direction they service news this

information -- disinformation and they weed out news on the right and left but predominantly on the right and that is what led to this moment. emily: what are you -- what do you make of the fact that google, facebook and twitter are all under attack by the president? do you think they have something to worry about? farms and ire big become big companies. when you look at the top largest companies at the planet a lot of them come out of silicon valley so of course they will be in trump's crosshairs. this is now communications platforms. he will hear and read about himself and the people he cares about all the time. i do think they have something to potentially be worried about or involved interview see them taking much bigger roles in washington. they all have large offices in starting a have more senior people showing up next week to stop -- to talk to the senate in they'll -- intel comitia he to talk about russian meddling. i do not know about worrying

about it. everybody worries about overregulation, but they cannot -- something that needs to be discussed will me talk about communications. white house -- emily: white house adviser larry kudlow says they are looking at google. this was the same time google is exploring back into china with a censored search engine. what could the government actually do here? news, there may not be enough -- a lot that the government can do. there is a liability shield that internet sites enjoy for third-party contents. if you were to cut into that, google has probably faced a lot of liable suits and things like that. i have not seen a lot of appetite do that. i have heard a lot of threats, i have not heard a lot of appetite. the federal communications commission might have an exit here, but they have just shown no appetite generally to do this

sort of a thing. what i would be looking at is whether or not the government things on privacy or as kate said, russian election meddling that would hurt the company. -- whether that is coverage of trump, i think that is what they are looking over their shoulder for. of facebook and the coo of twitter and perhaps someone from google will be testifying for congress next week. will send tenty walker. congress said that is not good. a reported this morning spoke to senator berg and other committees from the republican and democrat sites that they want the coo but they are not going to subpoena him to serve up -- subpoena senate? he loved getting a friend. he was the ceo and chairman.

i would say he is much more in the mold of the google founders. he is a product guide. engineering. he loves being in front of the company. he loves being at the developer conferences. he does not love addressing politics and does not love sitting in front and being killed by -- grilled by senators. emily: is google making a mistake by not sending their top executive? it is, think part of that seriousness, that now facebook and twitter are showing, i think it is well received in washington and by the public. we are part of the audience as well. it is a missed opportunity. one of the challenges for these ofpanies is it has been one the biggest assets. they're all the rhythms are one of their biggest assets. they should be playing a role from a shareholder point of view and making sure they are in the conversation to defend part of their apps that are so important

while being responsive to the public. not having somebody senior there , their voice has less clout in the middle of this conversation. companies like apple and amazon continuing to hit new heights. facebook, really got punished after their latest results. not keepso seeing it up. do you think that is a result of all of these controversies? impact of gdp are and the privacy roles reduced, if you have to authorize an sign-on and allow your data to be used or not in different ways, you end up with fewer subscribers, which is what facebook saw and that drove the results in last quarter. that has been a direct connection between what can happen between regulatory body and what happens between valuation. it is quite direct. emily: how can we expect these hearings to proceed next week? what are democrats saying about the latest tech problems?

said, they are pretty annoyed that google wants to send can't walker. -- kent walker. they will jewel down on the november elections. they will ask if facebook, google and twitter are really doing their part. are we ready for these elections , are they identifying foreign actors far enough, doesn't go be on russia? i think when jack dorsey testifies, he will face a lot of these questions about any conservative bias that we today are asking about google. emily: people on the left have at times, the same criticism of social media companies. any difficult position. and do we want them to make these decisions? : it a lot -- it is always scary when you allow any human beings to make these decisions.

the thing that facebook and twitter have been doing, , they areand fireeye becoming more transparent. that ire conversations think senator warren's proposals will be discussed. labeling bots, labeling sources of information. like when you read a paper it is nice to know who the byline is whether it is opinion or fact. i think there will be a very different conversation as we go forward. old sites care about this. mark: the major issue is how liable they are. , facebook and google in particular, have benefited from massive media businesses where they are collecting revenue based on content they are not responsible for hosting and they have been doing that for years and they dominate the industry and have depleted publishing in large part. i think the sympathy is running thin. emily: they certainly make a lot

of money off this business model. great to have you on the show. sticking with google, at least 13 ngos, including amnesty international have signed an open letter asking google to not provide china with a censored search engine. if it does go ahead with its china plan, there is a high risk that the company would be contribute into are complicit in human rights violation. google has a responsibility to protect human rights to fulfill its own human rights obligations. , last week, facebook, google and twittered took down the iranian account meant to influence global affairs. the company they have to think for that is fireeye. our conversation with the ceo is next. check us out on the radio, app, and the bloomberg in the u.s. on sirius xm. this is bloomberg. ♪

emily: it began last week with the news that facebook shut down six and a 52 a.m. -- iranian bots accounts to spread global misinformation. twitter and google took action against 284 and 52 of the accounts on their platforms. reactione following from facebook ceo mark zuckerberg. mark: security is not something you ever fully solve, our adversaries are sophisticated and well-funded how we have to keep improving to stay ahead. the shift we have made from if detection is a big change and it will make facebook safer for everyone over time. of the companies hoping to make it safer is fireeye. thanks to fire eyes warning that facebook and google spotted those disinformation campaigns.

joining me now how fire i've brought this to light is the ceo. what was it that tipped you off for russia and iran as well? get a sense for these beings. a couple of decades to responding to cyber attacks you start to learn the trade talks. there is a direct link between folks doing cyber attacks breaking in the networks and folks doing information operations. you cannot separate them. sometimes they are walking down the hall. when i talked to the analyst who found this, a lot of it was like and a lot of it was their unique training and their experience. he started pulling a threat on a twitter account that did not seem right. accountacter behind the just did not feel right. it felt like state sponsor. as you pull the threads, more things emergent we landed with the lowest mounds of multiple sites and accounts. emily: what else could there be?

we have to believe there are other countries doing this as well? kevin: one of the reason we do these information operations is we have to protect customers but the rules have not settled. nobody knows what is fair game. as i travel the world and meet other departments of defense and other government officials, everybody is thinking, what is a government's role on offense. what is a government's role in the in from inch -- information space? let's find weather is disingenuous sites where there is not authentic news and pointed out the folks. you believe these threats could be originating from other countries as well? what you think, what kind of evidence have you seen? if we see evidence we tell folks. at the end of the day it will happen. the information space is another tool that governments used to promote their agenda. microsoft president was

on the show last week. they identified several webpages tied to the russian military. they took control of those webpages, take a listen to what he had to say. now is ae are seeing pattern in many respects that is similar to what we saw in the united states in 2016 when certain campaigns and political parties were attacked. it is similar to the pattern that we saw in france in 2017. we really saw every major candidate for the french presidency targeted. we are seeing it again. it makes sense. if you're a political official, if you are wealthy, if you have power, you always be targeted by a criminal element work for espionage purposes. emily: what would you say is the extent of these disinformation campaigns? how difficult is it to stop? kevin: it is very difficult to stop. we are good white

talking about it today on bloomberg. the more people who are aware, the more people who will spot it. it is easier to be divisive and spread fake news than it is to catch up. we will take root defense, zone defense, we are looking for, if we can see it and it is organized, we hope to make a difference. inbox mike m backs -- my fills with spam every day. hundreds of things seem suspect. kevin: everybody plays a role. certain things may have less credibility than others. in general, most people don't want to be surrounded by lies, they want to be surrounded by truths. when you see sites going up saying it is news sites, you know it is disingenuous and not vented or it -- authentic. have: at the same time you a president who says facebook and google are biased, does that run contrary? kevin: i don't know if i have an

opinion on that one way or another. we are protecting our customers the best way we can. direct linkd that between geopolitics and cyber attacks we just need to be informed about those sides. fire i was engaged by google. tell us about that. if they weret know recently engaged or not but we have thousands of customers that rely on it to come up with the risk of files. our industry is at risk more today than yesterday. on. is probably there are a lot of companies that rely on our intel. emily: what can you tell us in general about how much you have been approached by potentially new businesses in this new threat landscape, now that we all are more aware of what is out there. almost every business threatens intelligence. i am a cyber security expert but i don't work on the frontlines of industrial control system networks. we need to get that intel out to

every entity so they can assess the risk based on their business, based on what they know about geopolitics, and based on their current security platform. the bottom line is, we promote the intel the folks so they can promote their own risks and better guard their safeguards. -- i am -- iteen is really hard to judge how the hearts and minds are altered by fake news or from anonymous people. emily: why is it so hard to stop? kevin: the platforms. the anonymity of the internet makes it hard. you can sit 10,000 miles away. say you are from ohio or texas and no one can tell the difference. emily: do you think these companies have a bigger responsibility that they have not been living up to? the fact that you tipped off facebook and facebook cannot see that for themselves -- kevin: they might have been able to see that for themselves. policing a platform of hundreds

of millions of people worldwide would be a very complex challenge to do. forward, obviously there is a lot of opportunities for fireeye and cyber security companies. what are the opportunities you are looking at to expand? we have the brain. what we are always trying to do is better protect our customers by having real-time detection on other -- every device everywhere and being able to give context. one thing that separates fireeye from other countries -- from other companies is we believe it matters. who does hack you matters. that is the only way you can play a role in global policies. what will we allow people to do and not to do? what are the acceptable behaviors? we will always be mindful. we are on a mission to safeguard our customers. there are a lot of startups doing a lot of good work. emily: over the next few deep -- few weeks leading into the midterm elections, are your analysts on high alert? author isn the

complete you on high alert. there are different worldwide events. the olympics, u.s. elections, other nations hold elections. i call it shields up, a star trek term. you have to be more wary and more diligent and every single person involved in cybersecurity in any election system will be on high alert. kevin, ceo of fireeye, thank you for stopping by and we will be watching. coming up, 2018 has been a tough year for social media security as we have been discussing. now instagram is taking new steps to become secure. what the app has plan next. this is bloomberg. ♪

emily: china's restaurant review

and delivery have an ipo in hong kong. bloomberg has learned that a stock offering could raise more than $4 billion at evaluation of up to $55 billion. chilly is said to become the latest company to tax services from companies like netflix, air b&b and spotify. it is looking to adapt to changing online digital platforms. theas proposed to level playing field between online services are more traditional businesses like hotels, music stores and cable television. aim to compensate for tax cuts at the same time. it willm has announced offer users the option of using more secure it hurt party authentication to log in. this comes after instagram users reported being hacked to discover their accounts were replaced with russian email addresses. instagram cofounder said we know we have more work to do to keep that actors off instagram and we are committed to continuing to

to do justtools that. coming up, stocks are hitting record new levels. tech benefiting from the most recent rally? we will discuss common next. you can check us out at technology and follow tictoc on twitter. this is bloomberg. ♪ retail.

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emily: this is "bloomberg technology." as a i'm emily chang in san francisco. back to our top story, president trump lashing out at google, claiming it is censoring results when it comes to positive trump news and promising to take action against bloomberg. the president made the claim at 5:00 a.m. eastern time without any evidence to back it up, and prompted a response from google -- search is not used in a political agenda and we do not bias results toward political ideology. still, our columnist warns his threat should be taken seriously, joining us from new york. what could the president or white house do here? >> it is not really clear.

we heard larry kudlow, the white house economic adviser, say the white house was looking into whether to regulate google search. i am not sure what that means. maybe he did not know what it means. but we have seen lawmakers already in congress talk about maybe cracking down on a provision of the law that shields google and other internet companies from legal responsibility for what their users post on places like youtube, or facebook. that would be a pretty real threat, but it is not clear that's what the white house has in mind. emily: so you go as far as to say trump's claim is bogus, you say trump is run on the facts. why? shira: i think there are legitimate concerns by all political stripes that google and facebook both have bias in their algorithms, the computer systems that determine what 10 blue links we see highest on google, what posts we see at the top of our news feed on facebook.

i just don't think the bias is evident in news results about him. what he is reacting to, he believes legitimate news stories from outlets like cnn he doesn't like, that he calls biased, that i would call useful pieces of information. emily: this comes ahead of next week, facebook and twitter at least testifying in washington. coo sheryl sandberg will be there, twitter ceo jack dorsey. google, interestingly, offered to send its top legal person, and congress said that's not good enough, but google hasn't offered anybody else. is that a mistake? shira: it is a mistake, because it becomes a new story. it looks like google is avoiding congress, or trying to evade responsibly for its actions, but it is also a bit of a no-win scenario for these tech companies, as it was perhaps with the banks in the wake of

the financial crisis when they were called to testify in congress seemingly every other day, right? these congressional hearings, they tend to be grandstanding, particularly on issues of internet censorship, as we have seen recently, and is not going to be a lot of useful information gleaned out of these hearings, so i can understand why the tech companies don't want to send their most senior figures, but it does look bad if you are not sending the people members of congress want to speak to. emily: all right. bloomberg tech will be there, of course, covering every minute. bloomberg's shira ovide, thanks so much for your opinion today. after fits and starts, u.s. stocks are trading near all-time highs, the s&p 500 trading above 2900 for the first time ever. how does tech performance fit into the broader markets? michael purvis gave this bullish outlook. michael: why has tech been stellar out performers? great stellar earnings

outperformance, and earnings growth that has been consistent. emily: joining us to discuss where things go from here, the managing director of snead capital management, and our markets editor. we start with you. apple, amazon taking off, facebook and alphabet, not so much lately. how are you seeing tech performance fitting into the broader market? >> michael mentioned eps, but i think a lot of it is more the revenue growth. think about the performance of tech. it is still up. year-to-date, it's the best-performing sector, and of course was the leader in the first few months of the year. it kind of fell out of favor in june and july, but if you look at the data from august, it is back on top. up about 6% when you are measuring sectors in the s&p 500, and a lot of that has to do with the reason earnings season, and the revenue growth, revenue

forecast these companies face. if you are a major investor looking for the safest sectors to be in, it was technology, pretty much the best-of-breed technology companies, the large-cap names that offered you good return and a relative degree of safety. emily: do you think the bullish sentiment will continue into the fall? >> well, how this all plays out over the next six months is really tough to guess, but i will follow on what romaine just said. this is about revenue growth. 15% of the total u.s. market growing 10% year in and year out, only 3% in europe. this revenue growth mania, the idea, as long as you grow revenue, all the investors will come your way and it will work out fine, looks incredibly problematic, particularly because this is the epicenter of that in the world. when will this end? that's a tough question. will it be troubling? it looks mightily troubling from our seat.

emily: why? cole: just because of price. economics are led by the fact someone has to produce a profit, everything is profit-taking at the end of the day. we live in seattle, we kind of joke we are sleepless in seattle. here we set, 10 blocks from a company that does nothing but try to grow revenue, and uses things like the future value of a customer in perpetuity. emily: you're talking about amazon? cole: correct. i bring that up, because it's not just an amazon conversation. shira was talking about the google and facebook advertising model. judge judy does a better job of reaching advertisers in one show than youtube does in a month. because they call reach one minute, google calls it one second. emily: is that fair, given that facebook and google completely dominate the online ad market, which is growing? romaine: it is growing. cole certainly has a point, about just how they measure

their value and how they measure their growth, and there's an argument to be made, some of those measurements can sort of the picks apart. i guess, when i look at it from a market perspective, you look at where the crowd is going. this is one of the most crowded trades, when you look at large cap tech names, the faangs, even adjacent names. think about the hedge fund reports we got, showing in the second quarter on an aggregate basis hedge funds did reduce exposure to tech as a whole. breaking that down to large-cap names, they increased exposure to large-cap, apple, amazon, those folks. there's a lot of folks crowded into one small space. if cole is right and somehow those measures, metrics get called out or breakdown in some way, you could see trouble ahead. but right now, the collective psychology in this market is

that is the safe place to be. emily: this has been the story of amazon from the beginning, and amazon investors have never cared. cole: but it doesn't mean the stock hasn't fallen 95% before, that's what it did in the dotcom fallout. this idea that because they are so impenetrable, that happens in all manias. people get very short memories. here we sit in san francisco. i live in seattle. these are the epicenters of conversation. it is a seattle business, not a south bay business. if i want to regulate big tech, through advertising. if hosting is what i want to regulate, regulate electricity, because you spend more electricity on things like bitcoin and hosting than anything else. it comes down to price. what can investors make in returns? what i rather take a risk on tech or bet that in 2030, we have the most millennials between age 30 and 40, and the money i make on them buying cars

and homes is way easier than trying to figure out if losing 5 billion in content per year can create something better than disney. emily: are you saying you think amazon could fall 95%, that we are on the verge of a dotcom bust or this could happen again? cole: this is narrow, 15 stocks. a 15-stock mania. in other words, if you strip out those 15 stocks, you take out a lot of market cap and enthusiasm. at the same time, doesn't mean it can't be damaging for equity investors, because the indexes of these things, lock stock and barrel. emily: meantime, we see a pullback in asia, specifically is that something that could spread here? romaine: i think the short answer is no. the main difference, when you look at a lot of the big chinese tech names, these are companies that pretty much rely on china and the greater china area for their revenue. compare that to some u.s. companies that are much more

diversified, classically speaking. you know, they are not quite in the same category, in terms of the kind of customer base that they go after. also, you know, the chinese tech names are sort of dealing with other regulatory issues that are very specific to china, companies like apple, facebook, twitter, those types of companies are not dealing with because they don't have the same presence there. i don't know if you could compare them quite the same. but when you lump those companies in together, you take the faangs, the baidu, alibaba, tencent, as a group it has been a pretty strong year for that group. obviously it has been weighted more towards the faang's, but a lot of people see the back portion of the trade coming back later in the year. emily: should we be wary of what's happening in china? cole: about 40% of the chinese msci indices are tech. we are at 26%, add back amazon and netflix and you get 30%.

the biggest opportunities for stockpicking our markets saturated by tech. that said, you know, as an index investor you can't go away from that. as stock pickers, that is our opportunity. emily: what about crypto? cole: i will go back to my electricity comment. if you could transact the world in crypto, we would have blackouts like you wouldn't believe, because as international payment settlement group said, you can't actually do that, there's not enough electricity. so i would try to figure out what is sustainable. people are going to get older. i can make money on things like that. are we going to be able to greatly change the payment systems outside of paypal, those phenomena in the next 20 years? that is tough. emily: so you don't have any crypto holdings? cole: no. i'd rather buy gold, to be honest, but i think even that is stupid, too. emily: giving it to us straight.

cole smead, thanks for stopping by. romaine bostick, thank you as always. coming up, didi is having a "delete didi" moment after allegedly murders and sexual assaults by drivers. we will discuss next. this is bloomberg. ♪

emily: china's most popular ride-hailing app in damage control as thousands of users pledge to delete it after a second woman was murdered, allegedly by a driver while using its carpooling service. steve engle has more from hong kong. steve: didi chuxing is taking fire from many fronts.

web users, regulators and state media in china, after a female passenger was allegedly murdered while using the didi carpooling service hitch, despite a complaint about the driver froma earlier passenger. this is the second death in three months, after a flight attendant was allegedly murdered in may. thousands of outraged users say they will delete the app, including a popular actors who posted on social media in china to her 9 million followers that she deleted the didi app. the host received 285,000 likes, and more than 40,000 comments. the push in china to get rid of didi is reminiscent of the "delete uber" campaign last year in the united states amid a series of scandals and missteps at the american ride-hailing company. the uproar comes at a critical time for didi chuxing, as china's most valuable start of faces rising competition and as

it reportedly considers an ipo and a bigger presence globally. it is still overwhelmingly number one in the china market, with more than 30 million active users daily. the closest rival has just under one million. but still, it is a serious black mark and an opening for rivals, given the anti-didi sentiment that has gone viral in china. didi has apologized and has suspended two executives and has pledged to overhaul services. stephen engle, bloomberg news, hong kong. emily: china is home to 4 of the world's 10 most valuable startups. goldman sachs estimates the company has raised $31 billion in venture capital in the second quarter, beating the u.s. for the first time. the backlash against didi shows how the combination of skyhigh valuations and pressure from investors to produce returns can lead to missteps, undermining public trust at a time when a slowing economy is already fueling middle-class anxiety.

is china falling out of love with its unicorns? maybe this one. joining us now is selina wang. the story, there is much more to it. first of all, not just one woman murdered allegedly by a driver, but two, and also there is reporting that there are in fact dozens of sexual assaults and harassment complaints tied to didi drivers. selina: right. this isn't the first time they were suspended because of these alleged cases. this is the second murder in just the span of a few months. what is especially concerning, just a day before the murder happened, another woman flagged this particular driver to the company, saying this man had followed her after he dropped her off at the place. furthermore, the victim's friend from this most recent case said the company had actually been delaying the response to reports she made to the service as well. now didi has said there was an issue on the part of their safety department and they didn't take the correct

protocols to follow up with investigations within two hours. as you mentioned, many reports against didi, at least 53 women have been raped or sexually harassed by didi drivers in the last four years, and at least 16 -- 14 rape cases were found involving didi citing court documents. emily: didi had new rules, including that drivers could not pick up passengers of the opposite sex during nighttime hours, which seems a little, like a stretch. seriously? that's the best they can do? [laughter] selina: didi has certainly made mistakes in terms of safety measures, and after the first incident earlier this year with the flight attendant, they wanted to protect women from dangerous male drivers, so they implemented this rule, during the late hours of the night and early morning, male drivers can't pick up female passengers.

that caused an uproar of criticism, not only is that very discriminating against women, it is also inconvenient for women, because most drivers are men, but they say they are trying to put in other safety protocols, including an s.o.s. button, stronger background checks, and other rules. emily: there are comments in the didi app, where women notice male drivers would be commenting on their looks -- selina: they put in this comments feature, where you could comment on how the passenger was as a rider and sort of rate them like in the uber app. the problem, the male drivers were using this to comment on the appearance of riders, so they have disbanded that. emily: the chinese government has been very critical of didi, which as we know is unusual, coming from the chinese government itself, which is normally more likely to raise

these companies up at a time when there is a lot of wealth concentrated in a few smaller, privately held chinese tech companies. how can didi recover from this? selina: the chinese government has taken a very strong approach against this, saying didi has this unshirkable responsibility and that they need to work with the government before they can restart the app again, and they said they are cracking down on what they call dishonest behavior. at the same time, didi is the largest ride-hailing app in the world, the most valuable company in china. the second largest competitor is a tiny fraction, so it is unclear if this will hurt their bottom line, and even if high-profile deletions will cause any sizable impact on its user base. emily: i know you will keep us posted. selina wang, thanks so much.

much more coming up. this is bloomberg. ♪

emily: sears stock got a big boost. the struggling retail and amazon have expanded a tire purchase and installation program. customers who purchase tires on amazon can get them installed and balanced at sears auto centers. amazon has discussed cofinancing to bloomberg has learned the tech giant has tried to cofinancing movies with at least two major hollywood studios in exchange for online rights. including paramount pictures. joining us now with more bloomberg, it is no secret that amazon has struggled with its

studio and the leadership of its studio. what can you tell us about these possible new arrangements? >> what me and my colleague have picked up on in l.a. is early exploratory talks amazon's having with two studios, major studios, sony pictures and paramount, which is part of viacom. both are the smaller of the big six in hollywood, and they are the ones that still take on cofinancing partners. the likes of disney don't. amazon has had conversations with them to explore what they can do to get bigger, more exciting films out to their users. one way that they might do that is by cofinancing films, seeking a stake in some of those potential hits. emily: so, talk to us about the finances of this, how big a deal would it be for a sony or a paramount to give up certain online rights to amazon?

or is it all about extra exposure? anousha: you know, it is a trade-off for a film studio. this is where some studios do it, some don't. someone like sony would have to give up any potential gains, say you sell 25% of the film from amazon, you spread the risk if it is a bomb, but if it is a hit, you get 25% less profits. that is something that potentially sony or paramount can't avoid, because they need funds. on the positive side, it would be a boost to the studios, meaning they can get more of the content that's out there, more of the exciting ip up for grabs, and compete better with the likes of warner bros. and disney and universal. both of those, sony and paramount, ranked fifth and sixth, so they could do with any help to kind of get that box office share. emily: amazon has had moderate success with its content, but certainly nothing on the scale

of netflix. how much does this have to do with the fact amazon may be struggling to produce its own hit content? anousha: one of the cautionary points made to us from our sources is that there's still early days in the conversation because the studios already have out the deals with the likes of starz and epix. amazon still needs to find direction in the film unit, and this would probably be part of that. they had great recognition at the oscars for films like manchester by the sea, but no game of thrones-type tv show, no big, award-winning film that is seen by a lot of people that people really liked. netflix had the disney star wars films. while that might be tailing off, amazon doesn't really have anything to compare. emily: ok. anousha sakoui for us in l.a.

you will keep us posted on any updates. that does it for this edition of "bloomberg technology." i'm emily chang from san francisco. this is bloomberg. ♪

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