emily: i am emily chang in san francisco. this is "bloomberg technology." forget the scandals and scrutiny from congress, facebook's shrinking margins are making investors think twice. can they jumpstart earnings as user growth by those? plus, bumble puts women first in the online dating game. the company is turning that attitude to investing. we hear from the ceo on her plans to invest in other women.

and, feeling the burn. how to turn a rejection into a fitness media empire. first, to the top story. and, feeling the burn. facebook has had quite a year. is giving network investors pause. as the shares continue to languish in its aftermath of the one-day plunge in july, facebook will need to show it can jumpstart growth to restore -- withthin the others investors who have been reluctant to buy. proctor whoichael has an outperformance rating and i will start with carol -- sarah. what are investors hesitating about here? >> i think what investors are worried about and what congress

are worried about are two different things. facebook is trying to say they are investing a lot in protecting their site from election interference, from ads that are targeting people for discriminatory reasons, hate speech, and all of these things we have come to know our problems with facebook. they are investing in fixing them. investors are worried about that facebook's mean product, the newsfeed, the ads are starting to run out of room to grow the advertising business because so many people around the world use the newsfeed already. they are not going to increase their frequency of ads in the feed to the future of business will depend on other bets like messaging adds like instagram stories and ritual reality and all of the things that are a lot more experimental. the margins keep narrowing. emily: facebook has a lot of

iron in the fire, yet you, michael, is concerned that facebook margins are shrinking. do you think they can change that in the future? michael: it is fully discretionary. i don't think we will see legislators compel them to do anything a were not planning to do. when we talk about compressing margins, they are investing in a bunch of things like virtual reality and artificial intelligence. they are obviously trying to build out some of the businesses that are not monetizing as well as the facebook five form like whatsapp and building advertising on instagram. it is not the compressing margins for people, it is the commentary on the last earnings call. this company is tracking low to mid 40's in operating margin percentage this year. i-30's to expect mid to -- too high 30's going forward

--mid to high 30's going forward. they would need to grow their revenue growth in the next three to five years. that does not compute. if they grow it by 50 billion or several hundred billion, how will they spend half of that above what they spend now? is crazy talk. he said it and i'm not sure why. i'm not even sure that was his decision to make, that is the board's decision. with the share price stumbling down to the one 60's, i think their board will get an earful from their shareholders. i think dave will change his tune. i think what -- i think it was -- saynt for him to see he will see margin compressions. emily: sarah, michael pachter is not missing words there. you think it is crazy talk?

here's what happens with these earnings calls. facebook says something that gets something -- everyone concerned on whether they can make the numbers in the future and it takes down expectations a bit. then, the next earnings call, they do not spend as much as they say they did -- would, and maybe they beat the revenue they say they would not meet. i think there is a little bit of expectation setting here. it's true facebook's overall business will grow less fast. it is true they will have to spend a lot more to grow in new areas. whether it will be doom for the business, they have so many different properties they could turn the lebron, but all of that will be a little more experimental than what they have done. not knowink they do how successful the other initiatives will be and do not want to promise they will be just as successful as the newsfeed which is one of the most lucrative products ever. michael, as sarah

mentioned, what investors are concerned about it what congress is concerned about are two different things. are you concerned as an analyst to covers the company about congress's scrutiny of facebook and tech a broadly. the department of justice is now asking more questions about tech giants and their power. that can't be good either. michael: i think you know i am a recovering lawyer. and iit for over 15 years have been licensed for over 30. the justice department has very little power to do anything. there is this perception on wall street that there is such a thing as too big and i trust -- and antitrust brings a big companies. if a company is so big it has market power and pricing power, then sure. we saw that with at&t's breakup and standard oil's breakup. that is not the case with facebook.

you can say they are the only social platform, that it is not like google has not tried. google failed because they did a poor job. anybody who wants to compete can. 93% share 93% -- with , they used to try to capture share and so did yahoo!. i do not think these have pricing power or exert pricing power. i do think congress can legislate. i don't think the justice department will find anything. i think congress will require these guys to take steps to assure user privacy and security. that is appropriate. remember, these are businesses. with the exception of all of the commentary from jack dorsey yesterday who seems to think he is a public interest organization or running one, these guys are trying to make money. the way you do that is you keep your users happy and keep your advertisers happy that they will reach your users.

you have to do both. to keep users happy, you have to protect them. you have to protect their privacy, protect them from hate speech, protected from whoever it might be. you might see legislation that says you have to do those things. i think the companies will have to do that. the president commentary about the google buys out rhythm, it is idiotic. it shows a complete lack of understanding of how algorithms work. the fact is that we all have a sample bias. if i watch emily chang on bloomberg all of the time and i search it all of the time, then if i type in bloomberg, emily chang will pop up. we get search results based on our behavior. whoever did that search for trump clearly read the new york times and watches cnn and that is why it popped up. not because google is bias. i don't fear a financial impact. i think sarah is right that

companies who promise something and do not deliver, stocks go down. the solution is do not promise. did not mean to talk about five years out because he does not know. remember what amazon did a few years ago. they were losing money, doing stupid things like the fire phone. the stock was in the 200s. as soon as they stopped spending their profit dollar growth, the stock is up 500% in the last three years. if facebook decides to do the same thing, its stock will go on a pretty steep, upward trajectory. emily: michael pachter we never know what you are thinking and now we know what you are watching. thank you as always. and, sarah frier, thank you. a story we watch, cbs is in talks that could lead to the departure of the ceo. cnbc says the chief operating officer would replace the ceo.

he has been investigated over isims, move as, -- move as , over claims.is chris palmeri joins us now. >> the headline is that this is the end of the era for one of the longest running media executives, and now it seems not to be a question of if but when. we still don't know -- we are hearing numbers between 100 million and 200 million in terms of a payout. it's important in the fact that these negotiations are ongoing. emily: talk to us about the negotiations in terms of the pay package. what is he entitled to if he is leaving under these circumstances? chris: it's a different story if you are fired her's is leave as a result of a merger or something. this is why it is a negotiation. if he is leaving, he's leaving

because of the allegations against him. the idea is to get him out the door before those results are released. this isn't necessarily a firing, so he will negotiate some large payout. he has been a fit tested negotiator -- been a fantastic negotiator. emily: that he is. chris palmeri, i know you will keep us posted. tinderhas been battling and fending us -- fending off facebook's efforts into getting into online dating and now it invests in women to invest in them as well. we will hear from the ceo next. if you like bloomberg news, check us out on the radio, , in the u.s., and on sirius xm. this is bloomberg. ♪ s bloomberg. ♪

whitney was the only woman on tinder's founding team. when she left the company two years later, she did not leave the scene. she flipped the switch. she launched bumble, the famous app where women take the first move. this is one of tinder's biggest competitors facilitated over half a billion connections. now, she is investing in other women as well. last month, the company launched a fund focused on female founded and led businesses. joining me now is the ceo. thank you for being here. >> thank you for having me. emily: let's talk about the find, but let's talk about competition first. tinder is there and mimicking your features. now you have facebook getting into the business as well. how does bumble continue to differentiate itself? >> we are generally flattered once to comeitor

into our unique space. what we stay focused on is being true to ourselves. oncewe were founded based on vs and we are a mission driven company. there is authenticity to that. as long as we stay true to that and keep innovating beyond that, we are not concerned about competition. facebook has been in the dating business since facebook started. the fact that they are attaching a label to it is usually validating to the entire dating industry. bumble has evolved beyond dating to a full-fledged dating -- full-fledged social network of people you don't know yet. emily: is there a floor shattering -- foreshadowing of what you want bumble to become? whitney: we want to bring good people together and bring them at every level of their life. not just bring you a date or business partner, we want to connect across the board. nobody in our space has been

able to successfully do that. the fact that we were able to go into friend finding successfully , we don't lose the user. they can connect the business and this is really showing we can be this global. form for introducing you to people you do not know yet. emily:emily: when you launch, you changed up the norm. women make the first move. i'm curious how the trend changes. is that the norm and where you do -- where do you see the online dating going? whitney: we were the first platform to empower women to be confident and own making the first move. traditionally, gender norms suggested men had to make the first move. as we evolve, with this incredible momentum of women becoming more empowered, we will also evolve. bumble is in such a position to build upon that and give women more control and evolving where

we are today. i think you will see that in the coming years. she watched the news feature allowing people to take a break from the online dating. why can't they just logout of the apple put the phone down? whitney: when was the last time you set your phone she watched s down? this feature is a great way to build upon our values. we want to engineer accountability. we want to eliminate rejections. just putting your phone down and ignoring conversations is not pleasant for either party on either end. we want to empower our users to take a break when they need to. the beauty of bumble, why we are not nervous about losing the bottom line or users, at the end of the day, we all need human connection. even if we take a break for a moment, we need to connect, find love, find business connections and friendships. we will always be there, but we encourage our users to focus on themselves. it is core to who we are.

you look at these social media giants on capitol hill and they are apologizing for the lack of accountability, lack of catering to the users in giving users a break or taking care of their users. say wele, we want to have been here standing up and raising our hands saying we are here to bring you an accountable experience. we want to engineer kindness and good behavior into the product through everything we do and we have been since day one. it is fascinating to see these giants apologizing, and here we are saying we have been doing this from the beginning. emily: let's talk about one of the giants in the online dating space, match, the parent company of tinder. you sue them back for patent infringement after they sued you , how would you describe your relationship status with match? are these lawsuits impacting investor sentiment and the company? whitney: first of all, we are

not raising money and our growth is not impacted by any means. our users don't care about what type of lawsuit the company might be in. by the way, we are staying focused and still on track. with growth, scaling at such a level, comes challenges. we are willing to weather the storm with what comes our way. i have nothing but respect for their current ceo. she is a remarkable woman and i think we will keep doing our thing and adding value to our users. we will see what happens. bought aey brought -- company stomping on your territory. vision foranged the you? whitney: no. we are going super international and the focus is going deeper into our existing market which will penetrate the markets we have already had exponential growth in and really proving we

can be this global, international high scale of brand. what they choose to acquire and what they choose to do, that is their own business and we wish them the best. whitney: i have to ask you about the fund you are investing in. is a goal to find technology you can use or just for the greater good? whitney: there is a mixture of both. i think we can add a lot of value to the new startups, but we really want to be there to build the future of tomorrow. we truly believe that the more women behind these new businesses building their dreams, building the solution, problems we are all experiencing everyday day, that will be a better tomorrow. bumble is at a place where we have the capital and intellectual capital to help expand our reach. what better way to build a more empowered future for women than to invest in them and share not only capital in a financial financial area,

but add to the team and that will add to us. it is about being at the forefront of connecting people at every different level. emily: bumble's founder and ceo, whitney wolfe herd, thank you for being here. still ahead, jenny lee has ranked device for companies shopping for investment. we will hear from her in a moment. bloomberg tech is livestreaming on twitter. be sure to follow our global breaking news network on twitter, tictoc. this is bloomberg. ♪

been investing in china and the u.s. and we have seen three or four down cycles. what we have seen is that if stocks have the ability [indiscernible] when the ridesharing market took off, overnight we had a few hundred players offering services in china. to get to the number one player means they have fought a tremendous battle in china. that allows them to give their own sense of a face of resilience. downturn, this is their survival and they will continue to survive.

china is the market for entrepreneurs, but when you are there in the category of companies that make it, if they survive five years, the next five years is easier. of ggvjenny leave their capital. we will be back with more of bloomberg technology after this quick rate. we will be talking to the ceo of peliton.on -- this is bloomberg. ♪ this isn't just any moving day.

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saving you hundreds of dollars a year. plus, get $300 back when you buy a new smartphone. xfinity mobile. it's simple. easy. awesome. click, call or visit a store today. emily: this is "bloomberg technology." wednesday was a jampacked day on capitol hill. we saw sheryl sandberg and jack dorsey defend their companies before the senate. then specific questions on shadow banning. according to our next guest, the biggest news did not come out of either. instead, it came from the justice department. talked about a growing concern that these tech companies may be hurting competition and

intentionally stifling ideas. had an analyst on earlier who calls himself a recovering lawyer, and he does not think any doj situation will have piece et al.. al any teeth at all. >> the political situation is worrying to me. the stifling of viewpoints, that essentially is echoing views you hear from president trump and other people from the conservative side of the political spectrum who believe google, facebook, twitter, and other internet companies unfairly stifle conservative viewpoints. it is not supported by evidence, that position, but it has become kind of a pervasive view on the right, and the fact the doj is opening this kind of meeting or convening a meeting based in

oft on that incorrect view the internet companies -- that was worrying to me, and it should be worrying to investors of those companies as well. emily: is there anything political about this? we know the justice department is run by jeff sessions, whose job is on the line. the president is angry with him for not recusing himself from the special investigation. could jeff sessions and the justice department be doing this to appease the president? >> that was my read, but it sounded like an overtly political statement. the worrying thing to me is there are legitimate concerns about the power of internet topanies and their ability influence information people see and do not see, but the doj statement kind of hijacked their concerns for kind of nakedly political pandering. emily: what could the doj actually do here?

>> again, there are legitimate potential legal issues for these companies, particularly around issues like antitrust. we do here antitrust concerns about companies like facebook and amazon on both the left and right side of the political spectrum, and that has been this interesting convergence of two sides that do not normally agree. if you are a tech company, that should be the focus of concern, but any topic of interest for the doj, even if it does not ultimately lead to a legal crackdown, it causes political headaches for these tech companies, and they are already onhting political wars multiple fronts at multiple agencies at multiple state levels. those will some of start to bite. emily: what is your read on the hearings yesterday? the thought is that what is happening now could lead to

potential legislation, but certainly not for a long time. do you think that this will lead in the tangible changes way that some tech companies are regulated, or do you think this s just noise? >> i don't know yet. it requires something of a good read on what is happening in washington and the ability of people in congress to legislate, and i cannot make a call one way or the other, particularly this close to midterm elections. i was rather impressed by the quality of the senate questioning, yesterday in particular, that is seemed like a good-faith effort on all sides, by democrats and republicans, by sheryl sandberg and jack dorsey in the witness chairs, to tackle big questions fort what is the right role the internet in public discourse and what is the right role of in making rules

around the internet and public discourse, and i thought those were high-minded discussions. i do not know if anything will come of it. emily: as always, thanks so much for weighing in. one investor watching tech areas closely is lightspeed ventures partner jeremy lou. he sat down with us in san francisco. he was an early investor in snap. the earliest, and fact. . asked his thoughts the biggestome of challenges for social media companies have been when they whatnot had a sense for sort of content is propagating. the ones that have had more of a lockdown ability of controlling who is going to be putting has moren the service control over how that spreads. emily: who do you think has a

good handle on that? >> snap hand selects who is going to be on discover, unlike an open platform. early you were an investor in snap. we talked about that. -- sharessnapper down of snap are down. could snap be dragged into the broader social media muck? degreecan see to what the innovation that snap has delivered has influenced the entire industry. i am a big believer in the company and its ability to really change the landscape. emily: it's clear instagram and facebook have copied many of snap's resources. it's clear they have the scale and resources to continue to do that. ,o you think snap can recover

take them on? >> i believe in their innovation. while other companies can try to emulate what they pioneered, each time they do that, they create a step of an advance over the rest. emily: do you think we are at a social media peak? think what we will see is more usage coming from more users. in the west, it is reasonable to -- itthat there will be will be harder to see more social media users, but as the internet continues to grow in , i thinkoping world there's plenty of room. emily: is this it? >> people have called the top four technology many times. then there was yahoo! dominates

and there would never be another opportunity. before then there was microsoft that no one could compete with. i believe in startups and their ability to disrupt the status quo. emily: what are you excited about? >> am excited about a rash of companies being led and founded by people who already have social followings. the growth of social media companies have allowed these influences to develop a direct relationship with followers. the authenticity and the direct connection their fans and followers have with them, and a good example would be jessica honest company and another good example would be kylie's cosmetics with kylie

jenner. emily: interesting you mention kylie. one tweet from her saying she does not use snap anymore wipes $1 billion off the company's market cap. >> it goes how powerful celebrities can be. if they choose to build brands around the credibility they like you see companies kylie cosmetics or rihanna with really- we are seeing big companies being built off people's ability to connect authentically with fans. emily: if you are one of the many, many people who got through the techcrunch who want to break out, what are the prospects in this market? always a great deal of creativity and always opportunities to be seen, and that is what -- that is why i'm

here. i'm really looking forward to hearing about how they plan to break through. emily: where are you putting your money right now? >> we continue to see some interesting opportunities in marketplaces. investments in some potentially disruptive new media and video companies, so there is a lot of exciting stuff happening. emily: coming up, feel the burn. the growing business of at-home fitness. and later, the tech company looking to streamline treatments , anda new global platform it's got the backing of a hong kong millionaire. this is bloomberg. ♪

emily: when peloton launched in 2012, it had a hard time attracting buyers. the company had to convince them that streaming live classes would work. the company is able to tell a different story today. they recently announced an additional 550 million dollars in funding, bringing their valuation to $4 million with more plans to expand. peloton's founder and ceo is with us in studio. the model first was sell bikes. then the subscription model. what made you believe in this

business? >> i believe people want grouptic instructor-led fitness from home. we had to build the software for consuming that content, and when i was pitching to investors out here just down the road, i would say we're going to build tablet computers, built the best bike ever created, stream the media to those bikes, open retail stores, do logistics, and at the end of the pitch, this sounds capital-intensive, this sounds hard, and you don't know if there is a market for this product. a course, people want fantastic workout from home. emily: you had to put $2000 down first. >> yes, but if you and your partner and spouse are doing it , it getsmes a week expensive, so over time, the investment is a fantastic value.

emily: now you don't have to buy the bike. you have this whole portfolio with yoga classes, studio classes. what is the vision? >> when you think about fantastic instructor-led classes at home, you think about indoor cycling, boot camp. we have over 10,000 free sales, so people want that platform. then you think about yoga. to your point, different verticals, different categories. strength training. weight training. all these different things you might want to do if there is an instructor and a group of people motivating you at a better location in a better value. we excited about that opportunity globally. cycle has a slightly operating inel, studio. how do you differentiate yourself? software,k about the

custom bikes, ios and android apps, we have python services in the cloud, hundreds of the best technologists in new york city, not out here in the valley, but we think we have a pretty good building in the valley. investing in technology, showrooms, growth globally so more people find out that better workout, better experience for you to get fit and get those endorphins every day of your life. it's investing in marketing stores, technology, all the expect.ou emily: you were president of barnes & noble. you know better than anyone how technology can change consumer behavior. how do you see exercise habits changing? you want to go where people are going to be and where the technology is going to be? >> it's funny you bring up barnes & noble. arekindle and nook

platforms for consuming literature at home. you didn't about the digital disruption of media, think about the 1980's when arcades existed. today, arcades are gone because you have better experiences at home. and you think about the peloton bikes and treadmill, if you can get a better instructor, better community, better hardware, better software, you might not travel for an inferior experience at a higher price point. emily: you raise a lot of money, you are engaging in capital-intensive exploits like building this new showroom in manhattan. how can you be sure the cost will be worth it? >> the founder of tcv has been on the board of netflix for the last 20 years. think about netflix closing a billion dollars or $10 billion

-- you probably know better than i do -- in original programming every year. we think content is king and we are investing in content via these studios for the content creation -- daily, fresh content. for studios under one roof, suppressed indoor cycling, best boot camp, best yoga. we will announce more and upcoming quarters so we have the best value, everything you expect from peloton. emily: when is the ipo? >> a good friend of mine keeps uber is going out in 2019, so i'm going to follow suit. emily: thanks so much for stopping by. great to have you in the studio. coming up, the tech matching cancer patients with treatment specifically tailored to them. a new platform that has the backing of a hong kong

billionaire to take it global. this is bloomberg. ♪

emily: a new global platform is aiming to revamp cancer care. driver was developed by a harper-trained oncologist. told ournd cofounder chief asia correspondent the startup launched in china with a number of cancer patients is exploding. >> we did not pick the timing. we have been in china over three .ears we have endeavored to build our platform as a global one. >> in a nutshell, how does it work and what needed filling? >> the problem driver salsas the following -- we have a market ailure in terms of how patient gains access to

treatment. the doctor did a good job interfacing with the patient and getting them treatment. >> there's a lot of information. how do you get the right treatment? >> there's a ton of information. the only way the patient can get access to the data is through a physician, and the physician is failing giving the patient access to the most advanced therapies in the form of clinical trials. driver says instead of the doctor being by himself or herself responsible for clearing that market, what if we had a platform to help? we are not a new treatment. we're an operating system tween whatatient and doctor, but we are hopefully curing is the treatment itself. up thely we can speed development and delivery. thes that marketplace, ecosystem that is there between the doctor and patient and what

is out there, is that marketplace broken? >> broken. it's completely broken. the data comes from societies like the united states where post obamacare, more than nine have theiratients cancer care paid for. than nine out of 10. probably 95% of patients have it cared for, but too many patients do not get the standard of care. the overall statistic is hard to define. numbers differ disease by disease, but there are some cancers where more than 60% or 70% of patients will not get guideline-based state-of-the-art care, so i would say that is a market earlier, meaning the treatment exists but the it, and is not getting they have the ability to pay for it, and the second failure is access to clinical trials.

the number of americans who would like to have access to clinical trials is more than 80% , and the number of patients with access to clinical trials is something like 3%. >> there are oncologist world, huge.the >> there is a massive shortage of oncologist. teen of really bad things are happening at the same time. one is there is not enough oncologist, and two is this more and more cancer patients. you take the fact that there are not enough oncologists. there is a 10th of the number of oncologist in china compared to the united states. >> i think it's 18 oncologists per one million people in china. u.s., we might have a

20% or 30% efficiency. if we are not comfortable taking part of the oncologist's job and migrating it, it means you are comfortable with a lot of people in the world not having an ecologist -- and oncologist at all. >> you decided you are a technology company, not a health care company. why in healthe care and medicine, if you are a tech company, you need an adjective in front of you. i like to say that drivers no company. health care we are a tech company. >>, stood this impact how you decided to seek funding -- how much did this impact how you decided to seek funding? >> many people, when we were getting started, said why didn't

you start off with going to pharma? excited -- really why we are really excited, we want to driver to be a platform for the patient, and we wanted to build alignment with those key stakeholders in that room when a patient comes out of treatment, and that's just two people, the patient and the doctor. we wanted to build our platform with the patient being the primary customer, with alignment with our partner centers, and now that we have done that, we are really excited to bring pharma in, but in highly patient-aligned ways that can augment their options. emily: that does it for this edition of "bloomberg technology." tomorrow, we are headed to boston where we cover some of the innovative tech coming out of the boston have.

that is tomorrow. ♪

>> u.s. equities fall amid as a lot of in tech, the nasdaq declines on flagging demand for chips. stocks slumparket as fear of contagion spreads throughout the developing world. waiting on the latest in a trade drama, president trump expected to slap massive tariffs on china. >> jack ma goes from english teacher to asia's richest