emily: i'm emily chang in san francisco. this is "bloomberg technology." sandberg, why the facebook ceo says he wants to work with sheryl sandberg for decades to come and says he has no plans to step down himself as chair. cut, foxconn is planning to $3 billion from expenses next year. could this be a sign of trouble for the global electronics industry going much deeper than apple?

the out that chair is struggling with google's china strategy -- phabet caret struggling with google's china strategy. first, to the top story. continued volatility intact. wednesday morning, stocks climbed after steep losses tuesday. the nasdaq and s&p 500 saw gains to start the day. even apple, which had lost 7.5% monday and tuesday, again with modest gains after reports of iphone production in cut. let's go to new york where julie is standing by. every day is different, how do we know how to assess the market? julie: that is what happened in a light trading week. a lot of people have taken off for the holidays. the swings could be quite exaggerated. something you pointed out is that these big tech companies really saw an awful first two days which made the entire fall quite a bit because

they make up such an outside portion of the dow, s&p, etc.. portion of the dow, s&p, etc.. it 1% move in something like apple or amazon is not the same as a 1% move in gap or foot locker for instance. if the big move made it so everything tanked. some days the dow was down more than 600.71 point. the nasdaq really leading the way on a lot of that. the nasdaq really leading the way on a lot of that. today has been a different story. you have seen gains and apple making up a lot of the losses it had yesterday. it will be really interesting to see what things look like next week when everybody is back at their desks deciding what is next. emily: let's take a look at the bigger picture. hundreds of billions of dollars have been wiped off of the ofket cap big tech -- cap big tex since august. is that the trend continuing in the big picture? julie: if you take a look at

what the s&p, nasdaq, and dow has done for the past couple in theall of those nasdaq started leading the way in terms of gains and it has come back and traded more in line with what the other indices are doing. it got ahead of itself a little bit. there was a lot of extra optimism out there. we had good earnings reports from a lot of these companies and everyone figured the rally would keep going. people got ahead of themselves the year end and 2019, it will be interesting to see what traders expect next and where things go from there. emily: what happened after the is theiving holiday interesting question. what are investors telling you? julie: a lot of these big banks will start sending in notes saying this is what our production is for 2019 -- prediction is for 2019. a lot expect the rally to continue but not big gains. four to 5% for that s&p 500 next

year. people should not expect to come back and see this blockbuster year, but they should also not expect to come back and see the dow and s&p decline 10-15-20 percent. different news flow, we have trade that we are worried about. other company specific worries about what the future holds for apple and the iphone. that will have an impact on what analysts, traders, and everyone else expects moving forward. emily: and worries about facebook as well. julie verhage, thanks so much for bringing us up to date. mark zuckerberg is once again for hisspeaking out coo. here's what he had to say on cnn. >> sheryl sandberg is an important part of this company and is leading the efforts to address the biggest issues we

have. she has been an important partner for me for 10 years. i'm really proud of the work we have done together. i hope we work together for decades more to come. emily: to talk more about the with facebook,s we have sarah frier. with facebook, we have sarahthe interview on cg really did not go much further than what he has already said. what was your big takeaway? sarah: i think the big takeaway here is that sheryl, for the first time, is being hit a lee from this article. in the past few months, you and i have discussed where has she been in the public conversation, is she doing more behind the scenes work, where does sheryl fit into all of this. heard a lot of calls for mark zuckerberg to step down but it has not hit sheryl and i

think the new york times report specifically focused on her decisions that affected the outcome for the company. i think we see a lot more direct focus on her and zuckerberg needs to come out and say directly he supports her and would work with her for decades to come. who expects decades to come, but certainly he does. said, a lot of the reporting has focused on sheryl sandberg's decision in particular. we had an argument made on the show earlier this week by an investor who had a counterintuitive take saying she believes sheryl sandberg is being thrown under the bus and what really needs to be looked at is the decisions of the board over the last several years getting up to this point. >> i only feel like she is being thrown under the bus because i think this stuff has been going on longer and has been a bigger problem that is related to

technology at the company and the way algorithms are used in the way they are used for other purposes. that is why, mark zuckerberg obviously doesn't get the impact that his company has on society. emily: sarah, there is a lot of blame to go around, but what about this board which is filled with experienced tech investors and ceos? is pretty board defanged because zuckerberg holds all of the voting control in this company. not all of it but the majority. he is basically on fireball and is the chairman of the board. if you look and how facebook is organized and run over the last few years, zuckerberg is in charge of some of those problems the overallhms and vision and sandberg has been withdirectly involved legal operations, scaling the business, and also handling

those relationships of governments around the world. making sure facebook's message is consistent and proactive. those are some of the issues we see come up with how facebook has denied things coming up, deflecting blame, and those problems certainly sit with sheryl. i think there is a lot of blame to go around here, but i think there is a reason focus has turned and why zuckerberg had to answer directly about her leadership on the interview yesterday. sherylitchen there -- is responsible for building the business. will this be the straw that breaks the camel's back? will this get users to turn away from facebook because we have not seen dramatic decline in user engagement or dramatic decline in ad sales. >> the issue here is that if we look at their valuation multiples, that is the lowest

they have ever been. compare that to the expectations. that tells you investors don't really have a lot of faith in the long-term story at the moment. there's a lot of visibility issue with facebook. if of the things they can do a board cannot be reshuffled is they could look at google and how they came up with the make suretructure to they get the flexibility in terms of diversifying revenues, because right now some of the -- some of the parts -- the sum of the parts is greater than the individual. emily: facebook has a lot of valuable parts, would they be better separate them together? sarah: i think the opposite is happening. he used to be facebook had operated a lot of its apps separately.

now, they are bringing them together. they are creating a family of apps being run or directly by chris cox who is the chief product officer. they are doing a lot more sharing of resources among those different ads and trying to make -- apps and trying to make sure the strategy and the collection is consistent across them. i think that would make it harder to break them up or split them up. the move this year is to do the opposite. emily: will users -- is this for behavior?ng to change i wonder at this scale, does the pattern change or does this blow over? jitendra: the user growth story will not change. we are seeing continued movement

toward instagram, whatsapp engagement, and exec that remain strong. it's difficult to see the trajectory changing. facebook growth user numbers would come down, but if you look at what advertisers and users are doing, that story is not doing. you have to think about more longer-term. where the growth story here hinges on taking advantage of whatsapp and messenger monetization which is not easy. they would need partnerships, acquisitions in the future to even diversify beyond advertising. i feel like the current set up holds back growth from the other properties they can take advantage of. they are valuable properties. ask youarah, i have to about this memo obtained by techcrunch in which the former head of communications for tookook on his way out responsibility for hiring the controversy oh p offer -- pr

firm -- controversial pr firm. what you think about? -- about that? sarah: he is already leaving the company so it does not hurt for him to say that it is his fault. one part of the memo that i found interesting was that --dberg has said she did not or that zuckerberg told us is in berg did not know about the definer's relationship, this firm that has been doing opposition research. in this memo, she said to employees that it may have been mentioned. that provides cover for her that if in the future she says -- if you didn't know about that and she did, there's a little protection. emily: there's also a controversy all higher who

has a lot to do. thank you both for joining us today. coming up, it has been almost a valuation bitcoin's and now it is piercing the $4000 mark. what is behind the plunge? we will discuss, next. this is bloomberg. ♪

emily: because new pedal big going to you over thanksgiving will have explaining to do. we see it though to 19,511 dollars just before the christmas season. this year, the story is different. as $4061ushed as low and is not seem like there will

be a turnaround soon. hairdo discuss is a chief commercial officer. sunny, not to say you would be that uncle, but what would you say to the thanksgiving dinner table this year? >> i would say bitcoin has become mainstream adoption around the world, has great brand recognition, and we should not look at the price so much but it is behind the scenes -- what is happening behind the scenes. be backike philadelphia launching their product or square launching the product, until those come out, i do not think there is much market catalyst moving either way. emily: jamie dimon has said about bitcoin and it has gotten -- what jamie dimon has said about bitcoin has gotten a lot of play. take a listen. >> it will blow up and china just kick them out. don't ask me to short it. it could be 20,000 before this

happens, but it will eventually blow up. it is a fraud. emily: he later said he regretted saying that, but i want the right now if it looks like he is being vindicated. sonny: i disagree with him on the front comment. price can go up and down and anything up that fast will come down. lye fraud thing i complet disagree. i imagine if he sees fidelity, his bank will also release a product. ,f you see companies doing ipos a lot of bitcoin miners, jpmorgan will try to get coinbase to underwrite. or q2 because big companies take a long time to launch their products. emily: do you think we should be starting to look at cryptocurrencies as different currencies? do you think some of the other currencies will break away from bitcoin or are they all basically the same? sonny: i think there is a big

night and day difference between bitcoin and everything else. bitcoin is an 800 pound gorilla and the one that has the mass network affect. the other ones, i do not know what will happen to them. theico's are being ruled by fcc. i think the ico market is dead and maybe a couple will survive but none of them will survive unless bitcoin survives first. sayy: what is uncle sonny next thinks giving -- say next thinks giving? -- thanksgiving. think it should be an exciting time. around the world, you are seeing adoption by bitcoin so bit pay will process over $1 billion this year. as ae are using bitcoin

way of payment transaction, and there is a case all over the world. emily: where's the price next year? sonny: i would say you would see price may be around 15,000. that depends on when these comments are product and they moves slow because nothing moves fast in the index -- in vindex. emily: all right, we will see you next year. coming up, ever wonder where your smart watch or smartphone comes from? there is a mega-city in china churning them out. we will take a visit, next. "bloomberg technology" is livestreaming on twitter. check us out @technology, and be sure to follow our global news network, @tictoc, on twitter. this is bloomberg. ♪ ctoc, on twitter. this is bloomberg. ♪

emily: it has been dubbed china's silicon valley. if you own a smart foreign or

computer, odds are, parts of it came from there. they grew into a mega-city of over 12 million people. welcome to shenzhen. angusispanic reports -- bennett reports. this is the chinese mega-city of shenzhen, a monument to china's economic miracle. it was a town with around 60,000 residents. now it is china's technological hub with a population of over 12 million. entrepreneurs, highflying tech graduates, and international companies flock here to join the tech revolution. welcome to shenzhen.

shenzhen sits north of hong kong in river delta, one of the most densely urbanized regions in the world. 120area has an estimated million people population. in 1980, shenzhen dedicated a free economic zone and experimented on capitalism in communist china. the effects were explosive. the population skyrocketed in over 30 years. the city has a massive migrant workforce. stay4 million residents during the week and return home on the weekend. it is tech hardware that put the city on the map. up,ilicon valley drains it this is where it is made. this is the market. arguably the largest economic market in the world.

here's a sneaky peek. core doors stretch across multiple buildings and many floors. the stores sell everything from the latest gadgets to the tiniest screws and many items have ripoffs. if you wanted to, you could buy all you need to build your own smartphone or $100,000 -- for $100,000. because shenzhen draws and workers, it's routine is just as varied as its population. if you're looking for the full banquet experience, shang palace has you covered. their lunch as a feast for the eyes and mouth. authentic of cantonese cuisine. or try something a little more casual such as chinese hot pot.

a simmering pot of soup stock is cap on your table and you put your ingredients in. one of the most famous perry rations is flavored with sichuan pepper. it packs a spicy punch. when you get the bill, you'll codes.qr it is used by locals to pay for everything. scan the code in the money is transferred. sounds great, but there is a hitch. you can't use them unless you have a chinese bank account. technology to make life easier only works if you are a local. finally, enjoy some sport shenzhen style. this is a competition put on by local companies. student teams from around the world compete using a variety of self-made robots to shoot each other and destroy the

opposition's base. keeptition aims to shenzhen at the forefront of the tech revolution. emily: that was angus bennett on china's tech city. the holiday shopping season is trying to a start. as shoppers move away from the black friday lines and go online, will retailers like walmart and target be able to hold their own against amazon? this is bloomberg.

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this is "bloomberg technology," i'm emily chang in san francisco. the holiday shopping season is upon us. more and more people are taking their holiday shopping online. with e-commerce giants like amazon in the mix, the stakes are higher than ever for retailers like target and walmart. may face greater competition from amazon. here to discuss is the boomerang commerce ceo. the threat tout

third-party retailers that are also amazon's bread and butter. >> it started on retail where amazon was starting to show their muscle on retail, but now, the battlefront is going to shift to brands. if you do a search on amazon for amazon's own brands, there are more than 10,000 unique products . amazon is essentially going after traditional consumer brands, public companies like black & decker. they are going after all of them in a big way. batteriess not just and baby wipes anymore. its microwaves. what products do you think we will see the most competition from? the amazonnd

playbook. amazon is not a traditional merchant. ony are not making decisions understanding the mechanics of the industry. they are looking at consumer purchase patterns of behavior of consumers who shop on amazon. what are they using? how much are they buying? do i need toion put on it? what title? creates decisions amazon is able to make through its automation engine. theucts go through manufacturer. can i call the manufacturer that is producing goods for black & decker and directly work with them? amazon has started a program where manufacturers can directly work with amazon to cut the and sell items under a different brand name,

which is amazon's brand name. paper towels, diapers, microwaves, things like that, and eventually getting into more fashion brands and things like that which might be a little harder for amazon to penetrate. no question that amazon has an advantage. how do you see the competition walmart, and other retailers playing out? isck's at this point, amazon already starting to dominate in ,erms of pricing and selection even much more than a year ago. currently with the holiday amazon -- 93% of items that overlapped, amazon is cheaper than target. for walmart, it was about 85%.

the battlefront has become fierce. , it was armageddon this year for retailers. , thenes that remain battlefront has just become extremely fierce for them to compete. walmart havedoes an edge? where does target have an edge? >> they have to strategically think about where to put their stores. if you just go to battle with amazon on their battlefront with price and selection, you're going to lose. but if there is a convenience or discounts from coming into the store, things like that. what about more niche retailers and specific brands? seenlk about how we have

many of them not survive the rise of amazon but i also wonder if some are stronger than ever because i can offer something amazon does not. -- because they can offer something amazon does not. are very big brand ride on the brande name and the cachet of that. that may be a reason for consumers to go into the store and shop. a consumer you are brand or a commodity retailer, you have to really win the toine battle and try understand, how do you use automation and artificial intelligence. amazon is pitting a robot against a human being, and in most cases, if not all, a robot what it to win because

can bring is exponentially higher than what a human can do. emily: i do all my shopping online. we will keep all of your thoughts in mind. thank you. , adding to the gloom , and howobal economics this news isn't just contained to apple. plus, why he says he is not company'sabout the plan for a search engine. this is bloomberg. ♪

emily: the gloom of around the global electronics industry is getting gloomier, this time with foxconn. cut $6.9cut -- set to billion from expenses next year setting a difficult year ahead in an internal memo. will also need to reduce expenses by almost $900 million and they plan to eliminate about 10% of non-technical staff. they missed revenue estimates because of weak iphone demand. we discussed. >> 50% of foxconn's revenue does come from apple. they are the number one supplier. they are very important to foxconn. fact, six of the $20 billion in cuts is in the division that assembles iphones. it's a lot more than other divisions. what that tells us is this is not an iphone only problem. it is broader.

includesog of clients ,p, sony, nintendo, cisco, dell a long list of international names. they are all impacted. they all feed into the wider issue we are seeing in the electronics industry and foxconn gets hit by all of it. issue,what is the wider that people are not buying hardware anymore, or is the market even growing as much as it had been? it's all of those things. we had macro economic headwinds. a lot of people got caught up in trade tensions, u.s.-china tensions. it is actually deeper. we know apple itself is trying to get morearder users. they said they are not even going to tell you how much they ship anymore, just focus on

revenue. the smart phone market overall has reached its peak in terms of growth numbers. sure, more and more people will continue to buy iphones, but not at the same level. other areas ofat hardware, iot products. the apple watch. that havehe devices been made have been sold. they serve up netflix videos, spotify music. we never's we the hardware, but see the hardware, but it is there. if any ofernet era, those folks show slowdown, we could see the impact wider and wider. foxconn is a company that has its finger in all of these companies. it does something for almost everybody. spent many years in

taipei covering the supply chain. every year we get feedback of how suppliers are faring. outlet that says early indicators are not good indicators and it is still a good quarter for apple. would you say this quarter is different? >> it feels different. we won't know until the end of the quarter if it really is different. looking at things like thentory, back in august, supply chain was at the highest level since the financial crisis a decade ago. we are not seeing sales that strong. we are seeing sales slow down. they are not as strong as they used to be. something's got to give. like it's worse because there are so many warning signs

across the board, not just apple, but other companies in the technology industry, and especially hardware, it feels like it could be worse. emily: tim kulp and in taipei. lpan in taipei. last week when we talked about iphone production cuts you said early indicators were not good indicators for what the quarter ultimately shows, but now we have even more bad news of production cuts across apple, iphones, and foxconn. does that make you more concerned? yes, but not to the point where we think there is anything wrong with the quarter. try to it is an art to read these data points. typically, when you hear these , there is a tendency

to think we have landed somewhere that is not right with apple for the quarter. camp that nothing has changed in the business for the last three weeks when they gave guidance. there is a process here for data points, just to put a finer point on it. we hear these things mid december, then we start to realize there is a problem. asked the question to tim, don't we see these drips and drabs every year, the answer is we do. it really is the magnitude and the timing that is the most important. simply put, i don't think we are at a point right now where there is any sort of risk to apple's quarter. emily: i want to turn to an

experiment you ran on yourself to try to take technology out of your life. you wrote a piece saying super -- future humans would use less technology, not more. tell me the results of your discovery. >> this is an important topic. partners atanaging luke ventures has done a lot of research and gone through phases over the last month where we have tried for slimmed-down versions of the phone. what we found is that all of us, most of us struggle with some form of tech addiction. people struggle with alcohol and they can manage it, there are people for whom it's more extreme. is this.e take away we have become content consuming .achines

the way these phones are geared -- it's not a hardware problem -- the way facebook and youtube gear their recommendations, it can become a trap of mindless activity. trying to doeally is find ways to minimize it. today, google came out with some the toolssimilar to apple has to use software to manage your tech addiction. that's like putting a lock on someone's alcohol cabinet that might have a drinking problem. there is an opportunity here to ways to delete facebook, delete instagram, .elete youtube i challenge your viewers, if you do that, you will feel more alive and more human. i don't doubt that, but here is my question. the expectations of

society, the expectations of your employers? don't all those things have to change if our behavior is also going to change? we think everyone should have a phone. we are not going back. multiple devices. we are huge believers in tech. we think they can coexist. kids, for example, just to be quote normal," you probably need to be on instagram to communicate with your friends, or be on snapchat. but the issue we have isn't with .ech it's when it becomes more consuming. you know when you are slipping into that. you spend 50 minutes in mindless activity. that is what we are trying to zero in on. always great to have you

on the show. have a great thanksgiving. you are human as well. still ahead, a response to google's handling of sexual misconduct claims. what he has to say. this is bloomberg. ♪

emily: acclaimed computer scientist and former stanford professor john hennessy was of handling google. page hasceo larry censored google china and more. we asked him for his reaction to google activism. students,ect

certainly, to be engaged in this kind of activity. it's less common among employees. i think google encourages people to speak out and to really participate in helping shape a great work environment. in this kindou do of environment? >> listen. that's the first thing. that's one of the things i learned at stanford along the way. just listen. is smoke, where there there is fire. if you see it early enough, you keep it a small fire rather than letting it get out of control. >> there were recent news reports of alleged coverups and payoffs. sundar wrote a note to the company saying these were hard reports to read. what did you make of those reports and is alphabet a different company than it was three years ago?

>> i can't comment on the individual details of the report, but i can tell you there is a fair a different policy in place that is viewed by the board, and the board gets periodic reports on actions taken under that policy. , as sundarcluded , there haveletter been a number of cases prosecuted under that, and people have left the company, including high-level management. readingid you feel that? android creator andy room and -- ruben is some an you are -- were involved with at the time. >> at the time, it was a very different situation. i cannot comment on the exact he tales of what happened. we realized that the

policy needed strengthening, and that is the goal, to get a stronger, more aggressive policy. my position has always been that powerful.gs are a workplace that is hostile to women or others, you are going to have a weaker workplace. >> what do you say to them? >> we have to do better as a company. >> china. anybody who does business in china compromises some of their core values. every single company in china because the laws are quite different. that comes to my mind and that i struggle with is giving chineseff dissidents a decent search engine, a capable search engine, even if it is restricted and

censored than a search engine that is not very good. improves the quality of their lives. that's the struggle. >> you can do more good by being there even compromised. >> i don't know the answer to that. or eighte there seven years ago. >> i think it's a legitimate question in asking how can you do it and still live within the .ontext of the regulations >> what does it tell you about the political climate these days that even when the search engine was in a prototype form, the news got out and people were wringing their hands. >> it's as hard inside google as it is everywhere in our country right now. there's divisiveness in our country and that divisiveness -- fed moresaid concern about how these

technologies get used. >> if google were to use cloud the companyn china, would have to store data in the country. is that something you should be doing? >> if you rewind, there was a lot going on, not just censorship, but surveillance, hacking attempts, things like that, and those all add together. it's a different time now. but if you store data in the country, it can be gotten at by the chinese. >> does that make you feel uncomfortable? >> i worry. you should make sure users understand that. >> we seem to be in a trade war with china. what are the applications for silicon valley?

>> i think in general trade wars are not productive. they're not economically productive. we should try to remind people of that and move forward. that was alphabet chair and former president of stanford university john hennessy. you can catch the full episode tonight at 9:30 p.m. eastern, 630 p.m. pacific. that is it for this edition of "bloomberg technology." have a wonderful thanksgiving technology to all those celebrating. we will see you back here on monday. we are live streaming on twitter. check us out. this is bloomberg. ♪

heidi: a very good morning. i am in sydney where markets have just opened for trade. >> good evening from new york. >> and hong kong. welcome to "daybreak asia." our top story this thursday, the a reprievec set for after a modest rebound in tech, energy, and oil.