emily: this is bloomberg technology. apples fall from the highest platform. they lose a stronghold over the title of roald's most valuable company after microsoft overtakes it. sand bagging sandberg. theceo in a spotlight -- in spotlight. mark zuckerberg says he has her back. we will discuss. counting the cyber monday cash.

the shopping extravaganza is expected to be the biggest yet. we will crunch the numbers. apples title of world's most valuable come -- publicly traded company is no more. monday, the market cap of microsoft overtook apple for the first time in eight years. last month, apple's value topped $1.1 trillion, but since then the share price has been shaved. there have been concerns about weak demand for the iphone. let's bring in mark. not amazon now, but microsoft surpassing apple. it is pretty unbelievable. a year or two ago if somebody said duty do you think -- said do you think microsoft would top apple, nobody would believe it especially in the current climate where a lot of people think apple has endless growth. if you look at the past two months, there have been so many concerns and issues with apple

in terms of iphone sales, concerns about the prices of the high-end iphones, the 10 at us and the tennis max, -- the 10s and 10s max, and tv and voice. will it turn around, and when? emily: i have a chart showing the rise of apple as well as the --l of apple and the rice the rise of microsoft. in terms of what apple is doing badly, what is microsoft doing well? mark: they have turned the company around. the company has transitioned from a software company to a software services company where they are trying to get their applications on as many devices as possible. you can buy an ipad and fully load it with microsoft apps. you can buy an android phone and microsoft it with

apps. you can't fill one out with apple apps. that is the big difference. microsoft works on every platform. google works on every platform, whereas apple is glued to its own hardware and microsoft is clearly winning for itself on that approach whereas apple to the last few years has been winning on its approach. there is room for both, but that is why microsoft has been successful lately. their infrastructure is around services. amazon, not far behind them. do we see these 4 companies trading as a group closer to the top and will its not be clear who has the title? going forward, will we see be shifts over and over? -- these shifts over and over? mark: i think we will see those big four companies vying for the top spot. we could see amazon, other days

it could be apple, other days it could be microsoft. anly: apple also facing antitrust case in the supreme court which could have implications for the entire tech industry. the class-action suit accuses apple of maintaining a monopoly over app distribution on ipod .wns -- on iphones justices appeared inclined to allow the ice -- the lawsuit to continue. greg. bring in not good news for the stocks, but what did the supreme court justices signal about their position on the apple case? that theysense was would let the lawsuit against apple go forward. i counted only one real vote on apple's side, john roberts, and as many as seven justices, while taking perspectives on the legal issues, might be inclined to vote to let the lawsuit go forward. if so, that is bad news for apple.

it adds pressure on them to reduce the 30% commissions they charge to app store developers. apple takes a huge cut from the app store. we know that, 30%. it has been in contention before. what makes this lawsuit significant? right now, apple is pivoting towards wanting investors to focus on its services revenue. , services revenue, the majority comes from the 30% cut. onapple takes a hit, 30%, -- this 30%, the revenue will take a significant impact which is why the lawsuit has so much at stake for apple. emily: greg, talk to us more about what is behind this case. lawsuitis is a consumer suing, saying we are paying too much for apps at the app store.

the focus of the lawsuit are the commissions mark was talking about. inle argues, and the issue the supreme court is, whether consumers consume over commissions that were charged to the developers and not directly to the consumers. there is a precedent from 1977 only direct purchases can sue debt purchasers can sue claiming they were overcharged. emily: how does this impact the broader industry? there is the android operating system, which is so much bigger than apple, but how could a ruling here go beyond this case? greg: there are two reasons. the most obvious reason, because of the precedent it would set. will this create issues for other app store makers like google with google play? will they have to change the way they charge commissions? will this spark lawsuits for consumers? what will this mean for amazon

and microsoft and other companies that opehese stores? what will it mean for any technology company that operates an online marketplace where royalties are going to the company for hosting? think of any music service. it functions similarly. what does it mean for apple's other properties, like the ibook store? thing is, does this mean apple will start allowing other app stores on its platform, such as allowing third-party developers to create a competitor? is that one solution, one way of settling the lawsuit? there are a few interesting ways this could impact everything. this: greg emma could trigger a massive change in how we buy apps? could.t the core of the lawsuit is focused on apples control over the app store. sole essentially made itself consumers can't buy apps anywhere else and the suing

consumers say that is the source of the problem. apple has a monopoly and it is abusing the monopoly to raise the prices of the apps. ultimate end of the day, what we could see is a world in which you can buy apps from more than one place, not just the apple app store. emily: are there any precedents that we should be looking at in terms of how the court has ruled on other cases involving big tech companies? it is kind of hard to generalize in terms of tech companies. the court, this is a generally pro-business court. generally businesses win here. antitrust cases have happened, american express divided the court along ideological lines. it is possible that the court five-four with five conservatives siding with apple, but that wasn't the sense of what i got in the courtroom area

you may have a bigger consensus willing to let the suit at least go forward. much, aseg, thanks so as mark,ark -- as well thank you both. come up, sheryl sandberg's leadership being questioned. issue being thrown under the bus? we will discuss. you like bloomberg, listen in on our app and sirius xm. this is bloomberg. ♪

emily: bitcoin dipped below $4000 before recovering some of the loss monday. it has no declined some 80% since last december's record high of almost $20,000. investors have been concerned about increased regulations and problems with exchanges. multiple crises at facebook this year have put immense pressure on chief operating officer sheryl sandberg. spoke to former employees from her side of the organization. some blame her for facebook's woes. they say she prioritized her own brand over facebook. they also say she didn't address problems quickly enough or treated them only as perception

issues. here to discuss is brian, senior analyst and brad stone. has an extensive piece on sheryl sandberg, and we have scenes group me of mark zuckerberg, that he didn't believe facebook could do some of the bad we have seen. do you think some of these issues around sandberg's will cause long-term damage echoes >> it is unclear. this is not sheryl sandberg's last chapter. she got a lot of credit for with $50a business billion in sales, helping mark zuckerberg taking facebook to millions of users. she is part of the policy and legal teams at facebook. she took responsibility for some of the recent revelations, the abuse in some of the relationships with outside pr firms. she has to answer for some of facebook's mistakes, but that is

what leaders do. they take responsibility. andill see how quickly carefully facebook and respond. if they can't right the ship, i think her legacy will be hurt. emily: it is reported she prioritized her own brand over facebook and focused on messaging around the challenges rather than getting to the root of the challenges as she was focused on growth. sandberge report on going to d.c. to smooth things over around some of these issues, the trip backfired because she didn't have enough conch read to respond to some of didn'tries of law -- she have enough concrete information to respond to some of the queries of lawmakers. brian: the nuances were useful. the bigger point around sandberg is that it does occur to me, i

wonder after reading it, i wonder if she has been so constrained in her role because she doesn't have absolute control over facebook. if she has any control, it is over herself. if you are never going to have complete autonomy, maybe that is what you focus on. while there is elevated criticism around sandberg, there appropriately was elevated concern about sandberg last year . i think when facebook has a policy where they mislead the british parliament, that is problem. when they are advertising products that are actively misleading customers, that is a problem. when they are consistently having metrics issues, these are under sandberg's responsibility. there are lots of things that she will appropriately be criticized for but it is not clear where the responsibility

lies, with her or zuckerberg. the bigger problem may be foundational inside the whole company from the ground up. you is what zuckerberg told cnn about his partnership with sandberg and intention to continue to work with her. >> sheryl is an important part of this company and is leaving a lot of the efforts to address the biggest issues we have -- leading a lot of the efforts to address the biggest issues we have. i am proud of the work we have done together, and i hope we work together for decades more to come. make of that?u bryans point is interesting, that if you can't control a lot at the company, the one thing you can control is yourself. brad: it was a sign of support that mark was making for sheryl. he doesn't want to throw her under the bus. that relationship will continue.

but brian is right. sheryl might be constrained and mark and cheryl probably need to work on their partnership -- mark and sheryl probably need to work on their partnership. emily: would you like to see facebook bring in a third person? there is reporting mark zuckerberg was looking for a third person to handle some of these policy issues but decided not to do so. i think the report was that person would report to sheryl sandberg. the big issue is a board level issue. let's go back to the days of yahoo! and marissa mayer. for all the criticism she rightfully deserved, after about two years, this was no longer her fault. it was the board's fault. problems at the facebook have been obvious.

if they are obvious to the president of the united states in 2016, who told zuckerberg you've got problems, they have had over two years at least of problems that have been pretty systemic. the board has to be aware for quite a while, and the question is, what do the independent directors do? all they can do, they are best positioned to get to the root of the problem and figure out what is best for the company. if the company is entirely dependent on mark zuckerberg, that is not the company, that is a sold proprietorship. proprietorship. brian is alluding to another story about u.k. parley and -- parliament receiving documents related to the cambridge analytic a scandal. governmentng another take extreme action.

walk us through what happened. go back 40 years when a small app company sued facebook saying it was favoring some app developers under -- over others and saying it was being inauthentic with privacy controls. that lawsuit was in california. the company was able to obtain some internal facebook communications. last week, the british parliament was upset over mark zuckerberg's failure to testify in the u.k. and the testimony being it disingenuous. they got the founder of the app company to turn over the internal correspondences they obtained or the court process. -- through the court process. what did they say? it could be internal communication about how facebook obtains information, from home, and -- from whom, and how they manage the information.

this could be damaging to facebook. emily: how concerned are you about the concern from other governments? brian: investors should be concerned. the stock should not be up on this. i realize there is a market level issue going on but i think a better way to characterize it is, this can't be good, it can only be bad. if you want to bet on facebook versus governments of the world, unless you think facebook will take the budget and invest in nuclear weapons, i would bet on governments of the world. government is choosing to exercise their power. brian, good to have you here, and brad, thank you both. a long time amazon executive to fill the cfo seat. does it mean they are one step closer to its ipo? we will have the details next.

live streaming on twitter. follow our global breaking news network, tictoc on twitter. this is bloomberg. ♪

emily: airbnb hired and amazon executive to lead preparations for their anticipated ipo. they say the executive will fill the cfo job that has been vacant most of this year. he has been vice president and cfo of the amazon unit responsible for global website sales. joining us is olivia. who is stephenson? >> he has been at amazon for 17 years. he has been very successful. he is a perfect choice for airbnb. the ceo and founder of airbnb has been hiring amazon

executives. he just brought in one of them to run the home business. it are trying to build an empire similar to amazon in that you have several -- several separate businesses. about how he is different than the last cfo, who was effectively pushed out. from my understanding, he wanted more power and control. olivia: he is a big personality, a veteran of wall street, a big name brought a lot of luster and attention to airbnb and people attribute airbnb's success to him. some people thought he got too .owerful and wanted more power he would but heads with brian chesky. he was pushing for an ipo sooner, one that would happen this year. brian chesky says the company will be ready to go in june but could go as late as late 2020.

emily: did the business suffer not having someone in the post at this stage? olivia: it is hard to tell. airbnb says it is growing faster than ever. its best quarter in q3 with over $1 billion in revenue but a report from morgan set only -- morgan stanley says growth is slowing in key markets. emily: where is the growth going to come from? olivia: we see a lot of growth in asia, china specifically. millennial's excited about airbnb for outbound travel. we see growth coming in and other pockets of the business. experiences is a big one. the luxury market growing. they are doing a lot with luxury homes. marketis the experiences going well? we reported on challenges there. of course airbnb says it

is going great and you have to give it more time. it burned a lot of cash to build that business, but there are people who do look to airbnb for the whole package. when they go on a trip, they go to airbnb for accommodations and to find out what restaurants to visit and where to spend the day. emily: what will you be looking for next in terms of timing? olivia: with airbnb, we are interested in growth. have they tapped out the millennial market? are they oversaturated? they also have a huge valuation, $31 billion, the second highest valued company in silicon valley at the moment. can they live up to that as they march towards ipo? we were questioning, did they have the right executive lineup, the right people in charge? it seems they do now. olivia, thanks so much for stopping by. this black friday-cyber monday

is expected to be the biggest yet. otherwise, how is it different from last year? we will discuss. ♪

is bloomberg technology. cyber monday is upon us and this year's shopping extravaganza is prudent it did to be the biggest and -- predicted to be the biggest in u.s. history. this comes even as shoppers increasingly spread their shopping over the holiday weekend. according to research, retailers launch their best deals way in advance, with online purchases on thanksgiving day itself totaling $3.7 billion. sales,riday's online $6.22 billion, continuing

through the weekend by mobile device. here to discuss is rob. and in seattle, president of online retail giant new lily -- how has this black friday-cyber monday been different from last. co -- from last year? i appreciate being able to talk to you and your viewers. we had a record-breaking weekend. zulilys of zulily, believes in a third way to shop. we make sure we have great products. our buyers look all over the offer ar products, and fun and addictive website experience. we have a cyber monday everyday of the year. this past weekend, we hit record

numbers driven mostly by mobile. emily: that is interesting. there are deals on the internet all the time. what actually makes this weekend different from any other weekend online? >> there is a lot of demand. traffic viage onile and it spiked 54% thanksgiving by mobile. consumers are reaching retailers and favored brands through mobile. they are reaching them earlier and earlier. emily: the deals are so weuminous and steep, are making money at the >> that is

ok. we are seeing double-digit growth throughout the holiday weekend. a lot of that is driven by mobile. social has become a very important attraction vehicle to get to consumers, particularly on the mobile device. is this a moneymaking weekend for you? >> it definitely is. i want to build on what was said , how do we get in front of customers in a scalable way? how do you build one-on-one relationships? social a powerful vehicle. when we we start thinking aboutw retailers are going to evolve about xml years, we see social being a powerful element but also video. our perspective, for instance on thanksgiving, all of the push notifications that we sent to customers, we literally had 300% year-over-year increase in the clicks and engagement. from a social mobile type of experience. walk me through the

economics of how all of these deals, over so many days actually makes sense for a company like the companies that are selling the products on your site. i think every retailer has to find the right type of business model to serve the customers. do is offer unbeatable prices, the best prices out there. as soon as a customer has a second -- at the second item to the cards, we are confident all of our internal studies say it is incredibly profitable for them. however, unlike other retailers that are a bit more transactional and more focused on two day shipping, we have set up an infrastructure network to allow us to serve customers a little slower, but with a better value and more unique product. that it off, esther my customer may not be willing to make but ours do. that is why we are able to do this profitably and sustainably. emily: what are the hot products

and hot retailers standing out this year? we scour the network and we are seeing a lot of chatter about consumer electronics this time of year, but connected devices are raising up to the top and we are also seeing the ditch products as well. we see through separate research reallynsumers are attracted to brands that have purpose, that are authentic, and vintage or nostalgic projects are attracting consumers and gaining that loyalty. seeing, and the consumer electronics space, gaming councils are really big this year. particularly with millennials. emily: i'm wondering if some of those brand you are talking about with these more authentic brands, a lot of these lands do not have deals on this weekend. it is almost as if there is a this everything on

sale all the time. is that an increasing trend you are seeing? >> that is part of it. particularly with the younger generation, we're looking for those -- they are looking for those retailers. there are promotions but there are less spikes. -- i was having a dinner with several retailers talking about the holiday and they talked about it is not just about black friday or cyber monday, but it is a smoothing of demand for the entire week. we see a steady drumbeat of promotions. over black friday, we saw 20% increase in emails sent and 30% increase of s&s push notifications. bush of thes -- sns vacations. that tells us we are creating a relationship with them during the entire holiday and beyond. is a: jeff, zuliliy

company that went public, got bought, is in the midst of a turnaround. -- turnaroundn and online retailer in the age of some of these more niche driven brands winning shares? of us have our own type of promises to customers, but for us, it is about this third way to shop. brick-and-mortar -- there was brick-and-mortar, then there was transactional e-commerce. amazon has a great business model there, but what we are trying to do is offer new, curated deals, personalized for each customer in a fun and engaging way. once you have the second item to the card, they should be confident they are getting the best deal. we arelily -- for zulily seeing tremendous success and your today growth is strong. today we have one million more active customer shopping in our store than a year ago. backwardsis working

on what the customer wants. it's may be different than other consumers who are going to amazon for a more transactional type of purchase. emily: all right, jeff. residents of zulily. i know you have a busy day ahead. as well as our sports vice president. coming up, our interview with the hpe ceo and what he has to say about the continued colored -- consolidation and enterprise software we have seen this year. releases one mosque how close tesla has come to collapse. how the carmaker is continuing to survive amid the controversies this year. this is bloomberg. ♪

emily: two hpe's big bet on the telogen -- intelligent edge. data effort to make more or useful to company. that means tech, security, automation, ai, learning. i asked about the $4 billion investment and when we can expect to see a return on it. take a listen. orwe believe the edge intelligent edge is the next frontier and the massive opportunity for all of us. that is why i made the announcement in las vegas that we will invest $4 billion over the next four years. we will see the investment over the next -- return of the investment over the next two

been years. we are growing the business double digits. we are taking the core platform and adding the incremental capabilities needed to move from what we call the edge to the intelligent edge. .e expand the conductivity we added analytics, security, security, and on hp discover, we are announcing an aspect of the infrastructure and platform which is a software defined platform so we can move from billions of things between people and places to trillions of things. that is the scale that is needed that is the scale that is needed to power this new edge. emily: what example of this at work was the biotech company jungla using computer power to power genetic testing at scale. what does your speed make possible there that would otherwise not be? >> we are proud to partner with them. one of the startups in the position medicine.

this is part of a broader initiative that would be called tech impact 2030. in september, we announced a with purdue university to improve culture, the quality of crops, and quantity of crops. we have a fantastic case here with live crops so we can show how we do that with them. onh jungla we are focusing position. it is all about improving the research on disease. , we saw amemories 250% informant -- importance -- improvement to understand the disease. emily: what do you mean on 250% improvement? >> it used to take days to get extracted inside of the data.

now they can do it in seconds. that is remarkable because it want to make sure they focus on the right aspect of the research so they can pass the research to people who can provide the cures. today is about time to buy and that will improve time to cure overlong. -- overlong period of time. for now, we bring in the technology to do good. it is perfectly aligned to what we're focused on. emily: we've seen a lot more idation in software but it seems a tech layers are on the sidelines. hp was quite inquisitive. what is your app is i-4 and the for m&a. your appetite >> if they have the right complement ip in the right talent, we will look at it. true to the core of what we're designing and add

capabilities of our platforms because customers like what we are doing versus trying to type ofly do a b approach. emily: do you think we will see more deals in general in tech hardware in 2019? >> it is hard to say. about elections really high at this point in time. that is my point of view. will be moree consolidation over time. i think now the landscape has been set. what customers are looking for is ip solutions and blocks where they can accelerate time to value through the data. or in, that infrastructure has to become more optimize for the .pecific workloads all the factors come together to deliver a specific outcome. that is why we have this unique vision. we think loud is not the destination. it is an experience and we need

to compose that cloud to the specific loads. to come together to deliver the solutions with the speed and agility customers are looking for. emily: what do you think potentially -- a potentially newly public dell would mean for the broader tech landscape? >> i think it opens new opportunities. we live in a time where disruption is accelerating so speed matters. control points and intellectual property matters. depending on what is happening in the market, we may see an acceleration of that, but again, valuation has to make sense. at this point in time, valuation is high. that is what we see a little correction going on in the market. we will see. at this point in time, our focus is in execution. i think we have done a really good job, and we are really proud of our execution front. emily: you have embarked on an

ambitious plan to reduce ape's expenses -- hpe's expenses. will we see more reductions globally? >> yea. you are referring to hp next. that is to rearchitect the company and focus on customers and partners. this year, we have made markable progress. the biggest change at the beginning of the year was moving layers between myself and the countries. we were moved to the regional thatture and now we have allowed me to get the pulse of what is going on in the market and empower people closer to customers to execute the strategy. we also simplify the number of processes. we are modernizing not just the process of our id systems. we're maker progress. systems. we are making progress.

reducing cost would make us more competitive. emily: the belief is companies will continue to buy servers for data centers as well as public services -- public cloud services. are growingicrosoft rapidly with their cloud services. what does that mean for the server market? does it stagnate? does apply to like the pc market? >> we believe the world will be a hybrid. we said that many years ago. today is a reality. the fact of the matter is, customers will have data on premises and off premises. i believe both markets, all premise and off premises -- on premises and off premises will grow. emily: that is my discussion there with antonio neri. still ahead, a startling

admission from elon musk. he said tesla was teetering on -- bringo collapsef of collapse because of the model three delays. we will discuss. this is bloomberg. ♪ s. this is bloomberg. ♪

emily: tesla's cash problem this past year was no secret, that in the midst of model three production problems and an investigation, do you expect the company to crash and burn completely? in an interview, even musk revealed how close the company was to collapse. he said tesla was within ks ofe-digit wee failure. >> tesla faces a new federal death due to model three production. the company's bleeding money like crazy and if we don't solve these problems over a good event of time we would be done.

emily: joining us now is max check in. chafkin. he talked about how difficult it has been to run the country -- company but what you make of it by him putting it that way? max: back in april, there was a gag where you live and took a picture of himself looking as if you are homeless or something and said tesla is bankrupt. that that learning is was not as much of a joke as everybody thought it was at the time. as you said, this was out in the open. tweetsare reading his and looking at the frantic nature of the messages coming out of tesla as well as reporting from bloomberg and others, you knew things were bad. they were really pulling out every step they could to get cars out of the door and the struggling with it. emily: here's a question,

though. they avoided collapse for now, but is that's going to be the sort of state of being for tesla wheree foreseeable future they are always a few weeks away from a potential disaster? max: i think assuming they are able to keep the production numbers where they are now, assuming that this is real and they are really able to produce 5000 model threes a week, the company is in a dramatically better position than it was say this summer. happened -- look at what happened with the stock market, investors are recognizing that. it is not clear that production is totally sustainable. we don't know exactly what the margins are. then, other carmakers are coming. isre was news today that gm laying people off and trying to

refocus around things like electric vehicles. lots of electric cars coming out of germany. the competition is going to increase. -- people areee starting to think this is a musk'sfor tesla 41 mental state and motivation, but also for the market, the future successes are not totally assured. emily: but stuck about the other carmakers because gm laid off 14,000 salary and factory workers, and closing several locations. part of that is because they are investing more in electric cars, more in their self driving unit. what does that mean for tesla? max: it means that there is competition. --se big carmakers like gm gm has done better in terms of -- hybrids and

electric's, but they are not able to tap consumer demand on the way tesla is. they are really good at doing large-scale production. be, if you were a tesla investor, that once these big car companies really start to figure it out, they will be price, undercut tesla on have these amazing networks in marketing and car dealerships with enormous ad budget ships -- ad budgets and they will take over the electric car markets. the counter would be that tesla it has spent years as teslaishing itself -- has spent years establishing itself as an electric car maker. this news is interesting because musk has talked about how hard it is to be a carmaker, but it seems like no carmaker is comfortable. that are any carmakers resting on their laurels because

they have invested in new technology in the future looks bright? if the future will be tesla asng for challenging as it is for gm, is anyone doing well? max: this is the belief that the people who are excited about the funding secured tweet, their basic point is that the entire auto industry is facing disruption of car ownership where self driving cars will come along, people will not buy electric cars, and tesla as a company ahead of the game, has a chance. i do not think it is clear how much of that piece is going to really bear out. people of gotten excited about driverless cars and companies have not yet hit the important milestones. i do not think it is clear how quickly that happens. and maybe a case where people might continue buying gas powered suvs for a long time, which would not be good for tesla. emily: the road ahead is bumpy and uncertain, but still the road ahead. kin, thank you so much

for stopping by. that does it for this edition of "bloomberg technology". we're live streaming on bloomberg.com. that's all for today. this is bloomberg. ♪ . . . . [ phone rings ] what?!

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haidi: a good morning. sophie: and in hong kong, welcome to "daybreak: asia." ♪ >> our top stories, asia-pacific stocks are set to follow wall street higher. indicatingrump higher tariffs are coming. apple fell amid talks