♪ emily: i am emily chang in san francisco. this is "bloomberg technology." coming up in the next hour, betting on the cloud a -- pays off beard -- pays off. ibm fourth-quarter sales beat estimates thanks to double-digit gains in its cloud business. what gives? the world economic forum in davos gets into full swing. we will bring the highlights, including conversations with ups and verizon. and another hollywood milestone. netflix gets its first ever big picture oscar nomination, cementing its place in the film industry.

but first, ibm shares jumped in after hours or 40 -- after-hours trading after reporting fourth-quarter revenue that beat estimates. revenue hitting $21.8 billion, above estimates of $21.7 billion. on top of that, cloud revenue for the year jumped 12% to $19 billion. to discuss, we have our senior analyst in new york. ibm shares shot up after hours. is this a surprise? >> the surprise is one of their divisions, global business services, sell very strong consulting numbers. that means enterprise tech spending is strong. it is the followthrough effect of a strong 2018. emily: ibm has been saying that the cloud would be big, ibm would get there, but there was a lot of doubt whether ibm could keep up with perhaps more noble -- more nimble competitors.

does this prove ibm can live up to these promises? >> we think the real test will be when the red hat acquisition closed and they are able to offer more products. their cloud revenue is between 10% to 20%, far lower than even the larger players like amazon and microsoft, growing at a much faster pace. on the application side, companies like salesforce and workday are growing north of 20%. in contrast, ibm being a small player compared to all of them, its growth rate is ok but not great. emily: for many years ibm has been touting other initiatives like watson, the weather channel, quantum computing. the question has always been when will this add to the bottom , line? i recently spoke with ceo ginni rometty. she had some specifics in terms of when quantum computing revenue would be impactful for ibm. take a listen.

>> what is the timeframe until quantum produces commercial results? we are probably in a 2-5-year timeframe you will see commercial business is doing real commercial application, and that means revenue. emily: is this going to be a big business for ibm? >> think about it. just even come up with $1 billion, it will take several years to get there. company, $70he billion, $80 billion in revenue. it would be a small drop. when of the things we said was when the red hat acquisition was closed, they would have a lot more software products to sell, and would make them more relevant when it comes to cloud. emily: i have a chart here in the bloomberg looking at the three most valuable companies, apple, amazon and microsoft. you can see the blue and yellow line, amazon and microsoft surging ahead, taking the crown from apple.

we see the market favoring growth in software, growth in services. does ibm have what it takes, what investors are optimistic about? >> as far as cloud is concerned, we think ibm is a distant third or fourth when it comes to public cloud, that can make an acquisition and the one of the top players when it comes to private cloud installations or hybrid cloud. that is where a large part of the spending will go for the next several years. in our view, microsoft is well-positioned. the red hat deal can help ibm strategic positioning. emily: it is a huge deal. $33 billion. what is the confidence that will close and there will not be a competing bid? >> that is a tough question. i am not the right person to answer that. having said that, we have not seen any bids at this point. we will see what happens in the next six months. if this does close, we think it

makes ibm relevant again and it -- again when it comes to next generation computing. emily: thank you so much for weighing in. shares of ebay surged tuesday. at one point the stock was up 12% on news elliott management sent a letter to the ebay board detailing "urgently needed steps to improve the company." the reason according to the letter, the guiding philosophy of the plan is that ebay can unlock value today by refocusing on its core business, improving operations, and enhancing oversight. for more, i want to get to spencer in seattle. breakdown the five-part plan, what elliott wants ebay to do. spencer: the only way to refocus on the core asset, they are looking to sell stuff hub --

stub hub and the classified advertising business. looking at investor pressure to pare down ebay, just like we saw a few years ago with the split between ebay and paypal. emily: ebay statement, "we appreciate elliott's recognition of the business and will carefully review the proposal and look for to the opportunity to engage with elliott, as we do with all shareholders." that said, if you take away stub hub and the classified business, what is left? spencer: still their core business, the online marketplace, where people -- it has been closing in on $100 billion a year. probably hit that marker or come close to it this year when we see results for 2018. so that is what is left. it is a big chunk. it is also potentially a prime acquisition target. if ebay were to shed some of the things maybe a retailer like

walmart, target, or a tech company like google might be interested in and give a shove back to amazon, if they lose some of the appendages, it might be more affordable and more appealing acquisition target for these other companies. all that could be good for ebay stakeholders. emily: how competitive is ebay with amazon when it comes to the marketplace? when you think e-commerce, you think of amazon. when i -- maybe i want to buy something used or secondhand then i think of ebay. spencer: that has been a real challenge. ebay has been growing. it is not like it is dead. it is just growing more slowly than e-commerce spending overall. every year, it is losing market share and its relevance is shrinking. it's not only losing market share to amazon, but walmart, target, these big retailers

upping their e-commerce gain, but it is still big. it has 180 million customers worldwide, so there is still a lot of things there. emily: meantime, another activist shareholder has built up a big position in ebay. the shares are up on this news. what are next steps here? spencer: this is judgment time for ebay's ceo. he has been preaching the same philosophy. since he took over the company. even before he took over the company, because we knew he would emerge as ceo post-split. it is up to him -- if he can deliver results, i am watching what the fourth quarter is like. if he delivers some results, some of the pressure might fade. if it is a disappointing fourth quarter, you can expect more investors to jump on the elliott management bandwagon. emily: thanks so much for that. to a story we are following, the

apple-qualcomm antitrust trial. qualcomm lawyers got apple to concede it had nowhere else to turn to get iphones 4g ready. apple's director of cellular admitted no other supplies could deliver to 4g specifications other than qualcomm. this is a point qualcomm has been arguing in the fight against apple, that it was a business need and not exclusionary practices that lead apple to become dependent on its technology. the trial will continue for three more's essence -- more sessions before closing arguments will be february 1. coming up, tech leaders and business leaders converging and -- converging in davos. we will bring you the highlights. if you like bloomberg news, check us out on the radio, bloomberg app, bloomberg.com, and in the u.s. on sirius xm. this is bloomberg. ♪

♪ emily: the ups ceo does not see an economic slowdown in the united states and expects online businesses to keep growing. he spoke to tom keene in davos. >> i am not seeing an economic slowdown, especially in the u.s. just to give you an example, small business played a big role in this for the peak season we completed, retail group an estimated -- retail grew an estimated 5.6% over last year. grew 17%, 18%.

>> this is really important. i am guilty of this. the answer is, we get wrong, retail doom and gloom, the world is coming to an end, and you are telling me online wrapped up double-digit? >> absolutely. and it has done so the last several years. we continue to see online growing. for all of that, online is still 13%, 14% total retail, so still a long ways to go. >> how are you and your good competition going to defend against amazon and the desire to take over the movement of parcels? >> amazon is a big customer. we have had a long-term relationship. that being said, at the same time, like any large company, they outsource and in source, so we watch carefully what they do and react to it. most people think of amazon when

they think of e-commerce. we are focusing so much more on all of these hundreds of thousands of small and midsized businesses. >> why can't they do business with amazon? or with federal express? >> many do, but many don't because they want to control the marketing rights and don't want someone else to have access to their information. we can provide them -- i will give you one example. >> please. >> it is where to go. it is a brokerage of warehousing, so we can match the available warehousing space for the small and midsize customers. that can allow them to give o day service -- tw service just like the big retailers. emily: that was the ups ceo with tom keene. verizon talked,

about competition with the tom keene and jonathan ferro. take a listen. >> i am excited over new technologies. and of course, i think verizon is one of the best technology companies in the world. to have a chance to do that, i think. >> but you are senior vice president of triage, as well. the quick math is $4 billion for this, $4 billion for that, and you have already taken a write-down. you are the new kid in the corporate boardroom of verizon. how are you treating the mop up of the acquisitions of yahoo! and the rest? we did the right of of the goodwill. there are many other things we are having. the yahoo! asset is a great asset. it really fits in our strategy. [indiscernible] from an impairment point of view, you take that.

i don't think it's a very strange thing. we still have the assets and think they are good. >> let's talk about strategies you are thinking about at the moment. i was saying you don't want the ceo of ericsson and verizon if you want to build a media conglomerate. some competitors are dropping some serious money building media conglomerates. why is verizon not doing that? >> we are building on our strong assets. we are the best network in the u.s., and one of the best in the world. we have great distribution from consumers to big enterprises to small and medium, as well as good brand names. i see our network as a service. we will work with partners instead of having all our assets ourselves. i think that's how are going to leverage our investment. >> is there a downside? by not going out there and building a big base of content in the way some of the big players are at the moment? >> there are so many options.

there are going to be different routes to take viewed -- take. we take our route, others take their route, and they believe it is right. we believe in our strength and assets. >> let's talk about 5g. what are the goals? why is it so important here at davos? we hear some of these panels that take place, why is 5g important to that? >> 5g is different from any previous wireless technology. they have been based on throughput and speed only, and differentht capabilities, everything from low latency, millions of i.t. devices so you have more use , cases. consumer use case is one, but you can do 5g home, 5g enterprise. >> everybody is disturbing to the cell phone. everyone listening and watching is glued to their cell phones.

on instagram, five hours a day. i am only on the phone 20 minutes a day. how are you going to battle with t-mobile? you have to do it on price, but what is the pixie dust that gets new momentum? >> first of all, we are a company that serves many types of customers. with the consumer segment, we still have the best network. that is important. to have quine quality -- high-quality and high-performance. we reported our figures for the fourth quarter. we had 1.2 million new adds. i think we have a good momentum in the business. we have had so for quite a while. emily: that was the verizon ceo from davos. meanwhile, google considering pulling its new service from europe. new rules would require web companies to pay publishers

when their articles show up in news search results or are shared by users. the internet giant plans to review the directive before making an official decision. google set a record for lobbying spending in 2018 at $21 million, according to a filing on tuesday. coming up, netflix dominating the oscars. how hollywood is reacting. the streaming giant is sweeping the industry. we are livestreaming on twitter. follow tictoc on twitter. this is bloomberg. ♪

♪ the u.s. labor department has accused oracle of shorting women and minority workers $400 million in wages. according to a legal filing, the tech company steered employees

into lower-level positions that showed a preference to immigrant visa holders at a lower salary. records show oracle paid women, black, and asian workers less. the probe is one of several investigations. oracle declined bloomberg's request for comment on this story. netflix has one more reason to brag in hollywood. the streaming giant scored 15 oscar nominations tuesday, including its first best picture nod for "roma." it got 10 nominations overall, including best director and cinematography, tying with "the favorite" for most nominations this year. the recognition comes amid news it is joining major hollywood studios. joining us to discuss this is our guest. not a huge surprise for netflix

given all of the awards "roma" has racked up, but certainly welcome news. what is the significance of a best picture nomination for netflix? >> it is hollywood's highest prize. it is voted on by a large group of the industry. but it is voted on by the industry not voted on by some , group of journalists, like the golden globes, so it is representation that netflix is considered -- i don't want to see one of us, it doesn't include me, but one of them, one of hollywood. so, there are up to 10 that can be in the best picture nomination. but it is the highest prize. it is a black and white film. there is very little dialogue. there are no stars. so it is on the film itself, the cinematography, direction, acting, it is quite a raw film,

that it has got this far. i think it says a lot about what they have done to get alfonso cuaron to make the film there and market his film. that says a lot to filmmakers and creators who might be convinced to go to netflix. emily: it appears the theater companies amc and regal are " from theiroma oscar showcases, only playing the best picture nominees that play by the rules, which is a traditional theatrical release, 90 days from being available to the public. amc said for more than a decade movie lovers have enjoyed the , showcase to catch up on nominated films. this year, academy members nominated a film that was never licensed to play in amc theaters and is not included in the amc best picture showcase. is that a little sour grapes, or do they have a point? is this all coming to a head?

>> it is not sour grapes. it is just their stand. they don't want to cave in any capacity they can when it comes to this exclusive run they have, and this window of three months. it has over the years whittled down. back in the day, it used to take forever before you could see a movie at home. now it is three months. it's usually disney movies, the big superhero movies that last the longest before they are available at home. netflix did part with the strategy and gave it just three weeks before they let it stream at home. even then, the big theaters were not going to show it. a lot of people, when this film winds,inated, or if it they can see it at home, but they might choose to go out to see it at the cinema of paper

popcorn, and that is the theater business. they are choosing to not show it for this sort of principle. it is going to be a big question in the next two years as other streaming platforms come online , if this will come to a head. emily: netflix only seems to be cementing its position in hollywood with this confirmation. the motion picture association of america. i will let you continue your reporting on that. thank you for joining us. coming up, we discuss what the future holds for huawei as it pushes for global growth despite the u.s. urging allies to cut ties. and later in the show, the prolonged u.s. government shutdown putting cybersecurity at risk. we will talk about where hackers may spot weakness. this is bloomberg. ♪

♪ emily: this is "bloomberg technology." we are joining "bloomberg daybreak: australia." >> let's take a look at the top global tech stories of the day for you. ibm reported fourth-quarter revenue of $21.8 billion, above estimates. four-year cloud revenue grew 4% year-over-year. ibm are going to buy red hat last year to boost its cloud business. tencent was left out when regulators ruled the latest batch of online games in china with concern the largest game company could wait longer than

anticipated to make money off of hit titles. regulators halted the release of new titles in the world's largest gaming market. dyson moves its headquarters from the u.k. to singapore. the company's recent growth has been triggered by growing customer base in asia. the dyson ceo said the move was not due to tax or fears of brexit. shery: huawei's head spoke in davos, weighing in on the impact of the global trade war. >> we have seen the damaging effect on companies including huawei, including some of the sectors from the tech world. as technologies have relied on the global supply chain and global ecosystem, we are probably suffering the most right now. shery: this is while the u.s. is

urging allies to avoid using huawei's equipment for fears it can be used in espionage, something the company has repeatedly denied. joining us to discuss is samm sacks, a digital fellow at new america. great to have you with us. huawei really taking a hit. we are not talking only about the u.s. but also europe and elsewhere. i we viewing -- viewing the telecom industry, how will this affect china's ambitions for their made in china 2025 policy? samm: the chinese government stated it wanted a chinese global brand competing in high-tech sectors. it is a real blow for companies like huawei. they have managed to be global titans in many regards. i think a lot of chinese tech companies and beyond the tech sector are beginning to reevaluate their plans to move into markets which are subject to u.s. influence. emily: there is an argument to

be made that regional economies are more closely intertwined than we understand. i have a chart that shows when manufacturing slows down in china, that impacts the united states economy. does he have a point when he says that the trade war is going to be damaging for global tech? samm: the reality is that the tech sectors are highly interconnected, not just the u.s. and china, but globally. when we are looking at unwinding supply chains, walking back, doing r&d, global partnerships, this is something that is not easy to do. there are a number of u.s. companies that are seriously reevaluating reorienting away from china. but they are frankly some things that are not possible and extremely costly to undertake. these conversations are certainly going on. shery: canada reviewing the use of huawei. or the access into their five g network. we were able to catch up with a foreign minister from canada at davos. take a listen to what she had to say. >> canada has spoken to the united states about the case.

it is a decision for the united states whether to seek someone from canada, whether it is a canadian or visitor, catch up with them and make a case for extradition in the legal system. shery: it could take years. will this be the thorn in u.s.-china relations long after a deal is potentially made? samm: for the last couple of weeks, there has been a lot of rumors, is she going to be released? there is a lot of uncertainty around this. it is so sensitive because of the trade negotiations. but the reality is, even if she is released, the u.s. ambitions to dismantle huawei are much bigger than this arrest. there is a whole government effort to take down huawei and i think we will see it even if the case drags on. >> it was not just about huawei. last year, we saw the supplier ban, zte, that was lifted. that nearly crushed the company.

huawei, i wonder how will it compare and how well-positioned is huawei compared to zte last year in overcoming all of this? samm: zte was so dependent on the u.s. market that a denial ban would have brought a company to its knees. i think it's not as grave for huawei but when we are talking about the u.s. going out to the five eyes partners and saying block huawei, that is crippling to a company that is really ahead at looking at the market and being a leader. they will have to reassess their business model. emily: i'm curious what you read between the lines between what we heard from the canadian foreign minister in terms of how well the united states and canada are actually aligned here given the conversations the u.s. is having with other allies around the world to block huawei. samm: canada is in a tricky

position. they are essentially paying the cost for an issue between the u.s. and china right now and it is very dicey. i will not understate the complication of the position canada is in. emily: do you think the u.s. could get other allies on their side? samm: a number of countries are having serious talks of reevaluating whether to have huawei in their network. we're going to have to look and see. is the u.k. going to walk back the model they had used for years where they evaluate the cybersecurity risks to having huawei part of the network. i think that has been the model for how you can do it. they are beginning to reevaluate that. you have germany, others, japan. this could be the bellwether on whether huawei will need to reorient this global ambition in the 5g space. shery: last year, we saw china proposing this new i.p. law that would ban companies that infringe on intellectual property from financing, bonds, government funding.

how seriously is china taking all of these international concerns? are they really putting effort out there to actually address these issues? samm: president xi jinping has doubled down on an effort to reduce reliance on foreign suppliers. it is something they have talked about doing for a long time. after zte was almost brought to its knees because of u.s. actions, the government in beijing said this is a critical vulnerability and we need to develop our own indigenous industry. emily: there have been conflicting reports about the progress of the trade talks, including a report today that talks up and canceled with chinese officials and then the white house denied that. talks are continuing. there is a meeting with a chinese official at the end of the month that can be very critical. how unprecedented is the lack of transparency here in the back and forth? samm: to me, what is unprecedented is the lack of

coordination within the u.s. bureaucracy on this. the fact that to this day, we still don't know whether president trump knew going into his dinner with xi jinping that meng had been arrested or not. the fact that this went on with a doj action simultaneously to incredibly sensitive meetings between the two state leaders, that is the unprecedented factor. you layer on lack of transparency on top of it, and i think we are in a whole new world. emily: and the administration claimed he did not know. samm sacks, thank you so much. always great to have you here. much more ahead on bloomberg television. this is bloomberg. ♪

♪ emily: as the u.s. government shutdown hits its 32nd day, the impact on cybersecurity is becoming more clear. aside from furloughed employees at departments like the cybersecurity infrastructure agency, one new report is highlighting the risk to government websites. according to a cybersecurity firm, since january 16, more than 130 government sites are at risk because their security certificates are lapsing. to tell us what this means is our white house and cybersecurity reporter in washington. what does this mean? alyza: thank you for having me. i think what this report reflects is the fact that with the less federal employees working on cybersecurity, the employees that are involved are

having to triage and pick and choose among the most important projects, which is why perhaps we see things like security certificates for websites lapsing because there is not enough people to triage and handle all of the tasks. emily: longer-term, the big question is, will this make the united states weaker in cyberspace? alyza: one of the big challenges in cybersecurity for government jobs is attracting and retaining the right talent. given the number of very well compensated, very desirable jobs in cybersecurity in the private sector, the government is constantly looking to attract and retain new talent. experts are saying this could be problematic because things like the government shutdown make cybersecurity jobs in the government less desirable. similarly, it could make contracts with the government seem more risky to top private sector companies. emily: meantime, you've got u.s.

intelligence today warning that adversaries like china and russia are taking advantage of this global turmoil to threaten the united states. what does the u.s. intelligence strategy released today mean for cybersecurity? alyza: the intelligence strategy released today is showing a commitment to cybersecurity. they recognize the effects that cyber threats can pose in terms of public health, public safety, trust and basic institutions and -- trust in basic institutions and global norm. the new strategy has made a commitment to devote intelligence resources as well as aim to help other parts of the government deter threats. emily: you've got a lot of sources in the cybersecurity community. what are they saying? alyza: they are saying that we need to wait and see downstream how this affects cybersecurity. there could be possibilities for after-the-fact, taking measures that would mitigate the damage.

right now, it seems too soon to tell the full effects on cybersecurity of the government shutdown. emily: thanks so much for reporting on this. the familiar refrain before president trump and congress passed a $1.5 trillion corporate tax-cut was companies will use this for buybacks. one year later, we have some data that shows that really happened. a new bloomberg businessweek article took a look at how four major companies fared after it was enacted. apple spent $72 billion as of september of last year. let's get to washington, with the author of this piece laura davison. she is standing by. talk to us about how apple compared to the rest. laura: apple compared to every other coming, the numbers are of greater scale, but in terms of trendlines how they spent their money, it is in line with what

we saw with a lot of companies. disney, starbucks, visa. they put a lot of money into buybacks. they had a lot of extra cash on hand and saw the tax rate go down to 21%. what they heard from investors and when they were looking around, they had a long period of growth and investing in new things. they said, we are going to give this back to investors. we saw that somewhat with dividends but it was really buybacks that was the strategy of choice. emily: how does it compare to what they promised to do with this money? laura: really in line. coupleromised to spend a billion dollars in buybacks, which that number $72 billion represents the first three quarters of last year. assuming what they did in the last quarter aligned, they would have hit that mark. they pledged to add 20,000 workers. they added 9000 last year and with the opening of campus in austin, they are on track to hit

that in 2023. emily: how do the tougher economic times affect all of these plans? apple has cut its forecast for the quarter. a big iphone slowdown. will that impact what they do with any extra cash they have? laura: it could. some of the big plans they had, it is very easy for them to cull those back or defer or delay the -- the leg. .- delay this is the story of the tax and trade intersection. companies started last year giving big bonuses, super excited. i can invest a lot and get a good tax break, but with all the trade turmoil with china, for example, car company saw all of their tax benefits eaten by tariffs. that is something going forward where it is really uncertain where the talks with china will go. apple has already said we need to cut our expectations. it is not going to be what we thought it was going to be. the other thing to remember is tax rates this year, next year,

next couple of years, these are the lowest corporate tax rates we are going to see. there are some side provisions of the law that means the effective rate companies are paying will go up over time. now it is the time to reap the benefits, and other headwinds are stopping it from happening. emily: in 2019, what will you be tracking in terms of where the money flows? laura: the thing really to watch this year, are people following with the promises they said they would? we saw a lot last year of one-time bonuses. they basically had a 40% tax cut. how is it affecting big picture, macro economic factors? republicans when they passed this law said we will hit 4% growth. that did not quite happen. democrats said this would all go to buybacks and dividends, none of it will be invested in workers, none of it will be invested in research and development, new jobs down the line. that worst fear also was not played out. it is really looking forward at

what are people doing with the money? how are they spending it? are they manufacturing things here, abroad? that was a big pole to dislodge to get people to store their intellectual property and manufacture things here but a lot of experts are saying this is not the global economy. we may see these around the edges and may see some high-profile examples, but to see how widespread the effects of this law will be. emily: laura davison, thank you so much for your reporting. still ahead, can a.i. disrupt the real estate industry? s are betting-- vc' big on startups that seem to think so. we will speak to the ceo next. this is bloomberg. ♪

emily: starbucks is expanding its delivery service with ubereats. it will offer delivery in san francisco tuesday, expanding to boston, chicago and other cities in coming weeks. the company says it plans to bring delivery to nearly a quarter of its u.s. coffee shops in seven cities this spring and will test in other countries this year. star banks said -- starbucks said 95% of its menu will be available through ubereats. ubereats adds another high-profile brand to deliver delivery following its deal with mcdonald's in may. more and more homebuyers are taking their search online using sites like zillow, redfin. but while searching has evolved, traditional brokerages have been notoriously slow to catch up with technology with high cost business models and a 6% seed. a real estate startup wants to close the gap. it is the first licensed residential real estate broker

to circumvent the traditional system using ai to offer buyers a flat 2% fee. total funding at $75 million from investors including former google executives and the crate and barrel founder. joining us from l.a. to discuss is rex ceo jack ryan. thank you for joining us. your business model is somewhat untested. what makes you think this is going to work? jack: we have been in business for three years. we are up to $1 billion of homes listed and sold. we are doing very well. it is very well tested. it has been tested in other industries too. think about haley -- how you hail a taxi today or trade shares today. all the other industries have done this other than this industry so it is working very well. emily: realtors have been not excited about startups going around them. do you think that receptivity is changing?

jack: i am not sure it will change with the residential real estate brokers, the traditional ones. it will only change for the consumers. the consumer saves an average of $20,000. it is faster and smoother. it is all things you would expect when you bring ai and big data to an industry that has been people driving you around in a car, looking for an open house sign. it is a much better way to buy a home, sell a home. sell bonds and stocks, etc. it is the same thing that most of your viewers in the financial sector are used to. just applying the same techniques. emily: give us an idea of the kind of volume you are doing in the markets you operate. what percentage of home sales are you getting? jack: we are probably listing now between five and 10 homes a day at this very moment. we just launched three years ago. we are launching in 12 cities in the next six months so the volumes are quite large. it is hard to find a company

that has scaled as fast as we have in terms of the notional amount of transactions we are doing. we will probably list $3 billion to $5 billion of homes this year alone, our third year of operation. emily: what is your outlook for the real estate market going into this year? we saw somewhat of a slowdown at the end of last year, but nobody could really predict which way things are going to go. the markets are fast-changing and hyper local which i am sure makes pricing a bit difficult. what is your view on trends in 2019? jack: it is hard to predict, but in many ways, this is kind of like, i noticed the passing of jack vogel this week. remember the 6% load in the mutual fund, they would charge you 6% to invest in a stock. that is kind of what happened in the residential real estate space. when you reduce the fees to move shares or bonds or homes, then the whole market goes up independent of what's going on

in the overall market because the assets underneath those securities become more valuable. as you drive down friction cost, assets go up. i think residential real estate is a great place to invest because as technology hits the sector, the underlying assets will keep going up independent of the macro effect impacting the industry. emily: that said, how is that impacting your pricing strategy? jack: the market or our technology? emily: the market in general. the capriciousness of it. the political and economic uncertainty we are experiencing right now. jack: for us, it actually helps us because on the buy or sell side, you want to limit the time you are exposed to the market. if you can go faster, that is better for you as a seller or buyer. because we are going around this clunky process, and matching buyers and sellers through ai, that time you are exposed is much shorter.

not only do we help you buy the home, we help you with mortgage, the escrow, the title -- all of those services and make it a one-stop shop. the transaction is shorter. the shorter the transaction, the less risk you have to the market. the volatility you are referring to is actually good for technology companies like ourselves. emily: it will be interesting to see how the real estate market plays out in 2019. rex ceo jack ryan, thank you joining us. that does it for this edition of "bloomberg technology." we are live streaming on twitter. follow our global breaking news network on twitter. i'm emily chang in san francisco. this is bloomberg. ♪ amazon prime video is now on xfinity x1.

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