♪ emily: i am emily chang in san francisco and this is "bloomberg technology there been a line coming up, press play. spotify makes two big pod cap -- podcast acquisitions opening a new front in competition with apple area was, game over. shares of big game makers take a plunge is the fortnight phenomenon to blame? promises, promises. in a high profile photo op president trump and foxconn vowed to transform wisconsin

into a manufacturing hub. but workers tell us it is not happening. first, fresh off announcing it made its first ever quarterly profit, spotify is buying gimlet bedpotify revealed the big on podcasting. they are buying gimlet media. the price tag is $200 million. post, the ceo explained his strategy, saying in just shy of two years, we have but, the second-biggest podcasting platform. we believe it is a safe assumption that over time, more than 20% of all spotify listening will be non-music content. mitchell green, partner at lead edge capital is with us. it is an investment fund. it counts uber and alibaba in its portfolios. he joins us from santa barbara. and from l.a., bloomberg's own mark gurman.

thisdo make of acquisition? mitchell, we will start with you. for early investors in spotify, what do you make of this strategy? mitchell: i do not think it is strategy.hange in they have been telling investors for a while it is an area of interest. they want to be in a position to take advantage of any time consumers are listening to things and podcasts are being listened to more and more. that is a consumer cultural perspective. there is a strong financial desire as well. podcasting will have much higher gross margins for spotify due to that you don't have to pay the three big labels. i think there are very good financial reasons to get into podcasting. emily: podcasting is still a niche business. apple has not paid much attention.

what does this mean for apple? for apple, this might indicate the core functionality is what they are up against in terms of competing with the spotify, which is number one. over the past couple of years, they have tried to position themselves at the top of the podcast market which i believe they are. they renamed their podcast app to apple podcast. from itunes podcast. they have been pushing heavily on social media. this could give them another opportunity and another reason to continue to invest in the podcasting app. emily: mitchell, how big of an opportunity do you think it is for spotify in particular? when you look at the economics of podcasting, people are listening, but it is not a huge slice of the advertising market. mitchell: i agree. it is still early. no question about it. nobody has made a lot of money in the u.s..

in china, people have been more successful monetizing podcasts across alibaba and other platforms. tencent and other platforms. it is a big opportunity for them. they have the users. i'm sure they are going to push the podcast in the people. it is all about gross margins. the company's stock was down a little bit today because they ker grossttle wea margin guidance. it came back a bit at the end of the day. this is about how do you get less reliance on the three major labels and all of the negotiations are coming up this year as well. do you think that spotify taking a big step into this market could lead apple to make moves as well? mark: absolutely. i think apple music has become increasingly important to them. services have become an important. it will be interesting to see how apple begins to monetize podcasting.

maybe a subscription related thing to podcast. maybe original content in the podcasting world. there is a lot of opportunity there for apple. emily: that said, spotify shares got punished today on concerns about revenue per user shrinking. what do you have to say about that? i think the stock was down on gross margin guidance. most institutional investors care about gross margins and the long-term bet, management said they could have 35% gross margins. they had 25.7 this year and now are guiding to 23 or 24 year. -- next year. they say it's due to podcast investments. i think there are a lot of investors who believe that they will continue to get a better deal this time around with

negotiations with the labels. management came out today and said that is not the case. we think it is going to be the same deals. they did note part of the reason gross margins are declining is that they are entering new markets. often times you have big upfront guarantees with a negative gross margin. india is the big market they are going into. the stock was down 6% or 7% ended down 2%. there are buyers buying the stock in taking advantage of the weakness. emily: give us an update on the competition between spotify and apple and music. spotify is in the lead when it comes to paid users. apple music is number two. mark: spotify is definitely in the lead, but apple has had strong momentum with apple music. the one thing that cannot be forgotten is the user base of iphones. apple said there are 900 million iphones in use.

they said this on their earnings call at the end of apple music january. is built into all those devices. if you are on some of the more recent software updates. apple music came out in ios 8.4 which was 2015. there are some phones probably still running that operating system. it is supported by a good chunk of those 900 million phones. they have a very easy way to tap into those users and an advantage the spotify does not have because they are not a hardware maker. spotify's expertise, the only thing they do is the streaming music service. they have a leg up against they can be all in. emily: mitchell you are also an , investor in uber. it appears it is going to be a big year for tech ipos. barring another government shutdown. what is your outlook for 2019? mark: if trump doesn't shut the

government down and the fcc does not shutdown -- although we have heard if they do shut down, the fcc is working on ways to get the file in. i think they are setting up for a strong ipo year. it is rumored there are big software companies like zoom or flack, or internet companies like lyft, uber. could see didi. there are a lot of good companies out there. there is clearly demand from institutional investors for growth. you can see it across software names in the public markets. they trade at high multiples. the stock price is a function of supply and demand. people want to own growth. i think it will be a good year for ipos. emily: uber is losing a lot of

money. do you think that will turn some investors off? mark: i think when people -- when the big institutional investors spend time with dara, who came from expedia, they will be pleasantly surprised at the economics for the business. business, uber-e, q3 rate,$8 billion plus grow 180% per year. they are spending a lot of money on that which investors will appreciate. they are still spending money on autonomous. i don't have an opinion if they are doing the right thing or the wrong thing. ent fors also preced companies growing fast. netflix has burned huge amount of money making content. tesla burned a huge amounts of money. amazon for many years burned

huge amounts of money. i think there will be strong demand for uber. if you want a strong company that can earn one billion plus users, there are not many to own. this is one of these assets. emily: mitchell green, great to have you. thank you both. shares of the new york times hit a 13 year high wednesday as online the subscription rose. the publisher added 265,000 new digital subscribers last quarter. it ended the year with over 3 million digital customers. the times says it wants 10 million paying customers by coming up, shares of take two 2025. and electronic arts dropped. after the video makers reported disappointing results. will they be feeling the pain of the fortnight affect -- fortnite affect? this is bloomberg. ♪

emily: striped, the most valuable payment startup -- totaling $100 million. the deal pushed the valuation to $22.5 billion. speaking to patrick collison, he warned the biggest headwind for company is coming in 20 years, meaning international expansion will be more difficult. in fintech isn getting fierce. nomura said square downloads

have outpaced venmo. david westin talked about the popularity of venmo. is one of themo crown jewels of paypal. today it is already at a $70 billion run rate in terms of processing that goes over that venmo platform. it grew less quarter at 70% year-over-year growth. for three quarters in a row, the number of net new actors coming on to venmo has hit a record each and every time. we are pleased with them. what venmo really is is a value proposition oriented to the millennial generation. the reason that it is so successful is that it basically takes every payment and turns it into an experience.

when you do a payment, you tag that payment with an emoji or what it was for. you share it with your friends and you can split transactions with your friends. it ties into this whole social network experience that the millennial generation grew up in. it is magic. -- its magic is that it is not so much a payment application as an experience application. we spend almost no marketing on it and it grows by leaps and bounds. >> every millennial i know uses venmo. no question about it. it for to five times a week to see what friends are doing. it is a fascinating look at where digital payments and every segment of the market has a different way of thinking about what payments are like. you and i think differently and

we are more private about our payments. you probably have less than 600 friends, but as you grow up, the millennial generation grew up with screens in front of them. they grew up with social networks. their public private lines are much more blurred than other generations are. but they are incredibly , responsible around money. they grew up in the great recession. they saw parents or friends scarred by that. their desire to control their finances, create the budgets is quite admirable. is a huge success in terms of its virality. is it as successful financially? how do you make money off of it? >> the best way to think about venmo is to think about paypal. paypal started off as a free

venmo started off as a free peer-to-peer service. we are offering more capabilities to venmo that are more monetize a bull -- monet izable. a venmo user can shop anywhere and it takes it out of their account. we put a venmo debit card into place so they can use their balance at offline merchant. we earn money off of that. if you want to take money immediately out of your account account to your bank account, we charge a small fee for that. we are basically very slowly but very surely building capabilities and benefits to the venmo user base that add more value to them but also struck to , create a financial model for us. basically last quarter, we saw a

tipping point on that where the amount of people doing a monetize will transaction is exploding. >> at what point will you make as much or more off of venmo as you do on paypal? >> good question. venmo is an accelerating part of our business. monetizable part of that is accelerating as well. it is an exciting part of our model. emily: you can see more of that tonight on bloomberg television. coming up, epic games fortnite is killing the competition. rivals like ea and take-two along with activision lower their forecast. bloomberg technology is live on twitter. you can follow tictoc on twitter. this is bloomberg. ♪ s bloomberg. ♪

in directedake-two the list of game makers being crushed by fortnite. they came out with a revenue forecast well short of forecast. the same thing happened e.a. a day earlier. shares of both companies plunged. traditional game publishers are under siege by the success of shooter game fortnite. is this all because of fortnite? chris: yes and no. changer,was a game phenomenally successful. really a cultural phenomenon. sucking up a lot of people's time. it is free to play.

how do you compete with free? there is more than that going on. revaluation of the industry as these companies were able to extend the life of grand theft auto online and keep selling more versions of the game. and in game purchases. the industry was reevaluated as being more valuable because it had a recurring revenue stream. now it turns out it is more of a hit driven business like it used to be. you can't always count on those customers. emily: what are activision, take-two, electronic arts planning to do to take on fortnite? chris: you are seeing some copies of games taking on the most compelling elements of fortnite, this battle royale mode. 100 players compete against each other. it creates an exciting and addicting form of play. some games are coming out in that mode. you are seeing some games are

coming out, very visually appealing games. they are free to play. they make up their money through purchases of decorative items in the game like fortnite does. they are going to refocus their efforts on creating killer games that stand out like red dead redemption, which was the best-selling video game last year from take-two. traditionaldo the game publishers have going for them? chris: they do have existing franchises. if you think about madden or call of duty, they may not have been the hottest games last year, but they have lots of fans and people that come back every year to see the latest version. networks the money and to distribute these games, the traditional in stores and online as well. they are far from done. they just have to learn to compete in this new world.

emily: what is your outlook for the year for 2019? we are predicting a flattish year. big players like activision did not have the strongest lineup. it may be a difficult one as these investments in the new modes of gameplay and the new marquee franchises come around. what are the trends that you will be following? we have talked a lot about gaming addiction. the landscape is changing dramatically when it comes to attention, whether it is on games or social media. what are the hot button topics? one thing will be watching, take-two had this game, western themed shooting game red dead redemption was the top-selling videogame in 2018.

they just now started an online version of that. as they had some bugs in that, people said the items they were buying were too expensive. to what extent can they extend the life of these games? a hit game through continued online purchases. that will be a big thing. that is what the future of the industry isbet on, that people will go directly to game makers and buy things online. emily: chris palmeri, thank you so much. meantime, for the second time this year, tesla is cutting the price of the model three sedan. all versions will now cost $1100 less. bringing the base price to under $43,000. tesla says the cost cut well -- will offset the end of a customer referral program that was more costly than the company realized.

we look into the tech ipo pipeline and when chinese companies will come to the u.s. and hit the public market. later, president trump boasted intonn's expansion wisconsin last summer, but on the ground things are not turning out as planned. this is bloomberg. ♪ this is bloomberg. ♪

♪ emily: this is "bloomberg technology" -- this is "bloomberg technology." we bring you the latest in global tech news. i'm emily chang in san francisco. let's look at the global tech stories of the day. haidi: spotify's moving into podcast. -- podcasting. terms were not disclosed but it was reported that spotify is planning to spend more than $200 million on gimlet. podcasts like homecoming, which was recently adapted into the tv show.

there is a possible collaboration on an electric fan -- van for daimler. they did well the last time they cooperated with tesla. it sold its stake in a company in 2014 for $780 million profit. and, one founder wants to close a gap between the company's market value in what he thinks it is worth. he is through the largest buyback, $5.5 billion of stock. proceeds from the scale of the company's telecom business will be used for their repurchase. those are the top global tech stories of the day. shery: from trade tensions to huawei, concerns about china continue to spiral in the u.s. -- but there is a wider view when you look at the pipeline for chinese companies that want to go public in the u.s. one of the optimist is drew bernstein.

he will talk us through the ipo process. he joins us here in new york. what are chinese firm specific -- firms specifically telling you about how they feel entering the u.s. market in this environment of trade tensions? drew: trade tensions are just sort of an impediment to the ultimate solution. i just came back from china about a week ago. i met with about 20 ceos and cfos, and they remain optimistic right now. right now, there's 180 private companies with valuations later -- greater than a billion dollars that are considered unicorn companies. the inconsistency there is a unicorn company is supposed to be company that is special, and there is 180 of them. there is only 300 in the world right now and 180th emaar in -- of them -- 180 of them are in

china. i think that is what is dictating the excitement right now. shery: how much of that is the china 2025 policy, how is it impacting the whole ipo pipeline process? drew: i think it's very positive because china has been clear with their policy. our firm right now is working on about 10 ipos, about six of them are in the fintech area. we are relatively optimistic. the chinese companies, in looking at the united dates, they both have something the other desires that doesn't exist any other places. -- in any other places. the chinese companies look at the u.s. market and see the ipo market as a disclosure based system, which means you actually compete for who gets the capital.

you have the ability to have a -- add on rounds here, so you can have a second and third round of raising equity and raising debt. and more interesting is, you have the ability for the companies to have this international platform which gives them brand recognition and also gives them the ability to earn foreign currency, even if the renminbi is a restricted currency. emily: you just go back from a tour through asia. what would you say is the sentiment among chinese business leaders and how do they compare to u.s. business leaders right now in the middle of a trade war? drew: there is nothing really good about a trade war, but i don't think a trade war is going to actually change the direction. it is more of an obstacle. there is still a lot of good sentiment to being able to go public right now in the chinese -- and the chinese companies also have some choices.

hong kong came off one of its best years ever. a lot of the rules right now are changing even for the domestic markets. as recently as friday, they permitted shorting on the a-shares. i think the hong kong market and the domestic markets in china are making progress in becoming more mature. and, they have become competitors to the u.s. market. emily: trade talks are going to continue next week, but still no plans for the president to meet again. how optimistic are you about these talks? drew: i think for any of us practicing in it emerging -- in emerging markets, we have to have this eternal optimism, but it is always tempered with concerns. and, the real concerns i have going forward, it's great that you have these 180 companies, and it's great to see that they will go public one day, but

i think there is still a lot of money on the u.s. sidelines right now, waiting to see if these chinese companies can really do certain things. i think the challenges for the chinese companies are going to be to produce reliable financial statements, and to build good management teams, to be able to cope with things like party transactions and navigate governmental and regulatory regulations. it's going to be challenging. shery: hong kong has managed to attract big companies ever since and came andt hard enlisted in the u.s. are they going to be strong competitors for the chinese companies? hong kong, perhaps the u.k.? drew: they will become better competitors, i believe. again, they don't necessarily offer the same kind of things that the u.s. market offers.

one of the things the u.s. market offers is very deep diversified sources of capital, which is what these chinese companies need. you saw it last year, maybe but -- about 30 companies going public. they raised a little over $9 billion in the united states. so, they will have their choices. it will be interesting to see, but one of the things i have seen in china is, i'm coming up on almost 20 years there now and over 20 years, a lot of people have come and gone. a lot of people who have gone are coming back right now, which means they are leveraging off of their relationships to try to get into these companies. so, i think it is going to be a pretty interesting year for everybody. emily: what choice do you expect them to make? drew: it depends on the company. i mean, if you are a chinese company and you don't think you can deal with the transparency issues, or don't want to, the

regulation issues, and you -- then you probably should not go public in the u.s. it really depends on what your strategy is. if you are a chinese company and you have no international ambitions, you cannot cope with transparency or don't want to, or the regulatory issues, then you are probably better off staying on the domestic markets. emily: choices, choices. drew bernstein, thanks you so much for sharing your views with us. markets across asia remain closed for the lunar new year. between an economic downturn and a prolonged trade battle, the year of the pig's outlook is anything but certain. heidi, you have a chart that delves into what it looks like. haidi: the year of the pig is meant to be fortuitous, happy-go-lucky, and quite a boost for equity investors. -- should be quite good for equity investors. as we can see from this chart,

we have barely seen a seller start. you can blame it on the start of the year when it comes to any data coming out of china is always a bit of a tricky one, given the seasonal uncertainty and volatility associated with the lunar new year. factor is closing down, people going on holiday. really kind of having signs of a losing year. the biggest chinese testing record outflows so far. we know it has been a lackluster market. you spoke about whether there is much in terms of a revival of animal spirits when it comes to dealmaking and ipos in china. -- there is too every month and it is to everyone we pretty much speak to an undercurrent of uncertainty as to what will happen with the trade war, but also what will happen with the structural domestic slowdown and what it means for consumer trends, for the tech sector, and for stock market investing. as you said, a lot of investor anxiety and uncertainty going into this year of the pig. in the meantime, traders are

spending time with family and eating dumplings. right? emily: yum. i'm hungry. [laughter] emily: lots more ahead, do stick with us. this is bloomberg. ♪ emily: facebook's top pr

executive is leaving the media giant after eight years. her departure comes as the company remains under fire over privacy issues and its role in russian efforts to manipulate the 2016 u.s. presidential election. she will stay with the company until a replacement is found. foxconn says it still plans to build a manufacturing plant in the state of wisconsin, creating as many as 13,000 well-paying jobs for wisconsin workers.

as early as 2022. many on the ground say it's simply not the case. our correspondent joins us now from new york. how to the promises here differ from reality? >> for the past couple of months, we've been talking to a lot of people on the ground at foxconn. about the early operations there. so far, the big differences are that they say things are not living up to promises, the pay has been low, workers feel expendable, foxconn is making an aggressive push toward more automation, meaning their roles could be obsolete in coming years. people say training is an issue. in one case, a worker had his finger nearly sliced off on the production line. so, there has been a disparity -- a jarring disparity between what was promised by the president and some of the jobs that are being doled out to residents of wisconsin right now.

emily: there are some issues that have developed in the last few weeks, whereby one assistant said the company was reconsidering some of its plants. -- plans. which plans exactly? austin: that has been the constant refrain since the deal was decided. you have gone through a ton of changes. first they were going to build a massive factory and then they scale down the operations. a couple of days ago, they said we're not going to build a factory, and then they flip-flopped again after president trump had a phone call with the chairman. the bigger issue is that a lot of people don't know what they are actually building in wisconsin. they have made a lot of commitments to the contract, but they are not sticking to the plan's. the plans have been unfolding since it was signed. a lot of the sources we talked to for the story just say the plans internally at the company at both the headquarters and the factory in mount pleasant

wisconsin factory felt a market ever-changing. emily: one senator had this to say. >> the environment keeps changing. there is all kinds and -- of uncertainty. what businesses always want is certain and stable is this environment. markets change. apple reported less demand for their products and that obviously affects the equation. in general, all the incentives that were given by governor walker were perspective. -- prospective. emily: is this because of apple? austin: it is partly because of apple that there has been pressure on the company but they -- i run the global market conditions and the global issues, but they missed their first year hiring targets by about 82%. they ended the year with only 178 full-time workers. that is far short of the 1040 they committed to hiring at the end of that threshold. the company can certainly afford to hire more workers.

it's not just because of softened iphone sales. the larger issue is with the senator is implying. that there is no risk for the state because they won't give any subsidies unless he company -- the company lives up to its hiring an investment stats. starts.nvestment it's partly true, but the truth is they have already invested a lot of money in man-hours and commitments to infrastructure costs. hundreds of millions of dollars have already been spent. there's a sort of myth there isn't any risk. that is simply not true. emily: the bigger picture, what does it mean for local -- global manufacturing and the supply-chain? austin: the larger issue is the romanticized notion that president trump has talked about as a campaign pledge, and he talked about in the state of the union last night, it's more challenging to bring that back to the u.s. than a lot of people anticipated. at least the proponents. it would be fantastic to create more blue-collar jobs, but the truth is, it's really

challenging, not just economically when you are competing against china and mexico, but the larger issue is that it is hard to replicate that supply chain stateside. a lot of that network is set up in asia and mainland china where foxconn has most of its manufacturing operations. that is why, when you have that network it is easier to build things. like iphones. trying to replicate that here in wisconsin is going to be a huge challenge, because there's not just the lack of supply chain, but also a lack of talent pool. emily: has the president commented on the situation in particular recently? austin: one administration official did tell me that the president and the white house would be "disappointed" if foxconn reduces its investments in wisconsin. any reductions they would be disappointed with. emily: thanks, austin carr. still ahead, carmakers are shifting gears and spending more

money on electric. but, is the infrastructure in place to meet growing demand? we will discuss, next. this is bloomberg. ♪

♪ emily: nasa is gearing up for the launch of commercial rockets that will take americans into space. spacex will have a test launch march 2. a nasa crew is set to go into space in july. for boeing, a test flight is set for no earlier than april with a manned mission to earlier than august. by 2030, electric car sales are expected to surge to 30 million vehicles worldwide. this, according to lambert new energy finance. -- bloomberg new energy finance.

one company preparing for the onslaught provides more than 1000 public charging stations for electric cars across 34 states. in the first half of 2018, the company's network charged more than 42 million miles. i sat down with the ev-go ceo to discuss the future of electric transportation. >> i feel like we are at an inflection point. the car companies have announced $300 billion at they are investing in ev's. there's going to be 160 new models over the next few years. this is going from crazy, boutique small to mainstream. consumers are going to love it. everyone i know who has driven an e.v. loves it. -- love striving it. -- loves driving it. the cost has to be competitive, the range has to be strong, and there has to be charging infrastructure everywhere. emily: tesla is obviously in the lead. where are you seeing competition

from competitors, audio, mercedez, and what companies should tesla be worried about? cathy: every car company and board room in the world said my goodness. they need to be worried about everybody. but we see in the u.s. is so much progress. general motors is great. nissan has been around for a long time. gm and nissan now have over 200 mile cars that are affordable. that is really big. ford has historically been a laggard, and now it is moving forward on making an electric f-150. i don't think there is a car company in the world that is serious that is not investing seriously in electrification. emily: how far are we out from mainstream adoption and fully -- mainstream adoption of electric cars and fully relying on charging stations? cathy: we have a million cars already. we expect 6 million or 7 million in the next five years or so.

which is a lot. bloomberg new energy finance says it's going to be 10% of sales in 2025, but an inflection point, on the s-curve, we're looking at 30%-40% of sales in 2030. emily: what is more needed in terms of infrastructure? cathy: historically, most people who bought and e.v. hard to get home. -- charged at home. people who live in apartments need to charge away from home quickly. the most interesting new it is -- bit is with the rise of these rideshare hailing economy, millennials don't want cars but they do ridesharing all the time. those drivers of those cars need to charge quickly and away from home. and they charge a lot. emily: when will electric trucks hit the scene, and how does the charging infrastructure change to support that?

cathy: i would say light-duty vehicles are a couple of years ahead of the trucks. i just came from your bloomberg coffers and there were a number -- conference, and there were a number of truck companies that have talked about it. a few hundred. the experiments are beginning, but i say within a few years you will see fleets relying increasingly on electrification. emily: how do you compare the road ahead in u.s. market to china in the next five years? what does it look like in both countries? cathy: the chinese are moving really quickly. the difference in policy settings or what might make china move even faster. some say that right now it is even money. we could win or china could win. it's the chinese government putting policies in place to accelerate the market.

there are some people who expect 70% of sales in china to be e.v. by 2030. no one thinks the u.s. market will move that fast. it has to do with creating policy reasons for the manufacturing to go ahead fast. emily: what are the risks you see to tesla, which is in the lead in this market in particular? years, whatt few are the biggest challenges? cathy: the market is growing so quickly, the market for non-luxury vehicles. there is going to be a lot of market entrance. tesla will have to compete with that on cost. they have beautiful vehicles, but kia and nissan and others are bringing vehicles to market that will compete with tesla, which is great. emily: my interview there with

the ev-go ceo. that does it. tune in tomorrow, twitter reports fourth-quarter results and i will sit down with the cfo, ned siegel. we are live streaming on twitter. follow our global breaking news network tictoc on twitter. this is bloomberg. ♪

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