emily: i'm emily chang in san francisco and this is "bloomberg technology." coming up in the next hour, while bitcoin has fallen off of the radar for many market watchers, demand is ticking up. after a modest market bounce. we will tell you why. plus, walmart reports its best holiday quarter in a decade. yup -- e-commerce business, once again a standout. we will check in on the health of the retailer and the outlook for slip cart. youtube announces new guidelines for users with one-time warnings.

will the rules be enough to avoid intervention from regulators? but first, to our top story. is bitcoin back? the cryptocurrency is approaching $4000 for the first time since the start of the year. the boost comes after last week's announcement that jpmorgan has developed a prototype digital coin that it plans to use to speed up payments between corporate customers. will the boost last? we are joined by the cofounder of blockchain capital and mike of bloomberg intelligence. is bitcoin back? in the short term. in the long-term, probably not. it has been way overdue for a bear market bounds. it is still working off of the bear market oversold conditions. if you look at the major indicators, all these things that have been synonymous with bottoms in the past. they show the market is far away from a typical bottom you would

normally see. emily: spencer, i presume you would like to disagree? spencer: bitcoin has never left, so it has always been here. are we going to see all-time highs? probably not yet. for now, the entrepreneurial activity and interest in the space has not ceded with the price. emily: do you think it has hit bottom? >> i think now's a good time to buy. is it the absolute bottom? i'm not sure. emily: has bitcoin bottomed? mike: it is unlikely. it would be nice if it is a bottom, but it's unlikely. if you look at the price, it has been trading between 3100 and 4100 and is doing the same thing as last year. it is consolidating at lower-levels and it still needs to go to liv lower levels. bitcoin to me is more like digital gold. i think it is expensive, but the rest of the space has more

gleaning to do. emily: spencer, what has been the entrepreneurial and investor interest through this? spencer: it is not slumped at all in terms of entrepreneurial activity. the number of new pitches -- we see more and more companies coming in every day and higher-quality entrepreneurs, as well. we think about bitcoin as an acid and this vortex of a macro environment with rising debt levels at an all-time high, money printing, tension between nationalism and globalism, and the notion of jurisdictionalism. -- jurisdictional competition, there is a strong case to be made that bitcoin is the strongest asset in the world right now. mike a lot of people are looking : at institutions. i think institutions might look at the going as a proxy for digital gold. the institutions that might buy gold might diversify portfolios with bitcoin. the rest of the space are technically cryptocurrencies and they still trade like

speculative digital assets. that is far away, but that is where you have to differentiate the difference. people are looking for institutions. bitcoin is attractive. it is getting that way, but i still -- gold is a more attractive investment and bitcoin at its current level. emily: spencer, where do you think the demand is going? spencer: there are three main buckets of demand going forward. the first is just the passage of time. every day bitcoin is live, it -- is still alive, it goes from scary and unknown to trusted and proven. the second major bucket of demand is from central bank institutions which value it as a non-sovereign digital asset with scarcity. much in the way that mike suggested digital gold, and the is techjor bucket demand. this is demand for bitcoin as programmable money. bitcoin is a platform anyone can build on top of. emily: what are the other indicators you are watching, mike. perhaps indicators that might show that a bear market was coming to an end? mike: this is where i like the dichotomy with spencer. a lot, but ihim

look at him as a markets guy and not a technology guy. network value to transactional ratio is still very high. if you look at addresses used, they are at levels below the 2017 low, which was around 900. these indicators need to pick up. technically, in the past, they have been leading indicators. looking at things like volatility. volatility is way too high for a bitcoin bottom. volatility probably needs to get to a new low. right now it is 15, maybe 25%. emily: i have a chart that shows the bounce we saw. right in the middle of 2017 and it shows the lows we are at right now -- not so much historically. what are catalysts that could end the bear market or help the market fully recover and get to where you want to see it? spencer: i think it is a tinderbox right and anything could set it off. to go back to my earlier

comment, we need more time to get past the bull market of 2017 and where we are today. it could be anything like over the weekend, cambridge associates, a top adviser to pensions and endowments, put out a report that said institutions, it is time to allocate crypto. that probably means less than 1% of your total portfolio, but in terms of pensions, it is a sizable amount. emily: mike, what do we know about what jpmorgan is doing with this going and if other -- coin and if other banks will follow? mike the key reason bitcoin : jumped, jpmorgan did something significant because it adds more supply to the space, and is going in the space -- what is the trend in the space? the trend toward stability and stable coin. proper transaction, store value, and currency. that is what jpmorgan is focusing on. it is competition for ripple. overall, that is what is happening in the space. if you look at the most successful coin in market cap, it is tether.

that is what the space needs. it needs to become more stable. emily: spencer, what are the coins to watch and the coins to stop watching? spencer: jpmorgan's coin, this is internet. you want to focus on inter-net, the open networks anyone can build on top of. i would not suggest people go much further down the spectrum. emily: two where? spencer: btc and east. that is it. emily: just two. not ripple? spencer: maybe down the line. , alwayscencer bogart good to have you on the show. mike mcglone, great to have you, as well as the thank you both. the trump administration's well. the trump administration's soaring rhetoric last year about creating a space force finally drifted down to earth. under a new directive signed by trump in the white house, the space force would be part of the air force and not an independent branch of the u.s. military. trump directed the pentagon to

stand up a u.s. based command post for troops during war, which the military has been working on since last year. there's a new space-related headlines crossing the terminal. its rivals spacex and u.s. launch alliance will split six military space launches at the pentagon, and the air force announced results of the latest competition between the national security launch providers. we will continue to follow that story. coming up, walmart posted strong sales growth over the holiday quarter as it continues to push into e-commerce. where it now stands in competition with amazon, that is next. if you like bloomberg news, check us out on the radio. listen on the bloomberg app, bloomberg.com, and, in the u.s., sirius xm. this is bloomberg. ♪

emily: some good news for retail. walmart brushed off the industry's disappointing december sales tuesday with its best holiday quarter in a decade. the retail giant's fourth-quarter u.s. comparable sales beat expectations while its e-commerce sales rose 43% in the fourth quarter. but while the company continues to take on amazon, its push into online sales, it is weighing on margins. to discuss is andrew in chicago and bloomberg opinions sara halzach in d.c.. how did walmart avoid a week december? >> i think they showed strength in a couple of key categories. one was toys. they had expanded their assortment online by 40%. they knew this was the first christmas without toys "r" us. they wanted to claim the market

share. it appears they did get a big piece of it. the other element is groceries. walmart has been investing in grocery delivery and collecting -- quick and collect in grocery. this is an area where they have an advantage and that was another source of strength for them on the digital front. emily: walmart has a redesigned website. they went after toys "r" us buyers, what in particular do you think helps walmart close the deal? andrew: i think they are firing on all cylinders across every channel. brick-and-mortar has been really strong. they've invested in their store bringinge, which is consumers back. a headlineahead -- with 43% growth. were a lot of other retailers faltered late in the season, walmart, amazon is well, but walmart in particular, was able to get a lot of those last-minute sales because of their strong omnichannel.

emily: let's talk about the competitive landscape, and amazon, in particular. i have a chart that compares the market caps on walmart and amazon. amazon in the blue, obviously much higher market cap than walmart, but when you look at walmart brings in far more revenue than amazon. when you look at profit, amazon's profits dwarf walmart. it certainly shows a lot of interesting, conflicting trends at play. how do investors see this story, sarah? sarah: i think they see walmart is finding its niche. amazon, its growth is slowing down, it remains the leader with $.50 of every dollar spent online going to amazon. that is tough to compete with, but walmart is trying to find its niche. not only with programs like click and collect, but by building this sort of galaxy of other businesses where they can

court a different type of customer then they can through the main walmart brand. bot a variety of companies and why a it is trying to focus on a customer who perhaps would not shop at walmart under other circumstances. walmart is trying to build this stable of brands that meets customers in different places, co unique compared to what amazon is doing. emily: but is walmart, even online, going to be able to squeeze the profit amazon is squeezing from its customers? andrew: a big part of amazon's growth is their profitability, which comes from adjacent businesses with aws and their fast-growing advertising business. those businesses have a totally different margin profile. the big question is, walmart's core retail business is moving in the right direction, but will they be able to layer on more

profitable business lines? they talked a bit about the advertising business. it is still small, but they wield a ton of potential there. amazon has a big head start, but watch themething to next couple of years, if they can lay on a much more profitable business, leveraging the enormity of customer data they have at their disposal. emily: sarah, how is the grocery battle shaping up? walmart is the leader, but amazon is in that territory. other grocery chains are doing more delivery, as well. sarah: walmart has really strong geographic coverage. they said something like 70% of the u.s. population is covered by their pickup services now. for the delivery service, it's somewhere in the more 30% range. that is pretty strong coverage. when you compare what amazon is working with, whole foods only has only 400 some odd stores compared to the thousands of walmart stores. that is an advantage for walmart. there is no question that the

dynamics are changing. kroger, which is a major grocery and major competitive force, has struck a deal with ocato will bring its technology over to the states to help -- its automated warehouse technology to help kroger ramp up its delivery game. this is a fast changing landscape. it is so little penetrated. certain categories now are 30% or 40% online, grocery is 2% online. it is really anybody's game. emily: meantime, the ceo of walmart is saying the online sales strength is weighing on gross margin. how do they intend to combat that? andrew: the online sales strength? right now, a lot of where that is coming from is flip cart. in the near term, slip cards -- flip card will be a drag on those margins, but that is a

long-term play. india is this massive market. everyone is hoping it becomes the next china as an e-commerce market. that might be a little bit ambitious. nevertheless, it is about how that plays out over the next five to 10 years. in the near-term, they will have to incur some of that hit, but i think it is smart, strategically. they seem to be guiding the street to understand what that means for their margin. emily: sarah, flip cart was hotly contested. welldo we know about how that acquisition is going? sara: we don't know a lot yet. what everyone was watching for today was we learned about these new e-commerce regulations going into effect in india which create challenges for both walmart and amazon as foreign participants in that market. we did hear ceo doug macmillan say on the call today that walmart is disappointed with the regulations and will have to figure out how to work within them. it's noteworthy they did not adjust the guidance. they had issued annual guidance

in october and they did not revise it today. that's a clue to us that, while they will have work to adapt to -- work to adapt to the market, this is a long-term play. a long-term play and we will see how they develop that over a long period. emily: sarah halzack and andrew, thank you for weighing in. coming up, the race for 5g is in full swing. qualcomm is vying to make sure its chips are at the center of this next gen tech. we will discuss, next. "bloomberg technology" is livestreaming on twitter. check us out @technology, and be sure to follow our global news network, @tictoc, on twitter. this is bloomberg. ♪

emily: a u.s. congressional panel asked facebook for a staff briefing on its privacy policy after a consumer complaint to regulators claimed some users may have had their health data exposed, directly appealing to ceo mark zuckerberg. lawmakers say a consumer complaint to the ftc claims some information shared in a closed facebook group was accessible to people not in those groups. as the race to implement 5g technology continues, qualcomm is introducing its second check -- chip to connect to the new generation of high-speed data transfers. qualcomm faces increasing competitions and they hope a new chip will of what it disappointing repeat of the 4g -- avoiding the disappointing repeat of 4g chips. where do the qualcomm chips stand? >> they are ready have their second generation of 5g chips coming before 5g is even here.

that speaks volumes to the rush they are in. they really want these 5g services to come and quickly. they believe they can win. the underlying thing if you look is if you look at what qualcomm has been doing five years. emily: how does that stack up against competitors? have roads to nowhere. intel is the closest competitor, and they will have the first 5g chip in the second half of this year. that's their first when the second qualcomm chip is coming along. all of this is dependent on the rollout. if there are no networks, it doesn't matter how good the chip is. emily: when are we expecting those network rollouts? ian: it really depends on who you talk to. suspects, united states, china, japan will see rollouts in their major cities quickly.

a bit of a debate in this country as to who it is first and whether it will be 5g are not. we will see in services from the second half of this year. emily: meantime, what about customers? we report apple not be integrating technology this year. who knows about next year? ian: right, no. it's a good question. obviously qualcomm and apple are , far from the best of friends. apple is no longer using qualcomm chips. qualcomm sees this as an opportunity to put pressure on apple's sales. all of apple's competitors have 5g chips whereas apple right now, apple will try to on the brand and rely upon their existing phone and user base to keep coming back to them and when 5g is ready, it is ready. emily: meantime, samsung has its big unpacked this week. will samsung the apple to the 5g punch? verysamsung is a -- tightlytacted

connected customer of qualcomm. emily: when do you expect we will see 5g truly hitting the mainstream? ian: that's a good question. you have to look at what the carriers are doing. it is one thing to listen to the phone makers, the chipmakers, but you have to listen to verizon and china mobile. when they start to set targets that they will have to meet, they will have to sell to the stock market. that is when things will really happen. emily: speaking of a company that is not a carrier but a phone maker and network equipment provider, huawei is in the midst of a huge controversy and you have the united states government banning huawei from u.s. networks and european countries banning them from their networks. where does huawei stand in the 5g race? ian: if we focus on europe, which is what the story was about, that is a good question. you are reliant on these equipment makers like huawei and

qualcomm to do your engineering for you. so if one of your biggest partners can't work with you anymore, or you have second thoughts about working with them, that could potentially put you behind the eight ball here and me a lot of these rollouts for places like europe might take longer or cost more. emily: i know you will be charging the race to 5g for all of us. thank you for stopping by. ian king, bloomberg tech. coming up, from infamy to internet giant, how japan's recruit holdings went from $14 billion in debt to a serious challenge for the likes of alibaba and amazon. titan wants to make investing in managed portfolios more -- accessible and is using educational content to encourage the next generation. this is bloomberg. ♪

emily: this is "bloomberg technology" global link where we join "bloomberg daybreak: australia" to bring you the latest in global tech news. i'm emily chang in san francisco, with haidi stroud-watts in sydney and shery ahn in new york. i want to get a look at the top tech stories of the day to start. what have you got? china has largely abandoned an obama-era hacking truce. chinese cyberattacks appeared to be in decline following 2015, but have ramped up due trump's embarked on trump the trade war with beijing. the targets included a telecommunication systems in u.s. and asia in 2018.

looking to buy amazon's chinese import business. the reported initial deal may be completed via a share swap. it's an e-commerce leader in selling imported goods in china. jd.com is planning to cut 10% of its senior managers. these cuts targeted at the v.p. level and above come as the company grapples with slowing customer spending. itss expected to have slowest rise on record. those are the top global tech stories we are watching. emily? emily: thank you. imagine an internet company that owns tech comparable to the following -- linkedin, eharmony, zillow, and more. chances are if there was an american company with assets like that under one roof, you would know its name. but if you have never heard of recruit holdings, you are probably not alone. the japanese tech giant owns a compilation of apps, portals and

more. it currently has a valuation of $46 billion, with site set on attracting the most consumers in the world by 2030. to discuss, we are joined by sandra sucher, a professor at harvard business school has published a case study on recruit. she joins us now from cambridge, massachusetts. recruit owns u.s. names like indeed, glass door, japan's top dining portal, for example. give us a little history on this company and how it got to where it is today. sandra: the story about recruit actually really starts with a scandal. this is a scandal of massive proportions. the company was founded in 1960. around the mid-1980's, its ceo gave shares of a stock that was about to go public in its subsidiary to about 70

government officials and high-ranking executives. news of this scandal broke in 1988 and it was a sensation. it caused the resignation of the japanese prime minister and his entire cabinet. it brought down another 150 people with them. it is still in the schoolbooks in japan. in fact, the first thing that someone says when you say recruit is, oh, the scandal. this is how the company had a coming-of-age moment that was unlike that of most other companies. i think the first thing you should know about recruit is it has been trusted, lost trust and has learned how to regain trust. haidi: sandra, even in 2019, you continue to hear about these government issues, transparency issues. i'm wondering how they were able to get past what sounds like a pretty much existential crisis for the company.

sandra: so what happened was the employees actually thought the company had about six months of life after the scandal broke. but they decided if anybody was going to save the company, it was going to be them. they went to all of their customers and they basically told their customers, look, our founder did this. we were not involved. we will continue to try to serve you the way we had in the past and they were very convincing. they were very convinced they could still run a good business and they lost very few customers. so, that was the beginning of a sense of belief in themselves. they went through a period of enormous debt when the japanese asset bubble broke. they also managed to pay that off as recently as 2006. this is a company that has learned that on the one hand, it can really do bad things, but it can really be humble and curious

and extremely confident in its ability to handle typical situations. that is the spirit they bring to everything they do now. emily: so then what is the strategy today? they also own a real estate portal, providing direct loans to businesses based on daily traffic. how does this all fit together? sandra: they have three segments in their business. one is that all of their i.t. businesses that are very involved with artificial intelligence and matching platforms for jobs. then, they've got one that is in the middle, which is where those businesses would be. those are the ribbon model. this is a model that says they want to create value both for the consumer and the client who is paying the money to try to be matched with the consumer. then, there is the third business which is the staffing business for both permanent and temporary staff.

they have always had this mix in the company of being interested in trying to help people largely around education and finding jobs. they have been growing out from there. haidi: sandra, what can we expect in terms of global ambitions, expansion ambitions? sandra: so, the company is on record as saying they want to have the most users by 2030, which is a pretty big ambition for anyone to say. i actually think from an ethical standpoint, it puts them on sort of a safer path to growth than saying they have a sales ambition to be x, y, z times the number of dollars they are making right now, because this is something they pretty much had to satisfy customers if they are going to go after this kind of a way of getting bigger. that is what their goal is.

but of course, like any company, there will be some challenges along the way. haidi: sandra, so great to have you with us, sandra sucher, professor at harvard business school joining us with her case study on recruit. stick with us. there is much more ahead. this is bloomberg. ♪

emily: managed portfolios and hedge funds have traditionally been limited to wealthy .nvestors with hefty fees start to tighten wants to change -- wants to titan change that. it chooses the best 20 stocks based on data from the most procedures hedge funds, allowing anyone to invest with just a 1% fee. at one year old, it raised $2.5 million from backers such as joe montana and paul graham. now it wants to get millennials into the game with a launch of a

new social feed. joining us to discuss is titan co-ceo, clayton gardner. thank you so much for joining us. explain what differentiates titan from other apps out there. clayton: absolutely, thanks for having me. titan actively manages user capital and a portfolio of stocks at an affordable price. importantly, our research team works behind the scenes to in-app insights through videos. when you think about the investing landscape today, you have the do-it-yourself trading apps that leaves the user to fend for themselves. you have set it and forget it passage solutions which essentially -- set and forget passage solutions divorce the investor from the portfolio where the investor is not actually learning. and then in the middle, you have managed products like hedge funds that are inaccessible for

most investors. in a nutshell, you can think of titan as the modern portfolio manager in your pocket at an affordable price that keeps you in the loop as to what is driving your portfolio. emily: what kind of customers are you targeting? clayton: our target customer today is a midcareer professional. someone who wants to engage in -- actively participate in markets, but does not have the experience, time or resources to do so. these are investors that don't want to manage the portfolio themselves, but also don't want to be divorced from the portfolio and sit on the sidelines in a low-cost etf. emily: now, talk to us about some of the newer features and what you think really sets you apart from some of the other options out there. clayton: i think today's announcement of our home feed is an exciting step forward. the way we think about the investing world is people need to be better connected with how they are actually invested. you think about the solutions today.

there are not many managed solutions available for retail investors. mutual funds is the only one accessible to the 97% of americans that are uncredited. -- unaccredited. i think the way we think about how managed experience needs to work is you need to bring the content, the actual information that is driving portfolios. you need to tie it to how the end investor is actually invested. through traditional brokers, you cannot do that. they are basically utilities, and with passive products like index funds, they are invested in vanilla products so it is hard to get under the covers to explain what is going on. i think you need to tie those two together to really deliver an experience people want. emily: what is the ratio of a.i. to humans, because there is increasing concern that technology will be able to do this job and you won't necessarily need humans to do it? clayton: it is an interesting consideration. i think -- our view on the future is active management in particular will be some

combination, a hybrid between machines, intelligence, software and humans. i think machines are really good at automating the more menial, repetitive tasks that humans are maybe a little slower at. humans have a sense of judgment, especially when it comes to investing for the long-term. it is really hard for machines to model. that is why you have seen investors in the active management space with really successful track records that are still doing things by the books, investing in a lot of these quantitative funds. i think we see the future as a hybrid between the two. emily: clayton gardner, titan's co-ceo, we will keep our eye on you guys. still ahead, twitter is intensifying its efforts to combat disinformation in political ads by unveiling a new -- another new policy. what is different this time? we will discuss, next. ♪

emily: tesla's revenue ramped up last year as the company resolved model three production problems. the netherlands became the company's number three market worldwide. china, meantime, saw sales drop. tesla began to ship model 3's to europe and china this month. twitter is taking steps to keep russia and other groups from meddling with european union elections in may. it plans on introducing extra checks and will publish more information around political ads in europe. the eu wants tech companies to step up efforts to combat misinformation or face regulation. what exactly is twitter doing differently? sarah: twitter will do what it rolled out in the u.s. last year

which is a little bit of a more transparent archive for political ads. now in the u.s., this is something facebook and google have already done with mixed results. there is some lack of transparency in terms of the verification process. people get verified as political advertisers even though they aren't, but at least it is a step in the right direction. what twitter is doing is basically what the honest ads act, one of the big proposals by congresspeople this year, to get there to be a similar level of transparency in digital ads as there are for ads in tv and radio. emily: so, how is this different from what twitter has done in the past? sarah: well, they are expanding it. now they have expanded it to the u.k. facebook is rolling this out around the world ahead of various elections. they say they will have it worldwide in the summer. it looks like there was going to be a standard across facebook,

google, and twitter for political ads going forward. emily: talk to us about where facebook stands. sarah: facebook, in the u.k. especially, is in trouble. we have seen a lot of talk from regulators, especially the digital energy and commerce committee in the u.k., saying that facebook has been acting like -- it has no regard for the law. they are trying to do with what -- do with people's privacy things that extend beyond their expectations. there was a major report that came out over the weekend that called them digital gangsters. there is serious reckoning happening there. you also have a possible fine coming from the fcc that could run into the billions. you have german regulators cracking down, as well. facebook is an regulatory hot water around the world and moves like this on the part of facebook, on the part of google and on the part of twitter can really help them stave off even more criticism.

emily: i want to ask you about a facebook story we mentioned earlier which is a consumer complaint about being overexposed in facebook groups. congress is inquiring about this directly to mark zuckerberg. what can you tell us about this? sarah: there was a letter that came out today from the congressional committee, the same one that interrogated mark zuckerberg in april, asking why was it that these people were joining these private facebook groups to discuss their personal medical conditions, and having that information be used by facebook in its advertising algorithm to allow advertisers to target those people based on their medical conditions. it is a huge breach of what people expect facebook to be collecting from them in those groups. someone was arguing a couple of weeks ago, we think about privacy in terms of facebook giving information to others, but what we really need to be thinking about is information facebook itself collects about

us and the ways they do it beyond what we would expect. in a private group, you would not expect facebook is keeping track about the fact you are talking about a very private disease. emily: there is a difference between what people expect and what facebook does, and what facebook may tell you in some long and confusing service terms. is it something that is ok according to facebook's terms of service? sarah: they are tracking all of your activity on facebook. even if you scroll through your feed and spend a little more time on one post than another post, even if you don't click like on it or share it, they are still looking at your behavior and trying to glean information from it in their algorithm. i think it really does go beyond what people expect. facebook -- they have the ability to follow you around websites they don't own, apps they don't own. all of this serves to enhance their advertising algorithm. some of it may not be necessarily facebook employees knowing things about you, but it feeds into the system that can

then target you with an ad that serves medicine based on the group you joined. emily: what does congress want to know from mark zuckerberg? sarah: they are demanding a hearing. they want facebook to explain what happened here and how this works and whether that loophole -- that problem -- that loophole has been closed. we have not heard a response from facebook on this today, but it is just another example of this drumbeat we will continue to hear this year of regulators calling out facebook for going beyond consumer expectations in how they administer their product. emily: sarah frier, thank you so much for that update. one we will continue to follow. well, twitter isn't the only platform changing up its policies. starting february 25, youtube channels will get one-time warnings the first time they post content that crosses the line. with no penalties except for removal of the content.

for more, we will bring in bloomberg's lucas shaw. how exactly are the policies changing here? lucas: the warning at first is something new. it used to be the first mistake, you would get a first strike which would penalize you. in some way. often with a ban on live streaming. now, because creators have complained the community guidelines are unclear, they will get a one-time warning that allows them to figure it out. that is good news for the creators who are upset about it. it does not solve the big picture problem which means the guidelines on youtube have not made a lot of sense to these creators and seem to have been applied somewhat capriciously. emily: youtube is saying with the new guidelines, they will make a better effort to be more transparent and give you information when they pull content down. there is only one penalty that will be standardized across all issues, not different penalties for different kinds of violations, correct? lucas: yeah. youtube has also adjusted the

punishment with each strike. the way this works is you get a warning the first time. if you do something again, a first strike. that strike lasts for 90 days. if you have another video that infringes in that window, you get another strike which leads to a steeper punishment. with a third strike, your channel gets taken down. it used to be the punishments for those strikes varied with the infraction and the type of channel you were. emily: europe has already been making changes to the algorithm to reduce recommendations of things like conspiracy theories, for example, which range from everything from the earth is flat, 9/11 conspiracy theories, to the parkland students were crisis actors. how is that impacting engagement on the platform? lucas: engagement across the platform, i have not seen a dramatic change. what it does is it tends to impact individual creators or pockets of creators because youtube has to ingest so much video every second.

most of that is still handled with algorithms. they will dedicate human resources to fixate on certain problems that are causing them headaches at the moment, but by and large, things are still handled by computers. you will see the algorithms flag certain types of videos more often. all of a sudden, somebody who previously had all these videos that were making money had all of these ads gets shut off. then youtube changes that, not realizing it will affect another video on the platform. it is a whack-a-mole that happens where youtube is always having to solve a problem from behind. because it is such a large company and there is so much a video, it takes so long to implement these problems, they solve a problem from six or nine months ago. emily: who are the main targets here? super prominent youtube stars like logan paul who violated policy by posting a video of someone's suicide.

or pewdiepie who violated policity by making racist comments. is that the problem or less prominent users? lucas: i think youtube is definitely guarding against those high-profile problems. they also want to look after the smaller creators. all sorts of inappropriate videos. youtube is a company that does not want them on their site. it does not please advertisers. but, i think mostly they are trying to come up with a policy that is consistent, that will mitigate the complaints of their creators, and make it look as if they have a system that is more equitable and more reasonable. and to use their own word, more transparent. emily: bloomberg's lucas shaw for us in l.a. thank you for bringing us those updates. we will watch to see how it impacts the platform. that does it for this edition of "bloomberg technology." tune in this wednesday. we will talk about the news coming out of the samsung event.

we are, of course, livestreaming on twitter. check us out @technology and follow our global news network tictoc on twitter. this is bloomberg. ♪ the latest innovation from xfinity

isn't just a store. it's a save more with a new kind of wireless network store. it's a look what your wifi can do now store. a get your questions answered by awesome experts store. it's a now there's one store that connects your life like never before store. the xfinity store is here. and it's simple, easy, awesome.

program. the opinions and views expressed are not reflect those of bloomberg lp, its affiliates or employees. this program is a paid presentation brought to you by dr. ho. >> on today show we are talking about circulation. if you suffer from pain and your neck and shoulders, bad circulation in your legs, pain in your knees or ankles, we are going to meet dr. ho. he has a device that helps relax muscles and improve circulation and relieve pain. let's welcome dr. ho.