♪ emily: i'm emily chang in san francisco and this is "bloomberg technology." coming in the next hour, tech names plunge. in a single day, hb think drops 17%. fox falls 9%. fitbit sinks 14%, and all on the back of earnings. what does it mean for the rest of tech? plus, could uber make a big global play ahead of its planned ipo? they're in talks to buy a middle

east competitor. and after dropping a few cryptic hints on twitter this week, we have coverage of elon musk's tesla news. and we begin with breaking news. tesla mystery solved. elon musk is launching a new model three at a lower base price of $35,000. the news first broke in the electric car blog after elon musk teased some mysterious news on twitter. california,00 p.m., tesla news. now we know what it's all about. tesla is holding an event at this hour where we presume they will announce this officially. tesla halted new car orders on its website. to discuss, we have gene munster on the phone in minneapolis, and in detroit, we have our bloomberg automotive reporter, keith.

keith, what do we know so far? keith: going with a lower price model three with a shorter range gives you on the opportunity to meet these ambitious sales volume targets. they're planning to produce 400,000 model threes this year. that's a lot of model threes and you can't sell them all at over $50,000. having a lower price model three should bring in new customers, value customers. the average price of a car in the u.s. is $37,000 so this makes it a joe average kind of tesla for the first time. emily: gene, hasn't tesla promised that the price would eventually come down to $35,000, it just took time to get there? gene: this was the original promise two years ago. in some respects, this isn't news. but in other respects, this is probably the biggest news since the model three was announced. because the simple math was that most, or many people felt for this car to get to $35,000 was

impossible. i think that is what is so important here. the $35,000, it doesn't sound so -- that significant. but compare that to the rest of the car industry, usually you are typically $70,000 plus right now. you can quickly see why tesla's 80% market share last year, they can maintain that kind of share, at least in the near term. the next one or two years. emily: tesla, as you mentioned, is already way ahead in the electric car market. it's going to be hard for other automakers to catch up. tesla shares are halted as we wait for them to officially announce what we believe will be a lower cost, $35,000 base price for the model three. keith, why did it take these two years to get here? kevin: you know, it's typical of automakers.

i know tesla isn't a typical automaker, but you usually start with a higher price models because it gives you the biggest profits. the biggest payback. then you move down the price letter and put out the lower-priced models to go for volume. you need to get critical mass going with high-priced ones. he is achieved that but now he has these ambitious production targets. in order to sell the cars, he really needs to have a lower price model. emily: now, how many more cars do you think tesla will be able to sell at this price? how does this change your model? gene: well, right now we are a little conservative relative to their 400,000 expectations. we probably need to rethink what our estimates will be for this year and next year. but the simple take is this. if you look at the broader market, there is 80 million vehicles sold per year. 1% of those last year were electric. in the future, there's no question 100% of vehicles, that

might be 10 or 30 years from now, but that's where we are going. this could be a significantly bigger company because of the $35,000 price. emily: meantime, keith, earlier this week, we covered the news the sec has asked a judge to hold musk in contempt around the production numbers, which jane gene wasoning -- mentioning. do you think some of these legal issues could impede tesla's progress this year? kevin: well, they could impede elon's progress, that's for sure. once again, he put out a tweet that said they were at a 500,000 rate on the model three when they're going to produce 400,000 this year. he continues to tweet unfettered. that's the issue the sec has. emily: gene, you had some choice words about musk's latest tweets. you say he has been reckless. how concerned are you these issues will continue to affect his leadership and possibly the

company? gene: concerned. and i want to make it clear i'm a believer in the tesla story and believe in elon musk and i think he's better as part of the company. i was once hopeful he could change, and unfortunately, he is not going to change. he's going to continue to do reckless things on the edges, and i just hope this recklessness doesn't impact the business because the company has a wonderful mission, and they are in a great place to change the world. emily: we continue to get headlines out of this official tesla news conference. tesla says it's shifting worldwide sales to online only and says the model three will have 220 mile range. gene, what does that mean?

gene: it means that it's a great car. other electric cars that are in this $40,000 to $45,000 range aren't even the cars you want. when you compare, at this price point, it will be 80% plus market share and probably close to 100% market share. and i think that the car companies, the industry, will go through an incredible turbulence in the next few years because to try to build something comparable that they can do at scale and make money on is a problem i don't think they are capable of solving. emily: tesla doesn't do much traditionally. is there any other automaker that has online only sales? kevin: no, the automakers use the traditional dealer network.

elon has been very explicit and how he wants to sell direct to consumers, which has gotten him into trouble with state regulators, who are tight with traditional dealers. he's finding a model that works for tesla. the important thing about this car, it won't have quite the range of the more expensive models that will be the seed core for the brand. this will give them a future beyond the wealthy people who have been able to afford tesla before this. emily: i still remember being at tesla the day the model three was unveiled, taking a test drive in one of those early models, gene. what does this cost? let's talk about what the cost means in terms of tesla making money. they can get the car down to this price, but how will it impact tesla's bottom line? gene: what they've said versus what it will look like initially are two different things. the initial units will likely not be profitable.

i can't imagine them making money on them through the next several months, but they have ambitions. they talk about the december quarter and the gross margins should be 20%-ish on the model three. that was with an average selling price of over $50,000. as you scale it back to $35,000, i think that the math is there. i mentioned earlier i think that's the real substance here is that they're able to produce a car -- the average price will be close to $40,000 at the end of the day. as long as they can keep it to , really, 5% or better margins on that, i think investors would because the size of this growth curve being one of the biggest waves coming in tech. emily: now, getting more details from the tesla news conference, not only our sales shifting to online only, but tesla says all of the sales going online combining with other costs, efficiencies will enable them to

lower the cost of all cars by 6% on average, allowing them to get to that $35,000 model three price point. keith, what does this all add up to? keith: well, i think this means tesla sees competition coming from the german luxury makers. others are trying to get ahead of that. they are trying to build a critical mass so they can continue to control the lion share of the electric market. emily: kieth naughton for bloomberg news out of detroit and gene munster, thank you both. meantime, terminal users can follow along with all of the latest analysis. just check out our tliv blog. and 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: a handful of tech names got dragged through the red thursday after reporting disappointing earnings results. fox, fitbit, hp ink. sell some of the biggest swings. a fourth-quarter earnings season has helped fuel a 23% rally since the market rout about bottomed out christmas eve. i want to get to new york where we're joined by a senior research analyst. daniel, all of these are different companies, but tech is a common theme. what do they have in common, aside from tech? daniel: well, emily, i think if you look at some of the companies that disappoint today, there are specific stories like hewlett-packard where people are worried about the printing supplies growth and printing supplies contributes to a percentage of the profit.

if you look at booking or box or fitbit, ultimately those are concerns around competition and the need to invest to differentiate. but if we stand back and think about what is going on in technology, a lot of the key secular trends remain healthy. the move to the cloud, the digitization of society, we see a lot of opportunity even with some of the macro headwinds. so, for example, we would highlight cisco, which is a leader in networking that has transformed its next toward software and services. and we think margins and earnings will be better than the market expects. another name we like is motorola solutions, which is a leader in public safety pivoting the faster growth areas like video. they have an excellent management team that has been able to execute on transitioning the company to newer areas and expand margins. another name we like is alphabet. we think the core search business is healthy. and newer areas like the google cloud platform are somewhat

underappreciated. and then longer-term, they have opportunities in areas like autonomous driving with waymo. the other one we highlight is apple, where we think the strength of the ecosystem is underappreciated. while sure, there are concerns about the iphone and china, but the install base is growing and user satisfaction is high. they're doing a good job in services and wearables. and the wearables, i would say, helps demonstrate innovation is alive and well. we expect the environment to remain choppy. none of these companies have great visibility. but those that are able to innovate with products and services, can create additional shareholder value over the next one to two years. emily: some names we talk about on the show all the time are apple and alphabet. some names we don't hear very

often, along with hp ink, fitbit, box, how does what is happening with them fit into what is happening with big tech? guest: dan's point is right. there's this secular shift toward cloud technology, but what that meant was there are a handful of high growth cloud software companies, like workday and salesforce, and they have had really impressive stock price run ups, even accounting for the dip in stock market prices around september, october last year. what that means is that now, those stocks are looking pretty expensive relative to themselves and the overall stock market. the piece i wrote today said, look, the growth rates are coming down for those high-growth software companies and the valuations are going up.

that sets them up for a crater, if and when there is any hiccups in performance or the macro environment. emily: dan, i'm curious to your outlook on the big tech names you didn't mention. what about the others like facebook. netflix is certainly in an interesting position. daniel: we like facebook and, while we think there is a lot of work they need to do around data, security, privacy, i think the company and management team is appreciating the severity of the situation and we're seeing a greater willingness to change and try to improve the health of the platform. what's interesting there is that, despite all of that, the metrics of the underlying business remain healthy. if we look at some of the other platforms underneath the facebook umbrella, you've got instagram, which is showing very strong growth, newer properties like whatsapp and messenger that

we think could be increasingly monetized overtime. with core facebook, you have this transition to stories and it will take time, but the results and outlook suggests there is quite attractive growth. shifting to netflix, what we think is interesting here is that the company is continuing to push ahead with differentiated and unique content. they've coupled that with a direct relationship with their users. they're helping to redefine the television experience. all of these companies, there is execution risks, sure, and there's competition, but we think they're very interesting. another name we like is amazon. the reason they remain interesting is that they're executing well in their core e-commerce business and doing a terrific job with the amazon web services. and when we speak to customers, suppliers, the shift to the cloud is very much in its infancy. we think they will have attractive growth for several

years to come there. emphasize withto amazon, they have an advertising business that's growing quickly. we think that's somewhat underappreciated. the key trends around cloud, mobile, social, they're not without complications, certainly in terms of the social elements and privacy. we do think more regulation is necessary, but if we think these companies can invest appropriately and continue to innovate, we think there is additional value to be created. emily: and more regulation could be coming, especially with the ftc forming a new task force to look at past acquisitions. speaking of cloud share, you got a piece out today about the stock bubble in the cloud. explain. shira: yeah, and it's really, again, about looking at how extensive the cloud stocks have

gotten, relative to their expected revenue over the next year. i came up with -- i apologize for this acronym, i came up with a fake acronym, putins, to describe those stocks because every grouping of stocks need its own acronym these days. i looked at basically the median multiple, how much are investors paying for each dollar of future revenue. and all 17 of the grouping of cloud companies that we looked at, they're all trading above the two year multiple average. that implies the expectations are very high for those companies to deliver on the growth promises. and if they don't, we might see crateringcatering -- that we see periodically from these high-growth high expectation cloud companies. emily: so much to discuss and follow. this idea was just released of the new faangs.

all of this we will continue to follow. thank you both. coming up, uber is looking to expand its operations ahead of this year's ipo. how the company is growing in the middle east, next. this is bloomberg. ♪

emily: uber is expanding its operations in the middle east. they reportedly are in advanced talks to buy a dubai-based rival, one of the most viable startups in the middle east. while, no final agreements have been reached, the companies could announce deals in the coming weeks that would value new company at $3 billion ibo. this is as uber pushes growth preparing for its upcoming ipo. joining us to discuss is eric newcomer who covers uber. what do we need to know about this company? eric: this is a moment where uber might acquire the company internationally rather than

retreating. uber seems to be willing to pay a pretty big price tag, $3 billion. this is not a done deal by any means, but it looks likely at $3 billion, uber could acquire the careem business and there would be some sort of combined force in the middle east. emily: what is uber's position in the middle east right now? eric: you know, they've been competing back and forth aggressively. two strong players there potentially, coming together. like in a lot of markets, uber sort of positioned itself as bringing the technology and efficiency to bear, while competing against local players that have the local knowledge and hometown advantage. emily: bigger picture, give us an update on how uber is doing internationally about retreating from china and russia. retreating from southeast asia. and also in the context that lyft doesn't have much

international business at all. eric: right, lyft's businesses -- business has been focused mostly on the united states with a slight focus on canada. uber is all over the world. latin america is certainly an important market, europe. they're trying tactics to get into places like japan. it's still very much a global business in the middle east. i think we'll see a lot more, and i'm excited to see a lot more, when they file their s-1 in a couple of months. the dow will tell us more about how competition, globally, is affecting their business, but uber definitely still has a pretty big global footprint. also, don't forget they still have stakes in those companies that they left behind, whether it's grab or deedee, uber still

has stake in those companies. emily: could a big deal like this impact the timeline to ipo? eric: they've been working on this for a while, so i think it's been on their mind. it's not a surprise. we've been watching this for quite some time. they probably need a little time to update things, but i don't think it changes the game. all we can really say is uber is hoping to go sometime this year, probably the first half. i don't think this will affect that dramatically. emily: alright, bloomberg's eric newcomer for us in new york, thank you so much for that scoop. tesla is putting a $35,000 version of the model three on the market. what does it mean for the company and the future of electric cars? we'll discuss next. can instawork grow from its early success? this is bloomberg. ♪

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emily: this is "bloomberg technology: global link," where we joined bloomberg daybreak: asia really up to bring you the latest global news. i'm emily chang in san francisco. let's get a look at the global tech stories of the day. haidi, what are you following? haidi: emily, softbank's vision fund is betting big on the chinese car market, specifically used cars. the fund is investing one $2.5 -- $1.25 billion in a chinese car trading platform, raising evaluation of more than $5 billion as a competes in a segment that has remained largely resistant to disruption.

french telecom giant orange is asking huawei to except france's france's terms to supply 5g technology, including access to equipment used in core networks, antennas, motherboards, encryption keys, and code. a group of i.t. consultants -- consulting firms it is fighting the trump administration's plans to increase limitation on h-1b visas. the alliance has filed over 40 lawsuits against the u.s. immigration services over visa denials. consultants are seeing a higher denial rate, as high as 40%, compared to just 1% for big tech companies like google and microsoft. these are some of the global tech stories we're watching today. emily? emily: thank you, haidi. we continue with our coverage of

tesla, tesla finally putting a 35,000 dollars version of the model three sedan on the market almost three years after ceo elon musk started taking orders for it. so david, obviously a big milestone to get to this $35,000 number, but with all the add-ons, you're looking at a bigger number, but how much demand do you think this will drive? david: well, we've been waiting for this vehicle for a long time, so i think there are a lot of people already in line. obviously, you've got some people who have gotten tired of waiting and have moved on. incremental demand may come from more of this new distribution model they are talking about where they will do it all online, a selling method that will be very interesting to see if that succeeds or not. it's really easy for the consumer, but at the same time, we're talking about a vehicle here, not ordering a shirt from amazon.

haidi: online also means there will be fewer people who will need to sell these cars. does this mean there will be more layoffs, as well? david: yes, i was wondering if that was included in the 7% headcount reduction he announced earlier or not. i suspect it's not, but i have not heard from the company to announce that, but i suspect yes, a lot of people as stores will lose their jobs. haidi: will that drag demand was emily's question, as well, but should we worry about demand and losses in states that will not allow sales without a dealer franchise? david: that's a great point. that's an issue that's been going on for a long time with tesla. there are very powerful organization, well-connected in washington. dealers are not opposed to tesla. they just want to have tesla franchises, too, is my take on that. it is very state-by-state.

states are very restrictive, in particular a state like texas, which is one of the largest markets in the country. however, tesla has still been able to get their vehicles in the hands of customers in those states. you end up technically buying them from a tesla store in another state and someone delivers the vehicle to you in texas. emily: tesla does have 35 brick and mortar stores in california alone, and they did mention 7% of the workforce would be laid off in january. so you wonder how this new process will impact the workforce, david. what are some of the challenges you foresee with this online only model? david: the big one i think would be, will it get past any legal issues? i'm not a lawyer so i'm not going to go to into that. i'm not too worried about that, as we were just discussing, tesla has been operating for a number of years already, and it

hasn't slowed them down a ton. i think the next big thing is, will consumers be willing to buy the vehicle on their phone or laptop or whatever it may be in great volumes? because what they're doing, this strategy works very well when the customer knows for sure that they want a tesla. they can go online and configure whatever tesla they want, just like if you want to buy a porsche 911 or high-end corvette, it would nice to go to chevrolet.com, configure your car, and have it delivered to you without ever leaving your house. tesla wants to go that route. tesla isn't held back because they don't have franchised dealers. they own all their stores right now, but there are people that want to compare maybe a tesla

model three to an audi or mercedes. the return period is potentially a smart move, but will it be enough to get hundreds of thousands and ultimately millions of people a year to buy vehicles? the german vehicles, they each cell 2 million, 3 million vehicles, roughly, depending which vehicles you're talking about. it just remains to be seen if they can do it, but making the experience easier in retail is a smart move. emily: it's hard to imagine anyone making a purchase as big as a car, a tesla, without test driving at first, but that said, musk speaking at this news conference saying introducing the car at this $35,000 price, he says it's excruciatingly difficult to make this car for $35,000 and will be financially sustainable. how much pressure will this

price put on tesla's bottom line? david: well, at the same time, you'll have a lot of costs going out. the theory is eventually, you make it up in volume. ultimately, it's hard to say how many consumers, but certain consumers that want that $35,000 car. they will want some other features, and suddenly they're spending $42,000 or $46,000 or whatever it may be, up to $60,000. and ultimately, a pickup truck, too. it's a huge segment. haidi: we're getting news from nasdaq saying the tesla stock will resume trading at five: 40 p.m. eastern.

we saw the stock to drop as soon as the announcement was made, though throughout the day, it actually rose. what are we expecting this announcement to do for share prices? david: i'd be surprised if we had a rampant spike. that's not new information. we've been waiting a number of years for it. it was just a matter of when. there were earlier comments from elon that it would probably happen at some point in 2019. there's also that old cliche, buy the rumor, sell the news, so i wouldn't be surprised if we saw a decline on this. now that we know, there's no reason to get hyped up about whatever the announcement is going to be because you know what the announcement is. emily: the $35,000 model three is only going to come in black. any additional color will be at least $1500. our detroit bureau chief had some funny commentary saying

that musk is channeling his inner henry ford, who famously said that any customer can have any color car that they want so long as it's black. david: he was right to point that out. i was thinking the same thing before we went on the air. that's an old henry ford quote. that's another example of, if you want a different color, fine, but you have to give us more money. for years, i've never hung too much on that $35,000 price tag because it doesn't work that way. it's not that simple. a vehicle can range from a starting price of $30,000 and with all the features, be up to $55,000. as long as you want it in black, and there's a lot of people waiting for this car, and, frankly, the model three is a great looking car, too, so it should do well. haidi: thank you so much for joining us, david westin,

morningstar analyst, joining us there on the phone. users can continue following the news and analysis on the bloomberg. much more ahead, stick with us. this is bloomberg. ♪

emily: a new startup is making waves in the gig economy, gaining one high-profile vc's attention. is to work just closed a funding round. just closed ak funding round. the company connects workers with employees in the hospitality industry. does the gig economy have more legs? the ceo joins us in the studio. what kind of jobs are we talking about here? guest: really, any position

suitable for the hospitality industry -- restaurants, catering companies, so dishwashers up to cooks, servers, pretty wide variety, but we have about 10 positions that we focus on. emily: how do restaurants focus on this and deal with it now? sumir: it's a wide variety of ways, but mainly windows. one of the ways that's been exciting for us is servicing a set of businesses who really do n't have any good options today. they don't have linkedin. they don't have recruiters. they're winging it and we think we can be a valuable tool for them. emily: the success of uber led to a rash of "uber for this" or "uber for that" industries.

what makes you think this will be a good opportunity for them and won't just be a flash in the pan? sumir: what we discovered is a large pool of workers that want to be part of the gig economy, but they're immigrants, college students, they do not have a nice car, but they have a skill, a desire for economic opportunity, freedom, flex ability, but they are not driving for uber or lyft, a number of companies, so we found a way to help them monetize their time and skills. emily: there's increasing visibility to benefits or lack thereof for contract workers. how do you deal with that? sumir: it's a really good question. all of our professionals are 1099 contractors. we help them get workers compensation is contractors and our workers make about $140 on average for a gig.

we think that's on the high-end of all the alternatives that are available, about 150% of minimum wage. workers get paid very well and what they see in the app when they accept the gig is what they make. so we're not playing any games of smoke and mirrors. there are true earnings upfront and it's really good income. emily: so what is the competition out there? sumir: well, as i said before, the biggest competition is a sign on the window or doing nothing at all. if a dishwashers doesn't show up, most of the time they're managing without that dishwasher. emily: is this something that task rabbit would do? sumir: i think there's a lot of places people could go, but they're coming to us more and more and one of the reasons is quality, speed, and convenience. we've that our professionals. we're able to fill 97% of our

gigs in 24 hours and businesses are able to pay professionals through our app in a convenient way, so we manage a lot of the workflow and matching. it's sort of a one click stop for qualified health. -- help. emily: how big do you think this market can be? uber is potentially as $70 billion company. task rabbit ended up being something much, much smaller. both very different companies, but how big do you think the market is here? sumir: we think it's very, very big. there's probably about one million businesses in hospitality and those businesses employ about 50 million people, and that's just in the u.s. one of the exciting things has been if we're able to deliver quality professionals to small businesses as scale very easily, we can actually help set them up for success in a world with uber geeks and post mates and door dash. you can now latch onto a lot of

these customers and get them in the door. but one of the reasons we started was there is no efficient infrastructure to service all these customers coming in, so we think there's an opportunity to make the market eager by providing quality labor at the touch of a button. emily: will this ever involve, you know, helping uber find drivers or some of these other gig economy services stay running? sumir: over the four years we've had the company, we've always followed our users. they've taken us in different directions and they continue to find ways to add value with them, just listening closely to our professionals and partners. emily: thank you so much for stopping by. we continue to follow breaking news out of the tesla news conference. elon musk saying he does not expect tesla to be profitable in the first quarter. of course, we've been talking about the economics of offering a $35,000 car with the add-ons and what that means for the bottom line, but news elon musk does not expect the company to

be profitable in the first quarter of next year. more to come. this is bloomberg. ♪

emily: youtube announced thursday that it's banning comments on some videos with minors. in a blog post, the company says it disabled comments from tens of millions of videos that could be subject to predatory behavior and will continue to do so in coming months, this after several large companies including at&t, disney, and kellog's pulled its spending from the platform after reports of bullying in the comment section. how exactly are these changes going to work? guest: they're going to use a type of machine learning software that's going to scan each video and see if the video features a child that is 13 and under, and if it decides there is a child 13th or under in the video, it will get rid of the

comments section so this nefarious activity won't be allowed to take place. emily: we talked a lot about how ai still has a lot of work to do and a lot of improvements to make. how will ai be able to tell for sure? guest: i wouldn't be able to tell who's under 13 in a video anyway. youtube is making the decision that it will probably err on the side of caution, like if there's a video of someone who is 14 but they're not sure, at this point, they would probably get rid of the comments section in that video, as well, because right now they're on the defensive. emily: youtube did release a statement saying no form of content that endangers minors is acceptable on youtube, which is why they terminated channels that attempt to in danger children in any way, and this is on the back of a horrifying story with her was commentary

beneath some videos that led to some sort of pedophilia ring. the impetus was quite extreme. and getting rid of comments for youtube is kind of a big deal because it's a huge part of the social aspect of the platform. how does this fit into the bigger picture of everything that youtube is trying to deal with? guest: well, from the point of view of comments and social, youtube isn't really much of a social media entity unless you have the comments section. emily: and yet, they've held onto comments forever. i expect they're often very toxic. guest: they've resisted getting rid of comments in the past, as well. if you're a video creator and you're doing a valid job, comments are great because you find new viewers there, you get feedback from viewers, so it's very valuable for creators and youtube has to balance. it needs all these creators to create content, so it's a big

deal that they're getting rid of some of the comments. emily: is youtube leading here or just playing catch-up? guest: as usual, they're playing catch-up. three years ago or maybe more, they were having similar problems and they always say they're going to fix it. the main problem comes down to the fact that it's an internet platform and doesn't want to be responsible for the content because it's impossible to check everything properly. even if this software does work a little bit, they don't want to be responsible for it. they want people who post the content to be responsible for it. that's the key difference. any time they're forced to become responsible, they don't like it at all. emily: here they are taking some responsibility. thanks so much for that update. new story just out, hbo's ceo is stepping down after nearly three decades at the cable network. he made the announcement to hbo staff in a memo saying hard as it is to think about leaving the company that i love and the people i love in it, it is the right time for me to do so.

for more, i want to turn to bloomberg's lucas shaw in los angeles. obviously, this is big news and interesting in the context of the acquisition. what's happening behind the scenes, here lucas? lucas: well, just this week, at&t, which is acquiring or has acquired time warner, got the final sign that the doj's case to block the merger was not going to succeed and once they knew the deal was done, they could start making changes at the different tv networks that they planned. turner in particular was one area where at&t had been very hands-off and we're starting to see the shakeups from that. richard is leaving. there's a report out there that david leavy, the number two at turner, is also leaving. the previous head of turner has already left. we're seeing what this reorganization of warner media, what used to be time warner, is going to look like now that it's owned by a phone company. i got off the phone with one of the biggest executives in tv and

the sense was that he felt like it was the right time now, that he was not going to have quite as much autonomy and there was going to be a reorganization that might put him under a couple of extra layers. he's used to running this network with almost complete autonomy. emily: that said, this is fairly abrupt. and if you look at his legacy and what hbo has accomplished in the last three decades, it's pretty incredible. however, there is more competition today than ever before. do you think at&t executives were not happy with hbo and his most recent performance? lucas: i don't think they were unhappy with the performance of hbo. to your point, he's a titan of the tv industry. he's been at the network for the past 25 some years. he's seen it grow from a company with a few subscribers to one of the biggest tv networks in the world. it's a immensely popular. he was there when they green lit "game of thrones," which is by

most accounts, the biggest show in the world. but i think they want to better integrate some of the different divisions of warner media, if it's distribution, advertising, finance, legal, they see a chance to run things differently. there are reports they will have a network group. maybe hbo and cnn would be in one group. then there would be more of a studio group that would combine warner brothers, the studio out here in los angeles with some of the production that happens for the new york networks. and whenever you talk about a big reorganization, the people who run those businesses are probably not going to be happy that some new owner is telling them there's a better way to do what they've been doing, especially when you're someone like richard pressler, who feels he's done a great job the past several years and is nobody who

can do a better job than him. emily: perhaps it's poetic as we prepare for the last season of "game of thrones." we'll continue to follow this story. thank you for giving us some additional context. that does it for this edition of "bloomberg technology." we're live streaming on twitter as always. this is bloomberg. ♪ so with xfinity mobile

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