emily: i'm emily chang in san francisco and this is "bloomberg technology." coming up in the next hour, facebook's new mission, social network -- the social network says it is pivoting to more communication. plus, amazon is flexing its muscle in washington, stepping up lobbying efforts and spending a record amount of cash to get its d.c. agenda on track.

and recharge. tesla making moves for its model three rollout by revamping its charger network if the infrastructure -- network. is the infrastructure in place to taken to the next level? it's no surprise mark zuckerberg is finding ways for the social network to change after the company was besieged by scandals and bad press. what is surprising is that he wants facebook to go from more open and public communication to much more private. zuckerberg says facebook will emphasize communications among smaller groups, and technology that keeps outsiders and facebook itself away from peering into what people are sending through its social network and the apps instagram, whatsapp, and messenger. one analyst says that sounds like snapchat. that analyst joins us now, rich greenfield, with bt edgy -- btig.

sarah frier is also with us. sarah, walk us through the reaction to this stunning post from mark zuckerberg. sarah: some critics call it a victory. this criticism zuckerberg has faith over privacy and now he says it is really important, but i think the difference is going to be what we see facebook do with this. it doesn't change the fact that they have their news feed or change that their advertising business is built on user data. not a lot changes of how facebook's business works. been vocal, you have on facebook and mark zuckerberg says the newsfeed will remain, but that's what make at targeting harder. is that concern you? rich: it is absurd, when you think about the fact of what is facebook right now?

you spend a lot of time browsing through newsfeeds, in groups. one thing you don't do a lot of if you don't spend a lot of time messaging. you go to messages someone, you are generally using i message or snapchat if you are trying to reach someone younger, but you're not using facebook messenger. someone overseas is using whatsapp for sure. notbook messenger has caught on as the principal way to communicate, nor has direct messaging in instagram. it's a rapidly growing part of facebook, that for mark zuckerberg and facebook, this is trying to reclaim messaging. they want to dominate messaging and combine it with what they already do with instagram stories, facebook stories, whatsapp stories. they want to capture more of your daily time spent. the one big place they are missing is messaging. i think that is a big opportunity, not just to drive

their content business over time, but to drive the commerce business, which is in the early stages but i think they are taking very seriously on how to between marketing and commerce. emily: net, mark zuckerberg says he sees private messaging fastest.he it is unclear whether he meant on facebook platform or other platforms. this raises a lot of questions. did he answer those questions when you spoke with him? nick: he answered some of the questions. he answered the question, my central question was that the post was unclear about whether he is a new network or owing to evolve the tools facebook has. he was clear about that is that -- in that facebook's tools will exist and they will be building something else.

if people do move more towards messaging, and if they move off newsfeeds, particularly to encrypted messaging, how do you monetize that? it will probably be some sort of payment processes. there will probably be some facebook coin. but how does a company that has turned into a half a trillion valuation based on big data collection and targeting off that data, how do they make money into this new era? emily: he told you the thinking is there needs to be two types of platforms and more public platform, the digital equivalent of a town square, and the other platform is the private space, the digital equivalent of the living room. how do these two work together? what are the questions you have, sara, about the execution here? sarah: the biggest question we have if we are going into this living room type space,

especially in encrypted type messaging, is whether facebook will be able to release that content. the answer is that they won't. we have seen what happened with whatsapp, which is an encrypted messaging platform, and has contributed greatly to the spread of misinformation and ely illegaltents -- and contents. facebook has not been able to do anything about it because they can't see it. in some ways, in this new market facebook is trying to go into, they are washing their hands of the debate over what kind of content a should have oversight over. emily: given you said this sounds a lot like snap, are you as bullish as you have been on facebook and it comes to revenue and also engagement, rich? rich: the reality is, if you think about the original concept behind snapchat, i remember going for a walk on the venice

boardwalk with evan spiegel and he said think about snapchat this way. if you can communicate all the time just the way you and your sister would do, to your phones -- friends endlessly, and then in between, you would watch television. that was the goal of the left and right side of snapchat, going back to the early days. messaging and content can live together. when you look at facebook and instagram, they principally have been content consumption platforms for news and information. videos growing quickly. look at instagram. it will be a bigger business and facebook. people are spending more and more time on instagram. that is coming through stories, which is not yet as monetize a boy as the core newsfeed, but the reality is that this is about capturing more of your time. ad dollarsbe lots of to grown instagram over the years to come. we are even more bullish than we have been. a lot of the fear that has been

stoked by the media, broadly by media and regulators that facebook is dying, around you. people -- look around you. to her is-old boy using facebook groups. i never would have assumed that you would have teenagers joining facebook groups because their instagram -- interesting -- they are interesting. there's a lot of great growth ahead. while there are lots of things to tackle in terms of privacy and issues, which are not easy challenges to deal with, the reality is facebook has more resources than anyone else, other than google, to deal with challenges. emily: as a proverbial member of the media, next, why do you think mark zuckerberg is doing this? he told you he's not so worried about the business, but he is worried about safety and security because there will be less -- it will be less easy for them to track whether bad behavior is happening.

cliche, is facebook doing this for the right reasons? is this just to avoid government scrutiny? to appease the ftc? is it because of the media? incredibly an interesting question and a hard one to answer. i would say there are a couple of reasons facebook is doing this. he does see this is what people are doing. s and sees where this is the trend of where people are going. is older now. when he started facebook, he was young and didn't care about privacy. number three, i think there's a real benefit with regulators. if you look at the fundamental threats of facebook, it is antitrust regulation, and many people pushing it the hardest have proposed a solution where

facebook, instagram, and whatsapp are split. integrated, suddenly the argument from the antitrust side comes harder. it involves public perception and employee perception. there's a sense facebook has been on the wrong side of history for the last year, facebook doesn't want their engineers to leave, so pivoting to privacy encryption, that's most people, particularly in the community, think that's the right way to go, is good for morale. it's a combination of personal motives, cynical government motives, management motives, and financial motives. emily: he talked about the difficulty of getting the right leadership in place within facebook and leaders that agree these are the right priorities. it will see interesting to see how facebook manages this transition. thank you all for stopping by.

up, a were two of the biggest data breaches in history. while congress is demanding more iswers -- why congress demanding more answers from the ceos of equifax and marriott. that is next. this is bloomberg. ♪

emily: equifax and marriott were targets of two of the biggest data breaches in recent history. sensitive data of more than 145 million people were stolen from equifax, including social security numbers and more. marriott have the records of 383 million guests breached, including passport numbers. permanent senate subcommittee on investigations questioned their ceos and were

not happy. take a listen to a senator, the ranking democrat. >> when hackers are able to obtain someone's personal information, the consequences are real. dataonstant stream of breach notifications we see is assigned to me that we could and should be doing a lot better. emily: i want to bring in the vice president of research at the cybersecurity firm very co -- verico. and in washington, we have our data reporter -- data security reporter. what was feis -- >> the lawmakers were not happy about the steps these companies took before the data breaches. they went hard and questioned them about what cyber security protocols they had in place and wanted to know what steps they took afterwards to notify consumers. said they equifax ceo

still don't know who stole the data. take a listen. >> our analysis is that there has been no evidence the data has been sold or no evidence of increased identity theft as a result of equifax data stolen in 2017. emily: he says there's no evidence the data was sold. what's the likelihood this data was taken and won't be used? >> pretty unlikely. usually, when we see a big data dump like that, then you know it is being monetized and sold. when you don't see it appear, is state isat the nation using it in a targeted fats and -- targeted fashion. they want to use this in a strategic way. emily: he says they still know who took it. is that unusual 18 months on from this breach? aris: attribution is

difficult task, generally speaking. if you look at the report, the one the senate came out with today that details the , theyigation in depth talk about how the server reached, they saw chinese traffic coming from it once they were able to monitor the traffic. have any operations there, so it was weird there was so much traffic generated from china. that was one form of attribution that seems possible. emily: what does that mean? chris: it means either somebody is bouncing through china or it state actors themselves, which may be reusing that information. how are they going to target individuals, perhaps high-value individuals with that information. anytime you have personal information that is otherwise you cant to come by, use its pretty effectively and social engineering attack or a

phishing attack where there is that nature of trust that you try to establish with that person by virtue of knowing information about them. you can see this information used in targeted attacks. emily: how does that differ from what we know about marriott, sara? sara: with marriott, they acquired the database system a irs wasrs ago, so the different because their system had already been breached since 2014. still looking to see how the data is being used, if at all. emily: do they know who stole it? sara: as far as i know, they do not. tom, ashris, senator you heard earlier, hit these companies hard. he said if the leadership that is running the company today was running the company when this

happened, it wouldn't have happened. is this a leadership issue? chris: there were a number of process and leadership and cultural gaps in the equifax. lapisok at the number of -- lapses that happened, nothing is one person's mistake. is a cascading failure of multiple processes. the number one rule is security is that if you don't do something is there, can't secure it. they had very little visibility into their assets and how their software was built, with these open source components. if you don't know that's, you can't secure those systems. there is an increased focus on that today. leadership is putting emphasis on that, and they realize the inventory issue is something they need to focus on. ,mily: chris eng of veracode lots of great questions along with sarah american -- sara. amazon is growing at presence in

n washington. . "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: u.s. groceries chain kroger tumbled the most in the year after its holloway -- holiday -- holiday

season. to kroger cfo spoke bloomberg about one of the biggest issues on investors minds, the rising threat from amazon. >> high have over 2700 food stores today and about 11 million customers a day on average coming to one of our properties. they live within a couple miles of our stores. we have been building out the dude told platform and we feel we have the infrastructure with our brick-and-mortar to serve our customers conveniently. emily: speaking of amazon, the giant is deking -- stepping up its game in washington. amazon lobbied more government entities than any other tech company last year. the company spent $4.2 million on lobbying in 2016. that the 460% increased over the last six years. this is as jeff bezos continues to clash with president trump.

talk to us about the trends you're seeing in amazon's lobbying tactics as opposed to other tech companies. >> amazon has been increasing its lobbying -- spending on federal lobbying, a lot in the last year. now that it has an established washington presence, it is getting more aggressive on how it interacts with its competitors in washington. you see amazon but heads over a gsa deal to sell office supplies to several agencies -- federal agencies. crowds -- cloud space as they bump heads with other tech companies for a cloud deal. in addition, we see amazon hireer marquee people -- as it navigates

questions from lawmakers about the lack of diversity in its workforce. we see a more aggressive amazon in washington. emily: why is amazon doing this? is it about this pentagon cloud contract? naomi: the deal is part of it, ,ut the bigger picture is that as amazon expands into other markets, and as it widens the scope of its business, it is getting more competitors. if it gets into the grocery store space and increases in that area, it will get probably more pushback from existing businesses in that market in washington as well. the competition it is facing in the marketplace is translating into competition in washington. emily: how is amazon throwing its weight around, and what is the impact that is having? is theone good example trade group space. amazon was part of a trade group

that was called iti. essentially, amazon muscled its wasand that's group advocating against it and amazon pushback. i group disbanded debt that -- that's group disbanded. that's one example of how amazon gets aggressive on its competitors and supporting his own interest. emily: how is jeff bezos operating in washington, has aside from owning the post. naomi: jeff bezos is building a mansion in washington, and you see him increasingly interacting with washington. he is going to more exclusive parties, showing up at events. a clubcently, he was at where he was one of the stars of the show. he did a whole skit and jokes

about how he might by the national enquirer, eluding to some of his more public issues there. jeff bezos is no stranger to the nation's capital. to coming to northern virginia -- hq2 coming to virginia, that will make amazon will stranger to a larger group of policymakers here. emily: interesting color there. naomi next, thank you so much for the update -- nix, thank you for the update. misinformation and cindy is to spiral around twitter -- misinformation continues to spiral around twitter. and later, the store closing. tesla's rough start to 2019 continues. we will discuss. this is bloomberg. ♪ is is bloomberg. ♪

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emily: this is "bloomberg technology global link" where we join bloomberg daybreak australia to bring you the news. in world let's get a look at the global tech stories of the day. buyirbnb has agreed to hotel tonight in its biggest acquisition yet. the move comes as airbnb continues to increase hotel listings on the site before its initial public offering. airbnb did not disclose initial terms of the deal, but hotel tonight was valued at $463 million in a venture capital deal kid of years ago.

softbank has launched a $5 billion technology fund focused on latin america. initially, softbank is committed -- committing $2 billion to the general will serve as partner. shares -- etsy shares dropped after the company provided five-year guidance including a slowdown from 2018 revenue growth. the slump comes on the back of shares soaring near all-time highs as investors showed faith in the company's efforts to woo more artists to the site. emily: thank you. a slew of running in elections this year are taking to social media to share

slogans, his policies, rankle rivals, and browse crowds ahead of campaign rivals. twitter's asia chief learns how twitter's asia chief talks to us about how the platform is limiting the use of fake news. >> we promise to be able to show every side of the story and what then when to do that debates are happening at elections and so on and so forth ? in markets like india and australia, we are bringing some of what we've done in the u.s., bringing things like a new transparency center, to be able bring information like who is advertising on the platform, etc., while we continue to focus on the big pillar of our strategy, which is health, and be able to enable people to have

free and open conversation with least disruption. >> fake news is one thing. fake accounts is another. what is twitter doing to address these concerns and privacy concerns? >> privacy is incredibly important to us and has always been. if you have ever heard our ceo, jack dorsey, talk about this, it is very close to our heart. when it comes to fake accounts, our effort has been on the pillar of health and improving healthy conversations on the platform. between efforts on products, on policy, we has made tremendous steps. we have seen that we are able to up the number of issues we are catching in time by three times from last year to this year. we are seeing that we are making

great strides. >> is ai really the front runner in terms of moving forward trying to crack down on fake accounts but also streamline content? >> we do believe that for us to be in the position of a healthy platform, we need both manual efforts and ai efforts. ai helps the effort scale. on theorts in video platform help our advertisers be able to get to healthy and brand safe advertising conversations, so we use this approach across our business. >> in terms of all the headwind we are seeing with global growth, how is twitter positioned to grow? >> we have had incredible success and momentum coming off of the earnings over the last quarter.

we see our audience continue to healthily.a very very healthy markets in southeast asia in general as well as korea being a very exciting source of growth for us . increasing demand for video and premium video, so our partnerships in the video space continue to thrive. >> is video the strongest component or contributor to revenue? >> over the last year, it has more of our50% or revenue, so, clearly, that is where audiences are putting their time and eyeballs, and it's also where advertisers are really driving engagement. particularly, we see strengths in the areas and times when marketers want to launch new services. twitter is the platform and twitter video particularly is the exciting offering for them.

>> in terms of how twitter has evolved from a platform of hundred 40 characters or less to being able to push out further what your message is and also video, how do you see twitter poised to evolve and grow -- from a platform of 140 characters or less? the conversations could be text or video, but essentially enabling a connection in the world around topics that matter so people can come to twitter and see what is happening at any point continues to be our strength and value proposition. to that extent, in asia, we have seen for instance partnerships in the video space with channel --en networks and australia in australia, strength with sport across the board. we think it will be an exciting year ahead across entertainment,

sport, and news. >> you mentioned a couple of earlier. i know the philippines is huge. korea.o mentioned what is driving -- millennials, really, but what is driving them to the platform? >> it is millennials. that trend0, we see playing out on our platform. in asia andig trend we see bands really drive amazing engagement with his millennial consumers -- these millennial consumers. regional growth and within that, we see philippines in gauging in tv content in interesting ways. you often see trends become trends on twitter within the region as well as globally and k pop drives trends regionally and globally.

emily: i want to bring in our own selina wang, who covers twitter for us. >> international revenue has been a growing component of twitter's overall revenue if you look at the daily active user base. it has been pretty much flat, barely growing, or negative in it hasted states, but been pretty good growth internationally in japan is twitter's second-largest market and growth has been bolstering some of the declines in the u.s. over the past few years. in the fourth quarter, revenue in japan grew 30%, outpacing that domestically. asia, japan, southeast asia, india, are all very important markets for twitter and increasingly so. >> this question of how they will be able to stop the spread of fake news on the platform, particularly as it is an election year for so many asian countries -- have we seen them

take measures to increase security and be able to prevent that kind of thing from happening? interestinge was an note from twitter that there was participation from foreign actors in the 2018 u.s. midterm elections. but that said, they did still find activity from venezuela and russia, so what that says is they are getting better at surfacing and finding this manipulation, the fake accounts, the spam during election years, but they still have a long way to go. as the vp mentioned in her interview, they are making stricter enforcement policies. they are combining human review checkers as well as algorithms pressing ande most abusive content and using those get rid oflicies to manipulation. millionsce is checking

of spam accounts, potentially malicious accounts every week. they all still have a long way to go in terms of securing elections, but they are certainly aware of it. you so much for joining us head. much more ahead, so do stick with us. this is bloomberg. ♪

learned atmberg has the pentagon is reviewing elon musk's a security clearance after the spacex ceo smoke marijuana on a podcast last year. the moment quickly went viral. went on the show,

spacex has won contracts for national security space launches including when valued at new $300 million. musk has refiled security paperwork since he went on the show according to sources familiar with the matter. sticking with musk, a blog that follows tesla reports says sales are slowing down. it estimates the company sold inund 5750 model threes february, a big drop off from the record 25,000 sold in december. the general manager of wedbush securities is standing by. concern you? >> it is not new news in terms of direction. right now, it is really about europe. issuesre some delivery we saw at first, but i think there has been a pretty significant positive in europe.

i think this is more of a speed bump rather than the start of a negative trend as a transition to model three and the midrange, especially with europe and china rolling on. emily: elon musk has in the past pushback on numbers, saying that they are wrong. how correct do you believe this are a?estimates of sales >> we continue to believe that accounts, tracking -- i think it is tracking slightly below expectations, but nonetheless, i think most investors looking at as as the trough quarter tradition to what we will see in europe and china. i do think the bark is a little worse than the bite here in

terms of what we see from demand. i think production has been pretty steady and i think demand will ramp up in march, but remember, europe is the key to one q and so far, it has been pretty smooth. the stock has had a lot of the punches we have seen over the past few weeks. emily: tesla is updating its charger networks with the goal of cutting wait times in half. of course, you have competitors ramping up their rollouts this year with their own infrastructures. what impact will doubling down on the supercharger network have ? their competitive energy has been the supercharger network and that is something they do need to double down on, especially with the the competition increasing, not just in the u.s. but in europe -- competitionith ev increasing. 2019 is a major transitional

here for tesla, not just to invest further in supercharger, but if you look at the buildout in shanghai and taking on debt, the rollout in europe, especially in the u.s., all about that midrange and, obviously, the 35 k, as you see the tax credit heard demand on the high-end, it was expected, but no doubt this has been a white knuckle period for investors in tesla and you see it reflected in the stock. emily: what is your read on this issue -- closing stores, moving to online only, the very abrupt nature of it, even after tesla in the last quarter touted its retail strategy? k it came down to for a 35 vehicle, they were going to do it where it would be gross margin neutral at first and ultimately something toward cars and margins. they needed to ultimately ripped the band-aid off and close stores. to figureoing to have

out some of the new models coming out of the test drive and making sure that there as consumers get the look and feel of the new model, but this is something where it is a risky move in the near term, but it was the right medicine for the long-term. from a margin perspective but as well as just the strategy, and i think this is something where the knee-jerk reaction has been negative, but we believe this is the right move for the long term for musk and tesla. emily: what is your outlook for this for this year, given other story imaging out of china that potentially there are some model 3's being delayed and customs inin retaliation for the ceo of huawei being extradited to the united states potentially? >> we continue to see this as a

quarter where you saw a trough in sales for model three, whose transitional period especially in europe, you look at what has happened on the tax credit, i think as they navigate out of this period, you will see profitability -- i do believe it is a self-funding model, and i think this is one they will navigate through this period and be a much healthier company a year from now and that is why we continue to view this as a name we are bullish on even though it is obviously a handholding period. emily: always good to have you. thanks are sharing your thoughts with us. still ahead, competition to commercialize space flight is heating up, but the private is noty's race to space quite so new. we will take a look at the history of private space next. this is bloomberg.

emily: tim cook has changed his last name on twitter. the president referred to him as tim apple, and cook joined in on the job changing his name to the apple logo on twitter. love that one. tech billionaires jeff bezos, elon musk, and richard branson are making the names known in the space race. while space exploration is typically associated with government agencies, this is not the first time entrepreneurs have taken on the final frontier. here's a brief history of private spaceflight. >> the time is coming in the human race will get to the moon with rockets. >> private companies will not want to do this. how are they going to make money? >> by charging for the ride. >> is crazy billionaires competing with each other. >> modern-day rocket men want to send you to mars. >> the private industry space

.ace is on >> we tend to think that space exploration and human spaceflight is all about governmental agencies like nasa, but it was not really always like that. some of the very first steps by early rocketry pioneers were funded by the private sector. >> in the u.s., it begins with .obert goddard 1920, and he publishes a method of reaching extreme altitudes. >> they called him the moon man and laugh. >> "the times" editorial writer implied your husband did not even know high school physics. >> he did not let such things to turn him from his experiments. >> he successfully launches the first liquid fueled rocket. money from the family of the

mining magnate daniel guggenheim soon followed. >> they provided him funding in today's dollars at scale of tens of millions of dollars. what's interesting is at the very start of this period, there was actually a great amount of enthusiasm and belief in the potential for these rockets to go to space. >> the german war machine gets under way. second world war gives rockets a whole new lease. >> the knowledge of rocketry cold waritical to the and in the 1950's and 1960's, it was almost exclusively a governmental affair. the private sector was essentially working as contractors to the u.s. government. that a not until 1982 serious effort emerges to build a privately funded rocket. the idea comes from a texas businessman. >> it may not have had the majesty of an apollo or the

thunder of a shoretel, but a shoretel, but if flu and that is what counts. >> everything speeds up at the turn of the millennium when freshly minted millionaires take interest. -- it may not have had the majesty of an apollo or the flnder of a shuttle, but it ew and that is what counts. >> everything speeds up at the turn of the millennium when freshly minted millionaires take interest. a $10 million award for reaching the industry's holy grail, a reusable manned space depot. in 2004, spaceshipone wins the prize. there it is, a craft that has been to space and back right in front of you. >> richard branson buys the rights, turns it into virgin galactic, and starts taking commercial reservations.

billionaires have interest in spaceflight, but their investments still pale in comparison to government investment. nasa, for example, is in most years spacex's primary customer. >> but there are setbacks. >> explodes into a ball of fire and debris. >> deadly crash involving virgin galactic. >> a spacex rocket bringing supplies to the international space station -- as you can see there, it exploded. 2015, the newin shepherd rocket becomes the first to take off and land vertically after reaching space. shortly after, spacex goes even further, sending its falcon nine to orbit altitude. >> the other major milestone onl be the first tourists commercial vehicles. i'm not going to predict who will be there first, but the hope is that by having more

competition amongst commercial companies and by leveraging advanced technology that we will be able to reduce the cost of going into space. >> 2019 as the years spacex and boeing are gearing up to take astronauts to the international space station -- 2019 is the year spacex and boeing are gearing up to take astronauts to the international space station. >> for well over 100 years, people have been dreaming and thinking and planning a future for humanity beyond this planet, and that includes a future for humanity on the surface of the moon, on mars, and even farther still. a goal of we have continuing to expand our cosmos, thenthe the ambition and dreams of individuals will be an important

part of realizing those goals. family: that does it for this edition of "bloomberg technology." -- emily: that does it for this edition. on our friday show, it is international women's day and we have a great lineup. that is all for today. i'm emily chang. this is bloomberg. ♪

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haidi: very good morning. australian markets have just opened for trade. shery ahn: good evening from bloomberg world headquarters in new york. sophie: welcome to "daybreak asia." >> wall street slides that to extend in asia. s&p 500 falling for a fourth straight day. investors further spooked by grim news out of europe.