♪ i am emily chang in san francisco, and this is "bloomberg technology." coming up in the next hour, facebook earnings out, legal earnings sorry, the social network saying it is setting aside $3 billion in preparation for a massive settlement with the u.s. federal trade commission. plus, tesla first-quarter results delayed. they are supposed to be out, but we are still waiting. all we know is that elon musk

has not tweeted in the last three hours. ei with a six-month investigation of the british supply train, but first, our top story as we wait for reports. revenue growth holding steady, beating or falling in line with expectations at facebook, but it's legal bills might be taking a bite out of the bottom line. facebook is setting aside $3 billion for an investigation by the federal trade commission, which has not yet been resolved. joining us is david kirkpatrick in new york, and we have got deborah in seattle. first of all, give us your take on the headline numbers, legal bills aside. >> yes, you are right. it is hard to put those aside necessarily because the idea of a potential settlement is so massive. , ander, the revenue beat the user numbers were not a

surprise to us. facebook has shown over the past year, and it has been a year since the word of cambridge and luca came out, they have been sophisticate -- insistently able to grow revenues. the market for facebook is doing well. so that was not a surprise. the surprise was the $3 billion that they are holding back for potential ftc settlements. emily: and, david, in context, that is a huge fine. ever wasve the largest in the tens of millions of dollars. how serious is this? david: it is serious, but the key question is, is it a one-off? saying, what debra was if advertisers do not have anywhere to go except facebook, and as long as that is the case and advertisers do not feel there is a serious associated

risk, the execution is going to continue to be good, because they have proven they can deliver. but there is something about the very moment that they announced a $3 billion set aside for a likely fine, that investors still bid the stock up four or 5%. you have to wonder when this company will begin to pay the piper for the fact that it is essentially losing social approver to operate -- approval to operate. i do not think they are changing the way they operate fast enough to ensure that does not happen. emily: let's talk about that chart in the bloomberg, which shows user growth over the last several years, incredible growth continuing monthly and daily, active users, despite questions we ask every quarter about saturation, saturation in its most mature markets, and yet, when you talk about that sort of or socialefit motivation to use facebook, you have got congresswoman

alexandria ocasio-cortez saying she has stopped using facebook. she is a congresswoman who needs to use, presumably, social media to further her campaign, and yet, she says she is not using it, because the costs are too high. debra, does that concern you? not concern me because she is still using instagram, and facebook owns instagram, and she is using resources there. with david, i agree with many of his points, particularly the fact that there is the settlement coming up. advertisers and people who watch facebook need to pay attention to what happens, what transpires, not just the amount of money that facebook might have to pay but what sorts of concessions facebook might have to make in terms of changes to the way it stores user data and the way it store -- uses user data or how advertisers can use that data for targeted advertising.

advertisers and companies who watch facebook need to be attention to that, because this really is big news. emily: david, i saw you chuckle said they ownra instagram, but she said she is scaling back on other social media. do you think this is a bigger problem? david: well, this is a bigger problem. no question. there is a massive backlash against tech, largely reciprocated by the behavior of this company, and look at europe, for example. apple and google have already received massive, multibillion dollar fines in europe. facebook never has, but facebook could very, very easily start to face major legal problems there too, certainly legal problems underway. none of them have resulted in massive fines yet, but zuckerberg has already begun to adopt this idea, this language, of having a privacy-focused

vision, which is nice. he had better start delivering on it. if i could quickly mention one thing that could happen. there is a possibility in the u.k. and possibly everywhere that it could be proposed that no one under 18 could have any data gathered about them or targeted in any way for digital advertising. if that happens, that will be a huge cost, because these companies, not just facebook, do not really have an ability to differentiate about who is above or below 18 in many cases, so there are some complex issues that wall street seems to be more or less disregarding, if you ask me. emily: so europe has certainly been out front on tech regulation and on tech companies than the u.s. has so far, but speaking to what zuckerberg has been making, he mentioned in the earnings release saying, "we are focused on building out our privacy-focused vision, working collaboratively to address important issues around the internet," and speaking to that

strategy, debra, we estimate 2.1 billion use facebook, instagram, and whatsa pp. pivots toe company this privacy focused, nobody knows exactly what that is going to look like, exactly what mark zuckerberg has in mind, but, debra, do you worry that could impact growth, as the way we use facebook and, potentially, all of these services changes? yes, that is something we pay attention to, and as a matter of fact, i am looking at a report on some of those issues right now. you are right. we do not know what it is going to look like. mark zuckerberg and his staff are very smart people. they are certainly thinking about this and thinking about the way marketers can reach people in these more private environment or these small-group environments, but it is going to

been a change for advertisers. they are so used to using that news feed on facebook to reach people, to get that mass reach. this will definitely propose some challenges for them. i don't know how it is going to roll out, but i do think facebook is going to have to have a way to get around this. also, i think that mark zuckerberg is saying all of the right things when it comes to addressing the ftc concerns in terms of a settlement, talking about privacy, talking about how they welcome regulation. these are things i think mark zuckerberg himself needs to say in advance of potentially making the settlement with the ftc. emily: now, the next 18 months are going to be a big test for facebook as we gear up here in the united states for the 2020 election and facebook looks to secure its platform from foreign and domestic meddling. of course, we have seen the mueller report come out in the last week, which did not make facebook look good. "the new york times and reported

today that they former homeland security secretary kirstjen nielsen was concerned about continued russian attempts to threaten u.s. democracy in more advanced ways that the public may yet know. meantime, you saw the son-in-law of president trump saying the russians just bought a couple of facebook ads, "a couple of facebook ads." david, how much do you think this issue is going to affect facebook over the next 18 months? david: i cannot believe it won't affect it quite a lot. i think when it comes to electoral interference on facebook and foreign countries interfering with the elections in other places, that isn't just a problem in the united states, so it could be a factor globally. andy country has elections, every country has enemies, and every country has now observed how effective it was when russia interfered with the u.s. elections on facebook, so you have got to believe it is an attractive target for a lot of

people. facebook clearly is working hard to prevent that, but i think -- like i said, i think they are kind of in a weird place that has never been seen before. it is almost like the cigarette industry. it is getting very close to that, where they really, from the level of regulators and, you know, social critics and the press, they are sort of losing their license to operate in the way they always have, even as 2.1 billion people still go there every day. that is great for them, but i wonder a lot about how quickly they can remedy these things. it is one thing to talk a good game, and debra is right. mark zuckerberg has totally changed the way he speaks about privacy, but lately, we have heard three major instances when passwords were stored inside facebook in a complete the unprotected way. this from a company where some time before that had already been talking about how privacy focused it wants to be.

these do not always go together. emily: news crossing the bloomberg, bloomberg reporting that facebook settling with the ftc does not include the ongoing investigations happening with the states and that, in total, this whole ftc probe could cost facebook $5 billion, so more than that $3 billion they are now setting aside. reaction.r i mean, $5 billion, that is a lot of money. david'st is, and to earlier point, there could be other settlements outside the u.s. this is something that facebook will be dealing with perhaps into next year. we will be seeing a lot of changes in the way that facebook will need to operate, and that could potentially lead to changes in the way that marketers use facebook, the way that people use facebook, and the way that facebook is perceived around the world. this is a pretty momentous

moment. emily: david, bloomberg also reporting that facebook is close to a settlement with the states, at least making some progress towards finding some common ground as to what exactly facebook did wrong. what is your take? is this going to be a one-time thing, or is this going to continue to happen? david: i actually think, in general, this is going to continue to happen. i think facebook got caught with a huge range of abuses of its system that it did not have the governance to prevent, and it is now seriously backpedaling, trying to implement governance in areas of its business that did not have governance before. i think there are many parts of it that are going to be extremely hard to fix, so i would say the problems will continue. i still get my hat to them for the execution of their business. on the other hand, they have to

fix these problems. they do not have a choice. emily: all right, david kirkpatrick and debra, we will continue to follow facebook's earnings call as it happens. coming up, more earnings with microsoft's big beat, and we are still waiting for tesla's first-quarter results. the call is still expected to start at 5:30 eastern time, about 15 minutes from now, but the results were supposed to be out a couple of hours ago, and we are still waiting. this is bloomberg. ♪

are out, twoey hours late, tesla reporting that they miss the average analysts wasmates, and the estimate 4.8 $4,000,000,000. $4.84 billion.

the deliveries they believe will happen in 2019, and the company may produce 500,000 vehicles globally this year. this, of course, a point of is goingn given what on between elon musk and the fcc over his tweeting. i want to bring in max, our "bloomberg businessweek" editor. max, i have been talking earnings for a decade. i cannot remember a time when earnings came out two hours late. what do you think happened here? max: yes, i think we were thinking this would hit one hour ago. two hours question where i was looking on bloomberg. we had a list, and they were also to between 4:00 and 4:30, and this is definitely very late, but tesla is always unpredictable. emily: you are right. closer to one hour late. i want to bring in a chief investment officer. we have the numbers now.

so, ivan, first of all, what is your take on the numbers, and does it bother you that they are late? from 4:00ould be right up until 5:00 or so, and usually be all over the place. there is really just an interesting dichotomy, that you really have an incredible company that makes a great car. i was just at the factory back in march and drove a model three performance, which is very impressive, and then you have the flip side of elon and his fighting with the fcc, and in the meantime, they have ejections. sometimes they succeed at them, and sometimes they miss. the company makes an incredible car. tremendous have a first-mover advantage and leadership position in electric vehicles, and then you have the volatility of the stock and many

extreme views from very pessimistic to very optimistic. max,: well, and i wonder, who is to blame in that case. tesla makes very ambitious projections, and even elon musk admits, "we do not always meet our projections." perhaps trying to be more realistic? max: it is part of the secret to the company's success in the last for years. one thing they have been good at saying is, "don't look at now, look at the future," and telling a futuristic story. back when they were making electric sports car that they were only selling to a few hundred people, they were saying, "no, no, no, the real thing is a luxury sedan, "and that started to break down around the model 3. i think what we saw with the big autonomy day, were tesla spent four hours, kind of boring

analysts' ears off -- assuring robo taxes are going to be a big thing, you are going to hop on board with that. trading,d after hours investors were expecting a tough quarter. ivan, when it comes to the actual number, is it, yes, they make a great car, as you say, but what is your take on the corley performance, which does matter to investors -- what is your take on the corley performance, which does matter to investors? -- the quarterly performance? ivan: they try to assess some sort of shareprice value. i think tesla would have been better served being more conservative in their projections, both from production and also profitability.

i mean, they really are in a net investing and r&d stage to grow this company, so the fact that they were going to be profitable, they were originally going to be last year, and now, not going to be profitable, and now back to investing. i mean, they do have a lot more investment to do with the buildout of the model y, of the semi truck, and of other new models they want to bring to market, along with the ongoing develop it of their autonomous technology. even though i think we are still many, many years away from actually getting into a car and home" withdrive me no driver actually driving it, and there will have to be a lot more infrastructure. autonomous vehicles are going to depend on the 5g network. they are going to depend on cars 3 to katie with each other, communicating with traffic signals and stop signs and the road itself -- they are going to depend on cars communicating with each other, communicating with traffic signals and stop signs and the road itself.

the one most recently demonstrated at the monday event i did not see, but a few months ago, i did test the autopilot system, and it was very impressive. excited about the potential self-driving, potential robo taxis without drivers, very, very soon. the call starting in about 10 minutes if it starts on time. max, i have to ask you about this shanghai carr fire. we are still trying to get to the bottom of it, but this video from the underground car park shows a tesla part, apparently off, and within minutes, being engulfed in flames. tesla said they said atm. do we have any new information -- tesla said they sent a team. this is a chinese news outlet. the paper reported they think it is a battery problem, which, when you are talking about

electric car, it doesn't really say anything, because any these with the on ion programs -- products catch on fire, which does happen from time to time, it is always a battery problem, so, you know, assuming this is true, it is not some kind of doctored video or whatever, tesla is going to look into it and try to figure out if there is some problem with some part or piece of its supply chain, and it seems like the worst case scenario is some sort of recall. out though pointing that these kinds of things have happened before. like i said, it is not super common, but tesla's have caught fire before, and the company has been able to deal with it. it is kind of one of the risks of dealing with this type of technology. emily: new earnings coming out, tesla expected to deliver up to 190,000 cars in the second quarter. of demandhat a sign

topping out or a sign of it still going strong? ivan: it looks like there is still strong demand. i believe there is still a significant backlog of orders, especially for the model 3. feinseth and max chafkin, thank you. we continue with microsoft's fueled beat as the cloud its growth. this is bloomberg. ♪

on earnings,uing microsoft reported beating estimates, with their massive cloud computing deal. i want to bring in our "bloomberg intelligence and court reporter. make it down for us. reporter: earnings across the board. whether it is pc numbers, whether it is on

premise. of a veryue testament strong corporate i.t. environment. emily: they also have some big clients, kroger, walgreens, exxon mobil. what does that mean, given that it is competing with amazon web services and google cloud. to work withu want amazon or microsoft? that is one of the biggest things we are seeing right now, and all of these legacy companies, this is really the time for microsoft to shine, before -- because the growth rate was from the likes of uber, lyft, and those companies would typically start off with amazon, but for amazon, it has been working with these legacy enterprises for decades, and this is where they want microsoft's help, to become like an amazon, or they want to compete with those entities. uply: microsoft shares are 33% from a low in december, along with some of the rest in

big tech, but it is not far off from that $1 trillion market cap. what are you looking out for this year? anurag: the single biggest point that we need to focus on right now is whether there is any change in corporate spending. that really can put a dent in this entire tech rally, and so far, we are not seeing it. we are seeing broad-based growth from almost every enterprise software company that we have seen or any i.t. services company we have seen over the last few months, so overall, a fairly spending environment. emily: all right, thanks much for weighing in, from "bloomberg intelligence," anjurag. here is what mark zuckerberg just had to say. make such important policy decisions for ourselves, if the rules were being written from scratch today, i do not think people would want private companies to be making so many

decisions around speech, elections, and privacy without a more robust democratic process. ♪

emily: this is "bloomberg technology." i'm emily in san francisco. despite a slow start, 2019 is shaping up to be a banner year for i.p.o.'s. several tech unicorns pintrest and lyft and uber is up to slack. uber is supposed to go public last month. joining us to discuss from new york we have sarah. and ellen. the last time you were on, i believe we talked about investors buying shares double the last valuation

so very optimistic about this coming public offering direct listing however they decide to do this. we think one is supposed to come very soon. >> could come as soon as this week. definitely something people are looking for. this will be the first time we look through the company's financials in a very comprehensive way and i think it's going to show people, how they expect slack to grow in the future and plans to expand its business. as we saw, there's already a lot of anticipation about the, like, prospect of this public -- this public offering and we saw it in the secondary markets, a lot of invest from -- a lot of interest from investors. we expect maybe june. emily: let's talk about the market slack is walking into. pinterest and zoom seems to be doing well since their debut last week. lyft, on the other hand, way you below the offering.

there was positive coverage from analysts. break it down for us. is lyft an outlier here? sarah: whenever i talk to investors about these i.p.o.'s that have null come to market you say you can't look at lyft and extrap lape that to the market. for lyft, many are waiting for uber to debut on the market. they have issues there. meanwhile, you take a look at zoom video, up 75% since it i.p.o. aid. it i.p.o.'d at $35 a share. now $63 a share. pinterest, for example, up about 40%. lyft is the only one that's truly struggling here. the others are doing just fine, it seems. emily: now, i still can't get over from the sound bite of the zoom c.e.o. that said expectations were just a little too high. take a look what he had to say when i asked if he was feeling the pressure. >> i do because the price

is too high. emily: so you think the price is too high? >> i think so. but anyway, yesterday we finalize the price at $6. today, wow, it's bigger. it is out of our control. we just go back to work. emily: so i can't remember the last time a c.e.o. said the price of their share was too high. he certainly pivoted a bit there. but, sarah, you know, the first day pop, a huge first-day pop isn't always great if you end up below that later. sarah: exactly. it's never good to hear the c.e.o. of a new public company come out and say they believe that their share price is too high. that is an issue in itself. you would imagine that if that is the case, if investors truly do look at the fundamentals of the company and take the vow's words and say, yeah -- c.e.o.'s words and say, yeah, maybe these are too high, they won't be sustainable at $63 a share.

we have seen them come down a little bit. it is still very early on, but i will say, if you look at the sentiment in the market in general surrounding i.p.o.'s, we have a strong i.p.o. market to date. there is one ticker i.p.o. when you look ain't decks funds, they don't take into account these newly public companies, but this fund does only hold newly public companies and it's up more than 30% year to date. so that just shows that broadly across the board these null public companies are doing well -- newly public companies are doing well and there is broad appetite. the question is if it's sustainable. emily: meantime, ellen, we're expecting a flood of new wealth here in san francisco. everybody is bracing for a rising housing prices, rising rent. the san francisco supervisor is looking at motion that would place a payroll tax on stock-based compensation which is being called the i.p.o. tax. how would that change the way things currently work?

ellen: so the supervisor talked about proposing an i.p.o. tax which would revert the payroll tax on certain companies back up to the levels that it was back in 2011 when, as we all remember san francisco lowered the payroll tax dramatically in an attempt to keep companies in san francisco. this was the one that was often dubbed the twitter tax break. and it seems like now, you know, politicians in san francisco are feeling like, well, we no longer need to work to keep these companies here. we will try to tax them in a new way in order to sort of balance out some of the inequality that many residents and people who work in san francisco see every day. so the idea is, yes, it would be taxing companies at the time when their employees cash out some of the options. they are calling it the i.p.o. tax. they want to make it clear it's a tax on corporations and not on individuals, but it's certainly a politically charged topic in san francisco, and i think is going to be something we'll see discussed a lot in the coming time. there is a long path between this proposal and

the tax actually taking place, including a vote, which would not come until november. but it is certainly a provocative proposal. emily: absolutely. and trying to turn the tables, all of these companies, pinterest, uber, lyft, slack, they are all based in san francisco. sarah and ellen, thank you both. i should know that bloomberg beta is an investor in slack. privacy concerns continue to spiral about amazon's alexia. bloomberg has learned a team at amazon dedicated to improving the performance can access the location data of customers. for more i want to bring in matt. matt, tell us what we're learning here? matt: so we're learning some of the team at amazon that's charged with reviewing a small number of alexia commands, some of the folks have access to location data paired with voice recordings. that means somebody at their job is asking you alexia to turn on a light or order you some product

on amazon.com. in the same pane, some at amazon's workforce can trace you back to your home address. emily: so what is new here? did we not assume they could access this kind of information on us? matt: oh, for sure we assumed it. amazon, after all, is a company best known for delivering things to your doorstep. i think part of why this is raising some eyebrows is amazon does not go out of your way, and really any of their privacy materials, really to the alexa service to say exactly what it does with the data. in their statement to bloomberg after we revealed existence of the alexa listening program a few weeks ago they said there was no way for people at work in those work flows to find a human being behind the recording. finding some location paired with voice recordings suggest in some cases, that's not necessarily the case. emily: so what else can employees access? can they access everything

we're talking about? can they hear my kids' knock, knock jokes? matt: i don't think so. to amazon's point it's relatively limited. from our reporting, this team does not have sort of free rein to go searching into everything the customers said to alexa. they can't do unsupervised searches. it appears often these rkers are assigned audio recordings in a cube. it's only in the order amazon makes it available to them. emily: so i guess the question remains, will it affect consumer habits? are people going not going to buy alexa because they're worried about privacy issues, whether it's alexa or google home or a home pod? matt: i think it's an open question. it's a concern on the minds of some people. microsoft was out with a consumer survey today showing something like 40% of smart speaker users, voice assistant users have concerns about privacy.

some of them have questions, who is listening, why? some of the concerns of privacy advocates, some companies would do well to explain to customers exactly what we're doing with the stuff. if you have nothing to hide, tell the customers what's going on? emily: all right, bloomberg tech matt day who covers amazon for us in seattle, thanks so much, matt, for that report. as we head to break, we're continuing to monitoring facebook's earnings calls. here's what the c.f.o. had to say setting aside of billions of dollars of set amment with the f.t.c. dave: this was up 80%. this includes a $3 billion acruel taken in connection n in crual take connection and this matter remains unresolved and we estimate that it's $3 billion to $5 billion. our total expense growth rate would have been 46 percentage points. ♪

emily: shares of at&t fell following higher than anticipated subscriber losses. they lost 204,000 net wireless users and more than 620,000 in television. now, most of those wireless losses were from tablet users. the company actually added 80,000 monthly subscribers. sticking with at&t and wireless, the race to implement 5-g is in full swing. mobile providers are trying get their platforms ready. the c.e.o. sat down with david rubenstiin on the latest episode of "peer to peer." >> let's talk about the business of cellular. you are trying to build out 5-g.

what will it do for us? >> it's real-time network. why is that important? it's really important when you start to conceive of services like autonomous cars. but it's very serious, right? a kid runs out in front of the car, there needs to be a real time always on, always connected network. this is really, really important as you begin to conceive of these services. you can begin now to conceive of robotic manufacturing that is always on, always connected via 5-g networks. and just to kind of put this in perspective, internet of things, devices and sensors that are connected all over the place, today's networks in a square mile, you can connect 1,000, 2,000, 3,000 of those. in a 5-g world, you can connect millions of those in a square mile. i couldn't conceive of the iphone when we built a 3-g network. you and i can't conceive of all of the services that will materialize with this kind of capability.

emily: and no discussion about 5-g is complete without mentioning the chinese tech giant, the u.s. government says poses a national security threat worldwide. stephenson talks if he agrees. >> by the way, will you buy the equipment of huawei? are you allowed to? randall: our government is -- has said not to. i get we are not using huawei, the largest equipment producer in the world for telecom equipment. but, look, our government is being very aggressive on this, that this is a security risk. i don't think we, our government is doing their best work in explaining why the security risk exists. and to me, the biggest risk is not that the chinese

government might listen in on our phone conversations or, you know, mine our data somehow if we use their equipment. that's not the issue. we can now put millions of connected devices in a square mile. this will be the basis for autonomous cars. five to 10 years from now, every manufacturing floor will be attached to 5-g. 5-g will be driving robotics. 5-g will be driving the manufacturing floor. 5-g will be involved in traffic management around our cities. i mean, we'll be using this in utilities. we'll be using this in refineries. we have to ask our question -- ourselves a question. if that much of our infrastructure will be attached to this kind of technology, do we want to be cautious about who is the underlying company behind that technology? we damn well better be. now, are there things we can do to protect ourselves? that's a debate worth having. but i think our government is asking the right

question. emily: you can catch a few episode of "peer to peer" conversation featuring randall stephenson wednesday 9:00 p.m. eastern. still ahead, we will bring you more highlights of earnings share. facebook jumping 9% after hours. we'll tell you more about why. this is bloomberg. ♪

>> everyone travels through it. we need to be able to adapt e way we serve people to oung and old

emily: and about $116 billion over the next decade or so to take on intel and qualcomm in the business of making advanced chip processors, quickening an effort to take greater control of the global chip industry. the company aims to have 15,000 production and research jobs over that

period to become the world leader in a field dominated by its u.s. rivals. samsung currently leads the market for the memory chip used in devices from servers to smart phones. we will have more on that story as it develops. former morgan stanley analyst mary is starting a $1.25 billion venture fund. the longtime silicon valley veteran known for her internet trends presentations co-founded bond capital after leaving in september. the new fund is closed and the security is doubling the size of the recently announced fund from kleiner. meeker let investments for air b.n.b. facebook, first quarter sales posting 26% revenue growth on a strong advertising business. meantime, tesla's first quarter report wasn't upbeat. the electric car maker missed revenue estimates and says it doesn't expect to return to profitability

until the third quarter. joining me, bloomberg's david welch, who covers tesla, and final thoughts. what we just said about revenue growth has a caveat which is that $3 billion potential legal bill that they are anticipating, if they do settle with the f.t.c. over this major privacy investigation and that is a huge, huge bill given that the biggest prior fine from the s.e.c. was tens of millions of dollars. that said, what's your take on continued revenue growth, continued user growth, slow and steady? >> yes, it is going well. they're managing the decline well. the price decline will continue. like what we saw with google, volume of ads sort of like circumvents price decline and revenue growth. that kind of transition is happening with facebook. so the revenue growth should be find.

as far as the f.t.c. issues are concerned, it's $3 billion to $5 billion is what the estimate is. our litigation analysts believe it's signaling it's nearing an end. it probably won't be litigated, probably will be settled at some point. they might have to agree to some consent decree but nothing disruptive to the core business model. emily: facebook c.o.o. saying there are half a billion people using stories daily saying there is value for businesses on instagram and facebook. when it comes to stories, the additional opportunities, she says, is big. jitendra: so next two quarters they'll keep transitioning but more things coming online. ecommerce is a big avenue. fourth quarter, if they end up merging these platforms, messenger, they will have more across the board. basically they could take those stories and drive growth ahead of

expectations. so fourth quarter is looking good. next two quarters will be gradual transition that they have been managing for the last two quarters. emily: facebook on the call getting questions about this big f.t.c. fine. take a listen to what the c.f.o. just had to say. >> to the ongoing settlement discussions that we're having with the f.t.c., this matter is not resolved so the actual amount of payment remains uncertain. however, we're estimating this range of loss be $3 billion to $5 billion. can't really comment further as this is an ongoing matter. we booked at the low end of the range in accordance with the applicable accounting guidance. emily: so the bill could be $3 billion to $5 billion. bloomberg just reported facebook is in the middle of several investigations by individual states but also potentially work towards a settlement with them. unclear what penalties or fines could be involved. how does that impact growth? >> so they actually

indicated for the second half their ability to target ads will be a head wind to revenue. essentially, if there are more regulations that come online, apart from the changes they make to the platform, it could reduce their ability to target ads but on a relative basis they will still be stronger. so we'll see how this pans out, the f.t.c. fine. like i said, our litigation analysts thinks this is nearing an end. emily: amazon coming up later this week. what are you watching for? >> they have been conservative with their guidance given slowdown in international growth. we have seen slowdown in subscription services as well. because of the conservativism versus what we've seen from other tech companies they should come ahead of that. but the real opportunity for amazon remains the profit side. this is a high growth story for this year. and the profit is the room for surprise because advertising growth ramping

up and a.w.s. continuing its strength. emily: what about amazon's international growth? they have run into problems in india. certainly they are not the market leader in several other countries that are quite large. jitendra: most is coming from five countries. they're scaling country by country but india is the biggest investment outside the u.s. it's a long-term play there. emily: and they're running into regulatory issues with the indian government. jitendra: everybody will learn in the process and modify and walk along that way. this is a longer term plan. the financial impact for, say, in the near term is limited but longer term, i think they should be able to navigate like any other ecommerce player. emily: longer term beyond the five? india being the big one and when? when you say long term is that five, 10 years from

now? jitendra: it depends the scaling in these countries. if you look for square footage, their square footage in the u.s. has been strongest. so clearly over here they have been scaling their business worse versus outside the u.s., they are still ramping up. depends on, like, potential to spend country by country, they can scale their business because without logistics, without warehouses, without the whole supply chain you can't scale revenues. it's a play boy by -- play-by play process. emily: thank you, as always. amazon coming out later this week. facebook, as we mentioned, beating estimates on revenue and user growth. of course, bracing for a potentially $3 billion to $5 billion legal bill. tesla missing estimates. we're continuing to listen to both calls happening right now. stay tuned to bloomberg television for more on earnings. that does it for this edition of our show. we are live streaming on twitter, as always.

you can check us out @ technology. this is bloomberg. ♪

>> welcome to "daybreak: australia." i'm paul allen in sydney. shery: i'm shery on. ahn.e: -- i'm shery sophie: and i'm sophie kamaruddin. paul: the top stories we are covering in the next hour. wall street closes lower. the dollar extends its rally to a four-month high. tesla swings wildly in late trade after a mixed bag of results. new losses.