chang in sanily francisco and this is "bloomberg technology." facebook earnings out. legal costs are soaring. the social network says it is setting aside $3 billion in preparation for a massive settlement with the u.s. federal trade commission. tesla first quarter results delayed. they are supposed to be out now, but we are waiting. elon musk has not tweeted in the

last three hours. the u.k. is getting tough on after a -- huawei six-month investigation. to our top story, facebook reported results on time, with user and revenue growth holding inady, beating or falling line with expectations, but legal bills might be taking a big bite out of the bottom line. it says it is setting aside $3 billion in the midst of an ongoing privacy investigation by the u.s. federal trade commission, which has not yet been resolved. joining us now is david kirkpatrick in new york and we have deborah in seattle. give us your take on the headline numbers, legal bills aside. >> yes, you are right. hard to put those aside necessarily because the idea of a potential settlement is so massive. beat and thenue user numbers were not a surprise to us.

facebook has shown over the past year and it has been the first news of cambridge analytic came out, they have shown that they can consistently grow revenues and users. the market is doing well in terms of people using it, in terms of advertisers wanting to spend money. for us, that was not a surprise. for us, the $3 billion they are holding back for potential ftc settlements. emily: in context, that is a huge fine. i believe the highest fine ever in terms of a settlement between the ftc and the u.s. company was in the tens of millions of dollars. how serious is this? david: it is serious and the key question is is it a one-off? was saying, debra advertisers have no place to go besides facebook and as long as that remains the case and advertisers don't feel there is a serious associate of risk, the

execution is going to continue to be good because the people have proven they can execute. there is something so disjunctive about the very moment they announced a $3 billion set aside for a likely find that investigators still put the stock up 4% or 5%. you have to wonder when this company will begin to pay the piper for the fact that it is essentially losing social approval to operate. i don't think they are changing the way they operate fast enough to ensure that that is not going to happen. emily: so, let's talk about that. i have a chart on the bloomberg which shows user growth over the last several years, incredible growth continuing monthly and despitective users questions we ask every quarter about saturation, saturation in the most mature markets, and yet when you talk about that social benefit or social motivation to use facebook, you have

congresswoman cortez telling other news she stopped using facebook, a congresswoman who needs to use social media to further her own campaign and yet she says she is not using it because the costs are too high. does that concern you? debra: it does not concern me because she is still using instagram and facebook owns instagram. it is a very popular platform and she has devoted her resources there. i do want to get back to a david said. i agree with many of his points, particularly the fact that there is a settlement coming up. people who watch facebook need to pay attention to what happens, to 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 how it stores user data or uses user data, the with that advertisers can use targeted advertising. these are questions that people

need to pay attention to because this is really big news. emily: david, i saw you chuckle when debra suggested she is still using instagram. i do want to say that she said she is scaling back on other social media. to you think this is a bigger problem? david: it is a bigger problem. there is no question. there is a massive backlash against tech globally which was largely precipitated by the behavior of this very company. look at europe. apple and google have both already received massive multibillion dollar fines in europe. facebook never has. facebook could very easily start to face major legal problems there, too. there are certainly legal problems underway. none of them have resulted in fines yet. zuckerberg has already begun to adopt this language of having a privacy focused vision, which is nice.

he better start delivering on it. if i could quickly mention one thing that could happen, there was a possibility in the u.k. an elsewhered that new laws may begin to be imposed that no one under 18 can have any data gathered about them or be targeted in any way for digital advertising. if that happens, that is going to be a huge cost because these companies, not just facebook, don't have an ability to differentiate who is above and below 18 in many cases. very complexe 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 much tougher on tech companies in the u.s. -- than the u.s. has thus far. speaking to the privacy pivot, zuckerberg did mention that in the earnings release. they are interested in working collaboratively to address important issues around the internet, and speaking to the family of apps, the strategy

that we estimate more than 2.1 billion people use facebook, instagram, whatsapp, or messenger every day on average and 2.7 billion people use one of the family of services each pivots tohe company the privacy focused future, nobody knows what that is going to look like exactly. do you worry that that could impact growth as the way we use facebook potentially and all these services becomes more private and changes? debra: that is something we are paying a lot of attention to. i'm researching a report right now looking at some of those issues. you are right, we don't know exactly 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 that marketers can reach people in these more private environments or small group environments, but it is going to

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

that the former homeland security secretary was very concerned about russian interference, continued russian attempts to threaten u.s. democracy in more advanced ways than the public may yet know. then you have the son-in-law of president trump saying the russians just a got 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 can't believe it won't affect it quite a lot. i think when it comes to elect oral interference with facebook -- electoral interference with facebook, that is not just a problem in the united states. it could be a significant factor globally. every country has elections. every country has enemies. every country has now observed how effective it was when russia interfered with the u.s. election on facebook, so you have to believe it is an attractive target.

emily: we have some headlines crossing the bloomberg right now. reporting that facebook settling with the ftc does not include the ongoing investigations happening with the states and that this whole ftc probe could cost facebook $5 billion. more than that $3 billion they are now setting aside. your reaction, debra. that is a lot of money. $5 billion. debra: it is. to david's point earlier, that there could be additional settlements in europe and other places outside the u.s., this is something that facebook is going to be dealing with over the course of this year, perhaps even into next year. we are going to see a lot of changes in the way facebook will couldo operate area that potentially lead to changes in the way marketers use facebook, the way people use facebook and the way facebook's perceived around the world. this is a pretty momentous moment. bloomberg also reporting

that facebook is close to a settlement. at least making some progress toward finding common ground on what exactly faced look did wrong. what is your take? is this going to be a one-time thing? or is this going to continue to happen? in general it is going to continue to happen because we have heard the rhetoric shift, but facebook got caught unawares by a huge range its system that it did not have the governance to prevent and it is now furiously backpedaling, trying to implement governance in areas of its business that did not have governance before. i think that there are many parts of it that are going to be extremely hard to fix. i would say the problems would continue. i still tip my hat to them for their execution of their business. on the other hand, they have to fix these problems. they do not have a choice. emily: david, thank you.

debra, we will continue to follow facebook's earnings call as it happens. coming up, more earnings coverage with microsoft. details next. we are still waiting for tesla's first-quarter results. we will bring you those headlines, along with reaction. full schedule to start at 5:30 p.m. eastern. the results were supposed to be out a couple of hours ago. we are waiting. this is bloomberg. ♪

emily: they are out! two hours late, but tesla earnings just crossing now, reporting revenue that missed the average estimate. revenue coming in at $4.54 billion. the estimate was for $24 billion. reaffirming -- $4.84 billion.

reaffirming their guidance for the year. says the company may produce 500,000 vehicles globally this year. this of course is a point of contention, given the current spat between elon musk and the sec over his tweeting. i want to bring in our bloomberg businessweek editor. i have been covering earnings for a decade. i can't remember a time when earnings came out two hours late. what do you think happened? max: i think we were thinking this might hit basically about an hour ago. two hours by your recollection? i was looking at the bloomberg top live blog, a list of the past times, they were between 4:30 and 4:00, this is definitely very late. tesla is always unpredictable. emily: you are right. closer to one hour late. i want to bring in the chief

investment officer at tigris financial partners. we have the numbers now. what is your take on the numbers? is it all the you that they were late? , it could bees anywhere from 4:00 or on up to 5:00 or so. the numbers with tesla can 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 3 performance which was very impressive. you have the flip side of elon and his fighting with the sec and the hard time they have meeting projections. sometimes they exceed them, sometimes they miss them. and the volatility of the stock. the company makes an incredible car. they really have a tremendous first mover advantage in leadership position in electric vehicles. and then you have the volatility

of the stock and many extreme views from very pessimistic to very optimistic. emily: i wonder, max, who is to blame in that case. elon musk admits, we don't always hit those projections, so why be so ambitious and the projections and perhaps try to be more realistic? max: it is part of the secret to the success of the companies over the last 10 years. they have been very good at saying, look at the future, and telling this futuristic story. back when they were making an electric sports car that they were only selling to a few hundred people, they were saying, the real thing is the luxury sedan. that has sort of gone on. that sort of started to break down around the model 3, because the model 3 was the end of the big plan from elon musk. will be earlier this week from this big autonomy they were tesla spent four hours boring

is thes' ears off company trying to get people to refocus on the future. these roboeve that taxis are going to be a big thing and it can happen that quickly, you are going to hop on board as an investor. slightly ups are right now in after-hours trading. investigators were expecting a tough quarter, ivan. when it comes to the actual numbers, yes, they make a great car, as you say, but what is your take on the quarterly performance, which does matter to investors, and does matter to analysts? despite over the product may be. ivan: analysts have to go buy some little guidance from the company to build models amd try to assess some kind of share price value. i think that tesla would have been better served being a little more conservative and projections, both from

production and profitability. they really are in a net investing in r&d stage to grow the company. the fact that they were going to be profitable, they were profitable at the end of last year -- now not going to be profitable, now back to investing -- they do have a lot more investment to do with the buildout of the model y, of the semi-truck, and other new models they want to bring to market, along with the ongoing development of the autonomous technology. even though i think we are still many years away from actually getting into a car and just saying, "drive me home," with no driver actually driving it, and there will have to be a lot more infrastructure. autonomous vehicles are going to depend on the five g network. they're going to depend on cars communicating with each other, communicating with traffic signals and stop signs and the road itself, but i would say the tesla does have an impressive autonomous capability or

autopilot capability right now. i did not see the one most recently demonstrated on the monday event, however i did test the autopilot system a few months ago and it was very impressive. emily: certainly excited about the self driving potential future, talking about robo taxis, tesla robo taxis without drivers very soon -- the call starting in about 10 minutes, if it starts on time, but i have to ask you about this shanghai carr fire. thee still trying to get to bottom of it, but this video from an underground carpark in shanghai shows a tesla parked, apparently off, smoking from beneath, and within minutes, being engulfed in flames. tesla has said they sent a team here. do we have any new information about why this happened? max: no. it should be said that it is a chinese news outlet, the paper reported that they think it was a battery problem, which when

you are talking about an electric car, basically doesn't really say anything. anytime these lithium-ion products, products powered by lithium-ion batteries catch on fire it is always a battery problem. it issuming this is true, not some kind of doctored video, tesla is going to try to figure out, was there's some problem with some peas of the supply chain or whatever? it seems like the worst-case an is it is some sort of recall. it is worth pointing out that these kinds of things that happened before. like i said, it is not super common, but teslas have caught on fire in the past and the company has been able to deal with it. it is one of the risks of dealing with this technology. emily: new headlines continuing to come up from the earnings report. tesla expecting to deliver 90,000 or 100,000 cars in the second quarter.

there has been some concern about demand topping out. is that a sign of demand topping out or going strong? ivan: looks to me like there is still strong demand. i believe there is a significant backlog of orders, especially for the model 3. we will bringht, you headlines from that call as soon as it gets underway. coming up, we continue earnings coverage with microsoft. of thematch the speed cloud computing business? this is bloomberg. ♪ erg. ♪

emily: microsoft beat analyst estimates, racking up new massive cloud computing deals. i want to bring in our bloomberg analyst. break it down for us. >> stellar earnings across the board. looking across whether it is pc numbers, whether it is azure, on

premise, it is a true testament of a very strong corporate environment. emily: they also won some big clients. what does that mean given that it is competing with amazon web services and google cloud? >> think about it. if you are a retailer, would you rather work with amazon or microsoft? that is really one of the bigger things we are seeing right now. all of these legacy companies, this is really the time for microsoft to shine because the first phase of growth rate was from cloud companies. those companies would typically start off with amazon, but microsoft has been working with these legacy enterprises for decades. this is where they want microsoft's help to become like an amazon or they want to compete with those entities. they really need to upgrade their systems. uply: microsoft shares are 33% from a low in december along

with some of the rest of the tech. it is not far off from that dollar market cap. what are you looking out for this year? >> the single biggest point that we need to focus on right now is whether there is any blip in corporate spending. so far, we are not seeing it, we're seeing broad-based growth from almost every enterprise software company that we have seen over the last few months. overall, a fairly stellar spending environment. much foranks so weighing in. we will continue to watch microsoft headlines. as we had to break, we are monitoring the facebook investor calls. here is what mark zuckerberg had to say. >> it does not feel right for a private company to make such important policy decisions fire selves. if the rules for the internet were being written from scratch today, i don't think people would want private companies to be making so many decisions

about speech, elections, and data privacy without a more robust product process. ♪

emily: this is "bloomberg technology." i'm emily chang in san francisco. despite a slow start, 2019 is shaping up to be a banner year for i.p.o.'s. several tech unicorns including pintrest, zoom, and lyft have already hit the public with shares soaring in their public debuts. and uber and slack is next up to bat. uber is expected to begin trading publically next month, while slack could make its s-1 prospectus available as soon as this week. 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. ellen: right. so we think it could come sometime this month, this tuesday. 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 a lot of information 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 interest from investors. paying up to double to get slack ahead of the valuation, 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: lyft does seem to be the outlier. whenever i talk to investors about these i.p.o.'s that have newly come to market you say you can't look at lyft and extrapolate 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.'d. it i.p.o.'d at $36 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 from the zoom c.e.o. on the day of the i.p.o. and 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. eric: i do because the price is too high.

emily: so you think the price is too high? eric: i think so. but anyway, yesterday we finalize the price at $36. 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 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. zoom fell about 8% today.

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 year to date. there is one ticker i.p.o. when you look at 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 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 note 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 day. 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 alexa commands, some of the folks have access to location data paired with voice recordings. that means somebody at their job is asking you alexa 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 workers 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 sentiment with the f.t.c. dave: this was up 80%. this includes a $3 billion accrual taken in 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 as much as 4% 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 to get their platforms ready. the c.e.o. sat down with david rubenstein on the latest episode of "peer to peer." david: let's talk about the business of cellular. you are trying to build out 5-g.

what will it do for us? randall: 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, huawei, the u.s. government says poses a national security threat to 5-g worldwide. stephenson talks if he agrees. david: by the way, will you buy the equipment of huawei? are you allowed to? randall: our government 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. ♪

emily: samsung plans to invest 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 chips used in devices, from servers to smart phones. we will have more on that story as it develops. former kleiner perkins partner and morgan stanley analyst mary meeker is starting a $1.25 billion venture fund. the longtime silicon valley veteran known for her annual 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 led investments for air b&b, uber, and slack. facebook, first quarter sales posting 26% revenue growth on a strong advertising business. meantime, tesla's first quarter results weren't quite as 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 jitendra waral with 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? jitendra: yes, it is going well. they're managing the decline that is happening. 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 fine. 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 on transitioning but there are more avenues 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 earning 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. dave: 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 working towards a settlement with them. unclear what penalties or fines could be involved. how does that impact growth? jitendra: so they actually

indicated for the second half their ability to target ads will be a headwind 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 think this is nearing an end. emily: amazon coming up later this week. one you watch. what are you watching for? jitendra: they have been conservative with their guidance given slowdown in international growth. we have seen slowdown in subscription services as well. because of the conservatism versus the results 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, u.s., u.k., germany, japan, and france. 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: it's very early on, and 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: do you see high potential another market? 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. so it's a 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. follow our breaking news @ticktok on twitter.

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