>> i'm emily chang and this is the best of bloomberg technology where we bring you all of our top interviews in tech. earnings are in all swing with result from face book, amazon, tesla, and more. plus, sam son has delayed the launch of its first foldable smartphone after viewers -- consumers report defects. can the company live up to its aspirations to become the super

app of asia? some of the biggest tech companies in europe are out with their earnings this week, including facebook. maintain theiro position. joining us now is david kirkpatrick. with us as deborah well. give us your take on the headline numbers, legal bills aside. >> you are right. it is hard to put those aside. the idea of a potential settlement is so massive. andver, the revenue beat the user numbers were not a surprise to us. facebook has shown and it has been years since the first news of cambridge in a lytic i came out, they have shown they have been able to consistently grow revenues, users, the market for facebook is doing well in terms of people using it, in terms of

advertisers wanting to spend money. that part was not a surprise. the big surprise was obviously the $3 billion they are holding back for potential settlements. david, in context, that is a huge fine. the highest ever in terms of the ftc and the u.s. company within the tens of millions of dollars. how serious is this? david: it is serious and the key question is is it a one-off? going to what debra was saying, advertisers have no place to go except facebook and as long as that remains the case and as long as advertisers don't feel there is a serious associative risk, the execution is going to continue to be good because these people have proven they can execute, but there is something so disjunctive about the very moment that they announce a $3 billion set aside for a likely fine that investors still have the stock of 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: let's talk about that. i have a chart on the bloomberg that shows user growth over the last several years. incredible growth continuing monthly and daily. despite questions we ask every quarter, saturation in its most mature markets, get when you talk about that sort of social benefit or social motivation to use facebook, you have congresswoman alexandria all caps your cortez saying she stopped using facebook. she is a congresswoman who needs to use social media to further her own campaign, yet she says she is not using it because the costs are too high. deborah -- debra, does that

concern you? debra: it does not concern me because she is still using instagram. facebook owns instagram. she has devoted all her resources there. i agree a lot with many of david's points, particularly the fact that there is this settlement coming up. advertisers who watch facebook need to pay attention to what , notns, what transpires just the amount of money 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 or the way it uses user data, the way advertisers can use that data for targeted advertising. these are questions that advertisers and companies, people that watch facebook need to pay attention to because this really is big news. emily: david, i saw you chuckle when debra suggested she still uses instagram. she did say she is scaling back

on other social media. do 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 the behavior of this very company. look at europe, for example. apple and google have both already received a massive, multibillion-dollar fines in europe. facebook never has. facebook could very, very easily start to face major legal problems too. there are certainly legal problems underway. none of them have resulted in massive fines yet. zuckerberg has begun to adopt this idea of this language of having a privacy-focused vision, which is nice. he better start delivering on it. if i can mention one thing that could happen, there is a possibility in the u.k. 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 don't really have an ability to differentiate between who is above and below 18 in many cases, so there are very complex issues that wall street seems to be more or less disregarding. emily: europe has been out front on tech regulation and tech companies than the u.s. has thus far, but speaking to the privacy pivot, zuckerberg did mention that in the earnings release, saying they are focused on building out privacy focus visions. around collaboratively the internet. appsing to that family of strategy, more than 2 billion people use facebook, whatsapp, instagram, or messenger every day on average. pivots to this

privacy-focused future, nobody knows exactly what that is going to look like, exactly what mark zuckerberg has in mind, but do you worry that could impact facebook a way we use potentially and all these services becomes more private and changes? debra: yes, that is something we are paying a lot of attention to. we are looking at some of those issues right now. we don't know exactly what it is going to look like. staffuckerberg and his 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. it is going to mean a change. they are so used to using that newsfeed on facebook to reach people, to get that mass reach that this is definitely going to pose 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 addressing the ftc concerns, the potential of the settlement, talking about privacy, talking about that they welcome regulation. these are all things that mark zuckerberg needs to say in advance. the next 18 months are going to be a big test for facebook as we gear up for the united states in the 20 20 election and facebook works to secure its 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 reported today that the former homeland security secretary was very concerned about russian interference continued attempts to threaten the u.s. democracy. meantime, you've got the son-in-law of president trump saying the russians just bought

a couple of facebook ads. "it 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. when it comes to electoral interference on facebook and foreign countries interfering with the elections in other places him of that is not just a problem in the united states. it could be a significant factor globally. every country has elections and enemies and every country has observed how effective it was when the russian government interfered with the u.s. during the election, so you have to believe it is an attractive target. emily: bloomberg is reporting that facebook is settling with the ftc does not include the ongoing investigations happening with the states and that this whole probe could cost facebook $5 billion.

so, more than that $3 billion they are now setting aside. your reaction? $5 billion is a lot of money. debra: yes, it is. there could be additional settlements in europe and other places outside the u.s. this is something facebook is going to be dealing with. we are going to be feeling -- seeing a lot of changes in the way facebook will need to operate. that could potentially lead to changes in the way marketers use facebook. and the way facebook is perceived around the world. emily: amazon also reported first-quarter results with investors focusing on profit growth, advertising, and the cloud. .ere is some early reaction >> we are joined by our guests. thank you both for joining us.

michael, you have been in amazon bull. lots to like. this is a more profitable company then has historically been true, but some of these warning signs about future spending and future growth -- what do you make of the quarter? michael: the upside is because they generated 43% margin, they just cannot spend all the money. they have $25 billion of gross profit and they managed to only spend $20 billion of it. this company has run out of things to spend money on. buildinggoing to keep fulfillment centers, but that is not going to grow materially year-over-year. they are going to build the same 50 or 100 every year. they are just minting money. the negative in the story is that investors don't appreciate up yetrd-party mix went again. bezos said it was 58% of sales. last year. it is about 60% of sales this year.

it is a great margin story. investors are confused by the top line, they get spooked by the guidance. the stock is not up enough on the sprint, but it was up about $100 on the last week. it really is a remarkable story. it is now a third-party marketplace. company.vertising what does this quarter tell you? >> michael hit on the margins. it doubled year on year. if you think about the call that margins could continue to double , you look at the big internet names, they have declining margins. facebook, google are spending to keep up with amazon. inis somewhat of a rare bird terms of that revenue growth. you are seeing the margin improved.

we think the biggest concern is that wall street thinks they should be a 20% topline story. you look at the margin profile. that could get into the teens easily. the recurring business will continue to compound. you also have the business which is going to give investors more predictability and confidence around the fuster -- future cash flow. emily: coming up, grab wants to become a super app. other startup is breaking away from its traditional business to offer food delivery, financial services, and more. if you like bloomberg news, check us out on the radio and on the app.

this is bloomberg. ♪

emily: in march, southeast asia's lead ride-hailing app brought its latest round of funding to $4.5 billion. it is no super sizing the round and plans to raise an additional $2 billion this year. going head-to-head with rivals and expanding services beyond ride-hailing. joined us tonder discuss in an exclusive interview. >> we are already southeast asia's everyday super app. we have seen tremendous traction. in 2018 we grew our revenue and our growth verticals that became the flotillas have been growing tremendously. grab food grew more than 45 times in 2018.

our payments and financial services group more than five times in the same year as well. in many different ways, we are already southeast asia's everyday super app. emily: you were talking about parcel delivery, digital payment, on-demand video, digital health care. how would you describe this? is it like amazon for everything? >> no, it is grab for southeast asia. it is important to frame why we are doing certain things with partners as part of the grab platform ship strategy. transport, food, payment, financial services. those are growing healthily and we are leading them and to end. news, groceries, video, content -- those are things we're doing in partnership with other global players like booking.com, microsoft. because we believe they have

technology and operational assets they can bring to southeast asia. emily: you have already raised $4.5 billion and you want to raise $2 billion more. why? >> we have seen tremendous growth and interest from global and local partners. , this is a great time for us to reinvest back into southeast asia, going from taking transportation from zero to the leading ride-hailing platform and no moving into payments and more. billion isonal $2 going to be used -- $6.5 billion is going to be used for possibly investing into food, payments and financial services, and doubling down in our largest and fastest-growing market, indonesia. emily: i want to talk to about the regional breakdown you are seeing. what is the evidence of traction in indonesia. >> food has been growing

tremendously. last year alone, we grew more than 10 times. in ride-hailing and transport, we are the largest market share. inly: you doubled revenue 2018, did you surpass $1 billion in revenue? >> we did. we have a history of executing on our plans well. just last month, michael thunder was in tokyo -- my co-founder was in tokyo. they were recommitting $1.5 billion more and wanted to provide us with unlimited support going forward. emily: he said he wanted to provide unlimited support to power your growth. does that mean unlimited access to capital? >> of course, he just added $1.5 billion to our resource and bank accounts. emily: he is not going to give you the next $2 billion? >> he has already contributed approximately $3 billion.

we had a long-standing relationship with him since 2014. the reason why this is important is because it shows that we have continued to be able to execute well. , they have big, ambitious plans and we do, too. along with softbank and other are eager toestors continue executing on that vision and trajectory. emily: the grab co-founder there. first up, tesla reports order results after a rocky start to the year. we will bring you the highlights next. this is bloomberg. ♪

emily: let's return to our earnings coverage. tesla has had a rocky start to the year. the company disclosed disappointing delivery numbers. in january, the cut the workforce by 7%.

they warned that the road ahead is difficult. wednesday tod on talk about the first quarter results. >> one thing tesla has been good at is saying, don't look at what is happening now, look at the future, and telling this futuristic story. that 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 and that started to break down around the model three because the model 3 was kind of the end of the big elon musk plan. i think what we saw a earlier , when theytonomy day withboring the analysts the autonomous vehicle strategies is to get investors focusing back on the future.

ares slightly up right now in after-hours trading. investors were expecting a tough quarter. 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 hogan the product may be. >> analysts have to go buy some level of guidance from the building models and assess some type of share price value. i think tesla would have been better served being a little more conservative and projections, both from production and also profitability. they really are in a net investing in r&d stage to grow the company. they were profitable at the end of last year and now not going

to be profitable and now back to investing, they do have a lot more investment to do with the , theout of the model y semitruck, and other 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 a car and 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 network, they5g are going to depend on cars communicating each other, with traffic signals and stop signs in the road itself, but i will say that 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, a few months ago, i did test the autopilot system and it was very impressive. that was ivan and max.

it was a busy week for tesla with its investor day happening two days before earnings. ceo elon musk pumped up the self driving future and singled out a tesla design shift that he claims will make this a reality, calling it the best chip in the world. >> not the best by a small margin, the best by a huge margin. it is in the cars right now. all capss being produced -- teslas being produced right now have it in the computer. we switched over about a month ago. we switched over model 3 about 10 days ago. all the cars being produced have all the hardware necessary for full self driving. bloombergs autos editor joined us to discuss. >> i think he has talked about having the hardware necessary for. driving before. before.elf driving

he is talking about the hardware being new and improved with the best computing power out there, but also walking investors through some of the advancements that they have made on the software side, as well, and that giving them the capability to actually put features out there, enable people eventually to be able to be sort of out of the loop, and then, after that, convince regulators that drivers can basically stopped paying attention. all of this again is a bold set of statements and we will see if it is actually something that tesla is able to pull off. he said this will not be something we will see on streets all over the place, but in a selected jurisdiction. we will see. emily: craig trudell there.

sri lanka shuts down social media in the wake of a series of horrific bombings. of facebook and youtube are feeling the weight of the world. bloomberg tech is livestreaming. follow us on twitter. this is bloomberg. ♪

emily: welcome back to "best of bloomberg technology." i am emily chang. the sri lankan government shutdown social media in the wake of the devastating terrorist attack. they are hoping to stop hate speech that is known to spread on social networks following violent attacks. youtube,es facebook, and more. this is not the first time a country has taken this measure to stop hate speech. can it work? bloomberg senior executive at her joined us to give us perspective. >> is not just an indictment of

social media, it is a moment in a long trend of lack of responsiveness to the requests of communities, especially non-english-language communities that have received this information and hate speech and harassment in online platforms, and have not been able to get an adequate response from social media companies to address their concerns in a timely manner. ofly: give us some examples where this happened elsewhere. in india for example, whatsapp has been blamed for the spread of viral rumors that have led to fresh waves of the violence. about how in non-english language communities you can see these tools used for ill. >> at the beginning, this is an

integration of how the tools are , and trends happening in communities around the world. a determined thing that technology is the only problem. however, we are saying in many places around the world and increase in harassment and hate speech incitement and in extremist language, and social media platforms are not designed .o handle restrictions they are challenged when it is happening in languages other they areones monitoring for. they need to build up teams that can actually proactively respond in a timely manner to the and build of threats content moderation systems. myanmar is a good example and bangladesh as well. they are challenged in

english speaking communities as we have learned. facebook released this statement, to the victims, and families and community affected by this horrendous act, teams from facebook are working to support law enforcement officers . we are aware of the blocking of social media platforms. people rely on our services to communicate with their loved ones. what is interesting is there is no evidence these attacks were spun up on social media or the cause of social media. there is a preemptive aspect here. what do you make of that? >> there is a lack of trust around social networks, and the hatredr and of viral they are incapable of. -- they are available of.

facebook wants to be part of the solution. they have rolled out safety to tell allow people their family and friends they are ok. and i merge to help local governments communicate. more often than not they are used to foment hatred. we see it in india and other .ountries on the subcontinent from a number's perspective, this is a small part of facebook's global business, but it is a terrible symbol of how instead of helping in these crises, they are viewed skeptically. examplesn you give us of how after attacks like this you can see the events spun up on social media, further spread of hate and misinformation, even if they were not necessarily involved in the attack itself? before that, it is important to note communities in sri lanka

are opposed to this man. independent journalists, not in favor of this, they are frustrated and ineffective in practice. this goes to your question. emily: why are they frustrating? >> because social media platforms are in element in communications. in sri lankastory for the past 20 years, independent nonmainstream journalism digital platforms have been essential to a diversity of voices and perspectives, and that is should today. when social media platforms are blocked, it decreases their ability to do their work. also, these blocks are ineffective. vpn andsy to install a get around them. when the block happened, when sri lanka blocked whatsapp and followingn march 2018

communal violence, researchers twod within a day or something like 15% of traffic was backed. this hurts communities that have less knowledge, fewer resources .o be able to build workarounds it does not hurt people who have resources or are motivated to be online. emily: none of this is black and white. what is right? to add, there is something unsettling. there is a fine line between shutting down social networking to prevent misinformation and mom behavior, and of the government, and authoritarian government or a democratic elected one shutting these down to prevent criticism, to prevent opposition parties from being heard, to prevent the free dissemination of news and information. a troubling development. up, we willg

discuss twitter performance in the first quarter. have they continue to clean up its platform? snafu, doesggest this dim the promise of new technology? this is bloomberg. ♪

emily: twitter surged the most since october 2017. the social network beat estimates on earnings and revenue and posted an increase --this ise oable their new self-reported metric. it continues to crack down on the spread of misinformation and fake account. i asked about the strategy. we disclosed the percentage growth for the last

nine quarters. it has been growing in a range for theto 14 or 15% last couple of years. the work for us is to get out of that range by improving the service and getting people a great experience. we are always working on improving the timeline, improving relevance to my notifications we send you. appill work on a prototype where you can see what we are experimenting with, and we will bring the best of those to the platform. emily: are you expecting that number to grow? >> we are working hard to make it grow. generally, you see a big the firstptick in quarter where there is absolute growth, then the work for us is to sustain that in terms of percentage growth over the year. seasonalityents and that tend to help that number on an absolute basis in q1. emily: this new number is not

transparent. we do not know how you decide what is an active user. should we be concerned about that, and can you give us more information? >> we feel it is transparency, daily active users are people who go to twitter.com or one of the apps you use on your phone, who log in and see ads every day. we cannot think of a number that is more transparent. importantly, it is the exact number we look at internally. we have been sharing a number externally for some time, monthly active users. if we get people to come to twitter once a month, we have failed. we want them to come every day, see value, and keep coming back to find out what is happening in the world. isly: monthly active users continuing to decline. international growth is slowing

down. the revenue guidance for q2 was light. should you be worried? >> mau is a more inclusive metric, people who get text messages with tweets or things we are not designing around. that number had moved a bit the last year. was going down. in terms of revenue growth, we drove a broad recovery throughout the united states. internationally in the first half of this year, they get harder in the second half of the year in the united states. that is not an excuse, just math and how it works. the challenge for us is continuing to improve to add products, drive better relevance and formats so we can deliver great results regardless. emily: you have been working on improving the platform. 30% of content is being flagged by technology and human review.

tweets wethe abusive review our being flagged by machine learning as opposed to humans. realisticallyh can you get that number up? how much more work can the technology do? can do more and it will be hard to get too perfect. our goal is to have clear policies, to have a product that can enforce the policies, and good people behind the product who can support it and the policies. hopefully 38% goes up, but we are proud of our progress. emily: there continued to be concerns about misinformation spreading on social media. we had this situation in sri .anka, a series of bombings was twitter shut down in sri lanka? me talk more broadly about how we think of these things. we are in a dynamic environment

where people are using platforms like twitter in different ways all the time. we need to be respectful of the tragedies that sometimes will occur, and we need to be thoughtful about how perpetrators use the platform, how victims use it, how people who were seeking news 10,000 miles away use a service like twitter to make sure they can trust the information, and are comfortable being heart of the conversation. emily: what is interesting about sri lanka is that the government without services evidence that the crime was spun up on social media. because they were concerned about misinformation spreading in the aftermath, isn't that a concern? that is the first reaction of an entire country. us tore is still work for do and others to make sure people can trust information on a service like ours that is being used appropriately. reason why health is

our number one priority from a resourcing perspective and a mindset perspective. emily: my interview there with twitter cfo ned segal. >> i think it is good efforts by them. they have a lot of work to do. it is still riddled with issues. tweaks likeoduct hiding comments or allowing them to be hidden, and their part about machine learning, and continuing to rely on users to self police, those will not change a social network dramatically. i would love to see a stronger position on proactive content moderation and regulation whaties ultimately stating

is banned, what is allowed. more consistent evidence of how they are handling bad actors would be helpful to see from them. are they banning them from life -- are they banning them for life? it would be great to see the voices of the users, or surveys to see the actual impact of these cleanup efforts. is the overall health improving from a user perspective? i feel like those questions and answers are missing. emily: would you agree? >> i do agree, but i understand this is not an easy problem to solve. for anylenge information system is to actually start to distinguish the between rumors, information, news. it is much more difficult to achieve than being on the outside. twitter should be doing more than they are.

they should be looking for ways to validate the actual accounts more strictly than they are. fruit theyw hanging could be talking now to make it better. emily: jessica, you mentioned you felt this new monetizable was not transparent. ,ed responded to that concern and we see that number growing, but it is a number twitter chooses. did his answer satisfy you? >> yes and no. he answered the question of how daily activefining users, that was helpful to hear from twitter. makeer, those numbers twitter look good. yes, it helps them stopping double counting and excluding fake users.

when twitter users numbers look better, the ad pricing and hinge on those user numbers and impressions. social networks finding a way to improve user numbers helps boost their ad revenue in the long run. there is a ripple effect in media buying, and selfishly from twitter's standpoint to find a number that helps them improve on the user front is good for them. there is a hidden incentive there. emily: minutes after i sat down news crossed that jack dorsey had just met with president trump in a closed door meeting. we do not know a lot about the meeting, the president did tweet about it saying, a great meeting with jack dorsey. lots of subjects discussed.

look forward to keeping an open dialogue. this is on the same day he was complaining about how republicans are treated on twitter, and twitter doing account cleanup. -- i cannot recall -- apple met with the president. if he is the president of the country and he wants to meet an executive, you have no choice as a citizen, you may not like the person but you have to go and meet the president. twitter is a huge part of the national conversation. >> it is where news happens. it is not on cnn or any other network, it is on twitter. that is where the genesis of information is.

everything comes from there. it is an important platform, there is a lot of work to do for these guys. you hold a ceo responsible in a meeting with the president. who dore a lot of people not appreciate the president, but that does not mean you should not go. that is how i see it. bloomberg lp, produces tictoc for twitter. after eight years of development, samsung unveiled its foldable phone, but customers will not be able to buy it just yet. what is keeping the product from the market. next. ♪

emily: samsung has delayed the launch of its foldable smartphone after test versions,

it announced it will be released without giving a new date. us how the device that further improvement could ensure the best possible user experience. we decided to delay the release, they said, and plan to release the date in coming weeks. this is the phone, and it will be the last time you will see me with this on air until they relaunch it. tomorrowpicking it up morning. i received the phone last monday, it has a plastic film that looks like what you would get on any phone, even samsung phones, iphones, that you remove before using. without 48 hours after moving that plastic sheet, the phone was completely dead.

the left side of the screen went out completely after about a day. dead across was 75% the whole thing. then it was completely gone. in my book, the difference between a $2000 phone working and not working should not be a thin piece of plastic. emily: what is your take on this? .> i think i agree with mark that is a big starting point. sign thathis is a big the industry was not ready for this. this is a big issue for samsung because their name is attached to this, but it is a bigger the category in general. they are trying to launch something new, there was not consumer demand for it. no consumers were waiting for this, in my opinion. road to accup in the

new product category, and there is a lot untold at this point. we are waiting to see what they will look like when they work. companies,t of these samsung first, but a few others behind them are rushing to market with these devices as they want to be first in the new product category. i do not see the initial demand for it. emily: we have had other analysts who are excited about this. do you see any evidence it is a product consumers want? >> the problem with this incarnation is it is both a phone and a tablet, and you can switch between the modes. it is not a very good phone, and not a very good tablet. if you read my review, i go into detail. you are getting for $2000 a bad tablet and a bad phone. for that money, you can get an

watchiphone, and an apple on top of that and have cash left over. in the samsung ecosystem, you can do the same thing and have $750 cash left over. there is not a user proposition to buy this thing at this point, especially because how bad it is on the software and hardware front. emily: when you put it that way, it is hard to argue. samsung had issues with the note seven. how bad is this in the context of the broader product lineup? >> personally i would say the issue was worse, because there were customers waiting for that product. they did have -- and still do have -- a loyal user base that were waiting for the note 7 when it came out. many bought them and experienced those issues. iso not see that there

actual consumers who have been waiting for this product. i think most do not even know it was ready to launch. if you look at the marketing campaigns that samsung has done around new products over the past 10 years, i would say this is as minimal as possible in terms of marketing. not only did they just launch the s10 lineup, this felt rushed. un-samsun like. i would almost separate those issues. they are different in nature. too manytaking technologies and try to get them to market quickly. they had more time to wait on that. it for thisdoes edition of "best of bloomberg technology."

we will bring you the latest in tech throughout the week. tune in every day. we are also live streaming on twitter. follow our global breaking news network tictoc on twitter. this is bloomberg. ♪

jonathan: from new york city, i'm jonathan ferro. bloomberg "real yield" starts right now. ♪ jonathan: coming up, u.s. gdp delivering a big upside to price, topping all forecasts. a headline flattered by an inventory boost fueling doubts the growth verse will be sustainable, providing another lift for treasuries. we begin with a big issue. united states looking like the best house on the block. >> strong growth. great economy. >> great gdp, great low inflation. >> better fundamentals. >> the underlying economy is doing well.