emily: i'm emily dying in go in this is "bloomberg technology." plummeting after hours after missing estimates across the board. what is the path to profitability? we have full analysis. thus, several advertisers tell bloomberg the software system used to run campaigns on facebook and instagram us crashing regularly for hours, if not days. we will tell you what is going on. and double digits, softbank

announce its second vision fun after its wildly popular first fun. first, our top story, uber out with second-quarter results including a $5.2 billion loss. level down to the lowest since may. here to crunch the numbers and breakdown uber eats an active is mandeep singh payment fairly disappointing, what is your biggest take away? >> i think it was just a revenue miss, and part of that was related to the user subsidies in their ridesharing business, i think they have been using subsidies for a while. they have been seeing pricing pressure because uber eats is a very fragmented market. on the core ridesharing side, i think they're doing fine. the large numbers -- large

growth numbers are catching up. i should add that the adjusted loss was lower than 650 $6 million versus 979 million dollars that analysts had estimated. monthly users are below estimate, 99 million, the street was looking more like -- looking for 101 million. what do you make of that? mandeep: the fact is, uber is a global company. they may choose to focus on more regions rather than others. subsidiesy the user that cause the big revenue miss. that is a sign that uber is more focused on market share gain. -- lyft is not going to expand geographically.

emily: uber has lost against that they may today going into this. do you see a path to profitability? mandeep: i think if you look at their core business, they give better disclosures then lift -- then lyft. there was a sequential improvement. what it tells me is, if they wanted to make these businesses profitable, like the ridesharing business, they can do it. right now they are focused more on market share in terms of adding new services and using subsidies to gain market share, that's the big one. i think that's going to help them in the long run. emily: we are listening to the

cooper conference call happening right now. mandeep singh, thanks so much for that analysis. we want to bring in tom white, with a neutral rating on uber and a buy on lyft. the same question to each of you, do you see a path to profitability? tom: we see multiple ways that management can move toward profitability. we see near-term drivers in the form of reducing driver and rider promotions and incentives. we also think they are things helping do in terms of move the company toward profitability in the near to midterm. longer-term, we see additional upside in the move toward autonomy as being a key

component in moving companies more toward profitability. emily: except that autonomy is just so far out. to say thatrted losses would decline next year. cooper indicated the price wars between them would subside. why do you have different ratings on uber and lyft? all, thanks for having me. our neutral view on uber really just comes down to limited visibility. it's a company fighting a lot of battles on a lot of fronts. on one hand they have the big balance sheet and the scale to probably outlast a lot of players it is competing with. on the negative side, it is reacting and responding to a lot of the original promotional activity from some of the ridesharing players and some of the food delivery players.

it creates a situation where it is harder to get comfortable with forecasting the financials. we think it is probably challenging for the management team themselves, to give investors of clear and specific 12 month view of where the financials are going to be. visibility and the share gains in the north american ridesharing market are kind of over the edge. about foods talk delivery, because on the call, they've been focusing on the competition not just in ride-hailing but in food delivery, seeming to indicate that is the super competitive part of the business now. obviously uber eats has competitors not just in the united states but different competitors globally. what is your outlook for uber eats and how can they boost or not boost the business going forward? asad: i think this quarter's

results really speak to just how competitive the food delivery landscape is, not just a mastic leak, but internationally. uber eats is competing with a whole host of competitors that are really well-funded, companies like door -- and others that have received large amounts of funding from deep-pocketed investors like softbank that are not afraid to go after the market in a big way. that is to the detriment of profitability in the near to midterm and that is hurting companies like uber which is facing so much pressure from investors to show a clear pathway to profitability. arehe near term, we encouraged by some positive signs we see. if you look at the take rate, which is the commission that cooper takes on growth transactions within food delivery, we have seen that trend upwards over the past three quarter sequentially. that is something we are encouraged by.

we are incrementally more positive based on signs of consolidation in the space with their rival, door --, -- door caviar.uiring emily: when we talk about profitability, a lot of investors will point to autonomy and the future of self driving cars which uber and lyft are investing in. but isn't that just so far off that it is difficult to include it in any sort of near or midterm model? >> i tend to agree with you. we think in five years, autonomous vehicles and rideshare are still very much on the margin. and specific group geographies with clear weather, not a lot of fog, so very much in the margin. the reality is that until the

technology advances to a point where it can be more broadly and widely deployed, over will need a lot more human drivers, not less. that continues to be one of the big challenges for both of the platforms, how did they demonstrate a path to profitability by making sure theydrivers -- making sure don't raise prices so much for consumers that it eats into the number of use -- services that people use them for. drama,never short of yft. versus l we will keep listening to the uber call and bring you headlines as we have them. the u.s. is holding off on granting lines -- licenses to businesses to supply technology .o huawei

remember the u.s. has blacklisted huawei an prohibited u.s. companies from sending critical technology including software and chips. the u.s. was considering granting licenses to certain u.s. businesses to restart sales to huawei, but now we hear that the u.s. is holding off on granting licenses after china halted buying u.s. agricultural products. a lot has happened in between. the u.s. labeled china a currency manipulator and of course the trade war between the two countries only escalating. this is one more ratchet up. we will continue to follow that story and bring you any updates as we have them. coming up, facebook's ad network is creating major headaches for advertisers. is the social network at risk of losing those at dollars -- those add dollars -- ad dollar?

xm.k us out on sirius this is bloomberg. ♪

emily: scrutinizing ghouls digital ad and search operations as authorities gear up a brought antitrust review of the market power of giant internet

companies. joining us to discuss is kirk wagoner. let's start with the doj story that just crossed. assume google was at the top of the list. >> what we reported today is looking beyond the usual suspects of characters and rivals in yelp, oracle, they have been complaining about google for years. the department of justice is talking to other publishers and tech industries that have complained more quietly about google's display advertising business. that googlee claims has been behaving unacceptably. looking into the

broader ad industry, facebook is number two to google. the adlet's talk about averages that sound pretty awful. it doesn't sound like they're good for facebook's bottom line. >> the whole point i was told to set the reason you do these campaigns is because you want to do them accurately. if a certain image or video you're pushing is not actually resonating, you want to be up to take that down right away and replace it with something else or put money behind a different at that is working. when the system is down, you can't do any of that. not only can you not start the new campaign, but you cannot adjust existing campaigns. that can lead to people spending money on campaigns that are not actually working. leading up to thanksgiving was kind of the biggest issue i heard. black friday last year, you may recall there was a big outage that freaked everybody out because like friday is one of the biggest retail days of the year, to not being able to prepare your ad campaigns, it was a huge issue.

every year since then you have seen these with more regularity. it can be a long process. --ly: facebook statement they go on to say they are committed to getting better. put it in context for us. obviously facebook and google are the biggest players, what does it mean that now you got the justice department investigating the way google runs the system. do you think that will impact google's market share or give facebook an advantage or not? they investigated google years ago and dropped the case. the eu has a different approach to antitrust. it has turned on the idea that behavior affects the market. historically in the u.s., google

and facebook will say show us the consumer harm. a lot of people are talking about if the doj starts to change the definition there, that could be something that has a big effect on these companies. we are still waiting for the repercussions of the eu. if the doj can do that with google and facebook, then they might be able to change the market. is what'sther issue flaws.whatsapp >> it sounds a little scarier than it is. i think of it more as a product flaw than a security flaw. you know how when you reply to an email, you can go down and maybe edit what the email you are replying to looks like. it's kind of that situation with whatsapp. you can change what the message looks like in your reply. it creates some concern for

sure. it's not the kind of product you want to have out there, but it's a little different than hacking in and changing the message. emily: perhaps explains facebook's response. >> it's the encrypted messaging service that facebook likes to tout. for them it is important for people to know that they don't see this as a security issue, but again, this could be a big issue for things like fake news. if i am doctoring what a message looks like, that could be misleading to people. in some parts of the world, that has caused some really serious consequences. emily: it will be just a couple more minutes before we have more google and facebook news. coming up, silicon valley's hasst unicorn scale ai secured $100 million in new

funding. how the company is using the investment to teach computers to see even better, next. this is bloomberg. ♪

emily: netflix has signed the game of thrones creator to a multiyear theater and film deal work $200 million, according to reports. as part of the deal, they will no longer be producing shows for hbo and will work on projects exclusively for netflix. they were also reportedly in talks with disney and amazon. artificial intelligence companies are spending millions a year hiring people to teach -- two machines. could costly process that take anywhere from 10 minutes to a couple of hours. the startup scale ai wants to

speed up the process. they take the first look at photos before passing them on to humans for review. it already has several customers. the company software takes the --st look at photos before this we it closed another 100 mood dollars in funding for the company, valuing the company on more than $100 million. thank you so much for joining us. >> it gives the data they need to build the algorithms in a reliable way and then they use the data to build their software. emily: what kind of algorithms are they building using your software? >> one of the big problems and

machine learning is perception, being able to fully understand the environment around you using machine learning. for other companies, we process ort data or tabular data niche data. emily: is the work you doing going to improve the safety of self driving cars? it has to be perfect. >> even further than that, the work we do is critical to building safe autonomous vehicles, because without the data we are able to provide to these companies, they would not be able to build algorithms that could perform in any manner that is safe and reliable. future, how much

of that work can ai really take on? it seems that there will always need to be some sort of marriage humans and technology. you cannot eliminate humans altogether. >> i definitely agree with that. ai is about augmenting humans with technology and making them more effective and efficient using technology. in particular, for a lot of the problems that we work on where ai plays a critical role, you really want to make sure that humans are part of the process to ensure that the systems are performing safely and reliably. emily: so there are other companies try to do what you do. amazon has its own labeling services. what differentiates you from the competition and how does the market evolve? >> one view we have taken is how do we solve it in the most tech

enabled way possible? how do we use machine learning on our side to make it as efficient and high quality as possible? many of the other efforts are much more human powered than technology powered. emily: do you have any idea which company will get a self-driving car to the mainstream market the fastest? >> i cannot really comment on that. i think it is very exciting that all these companies have incredible technology and it is getting better and better every single year. we are really getting closer and closer. you are 22ve to ask, years old, you have been doing this for how long? >> three years. emily: how did you get here at 22 years? >> i was lucky to be able to come out here in the valley and mark as a software engineer. that exposed me to a lot of these problems where ai and machine learning are really core

. i went back to school for a year and after that year i dropped out and started this company. emily: should everyone drop out? is it something you recommend? >> i think if you know what you want to do, more and more these days, you don't need it degree to be able to accomplish what you want to do. people care a lot more about what you should accomplish than what are your skills. emily: thank you so much. coming up, the top story of the moment. cooper shares taking after hours after big earnings miss. we will have more on that, next. this is bloomberg. ♪

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emily: this is "bloomberg technology." uber out with second-quarter results, and they are not too pretty. after-hours h-shares's still in the red following the company's sales ms. and a $.2 million loss. areceo is dressed how they handling their competition. >> the competitive environment and our position in the ridesharing space continues to be stable to improve. we will take some of that improvement to continue to lean into our its business where we see plenty of competition and significant investment but incredible potential.

emily: i want to bring in someone who has comments on the strategies of both uber and lyft. we sort of expected a big loss due to stock-based compensation tied to the ipo, other ipo expenses. what did you see in these numbers that you did not expect gekko >> first of all, i had expected them to at least beat the revenue estimates. kind of looking at what they did kind of in the last quarter and trying to kind of extrapolate out, say ok, if they could at the earnings, the revenue estimate for jim, at least continue that upward trend with respect to the revenues, but they did not. if you look at last quarter, $3.1ue came in at about million. this quarter, it is about $2.87 million. last quarter, there was, you know, a big percentage increase

compared to the last quarter of .he year before there is still an increase this quarter compared to the quarter of the year before, but when you look at the two quarters side, there is a little bit of a dive. you? what does that tell >> this raises the question of how they are going to finish out the year with respect to revenue, which is their topline andormance metric, both for -- both for lyft and uber. in the case of uber, they have adjusted net revenue, growth bookings, and number of riders as key metrics. the question is what will revenue look like for the next couple of quarters. arey: both lyft and uber sort of signaling that they price wars, irrational

environment, incentives for riders are going to decrease. do you believe that? >> if you look at uber's adjusted revenue number, when they started off their driver incentives, comparing the amount of driver incentives compared to the revenue, it is actually stable compared to the last two quarters. it is rounding out at 10% to 11%, so actually, this quarter is slightly lower. 10.2% compared to 10.9 percent last quarter. there is revenue growth, but it does not seem to be necessarily driven by providing access driver incentives. emily: what about eats? >> their driver incentive last quarter actually tripled, which is interesting. the key thing to watch there is

overall, driver incentives seems stable, but if you look at the businesses within their core where exactly is the increase in driver incentives coming from? right now, it seems like it might be stable across the board, but when you dig into the mights, for uber eats, it actually be increasing to generate more revenue on that end. emily: associate professor at the university of illinois. we continue to follow more uber headlines as they come, and we will be looking to see how shares opened tomorrow. thank you very much. speaking of uber, before going they company raised millions. softbank profit from the big in thend jumped quarter. now softbank is at it again with a second vision fund that will expand investment in enterprise technology and cloud computing.

thank you for joining us. david, what is your take on world to? the will there be enough places for softbank to place all these big bets? >> i think there are. the first fund focused on the on-demand sharing economy, and i think they will now focus on cloud computing and enterprise software, which obviously has been growing quite well. in 2016, the multiples of revenue for their market cap. i think they are really trying to follow where the money is and where the multiples are higher. is there a lot of money to be made in enterprise startup investing?

perhaps more than in consumer technology these days? >> i would say consumer gets all the headlines, but the reality is you cannot have any of those companies without computing, without enterprise software, development technology. my perspective would be if you are in the fortune 500, you cannot be in the fortune 500 unless you are a technology company. everyone is investing in cloud computing and developers and engineering and that is what is driving profits today. this companies are trading at 25 2018 numbers. emily: as an investor who has made a lot of consumer investment, what is your ? action to that >> i think it is natural, the whole advent of mobile phones and smartphones. i think consumers had access to

the technology first while the enterprise was still using laptops for their desktops. desktops.r the growth in the consumer side was actually natural and there has been a lot more innovation around consumers around the smartphone as a platform initially, and i think that is getting penetrated into businesses. obviously fueled by cloud computing. theefore, now, it is really turn for businesses to leverage the smartphone and the mobile revolution. emily: are there enough places for softbank to really place all ? ese bets, even in enterprise i have heard investors complain there's not a lot of great things out there right now. >> i would say yes and no. if you look at the number of

$100 million and above rounds that have happened over the last few years, the perspective really is the enterprise is different from consumer. you cannot just throw a couple hundred million dollars and expect to win. money is not the competitive advantage. there is money from every pocket of the world. unlike consumer where you can actually throw marketing dollars into media growth, this is a lag time for a lot of these businesses to increase their sales, for enterprise to adopt their technology. my answer would be yes, there will be plenty of opportunities, but, no, it is not the same effect. money is not the main aspect of what will win in the enterprise space. emily: how have softbank and the vision fund changed up the vc landscape? many of the things in vc were

the same for so long, then you have softbank coming in with a lot of money. does that change your strategy? >> i think it has been a positive thing for early-stage 's. softbank is allowing some of the early-stage vc's to exit. the market has changed over the last five years were much larger late stage funds have long the exit because they expect -- well, they have then paying high prices, and they still expect pretty good returns, but i think fundamentallyd changed the landscape. expect late stage funds too 3x over a three five-year period, and softbank is going to investors saying they are still willing to bet long-term and willing to write a bigger check so they can be the

competition. i think that is very appealing to entrepreneurs. dealsypically when the because late stage folks are looking for a little bit more size-term and their check is smaller. emily: it is great for early-stage vc's, great for entrepreneurs, but i wonder if there is a risk of companies being kept afloat that should not be kept afloat with this much money flowing into the system. >> absolutely. inre is a long lag period the public private and lots of money is not necessarily a good thing. coming too much money into a sector means returns will eventually go down. a lot of times, founders may not do smart things with too much capital, so that is definitely one thing to worry about in the enterprise space, and that keeps me concerned as well. emily: david, you are in tokyo

-- go ahead, respond. say, on theng to contrary, enterprise software, you need a lot of salespeople to get to the companies to sell, whereas consumer, you can use the social networking to go grab customers. i would disagree that you actually do need more money to go a quiet customers in the enterprise -- go acquire customers in the enterprise space, and it takes longer for enterprise customers to sign on. so you do actually need more money for certain sectors. good thing they do long-term deal -- >> may i inject one pc? emily: quickly. >> i think you can raise a how much money

someone really needs at that scale. the way you sell today has gone bottom up. companies are more efficient than they used to be, so i think both.a balance between emily: we will let you guys continue this conversation off air. thanks so much for the debate. all rights, the deal that was, then wasn't, is now once more. broadcom says it has agreed to buy symantec. broadcom's ceo weighed in on the deal saying, "this next step represent the next logical step of our strategy." the deal is expected to close in broadcom's first quarter ending in january. coming up, the white house wants to gather technology leaders to fight terrorism online. this is bloomberg. ♪

emily: u.s. transportation safety officials have demanded data from tesla on autopilot be the, a move that may start of an investigation into the electric carmaker. we will have more on that story coming up on "bloomberg technology." btw most recent mass shootings in the united states have questions on the way people are being radicalized online -- the two most recent mass shootings. to discuss in washington, we have the ceo of the internet association, a tech lobbying group that includes facebook, google, and twitter, and the

reporter who covers social media for us. what do we know about this meeting scheduled for the white house tomorrow? >> it is supposed to be a way to get companies to come together to talk about how they will confront the idea of domestic terrorism. the companies have had a system to deal with international law makers and four years have worked on developing a way to share that information about and videos that go up and are able to take it down across all are dissipating companies. it will be interesting if they come to some kind of conclusion like that. the flipside is the white house has also been on the company's case about anti-conservative i.s.. bias.i-conservative a lot of the rhetoric about white nationalism has ties to that kind of rhetoric, too, and the worries they will end up

censoring things. emily: you are going to this meeting. there has been a lot of debate, especially in light of these recent shootings, about online violence but also the availability of guns, racism, and a lot of issues at play. what's the argument you and ? ese companies plan to make >> these are for the crimes that happen in the off-line world, but our companies are committed to do an oversized role on the internet to help take down extremist content and takedown hate speech and work with people in communities and law enforcement to help ensure that these things do not happen, but as you mentioned, crimes like before theappened internet. if you look at global statistics, the united dates ranks number 15 in social media penetration, but i think we all know where we rank and mass shootings. we are happy to be part of the solution and have a constructive conversation with the white house tomorrow.

emily: several companies have gotten together to form a coalition to fight terror online, but there's a lot of question about how productive the coalition has been. take a listen to congressman max rose questioning companies after the christchurch shooting. this is what he had to say about the coalition. >> i'm getting to the fact that you are not taking it seriously because there's no public building, no staff, no public 's until after the christchurch shooting. how is anyone supposed to think you all take this collective action problem seriously if you have no one working on it full-time? this is not something technology alone can solve. this is a problem we are blaming the entire industry for, rightfully so. this coalition actually making progress? >> yes. yes. our companies have worked incredibly hard both independently amongst themselves and with law enforcement and

national security agencies around the world to help fight help fightnd extremism and all these other terrible things that have existed in our society for a very long time. i am proud of the work they have done. the congressman i think is a little off days in some of his accusations in the work these has made aave done huge difference in the united states and around the world -- the congressman is a little off base. >> the problem is the companies have not agreed on a definition for what kind of content constitutes this white nationalist extremism. i guess i'm curious what the conclusion is about how they will work together in the future . facebook talk to me about how after the fact a manifesto and were able to scrub but from platforms, anything proactive they can do?

emily: that is certainly a question a lot of people are asking. criticism from lawmakers on both sides of the aisle, these mass shootings -- what is your job ike in washington these days? >> our company are certainly under scrutiny, and i don't think they get the recognition, the credit that they deserve in some of these cases. are they perfect? no. can they do better? absolutely, but these are major problems with huge, complicated questions in our society as a whole, and companies are doing things to tackle them, but sarah pointed out a great point. a lot of the speech and content people are trying to post on the internet and talk about every single day is first amendment protected speech. each platform has a different set of community standards. i think it is perfectly

reasonable and write in these circumstances for companies to say we don't want white supremacists or hate speech on our platform. many do not agree with that. many in congress and elsewhere have said companies should not take that down and should just, you know, put their hands up, but i think it is perfectly reasonable for a company to have community guidelines and that clearlyndards state that hate speech and white supremacists and all this kind of violent content are removed from the platform and do not have a place on the platform. that is not the case with everybody. when you look at our members, they are good actors working to solve a lot of these complicated and difficult issues we have, but there are many bad actors out there. and some ofut 8chan these bad actors. emily: the question is where do you draw a dark line daca we will check in with you after that -- where do you draw a dark

line? we will check in with you after that meeting tomorrow. coming up, what happens on your iphone stays on your iphone, right? maybe not so fast. this is bloomberg. ♪

emily: plenty to discuss in the world of cybersecurity coming out of vegas at the black cat conference. apple said it will start distributing special iphones to security researchers to help them discover flaws before malicious hackers do. meantime, a google researcher -- google security researcher on stage exposed some vulnerabilities and apple's messaging and email. impactfuleen the most to you? to see thest amazing increased collaboration between

enterprises and hackers and security researchers coming together to form solutions. you mentioned google helping a competitor in this space and apple to point out security faults, be rewarded for that. that type of collaboration where we are relying on hackers to find bugs that exist in all software is really powerful and keeping all of us safe. emily: how optimistic are you about the sort of white hat hacker movement and the ability of good guys to sort of identify the vulnerability, given that there seem to be so many more powerful bad actors out there? >> i'm completely convinced this is an essential part of tilting trustworthy software and keeping consumers save. in the last five years, friendly hackers identified 125 thousand vulnerabilities and been awarded enterprises,ion by tech companies, and financial services organizations. is anone of those

important feedback loop to have one less bug out there that a criminal can take advantage of. the more we see that type of collaboration occurring, the safer we are. the number ofar, vulnerabilities have -- emily: before you go, we have about 30 seconds left. i just want to know what you think the biggest emerging threats are. >> the types of things researchers are diving into today -- there was a lot of research into how we detect and combat deepfakes, which will be very dangerous coming into the upcoming election cycle. researchers are doing research into full in the 787, vulnerabilities in mobile devices -- researchers are doing 787,rch into the boeing vulnerabilities in mobile devices. andof our devices have bugs

we need hackers to keep it safe. emily: that does it for this edition of "bloomberg technology." stay tuned to bloomberg television. this is bloomberg. ♪

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