i am taylor riggs in san francisco. this is "bloomberg technology." asing up, pressure rises some board members of wework consider ousting the ceo after the delayed ipo. plus, snap to attention. the giant seems to be helping the federal trade position -- federal trade commission.

vimeo to become a publicly traded company. we will hear about the content strategy and a new hiring feature. first, our top story. more worries for wework. pressure is mounting to oust ceo adam newman -- ceo adam neumann after the delayed ipo. the board was supposed to meet today but they are likely going to meet later this week. huet covers startups and she joins me. why the shakeup? ellen: insane week in the last week or two. pressure first to delay the ipo and now it seems like there are reports to consider replacing the ceo, adam neumann.

a lot of back and forth within the board. maybe delay the ipo october and later. we seem to be watching as it unfolds. possible board meeting this week , not expected today but likely very soon. taylor: who wants adam neumann out? ellen: that is most likely softbank. they hold two board seats. it seems like they also have support from benchmark. one board seat has been an early investor. some viewers they remember was also instrumental in the ousting uber.vis kalanick from remains, atess least softbank and benchmark are

adam neumannetting out as ceo. taylor: support seems to be wavering a little bit. ellen: it has been an about-face. softbank has been a staunch supporter. they have been the only investor since 2016, pouring tons of money into this country -- into this company. their chairman has shown a lot of support. -- support for adam. they have been portrayed in the media as kindred spirits. it seemed like they had been aligned on the incentives, the purposes and goals of the company, and now it seems like the support is shifting. taylor: we thought we would get that board meeting today, on

monday, we didn't. anything on what we can expect this week? toen: we have been trying report the latest developments. we will be looking for this meeting. i don't anticipate it will be decided in one day. this is a huge change for the company. a ceo who has been a co-founder since the very beginning. ideas, vision, personality. similar to uber, very hard to separate the culture from the personality of the ceo. changing anything about the position will be a huge shakeup at the company. taylor: the saga continues. hunk you to bloomberg's alan -- bloomberg's ellen huet.

abby, how concerned are you now? what does this board shift into you? hit on a lot of the high points. the concern for investors will go back to the governance side as well as the business fundamentals. when you have a ceo in play like this, you have to question which are being driven the most by that. it tells us that the governance house is very much not in order. gene, give me your thoughts on a potential board shakeup it is that enough to squash some of the investor concerns? gene: far from it. i think this will take a year or so. ellenk the set up piece, really captured it when she

talked about the infusion of adam's views with the company. i don't think he will survive as ceo. i think he will be some kind of executive chairman. an organization like this in high growth mode to align with more scrupulous public investors is a most difficult agenda. ultimately, i think this will take a lot of time. i think there will be some changes in terms of late stage private investing because of the result of this. about adamt is it neumann? is it the spending more than the income, his quirkiness, his management style? what is it investors are so concerned about? gene: he is perceived as being reckless.

when you look at the evil lucian of a company -- when you look at the evolution of a company, there is a period when recklessness is seen to change the world. there are several factors we have talked about that play into it. the list is long. ultimately, i think it creates some anxiety around investors about what is going to happen. it really is an open-ended question when you hear stories about the party type of culture. that recklessness does not sit well with public investors. theor: abby, explain for us role of the board. we know corporate governance 101 is to hold the ceo accountable. is the board holding the ceo accountable? abby: i think it goes beyond that. the first rule of governance is

the business judgment rule. the board members have to act in the interest of the overall corporation. they have a duty of loyalty and a duty of care. when they look at the role of the ceo, they have to ask themselves, is the ceo the right person to lead the organization? a lot of problems coming up, related to what gene just said, why are we facing this issue now? is this not something that was known to this board and this team and private investors? we didaylor: -- taylor: know about it in the case of facebook. why now, why the focus on adam newman and we work when zuckerberg got away with it? the private markets have pushed and pushed and we got

that breaking point. the outrage really sort of drew the line. people can talk about the public market environment, other public role models, but i think he got pushed one step too far. sorry. elon -- gene, i was thinking about elon musk. talk about these ideas of tech companies where you have mark zuckerberg it was ok, though shareholders are ok with mark zuckerberg running the company. why is there this concern over adam neumann at wework? ? is it because the company is not profitable? gene: the exception to the rule, i think mark zuckerberg is one. the line is drawn generally around what i refer to as recklessness in the past. drug usage, which is common in the tech community.

i think there is a level, awareness of that that gets public investors more concerned. ashink a culture that is not respected as they should be, that is a concern, too. i know it is easy to say negative things in an environment like this. i think the simple take away, if you look at somebody like mark zuckerberg, even though he had a break things type of mentality, i think those two former pieces, he was measured and respected. i think that is why the differences. in the brief time we have, i want to quickly -- taylor mentioned, i think there will be some changes. i think this concept of super voting rights will probably go away over time. now not onlypany having power around politics,

media, the economy, this is a perfect example of why 20 to one voting rights isn't appropriate. taylor: abby, you are nodding your head. abby: i think gene is spot on. i think we will see a lot of changes in the private market. it may be has not surprised people that the litany of ceos you are talking about are sort of the bad boys of silicon valley. bad boys need good parents. this is where the board has to step in. taylor: gene, let me get comments about the basic fundamentals. $15does a $10 billion to billion valuation feel to you, a good value? gene: i think that is the right range. growth whichenue we talked about, probably closer

to 10. i think some of the language has been changed. the probably favors kind of low end of that. the challenge, when you think about the valuation, there is probably no good comp. ins is a tech company quotes, but a real estate company in practice. i think it feels closer to that range, 10-15. do an ipo they don't this year, how does their balance sheet look? it starts togene: get stressed at sometime next year. that is why i think adam starts to move toward a chairman role. the balance sheet needs work and will need some help. close to $1 billion.

$700 million seems to be the number that would get them to a more appropriate ipo. if you look at a chart here that i am showing our bloomberg audience, it is that the bondholders have held in pretty well. i believe i was reading that there might be a clause that if there is a management change, bondholders would have to get cents on the 101 dollar. gene: news to me. that could impact some of the forces at play. 101%,tely, if it is just i think that doesn't change kind of how i feel ultimately that change at the top is needed here and we will get that. taylor: it is a roundtable monday. loup ventures co-founder gene inster, and abby alderman

san francisco. coming up, we will discuss the focus of facebook's antitrust probe by the ftc, next.

taylor: federal prosecutors are conducting a probe of e-cigarette maker juul according to a report by dow jones, citing people familiar with the matter. the investigation is being led by the u.s. attorney's office of the northern district of california. the fda and several state attorneys general are investigating juul. the trump administration said earlier this month that it planned to ban most flavored e-cigarettes. a company spokesman has denied it markets to tenens.

social media company snap is reportedly talking to regulators about the way facebook allegedly tries to thwart competition. it is reported that the snap legal team had been keeping a dossier nicknamed project of old amort on facebook tactics -- project voldemort on facebook tactics. for more, i will bring in michael, research analyst, who joins me from new york. what is your take on this report? reaction is that they are probably one of a laundry list of companies that the ftc is probably currently reaching out to to have a better understanding of if they are apt -- if they are acting as a monopolist. had a negative impact

with regards to emulating what they had done with stories. there is probably a little bit of an ax to grind, a baseline. we have been hearing it from we have been hearing it from large advertisers as well that the ftc has been reaching out. taylor: you cover facebook as well as snap. i wonder how much of this is normal cost of doing business and how much is facebook really overstepping the bounds? michael: it is hard to say. i have some firm opinions looking at the big names that are at this point under the scrutiny of the government i think, and a lot of cases, when i look through what facebook has done, definitely what they are doing with cambridge analytical was a little bit aggressive last year. i think they are a tough competitor. i think they have definitely emulated competitors in the past, they have done so with snap. i think the tactics about going

ahead and trying to publish influencers gets a little close to the line but i don't know if aat in itself makes facebook monopolist. taylor: depending on how these discussions go, what is the real threat that facebook would be broken up? is something you have to respect. i think you are seeing that in facebook, google, and amazon stock. investors don't know quite how to handicap it. if i were to roll things forward by a few years. let's say, for example, instagram was broken off of facebook, i think you would ultimately have value creation because i would suspect the instagram assets growing at a much faster rate than facebook. facebook would probably be showing much better margin at the core. he would have necessity to re-duplicate some of the

targeting infrastructure and sales but ultimately i don't think it would be a game changer in terms of just being company ending. would it disruptive? certainly. taylor: what we have heard is the market actively pricing in, let's quality conglomerate discount -- let's call it a conglomerate discount to facebook? michael: one of the examples i would point to out of earnings that i thought was probably the biggest surprise, amazon, google, facebook, currently being investigated, is basically google where you had numbers go up by 11%, the stock went up 9% after earnings and is basically down a couple of percent since then. what you are seeing, reaction to earnings, reflecting some degree of a government overhang. a discount, then what

investors think it should be worth, it is hard to say. it is a bit of an art form when it comes to multiples but i have talked to frustrated google and facebook bulls who have loftier expectations about where the multiples could go in the short term. taylor: is the only way to get ahead of this from a tech company perspective to self regulate? michael: i think it is a little bit harder for the government to come through with nuances for what you are able to do with regards to advertising. there have been attempts over the years. i think the nuances get pretty granular and it is challenging. we have certainly been a little bit more negative with regards to google. we think things like the play itunes, apple's case,

to come in and say, 15% feels like a more appropriate cost of doing business. that is my suspicion. taylor: what tech companies do you like that don't have that regulatory overhang? michael: we are huge fans of snap, huge fans of twitter, both of which i think are going ahead, executing fabulously. twitter, let's take that for the first example, is a name i am hearing more and more from investors. they want to own into the invest -- into the election year. they have a sizable presence in japan so they should benefit from the olympics. meeting earlier today with snap, i think their execution is phenomenal. a massivereally been turnaround at the senior ranks. user growth is rebounding. we think trends are looking strong.

taylor: thank you. that was michael levine of pivotal research. coming up, life on the roadshow. highlights to potential investors. what to expect ahead of the ipo, next. this is bloomberg. ♪

taylor: google bracing for another landmark privacy decision from the eu comedy right to be forgotten law that passed five years ago. the law forces the tech companies to delete personal information upon requests. the court is questioning whether the law should be applied globally. a decision could be reached as soon as tuesday. still with google. investigators will again listen to audio snippets of people speaking to a digital assistant if users give the company

permission. google paused all human review in july. under the policy, google will tell users that they could be listened to if they opt in. hopetives at peloton hotels will propel investor demand. john foley helps highlight the bike and treadmill at a luxury hotel in new york. he said subscribers will to continue the peloton while traveling. in june, they had bikes and 700 hotels. -- trading sales debut thursday. coming up, apple is making a supply chain shift amid the u.s.-china trade fight. where they are building, when, and why, next. roku shares in vocus. we dig into the company's

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this is bloomberg technology. i'm taylor riggs. now for the latest on trade and tariffs. apple says the next version of its macro desktop will be assembled in texas after the company received tariff waivers. the company on friday was rented exclusion from the trump administration on several parts, including processors, power components and the computer casing. it will include components made by more than 12 u.s. companies. for more, i'm joined by mark gurman in los angeles. is this part of a broader trade deal? mark: thank you for having me.

i don't think so. it is very possible they can use this -- they will be manufacturing this computer which they have been doing for for six years in texas, to maybe influence the trump administration to go easy on them on december 15 when the iphone, ipad and other important products are due to be hit with tariffs. taylor: you brought up december 15. we know the mac pro was made in the u.s. why can't they make all of those other products that are facing future tariffs to to avoid those tariffs too? mark: to be clear on the mac pro, it is not complete lee made in the u.s. primarily, the casing and other important components are made in china. then, they are exporting them to the u.s. for what is known as final assembly. whereas in china, the iphone is primarily made there, all the components and the phone's actual production. why can't they make the iphone and ipad here?

they are more complex than the mac pro. the mac pro is basically a mismatch -- mish-mash of components that are easier to assemble rather than something as small as a mobile device. taylor: do you have any sense of tim cook's conversations with the president? how did this come about? mark: apple has been lobbying the trump administration for relief on tariffs for over a year. they started by lobbying against publicly -- the apple watch last year, they got a brief waiver on that. they save some money there. trump has notably been meeting with tim cook. there have been dinners, white house meetings, oval office meetings. a famous photo of tim cook along with president trump and john bolton at the time in the oval office. clearly, he has been working behind the scenes to make sure apple's business is s8 best possible from the impact these

tariffs will have on many american companies. taylor: i have to note that the mac pro being mostly, as you mentioned, assembled in the u.s. -- a win for apple, consumers. you wonder if this also feels like a win for trump too. 12 u.s. companies will be participating in this, made in texas. how important is it that 12 of those companies are u.s. companies? mark: this is all p.r., right? this is not a big change in their strategy. the previous model was manufactured in the u.s. even the trump administration will very likely flocaunt this. trump talk about apple building big, beautiful plants in the u.s. whether or not that is actually true. and making a point that he has apple on his side. calling tim cook one of his good friends. from a strategic standpoint, i am not sure much has changed for apple. from trump, it is a pr win. taylor: another day, another

apple product, another tariff. that was mark gurman. hase the streaming wars begun and big companies have gone into the game, it has been bad news for roku. cheaper services like apple tv plus are making investors worried about how roku will be able to compete. are investors overreacting? i asked rosenblatt security analyst on the phone from minneapolis. mark, let me start with you. is the market overreacting? mark: thanks for the question. i would say first off, more recently, the market has been reacting to comcast and the streaming box set. they are new to the market. they came in with the streaming box back in march. they will offer the box for free. there is a pretty significant overreaction so that announcement, given roku's

leadership lead, if you will in streaming devices. we estimate they have 35% penetration of u.s. broadband households. we see that reach continuing to be extended, not only relative to comcast but relative to amazon fire devices. taylor: let me pull you in here. analystsvery recently, were pretty bullish on the stock. what happened in the last week? guest: sure. thanks. i think we should talk more about the last couple of weeks. as we think about the bullishness on the stock, it is more along the lines of the international expansion opportunity. there was a lot of talk there. prior to the apple tv plus rokuncement, the ceo of disclosed some of his near term international expansion. that was a little bit

underwhelming because they announced only one tv partner versus the six or seven they have today. aid, more like mark s of the comcast announcement with the three device offering -- free device offering as well as facebook's device offering. taylor: mark, how much of that international growth and international expansion can you factor into a long-term sales growth for roku? mark: we have very modest expectations. i sort of look at international as somewhat of a call option on the stock. if you look at the expectations, we have only about 40 million u.s. households as active accounts. depending on how people are modeling the growth, i think there is still some room in the stock as it relates to international. we sort of look at international option here.

taylor: you were talking a lot about penetration rate. i wonder, when we measure current demand, how elastic are customers? could you very easily switch or do you see demand holding in there? mark: well, i think it is very easy to switch, but i think habits are hard to break. you think about how roku is being used today in the household, it is an aggregation device. it is whether you are watching apple tv, netflix, hulu, what have you -- you are watching all of your tv programming from one device. i think roku does that very well. you are not paying for it on a monthly basis. i don't know that switching costs necessarily are relevant roku'swill in t marketplace today. if you think about comcast, they own the broadband pipe, but they are late to the game. roku has roughly 35%

penetration. we estimate as it -- amazon fire has 25 penetration of hope. mes. it is a big hill to climb. you are fighting against the brent that is a household name in training. taylor: you started off the conversation talking about the last few weeks. i wonder how much of this was really the multiple and the price and the sentiment getting ahead of itself a little bit. woo jin: sure. if you think about valuation price of the last couple of weeks, it was trading around 11, 12 times sale. i fall back to the international enthusiasm. where we are in the multiples, we are about eight times forward sale. the way way we are measuring valuation is relative to the consumer facing ad generating internet names. a value proposition for roku

long-term is more of the ad revenue it can generate off of the video streaming, more so than any type of subscription. taylor: that was mark zgutowicz or rosenblatt securities. woo jin ho, you will stick with me because i want to stick with streaming wars. days after resigning, bob iger floated the idea of the merger between two companies if steve jobs was still alive. that was from an excerpt in his upcoming memoir. for more on how these friends went from friends to foes, austin carr, and still with me woo jin ho of bloomberg technology -- intelligence. woo, set up this conversation of where we are in the streaming wars. who in your analysis is poised to benefit from the structural shift of streaming? woo jin: sure. if you look at the streaming vendors right now, it has always

been or has been this standalone streaming vendors. we started with netflix with going from disc to an over-the-top model. now we are starting to follow along with new players such as disney coming out with their disney plus, as well as apple tv plus coming up in november. if you look at the top five streaming platform players today, it is going to be netflix and then we drop down to youtube, hulu and then hbo. i think disney and apple will be very fast followers. taylor: austin, let me bring you in. you heard disney and apple could have been sort of these big hours at work, but i love the quote you let off with in your story that said it was so dependent on steve jobs being alive to get this done. why was it so dependent on having steve jobs still in the picture? austin: what bob iger was getting at was the close

relationship that these two had, both when they were on each other's boards. bob iger was close with steve throughout the acquisition of pixar. he's of course been close personally. in that excerpt, he is closed that steve jobs was one of the first -- he was one of the first that steve jobs disclosed his cancer and health issues to more than share holders. he really talked up that close relationship and how even more so than under tim cook there was more likelihood they would have merged together and created this really unprecedented partnership between the distribution side and the content side, which is what woo jin was talking about. all the streaming wars goes down to owns the platform and who owns the content and which is more valuable. taylor: bringing this to present day, i wonder how likely would be a merger. apple, $200 billion of cash on the balance sheet.

what would a merger look like today? austin: it would be complicated which is why there was a lot of hedging in that article about this is years in the past, a hypothetical. even if steve jobs was still around, it may have something they considered somewhat seriously but not something that would have happened. the reason is, the reason it is so intriguing is it goes back to that apple tv plus announcement. we might have a rendered oprah famously saying why did i partner with apple? because they are in a billion pockets, ya'll. they have their iphones, ipads, macbooks. every different device you can imagine, they are in the pocket of consumers. inversely, they have no content. some stock analysts have described their launch of tv plus as building a house without furniture. they don't have that tremendous back catalog of content in movies and tv shows which is what they are trying to build out and what disney could have offered them.

taylor: well, the streaming wars discussion continues. that was austin carr and woo jin ho. coming up, we hear from the ceo of -- why the company is staying out of the streaming space and the road to become public. this is bloomberg. ♪

taylor: in the age of streaming wars, vimeo is a turning attention more people behind the cameras as it announces a new tool that lets businesses, brands and agencies signed and higher world-class video professionals to create content. vimeo ceeo anjali sud spoke to ed hammond on how this move the company forward. anjali: this really is not a new offering, it is another way for us to lower those barriers for

businesses and make it easier. we don't think of ourselves as a marketplace business. we are a software as a service or staff business, but we have this wonderful community, this creative committee of scale. so the ways we can leverage it to add more values to our users is a differentiator. ed: you are also a premium content business. you cannot access it for free. but you have set in the release today there will be no commission vimeo takes so how do you monetize this business? anjali: this is not really a separate revenue line for us. the reason we are doing it is to increase engagement or attention on the platform. like any good staff business, we are interested in building long-term values and relationships with our customers. the vast majority of revenue's annual subscription plans. for us, this is about the more people coming to the platform can make video, the more value

they are finding, the more they will engage with our tools. that is good for our revenue line. ed: does it give more power to the businesses who are using the site to access content because now they can come and say this is the kind of video we want? almost a commission we want to put out there. all right, we are well equipped to provide this because of x, y, z reasons. anjali: if you are business or brand or start-up, you need to make video every day. you are making video for social media. the audience almost expect netflix style content. the demand is there but it is really hard. it is hard to figure out who you can work with, find someone in your budget. in many cases, businesses are not taking about video. they are thinking about growing their business. this is really about lowering those barriers. what we found is there is a high

demand for this, from both sides of the community. ed: it is impossible to talk about vimeo without looking at where you are heading in terms of becoming a standalone public of any. company. vimeo is one of the two companies under the umbrella that has its own results broken out. talk to us about the path to ipo and where you are headed on that. it's really true, for vimeo ipo is not a business strategy. it is a funding vehicle. well-funded,have a long-term shareholder. genuinelyis really not about ipo, it is about capitalizing on this massive market, $20 billion market, for serving the people behind the camera and not investing in content like so many others are doing. but investing in the businesses and creators that are making

that content. taylor: that was vimeo ceo anjali sud talking to ed hammond. still ahead, trying to face the music. the first investor day for alibaba without jack ma at the helm. investors have a long list of questions for the e-commerce giant. we will speak to one of them next. this is bloomberg. ♪

taylor: china e-commerce giant alibaba is holding the annual investor conference. it comes after the backdrop of a worsening outlook for china's economy. the government has increased as china's sprawling sector which includes alibaba. over the weekend, hangs out officials in a move they say was the facilitate communication and expedite projects. join me on the phone from that meeting is rbc analyst zach

schwartzman. thank you for joining me bright and early over there in china. let me start with the basics. it is all about e-commerce. makes up 86 of revenue for alibaba. what do you need to hear from the company about their e-commerce? zach, let me know you can hear me on alibaba. their investor meeting that is coming up. zach, do we have you? that alibaba has their investor meeting -- we will keep talking until we get some technical difficulties figured out over there with zach who is joining us on all things china. we know this is expected to be day two of the analyst meeting. we had day one today. of course, we do know as we take a look at the company's revenue

breakdown -- 86% of the revenue does come from e-commerce. you have some other parts of innovation, for example, which makes up 1% to 2% of their total revenue. let's get to some other stories. twitter and facebook say they have removed 365 fake accounts linked to things of the conservative popular party. the accounts were used to influence public opinion and spread spam. twitter says the accounts were identified as falsely boosting public sentiment online in spain . the accounts were active before spain's april 29 general electric. -- election. zach, do we have you now on alibaba? zach: yeah, thank you for having me today. taylor: thank you for joining me. start with what you want to hear from the company as it relates to their e-commerce platform. zach: yeah, great.

we actually did hear a lot about the e-commerce platform yesterday. some of the improvements they have made. alibaba has positioned itself well to whether this long-term trade war that you were just referencing with strategic investment domestically to cater to this growing middle-class. taylor: it was really interesting, when you talk about tier three cities, 70% of long-term growth is excited to come from some of those lower tier cities. we talk about penetration rates. what do you need to see in terms of growth in those lower tier cities? the: yes, it is really strategic investment that alibaba has made. they have gone through this 50% a fewt cycle -- years ago down to 30% today. some of those investment are in their logistics platform they spoke about. others in local consumer

services, such as a food delivery. that 70 ofn update the cities with an additional 60, and we think this is going to allow them to gain more market share in this $1.3 trillion opportunity over the next 10 years. taylor: i love that you brought up food delivery. a pretty capital-intensive business and competitive. what do you need to hear from the company about food delivery? competitor outn what's interesting this and's unique about some of the other food delivery platforms in the u.s., ali pay has a platform. they have off-line transaction data. they can have great targeting ordering and new

consumers ordering food. they can provide a rich data set asa restaurant off the bat they have prior purchase history. taylor: zach, quickly here. as every internet giant goes to a.i. and cloud, can you further assume margin expansion with the shift to cloud? zach: cloud's still not profitable for alibaba. we think that may happen over the next couple of years, but most analysts are not modeling that, at least not yet. on a comprehensive basis, we are modeling profit growth over the next few years. we have 50% adjusted from last year because of these adjustments they have made in the past few years. we think profit growth will actually accelerate to 29% in fiscal year 2020 and 33% next fiscal year. taylor: we will have to leave it

there. thank you so much, zach schwartzman on alibaba. that does it for this edition of bloomberg technology. we are livestreaming on twitter. check us out. this is bloomberg. ♪

paul: welcome to daybreak australia. i'm paul allen. kathleen: i'm kathleen hays. sophie: i'm sophie kamaruddin. we are counting down to asia's major market open. ♪ here are the top stories we are covering the next hour. world leaders gather for the u.n. general assembly. the call of climate change top of the agenda. teenage activist greta thunberg says it is too late. she says