taylor: i'm taylor riggs and this is "the best of bloomberg technology," where we bring you all of our top interviews from this week in tech. coming up, the beat is on. apple's fourth-quarter results beat across the board despite sputtering iphone sales. profit and sales top estimates. we have complete coverage. plus, twitter political ad ban. ceo jack dorsey does what facebook's zuckerberg would not. twitter is banning political ads

of all types. we have details. tesla owners talk. bloomberg conducts the biggest survey of tesla drivers to date. 5000, in fact. what they have to say about what elon musk is doing right and wrong. now, this week was dominated by tech earnings. apple beat across the board wednesday, topping estimates for both last quarter results and next quarter's forecast. this all despite sputtering iphone sales. highlights included sales and profits that topped analyst projections. services revenue also reached a record high. the ceo announced apple will launch a no interest iphone payments on the apple card, adding that the apple card is the most successful launch for a credit card in the u.s. ever. i got insight from forrester analyst julie ask. and from lee drogan. >> we have been seeing upward revisions to basically all of the numbers throughout the quarter so it is not a surprise that the stock had performed pretty well coming into the report. that said, especially on the services aside, this was a

really large beat. that and the gross margins number were very unexpected. obviously, the guidance for the holiday quarter was really good. i want to put that in context. when you look at the iphone numbers and when you look at the expected revenue numbers, the midpoint of that guidance number for the holiday quarter is about $5 billion below the all-time high, which was last year. so in terms of, you know, apple's business, the financialization has led to higher eps and higher stock price. taylor: julie, as we know, the company, 52% of the revenue still comes from the iphone so it still comes down to iphone sales. i'm showing a chart in my terminal at g tv talking about the average sale price. as they have lower that, the number of phones are starting to pick up. how much of this demand are you seeing, particularly perhaps

around iphone 11? >> i think certainly lowering the prices can bring more consumers into the market or speed up replacement cycles. as the phones have got more expensive, and certainly they rival and are higher-priced than laptops in the market, consumers have slowed down. if we were to look back five years ago, the replacement cycle was much closer to two years and now it's up beyond that. taylor: lee, did we see in this quarter people replace their older phones faster than we thought? is that also what is driving next quarter's forecast for iphone sales as well? >> it doesn't look like that, actually. i think julie has got it that the replacement cycle is expanding. myself and my wife are good examples. i have the 10 and she has the seven and neither of us upgraded this year because we are looking forward to something new, you know, something that is actually a game changer in terms of the hardware. there is really nothing there. the next cycle looks like we are going to get 5g.

that's where both of us will obviously upgrade. i think you will see that upgrade cycle tick up again. i think the market basically baked this in, that you will get a lower upgrade cycle. the other issue is out in china, that upgrade cycle is also slowing significantly because they are working off of comps from the last year where the upgrade cycle was very high when apple did not have a large phone to sell into china. then it did. now we are on the backend of those tough comps. so it will take a little while for that to kind of burn off. and then again, that 5g upgrade cycle you might see pickup again. taylor: julie, we were talking a little bit before the show. as we want to focus on iphone, more and more we want to talk about services as well. that is the higher-margin business of the company. i'm showing another chart in my

terminal showing the growth of that services business. which has rebounded, up 18% here. how much of that services business do you see pushing growth going forward for the company? julie: i think it is absolutely essential to apple as we move forward. -- look forward. on one hand, they have more services on the market with bringing the tv service and arcade service in. and if you were to look at somebody opting in to buy all of their subscription services, you could be up over $500 per month. that's per consumer on an annualized basis. because they are subscription, they tend to be stickier. the other advantage apple has in the market is a lot of billing and do have the billing relationships with almost all their customers. that makes it easier to convert customers and keep them. taylor: that was forrester analyst julie ask. and lee drogan. facebook was

also one of the most anticipated tech companies out with earnings this week. the company impressed wall street wednesday by posting strong third-quarter sales. this is all despite regulation woes and doubts about its cryptocurrency plan. ceo mark zuckerberg remains defiant on the investor call. >> i expect that this will be a very tough year. we try to do what we think is right, but we are not going to get everything right. this is complex stuff. anyone who says that the answers are simple has not thought long enough about all the nuances and downstream challenges. i get that some people are going to disagree with our decision. i get that some people are going to think that these decisions may have a negative impact on things that they really care about, but i don't think anybody can say that we are not doing what we believe or that we have not thought hard about these issues. taylor: for insight, i turned to our bloomberg intelligence senior analyst. >> it has been a big topic for the last couple of quarters and it will continue to be so. going into an election year. if you look at the business side of things, that is humming well. they came ahead on every metric there was. including margins where there were some worries.

they are projecting a slowdown in 4q. it might be a little conservative. there are some comparison issues in four q with respect to product changes and things like that. what this quarter is really showing is that facebook is setting appear next year for its newer businesses to diversify beyond advertising. so you are talking about e-commerce, payments. that is what is going to be the story all about from a business standpoint. as far as the regulatory aspect is concerned, i mean, that is going to be an ongoing discussion, debate, argument throughout next year. but the business side is sort of stays untethered. taylor: are we seeing any cyclicality in their ad revenue around the election cycle? we know that facebook and google continue to dominate the ad space. but are we starting to see any cyclicality there?

jitendra: it is not that big in terms of their total revenue. so if you look at facebook or twitter, the political ads, it is a very small portion of their business. not a lot of cyclicality in terms of revenue, per se, but there is some organic traffic, more eyeballs that come along the way. that may help twitter more so than facebook. cyclicality based on elections, at least on the business side of things, it should not sway the results much. taylor: not to be a total negative nancy, but i think there were some concerns that the margins beat. we were looking for a margins miss to show that they were spending money on cleaning up the platform. are they doing enough on cleaning up the platform? jitendra: and they are accelerating hiring next year. if you look at their expenses, $54 billion for 2020, they usually give a higher guidance early on and taper it off. it is basically telling you that the headcount growth will continue to increase going into election year. they are being more cautious

with these improvements and henceforth. this is really going to be a moving target over here. this is not a one quarter or one year fixed really. and how they allocate personnel -- there's going to be an evolution of infrastructure spending and how they allocate personnel. so at least from a financial standpoint, they are making sure that there is capital and spending allocated or baked into expectations for next year, especially going for an election year. taylor: that was bloomberg intelligence's jitendra waral. later this hour, we will hear from facebook coo sheryl sandberg, who sat down for an exclusive interview with the bloomberg -- with bloomberg after the company reported earnings on wednesday. again, that interview later this hour. coming up, political ads on social media sites like facebook coming under scrutiny. twitter makes a big play, announcing it will stop accepting ads from candidates for elected office. details ahead. and if you like bloomberg news, check us out on the radio. you can listen on the bloomberg app, bloomberg.com and in the u.s. on sirius xm. this is bloomberg. ♪

taylor: twitter announced on wednesday it will ban political advertising from its platform globally starting november 22. ceo jack dorsey tweeted to the move saying "we believe political message reach should be earned, not bought." bloomberg opinion's shira ovide says twitter's decision clearly upstaged facebook. she weighed in on the matter thursday. shira: he was already under some considerable pressure, right, if you have people like joe biden and elizabeth warren and alexandria ocasio-cortez all piling on, criticizing mark zuckerberg and facebook about their policy on political advertising and political speech on facebook. i am not sure jack dorsey really tips the scales that much more, but certainly what jack dorsey

and twitter did on wednesday, it's one, it takes away one of mark zuckerberg's arguments, that his peers at twitter and google are all doing the same thing when it comes to political advertising. dorsey basically said ,nope, we are not. taylor: at .5% of revenue, why -- revenue, the political ad contribution to facebook, why even get into this controversy to begin with? shira: i say that is a great question and certainly that is a point that many people have made, that facebook would not be giving up really that much revenue if it decided we are just going to stop taking political ads and just take ourselves out of this part of the conversation. i think the argument that mark zuckerberg is making and you can say it is the wrong decision, but it does feel like he really believes it, is that facebook does not want to be in a position where they are asked to censor political speech. he really sees this as kind of a free-speech argument and there are certainly a lot of people, particularly conservative politicians, who agree with him.

it does feel like a principled stand rather than a stand that is motivated entirely by money. taylor: facebook has .5%, twitter has 1/500 of their revenue from political ads. so why their decision to weigh in here? shira: it is one thing for them to start saying they are going to stop taking ads related to certain issues, because those kinds of advertisements are a teeny fraction of a company that is already a fraction of the size of facebook. so twitter has never been a place that was either large enough or were the ads are targeted enough to be appealing for political related advertising. dorsey, look, give him credit for taking a position and sticking to it, but it is also true that it is a little bit easier to take that kind of stand when the advertising that he is talking about is relatively insignificant for

twitter. taylor: you read a bloomberg opinion column and you get hundreds of calls coming in. using that as sample data, who is right here? shira: i don't think my email comments are necessarily representative. but i do feel like that facebook is in this cycle were nothing they do is right. -- where nothing they do is right. there is a little bit of unfairness to that, but it is also true that look, they are a place that has an audience of a couple billion people plus on a daily basis. the choices they make have an extremely large impact, both on what people see, who gets seen, whose voice gets heard. that's why there is so much attention on the policy choices that facebook makes and on how they write their algorithms that the choices of one company, controlled almost entirely by one man, are so important in the discourse of the country. -- country and the world. taylor: you write a very obvious question that i had failed to

ask up until this point, which was, how did google manage to stay out of all of this? shira: i don't know. to me, this is one of the great mysteries of advertising, online advertising controversies. google has managed to stay out of the fray. google is the largest advertising seller in the world. while mark zuckerberg has gotten criticized by everybody from the president on down for how they handle political candidates and their advertisements on facebook, google has said nothing, as far as i can see, and they have not really been called to account. i can't imagine it will stay that way, but so far, they have just kind of let mark zuckerberg take the fire. taylor: that was bloomberg's

opinion shira ovide. coming up, complete earnings coverage continues with alphabet posting a few misses in the third-quarter. we had details, next. and bloomberg conducts the largest survey ever of tesla model three owners. what they think about reliability, design, and function. this is bloomberg. ♪

taylor: while facebook and apple beat earnings, alphabet,

google's parent company, delivered a mixed bag when it reported third-quarter earnings on monday. operating income, earnings per share, and even paid clicks missed estimates. but the company did say it is investing heavily in thousands of new jobs geared towards google's cloud computing business. according to the ceo, cloud computing and machine learning continues to be the company's priority. i got reaction from a market analyst nicole perrin and jitendra waral. jitendra: they are spending and ramping up cloud but it is showing results. it is pretty strong. probably cloud is going much faster than that. what we are seeing over here is for the next year, cloud is going to take center focus as they push into enterprise. they are getting some early

success over here. they have the capacity to compete with amazon and microsoft. you're going to see cloud becoming a bigger and bigger deal for google but it will come at a cost as they scale that business. that's what you largely see in the cloud business. taylor: nicole, what is your take on the cost of keeping up and gaining market share in that cloud business? nicole: it is going to take some continued investment, as we just said, but i think there is the potential for a huge payoff on that side. we have seen some major contracts awarded to competitors recently, so i expect google to keep investing in hopes of winning some of that business in the future. taylor: i want to talk about the income statement, because it seems like a broad-based myth. toppling revenue comes in line, -- topline revenue comes in line, but operating income, margins, and the bottom line seemed to be a miss all in a row. is it a revenue problem or expense problem? jitendra: it is not a revenue problem. if you look at their core ad business, there is a dynamic where the ad pricing is improving. we see a search becoming more and more valuable on mobile as

it gets more credit with space. -- corroded with -- crowded with this space. there is impact in terms of improving with pricing. that is offsetting the 18% increase in paid clicks, the volume of ads that you see. this dynamic will keep playing. i think the ad business will keep humming well. the cloud business is where disclosure could be a bigger deal for them next year. at scale, it is a very profitable business. as we have seen with other competitors. google has the scale. and if they can come out and show that disclosure, look, this -- disclosure to the street, look, this is how fast we are growing and this is the profitability, which could very well happen next year. it could spur a re-rating for the company. taylor: i just got off the phone with the cfo as she said it was a very noisy quarter, which broadly led to the miss in the margins and bottom line. on the expense side, there was a one-time legal expense they had to pay for. there was also an unrealized gain or loss which had to do

with some accounting changes and how you have to mark to market. some of those unrealized losses on your income statement. namely, we think it is uber and slack. she would not specifically clarify that those are the companies. but is there a real impact that the venture capital arms of these companies can lead to some bottom line misses relative to where you think they should be? nicole: i think that it is possible. for me, my biggest take away from google, we do focus really heavily on the ad side and they beat investor expectations and our expectations for their gross ad revenues. although cpc's are continuing to decline a little bit, overall paid clicks are way up. as we said. additionally, traffic acquisition costs have continued

to stabilize. that was something that had investors worried. they peaked earlier this year. they have dropped slightly since then. i think that is a really good sign for the bottom line on their ad business. taylor: we have talked a lot about the ad business. last week, we sat here and said the same thing about amazon. but that ad business is so strong for that company. it is a lever they can pull. how mature is google and alphabet's ad business or is there still more levers they can pull? jitendra: google search has room to grow. they are still trailing peers. as the results show, it continues to be a very valuable franchise for the company and they are the market share leaders. so we expect the momentum to continue there. but with amazon and google side-by-side, they are switching roles, where advertising will come at the forefront for amazon going forward as the cloud business faces large numbers while google will start showing results on the cloud front. you will see this dynamic play out, which really plays well for both companies. i mean, we don't, the market is growing at a very healthy clip. there is enough room for the three of them to enjoy good growth. but disclosure on both companies, advertising on amazon and potentially cloud on google, is what could make it more exciting. taylor: you had a good note on this, that ad revenue had accelerated in 2018, had a bit

of a slowdown or moderating of that pace in 2019. did this quarter give you enough of ad revenue or are there still some pockets of worry, let's say? jitendra: for google, the dynamic of ad pricing improving to offset any slowdown that we see in growth in general would continue. because they are market share leaders, because it searches in many ways a mature business. there is enough room to keep the business humming at a healthy clip. taylor: i mentioned that we haven't spoken with the ceo earlier. i want to bring up a quote when i asked specifically about youtube. there is arguably outside the cloud, youtube could be a big future growth area for the company. she did reiterate that, saying that we continue deliver does to -- deliver growth. we are excited about the upside potential. grand advertising is growing at a healthy pace.

are you getting enough of an outlook going forward into the next few quarters as it relates to youtube to make you confident that that can continue to be a driver? nicole: i do think that youtube will continue to be a driver. we certainly have not seen anything that suggests otherwise. advertisers are very keen to spend on video placement. they would love to have more video inventory, especially video inventory that they can target at scale. youtube is the absolute number one place to do that. taylor: there has been a lot of controversy sometimes about youtube. are they doing a quick enough job of pulling down content? there is a broader concern about i data privacy and misinformation. what is the downside risk here with youtube? jitendra: the downside risk really is more on the profitability side of the things, you know, like we just said, the momentum in advertising will continue to be

strong. because it is shared infrastructure, searches share infrastructure, youtube is sharing infrastructure, cloud is sharing infrastructure. so if you look at their cost profile individually, search would be considerably more profitable. that helps them keep youtube humming on a good clip on a topline basis. i think youtube will keep hoping that topline. as far as disclosure is concerned -- will keep helping that topline. as far as disclosure is concerned, would you not think youtube numbers will be disclosed anytime soon. it would be hard to see that. but cloud, there is real potential. taylor: that was our market analyst nicole perrin and bloomberg intelligence's jitendra waral. coming up, we asked about 5000 tesla model three owners what they think about the car's reliability, function, and design. those results, next. and "bloomberg technology" is livestreaming on twitter. check us out at technology. and be sure to follow our global breaking news network at tictoc on twitter. this is bloomberg. ♪

taylor: welcome back to "the best of bloomberg technology." i'm taylor riggs in for emily chang from san francisco. despite reporting surprise third quarter profits tesla revealed -- profits, tesla revealed in a filing this week that the automaker saw a nearly 40% drop in u.s. sales. sales in china, however, rose to almost $700 billion from $409 million. the filing was revealed the same week bloomberg released a wide ranging survey of owners. bloomberg polled 5000 model three owners with 164 item questionnaire. the data reveals that tesla has finally figured out how to deliver cars with fewer problems.

but that is not all it revealed. as bloomberg news' tom randall explains. tom: i think what we're seeing here is an artifact of them continuing to expand their geographic footprint overseas. so looking at the year over year number, we are comparing that to the third quarter of 2018 and that's when tesla finally figured out how to really mass produce cars and started cranking them out and flooded the u.s. market with the model 3, to satiate two years of built-up demand. so after they satiated that demand they moved in february to start selling cars overseas. so of course their u.s. numbers dropped considerably. i think some people will look at that number and say is this a warning signal that u.s. demand is dropping off a cliff? you know, i just don't think there's a lot of evidence to

support that. if you go to tesla.com right now there's a two-month wait to get a model 3, and that's i think the longest wait that they've had since about this time last year. so, you know, i think that it's a signal. it's representative of what's happening as they expand overseas and kind of smooth out their production. but it was a record quarter for unit sales and i think we're going to continue to see that ramp up as we see their shanghai factory going. taylor: well, tom, you are not just sitting there being a talking piece, you're actually doing the work and rolling up your sleeves and questioning 5,000 tesla owners. generally, as you take a look at the first part of the survey, what is the key take away? tom: so this is a massive survey. nothing like that had ever been conducted for tesla. what we really wanted to get at is now that tesla is cranking out 100,000 cars per quarter, what is the experience of owning one? and can they provide the kind of

quality and experience of a volkswagen or a toyota that's going to attract the next round of more mainstream buyers? so, we started by looking at quality. there's two kinds of quality. there's the driving performance and high-tech features that people love about tesla and people are just raving about those things. then there's the quality of manufacturing quality and precision. we measured that by asking first "how many problems did you have with your tesla when you first received it"? and we found that that rate peaked in q-3 of last year, that we were just talking about. in that quarter you'll remember that's when tesla famously created a whole new production line in their parking lot under a tent structure and tripled production. since then, their defect rate has dropped significantly and is down 44% in the third quarter of 2019. taylor: that was bloomberg's tom randall.

as for the electrifyication of vehicles like tesla we saw plans -- tesla, we saw plans this week for another auto maker embracing ev's. on tuesday general motors laid out an aggressive approach to electrifying its vehicle lineup, saying the bulk will be spent on ev's and not combugs engine -- not combustion engine cars. but is the demand strong enough to support a strategy shift? i asked adam jonas who covers -- jonas, who covers the auto industry. adam: here we are 111 years after the model t, the average car on the road emits 5 metric tons of co2. there are 40 tons per second of co2 emitted by all the cars in the united states, 40 tons a second, yet the world's most valuable auto company, toyota, makes zero ev's today. it's kind of a shock and then on the flip side you have the world's most shorted auto company, tesla, that only makes ev's. so something has to give and

investors want to understand how to play that shift in capital. as we reinvent this industry, something has to give. taylor: how does technology play into this? i think of early days when i wasn't sure if tesla was a tech company or automotive company. where is technology? adam: we think tesla is more of a software company and a hardware-software fusion company that in an ideal world would be covered by a tech hardware analyst rather than the auto analyst community. so we'll take what we can get. we think the connection between tech and autos is when you see these large trillion dollar tech platforms like amazon, alphabet and apple that clearly have their sights set on the all theo industry not necessarily to make cars but perhaps apple wants to turn your car into an apple store. right? so as they try to look at this internet of cars marketplace, a

multi-trillion dollar market, they are getting drawn in to that 40 tons per second in the u.s. eco system, and it's happening within cities where ride sharing vehicle might emit 25 tons in a year, five times more than the average car. so as tech firms get close to that autonomous vehicle topic and that shared autonomous car, -- shared and connected car, they are being drawn in and they have the resources and the capital and frankly the obligation to do something about it. taylor: also in your other latest report in october of 2019, you talk about within the u.s. we're down year over year but we are up year to date in terms of u.s. sales in the battery vehicle monitor -- market. as you look out into 2020 and beyond paint a picture for me. where are we? is there demand? adam: we think the stock market is still defining ev adoption through the completely wrong lens.

they're looking at it through the lens of wealthier people buying cheaper and cheaper teslas in a suburban community for your home. like the retail experience of personal ownership. that is going to grind along. i think that your segment before tom, i believe, who did that 5,000 survey was absolutely spot on with his observations and conclusions. but we think that where the stock market is moving to now, in terms of analyzing ev adoption, its fleet and it's shared vehicles. so in order to make the large shift to get to 2% adoption in the u.s. to 10, 20% it's going to be the regulatory purview of a dense community like a city going after logistics, taxis, shared mobility fleets. that's how you can get the big

chunks and again that's where the money is. that's where the business model can make use of ev infrastructure and use data and software to solve the problem instead of just leaning on the 100-year-old legacy system to do it. that's getting blood from a stone if you try to do that. taylor: that was adam jonas from morgan stanley. now, in china we got a glimpse this week of how the ongoing u.s.-china trade tensions and pro democracy protests in hong kong are weighing on the travel industry. ctrip, which is china's leading online travel agency, and parent trip.com has seen trips decline as a result. tom mackenzie caught up with the ceo in beijing. >> people probably still will travel, but maybe instead of traveling four times a year they -- a year, they might reduce to three times a year. maybe instead of traveling long haul, it might be traveling to asia within china. but i think travel for middle to high end customers almost is a natural during their holidays, new year, or breaks. tom: is growth being weighed down by this weaks in in the --

by this near-term weakness in the economy? jane: the hong kong situation, yes, it has a negative impact on our top line. but i think that is a one time kind of thing. so we will see through it and still make a strong investment in the long term. taylor: how would you say, how would you characterize the border impact of the trade war on your business? jane: i'm very hopeful that the leaders from both countries will have the wisdom to focus on our shared interests. and there's so much things we share together. and maximize our shared interest. only then i think both countries will be benefiting from our collaboration. tom: we know, of course, tourism in and out of hong kong has been under significant pressure. can you quantify for us how it has played out for ctrip?

in terms of mainland tourists looking to travel and stay in hong kong? jane: the one-time impact we roughly estimated is around 5% 5% of our total revenue. tom: about 5%. ok. when do you expect that to turn do you, around? -- do you, when do you expect that to turn around? jane: hopefully the area will be stabilized very soon. so again i think both government and people will look into the future, right, look forward to what is the best for hong kong. tom: a big focus i know recently has been to grow in smaller cities in china. how much success have you had there and what are your targets for growth? there was one target i was seeing an additional 50% revenues coming. are you close to meeting that target? jane: correct. we have about 8,000 offline stores, and the growth empowered

by these offline stores is tremendous. we also put a lot of effort in the third tier, fourth tier, and fifth tier cities. so far it is working out very well. the year-over-year growth for lower tier cities is more than 50% year over year. so we're confident in that. taylor: that was ceo jane sun. coming up, part of bloomberg's exclusive interview with facebook's coo, what she has to say about the social network giant's policy on political ads. you can't mention facebook without mentioning the scandal of 2018. we hear from one of the central figures to immers from those -- emerge from those events. it's britney kaiser. her personal comments on data and her new mission. that's next. this is bloomberg. ♪

taylor: facebook has seen its share of rain clouds with antitrust issues, cryptocurrency pushback, and data breaches hanging over its head. one of the most controversial stances was recently announced by ceo mark zuckerberg who said facebook will not ban political ads, even those that are known to be false. in an exclusive interview after the company posted earnings wednesday, we got perspective of facebook coo, sheryl sandberg. sheryl: we're not doing it because of the money. this is less than 1% of our revenue and the revenue is not worth the controversy. we believe in free expression, we believe in political speech and ads can be an important part of that. where we're focused is on transparency. we put out an ad library, we now announced's an ads tracker which dashed announced a presidential ads tracker which means you can see any ad that anyone is

running anywhere in the u.s. anywhere in the world, even, if -- even if it is not targeted at you. that kind of transparency we think is really important to people understanding. you also talked about investing in protection. one of the things we talked about just now is the size of the investments we're making prepared for 2020 working with election commissions all over the world, hiring engineers, using reviewers, doing what we can to make sure people are kept safe. caroline: so when twitter decides to go the opposite direction, does that make you question your decision or you still stand by the fundamental reasoning and transparency you can bring? sheryl: mark has said on the call that we thought about this for years and certainly we've been thinking about it now. we fundamentally believe that political ads are an important part of the dialogue and can be important against incumbents, for new views. but we also believe that free expression across the board is something that we stand for as a

company. and people all over the world are using that, certainly politicians are using that but people are using it and that's how you see our growth continuing. caroline: talk more a little bit about politicians because it's going to be a tough year in terms of regulatory scrutiny. do you worry about talk of the business model being under attack? how do you see your role on educating, particularly, those on capitol hill about this? sheryl: i think we really have to help people understand that targeted ads and privacy are not at odds. we can do both. so if you're an advertiser you're the biggest company in the world or you're the smallest company, and we have 7 million advertisers, 140 million businesses using our services. you want to show an ad to women in their 50s, that's me, who live in california, we take the ad, we show it to that person, we give you back aggregated results. we can do very good ads

targeting that makes ads good for people and helps advertisers reach the right person without violating privacy. that's something i think we need to do a much better job of explaining. taylor: that was part of our exclusive interview with facebook ceo sheryl sandberg. the facebook cambridge analitica scandal of 2018 shows us just how vulnerable our personal data is online. one of the people at the center of cambridge analytic a at that time was whistleblower britney kaiser, who has a new role and mission. we caught up with her at the sooner than you think tech conference in new york this week. >> since becoming a whistleblower i have sought to explain to people exactly how important their data is. it is now the most valuable asset on planet earth, more valuable than oil and gas, and on a day to day basis this is being taken from you by companies all around the world

making a multitrillion dollar industry off your most private information. that sounds a little gloom and doom when people think they can't get their privacy back but that back, but the truth is people have agency. there's a lot of things we can do on a day-to-day basis to protect ourselves and legislators and regulators are finally listening. there are fantastic laws that that have been introduced that not only can protect the head of -- protect us ahead of the next elections but make sure we live a more ethical digital life here forward. >> what kind of legislation sets the highest bar? we've seen california pass laws, working with wyoming. but do you think p.r. is something that facebook has pointed to and europe is looking at some sort of blueprint. where do you think legislation is leading the way? >> i think gdpr is the most important is it recognizes that

data is your property and therefore tough right to transparency. if they want to continue to use it you need to opt in. transparency is the most important part of this conversation, which is why i'm really excited that the state of california has implemented a version of gdpr, that is going to come into effect in january. also governor gavin newsom in the state of california has introduced the data dividend law which means do companies not only have to tell you what they're holding on you but give you a cut on that. there's national legislation put forth by senator ed marky which means we have to opt in as a nation. right now everyone is opting in, -- is pre-opted in, which is the opposite in europe where you are pre-opted out. you have to actually consent, right. also senator mark warner has an entire package of legislation that demands everything from transparency and consent to how your data is collected to

banning negative use cases of your data and malicious algorithm that push hatred and vitriol to the top of your news feed on social media. caroline: it's interesting that at the same time legislation is being enacted, we are also seeing the companies themselves react in many ways. facebook announcing they are having more third-parties fact checking. the amount their spending on security. the fact that we now see google moving more with what youtube did. what do you think about the steps being taken by the companies themselves and whether they go far enough? >> i think that the investment that facebook is currently making into stopping foreign intervention in our elections is incredibly important and direly needed. unfortunately we didn't have those protections in 2015 and 2016.

unfortunately what facebook is not recognizing is that the greatest threat to democracy is domestic. our politicians being allowed to say whatever they want in their advertising, i think that decision a few weeks ago could not give the same community standards that you and vi to -- you and i have to abide to two politicians is not only a massive threat but will continue the problems that we saw in 2016 where everything from incitement of violence, racial hatred, sexism and voter suppression tactics are used by the trump campaign and trump super pac and aided by facebook. -- were used by the trump campaign and the trump super pac and aided by facebook. taylor: that was britney kaiser, cofounder of the digital asset trade association. coming up, crypto industry big wigs descended on san francisco as part of block chain week. we hear from the coin list ceo who passed a new big tech industry backer. details, next. this is bloomberg. ♪

taylor: security, economics, and products. they were all part of san francisco's second annual block chain week. the event was a who's who of investors, businesses, academics and even regulators. coin with -- coin list ceo among those attending. he stopped by to share some news. >> we are building an exchange called coinless trade.

we have historically run token sales. we have done primary offerings for new token and today we're expanding it into secondary trading. historically when you've run these primary sales you've gotten these tokens afterwards and need to move them to an exchange to trade them afterwards. imagine if you bought shares in ipo and had to move them to an exchange to trade them. doesn't make any sense. we are changing that. we're taking sales that we've run the primary for, put them on the secondary exchange and letting people trade them. taylor: i was chuckling a little bit because you said you are compliant. in this world what does compliant mean? andy: a lot of things and there are a lot of agencies that have stake. the sec, fin rep, fin sent -- finn rough -- finra, all these

different agencies are looking at this space and you have to make sure you're abiding by whatever regulations there are. trading crypto currencies, nonsecurities assets so you have to be compliant with whatever regulators are looking at. we look at what they're doing and have to be careful around those issues. taylor: when we talk about being compliant i would be remiss not to bring up libra. they said they would not launch until they had regulatory approval. what are your thoughts on libra? andy: libra, i think, is a great thing for the industry. facebook has more reach than almost anyone in the world and they're going to expose a lot of consumers to the idea of crypto currency. once that happens it's an open market and people compete for market share with libra. i think there are upsides and down sides to the details but at the end of the day they will expose a lot in this industry. taylor: how is that regulatory environment? you talk about how you have been talking with your regulators to get compliance.

libra clearly has struggled to get people onboard. how is the regulatory environment shifting? andy: one big piece touf look at -- big piece you have to look at now is facebook is not looked at kindly in d.c. for a lot of reasons, and a lot of that is tainting the discussion around libra. some of the pushback is not specific to libra but more about the issues that facebook has had. but there is good news and this has gone largely unnoticed. in the last couple of weeks, commissioner hearst, from the sec, has started to talk about in public speeches, about the idea of a safe harbor for crypto tokens that you might be able to -- tokens. that you might be able to carve out certain attributes and allow them to be traded more freely. we are far from a conclusion on that but she is at least talking about it and moving it forward. taylor: so you think by the fact that we're talking about it more, despite some of the negative headlines for libra, is good for the industry because more people are talking about it. andy: i think at the end of the

day they will find a way to launch libra. there are hurdles but they will launch it, it will shift, it will reach millions maybe even more people and that will be a good thing. -- good thing for crypto as a whole. taylor: so funding environment, a private company. we talk a lot about private companies, particularly wework, in how they have just change it had funding environment and valuations. how is the funding environment now more difficult than let's say a year or two years ago? andy: there is a lot more scrutiny around business models. for a long time we were living in this ecosystem of growth at all costs. if you could grow, you could raise money. today, especially in light of the wework news over the past couple of months, people are looking at business models. it's something we've been focused on because the crypto industry more than any other industry goes up and down. it has crypto winter and spring and you have to be able to survive that. for us being able to build a real business has been incredibly important for building. taylor: and did your investors this time around want to see that more so than two years ago? andy: i think for the most part. polly chain was already an

invester, jack looked at this. but we have a lot of investors and that's why they've reupped their stake and got involved. taylor: that was coin list ceo andy bromberg. that does it for this edition of "the best of bloomberg technology." we will bring you all the latest in tech throughout the week. tune in each day 5:00 p.m. new york and 2 p.m. san francisco. and "bloomberg technology" is live streeming on twitter. check us out @technology. and be sure to follow our global breaking news network on tictoc on twitter. this is bloomberg. ♪ sometimes your small screen is your big screen.

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francine: adidas is the largest sportswear company in europe, and second in the world. that means it sold more than 400 million pairs of shoes last year, over 450 million pieces of apparel, and 110 million pieces of sports equipment, like basketballs. the brand is known around the world for sponsoring world-class athletes and sports teams, including manchester united, and more recently, partnerships with kanye west and beyonce. today, on "leaders with lacqua," we meet kasper rorsted, the chief executive of adidas.