>> i'm taylor riggs in dzumhur cisco. this is "bloomberg technology." coming up in the next hour, apples shine. the company keeps hitting records. a new milestone in china. we will have details. the food delivery business is getting very crowded. grubhub may be looking to consolidate. we will explain. sales floor in the sky. it is no news that microsoft competes with amazon in the cloud business.

but a new target seems to be its retail customers. first, to our top story. that is last year, tim cook stunned investors when my company readjusted its forecast due to struggles in china. what a difference a year makes. official government data shows the apple smartphone shipments in china grew 19% year-over-year in december. that marked a big jump from previous months. it is particularly remarkable when shipments of phones of all brands were down 14% in the same period in china. for more, i want to bring in our reporter. are you surprised by the amount of bullishness we have on apple and the iphone shipments in china? >> certainly in china, that number is a surprise. engine -- broad bush push in china to have consumers by phones instead of iphones. has of the trade tension come down in recent months. maybe that has something to do

with it. i think more to the point, a device like the iphone 11 is a little cheaper, the battery life is very long. the photos you can take are better than the previous version . when you put those things together and combine it with a large backlog of older iphones like the iphone 6 and iphone those devices, 3, 4, 5 years old, it comes to a point when millions of people will upgrade. taylor: one of the other things that surprised us was the fact that the iphone 5g phones are not out yet. what then was driving the big push we saw in december? alisair: i think partly it is this upgrade. even if they did not produce the iphone 11 and had the same new

phones from last year, if you have an iphone 6s which is four years old, you have to upgrade at some point. i think jumping to an android phone nowadays is becoming a bigger and bigger step for people because a lot of your digital life is run through these devices now. there are other ways that i'll hooks people into the ecosystem. giving that up and going somewhere else is really a huge step and people are not willing to do that. taylor: i want to touch on a company mentioned earlier which is huawei. i'm surprised we have not seen more nationalism in china about huawei and pushing away apple. alistair: i think that is very true. i think part of it is this ecosystem issue. if you already have a huawei phone, you are used to the android operating system. and you probably will stick to that. i think apple now, the challenge really is kind of a lot lower than two years ago, even two

years ago, investors were expecting the company to keep growing iphone sales and then unit sales. after that shock last year, that really reset the bar. aw, if apple gets 5% growth year in iphone sales going off into the next few years, investors will be over the moon because there are other things that are coming that will add to growth. taylor: you mentioned the ecosystem. we know they are trying to draw us in and be services business and wearables business. where else do you see apple trying to tie us in when it comes to keeping us in that ecosystem? alistair: we were discussing earlier the idea that there has not been a lot of bad news about apple lately. when you look at the stock chart, it is incredible the last cup -- couple of weeks. another's stat driving that was performance over the holiday week over christmas and new year. apple puts out a number but this year, it was solid.

this is app store spending by consumers, that was up 60% year-over-year. that implies that people are still, even if you have not bought a new iphone, you might buy an new app with a subscription and apple gets a percentage of that. taylor: i want to come in and look at a chart showing inside my terminal, it looks like shares are fully valued. the apple prices at 309 today. even the median price target is around 275 or so. what is this bullish consensus you get from the street of what else could drive the stock higher, given it is at 309 and likely one and a quarter trillion dollar market cap? alistair: one of our colleagues on our stock feed wrote a good story last week, which addresses that. apple, in the last 10 years, has been seen as a hardware company. a really, really good hardware company. when you are a hardware company, you have lower margins or your

revenue is a bit more up and down. now when it is adding a lot of the services to the hardware business, that is a lot of recurring revenue, new subscriptions and things like that from apple music, and the type of revenue is steadier. investors like to give that a higher ratio. i think some of the gains are investors are rereading this company and giving a higher valuation. taylor: great analysis on all things apple and the 309 market cap here that is bloomberg's alistair barr thank for joining us. they took a dive in two biggest markets in the fourth quarter. wework signed the lowest amount of space in manhattan and more than five years. new space in london also grew the least since the brexit vote in 2016. all of this comes as wework scrapped plans for an ipo and needed to be rescued by softbank. i want to bring in ellen hewitt

who has been covering the company. what do we know about the size and scope of the slowdown? ellen: we know it is pretty significant. these are major drops in the amount of new leases that the company is signing. this shows that basically, as early as september, the company was really putting the brakes on saint -- signing new leases for the last quarter of the year. which is a huge change from how the company had been growing, at a huge and fast rate for the last couple of years before that. beenwas something they had pushing forward much more than usual in the month leading up to what they expected would be an ipo in september. now that that is off the table for the time being, seems like a new leases are often we will see continued slowdown in growth for the company going forward. taylor: is the slowdown appropriate given the company is in the middle of trying to right size itself? ellen: it seems on path with what they have said is important to them.

i'm sure some more cautious investors are looking at this and thinking, this is probably prudent. the company getting back on track and growing in a way that may might make more sense for the type of business they are and which requires signing these long leases, sometimes 10 to 15 years. the company still says they opened a record number of offices in december. i think that is just a continuation of a pattern of signing leases earlier in the year and continuing construction. we will continue to see new offices opening because those take many months to get ready. those are still remanence of the ultra growth period of earlier 2019. we expect to see fewer of those going forward because the company has made public things to slow down the aggressive growth and get to profitability. taylor: i want to show you a chart i'm showing inside my terminal. you know the story better than anyone. the bond prices have appeared to stabilize. they are at $.80 on the dollar,

off the lows we saw in november at $.70 a dollar. we saw the market bond yield price stabilization into your world of the company. is the company appearing as stable internally as at least the market appears to think they are? ellen: i think there are question marks around where the company is going to go in the next six months. huge, apparent leadership gap. they have these two co-ceos stepped in as soon as adam neumann stepped down in september but they continue to have rumors of looking for new ceos were doing another search. i'm sure internally, people are thinking the replacement ceos are not long for the position. they have a new executive leader in the form of their executive chairman who was installed from softbank. this is a new person who is running the show but also not ceo. i think people feel probably pretty shaken up as well, employees went through very serious layoffs in the last couple of months. huge cuts at the company.

people probably feel there certain -- of future is uncertain. the company seems more stable than it did in september and october. the future is probably still a little unsure. taylor: bloomberg's ellen hewitt, thank you for joining. coming up, the food delivery business is getting crowded. grubhub may be looking to consolidate. we will discuss next. if you like bloomberg news, radio, yout on the can listen on the bloomberg cap, bloomberg.com and in the u.s. on sirius xm. this is bloomberg. ♪ xm. this is bloomberg. ♪

taylor: wall street is weighing reports that grubhub is exploring strategic options in the midst of intense competition discounts.

the news gives fresh admittance to the idea that food delivery companies have no choice but to merge or acquire. we are joined by tom white and also with us, brent silla. you have been covering grubhub. let me get your thoughts on grubhub being bought or grubhub buying someone else? brent: i think both are logical outcomes. you have seen consolidation dash buyingdoor caviar and other players get rolled up by others in the industry. i think it can go either way. clearly there has been pressure on the revenue and the margin, doordash has come in and put focus on this market. our thorpe -- our short-term thesis is grubhub is dislocated from this given they have great margins. long-term, i think the economics can be restored. i think the ceo of grubhub has

said that. consumers should not get used to the prices they are seeing now because they are not sustainable. like in any market, you see too many vendors chase the market and you are seeing that now. there is make -- way too much competition. that will consolidate and economics is restored. i think you could see there is a standalone case for grab where they could do very well among three big players which we think they would be the third biggest. there is another case where you could see what amazon -- could uber or doordash look at a way to consolidate some of the assets together, could another large food company or beverage company look at this? i think there are a lot of options where shareholders can win at this level. we don't have a buy in the stock but do believe you can see a higher price. taylor: you mentioned uber eats. tom, let me pose this question to you. as you have covered uber and uber eats, do you see potential

for uber eats to come in and take up grub? tom: i think i do. at going the comments of my colleague here -- echoing the comments of my colleague here, i think this is a space ripe for consolidation. you have a lot of businesses that have similar if not identical business models. they are burning cash, chasing growth, and so on paper, consolidation seems to make a lot of sense here. i do think for trooper, it makes a ton of sense to explore this. i think there is reasonable question as to whether or not they can get a deal done. i think uber has a target on their back in the eyes of regulators broadly. that is an open question. with these sorts of deals, when antitrust folks look at it, it depends on how they define the market. are they going to define it narrowly as online food delivery? are they going to look broadly at food delivery in general

including off-line and restaurant volume overall? there are some questions there. point,o brett -- brent's one thing that could go against a deal happening is it will likely result in prices for consumers going up and that is not something regulators like to see when they are going to approve some sort of large-scale merger. i think it is inevitable eventually that that is going to happen. a deal would probably accelerate that timeline. taylor: brent, you are soft on a potential valuation of grub. you are looking at maybe five to six times eb to sales, similar to a deal when you had uber eats. do you agree with our valuation? brent: i think that's right. when you look at the street that has a massive deceleration growth. the one thing you could argue is the street looking too far in terms of the deceleration in grub's growth rates.

if they can actually show better growth, you are looking at a of sales which is not a big multiple and that is below that. if you look at other industry leaders, you have seen multiples that are fetching 5, 6, 7 times. we deal with software companies that have sold 4:15's revenue. times revenue. it could be three to four times. you are seeing assets trading between five and huizinga digits. i think you can get to a higher multiple, assuming the revenue does not implode. you can get a higher stock price both organically and in organically, if they execute a little better than they have in the last year. there obviously are a bunch of what if's. the multiple at just eat is

going to get you a higher stock than where it is today. taylor: talk about that organic versus inorganic growth. uber eats would be better served growing organically. can they get there? this is in an economy of scale do business. it is very capital intensive. tom: i think optimally, you would be able to grow organically. if you recall, huber has put out an aggressive timeline for achieving profit -- achieving profitability. consolidated -- consolidation and online food delivery of meaningful scale would help accelerate the timeline. i wanted to touch on the idea of valuation. it is appropriate to analyze multiples, in deals like this where you have got a strategic asset that is somewhat scarce, that is a large online food delivery network, fully scaled unprofitable one that has a lot of potential suitors it, this could be one

of those situations where the ultimate winner is basically the guy who is willing to pay what it takes to keep it out of the hands of what they view as their more serious long-term competitors. i think we could see a wide range of outcomes on valuation. taylor: that was tom white of da davidson, think you for joining us, and brent thill, you are sticking with us. we will discuss how jeffries sees more room to run after snap's 2019 rally. snaps jumping off of its note. this is bloomberg. ♪

taylor: snap shares spiked thursday after the company received two upgrades with both firms citing an improved view for its 2020 prospects. they boosted their price target to $20 from $16, it comes on the move of jefferies lifting its hold. from a buy to a

brent thill raised his own target to $20. brent joins us now. look at a chart i'm showing inside my terminal. analysts have struggled to stay ahead ahead of the big rally and snap shares. your take on the path from the $17 to $21? brent: look, last year was a huge move. the stock was one of the best-performing names. i think the stock was oversold. they fundamentally put the company back on track with the rebuild of the android version, they have the financials under control, there were a lot of things they got set up. we missed part of that run. we don't get them all right and i think our view going forward is that this still has more room. the answer is yes. clearly giving him into the low 20's is not as big of a move as it had from single-digit stock, ending the following year to what happened last year.

our view is that it is still a good story that is showing improvement, showing improvement in terms of users coming to the platform. and lastly, financially, they are showing bottom-line support by getting towards profitability at the end of the year. we think all of these things are moving in the right direction. that's why we don't expect the stock to double from here. we still have enough room for a buy to get over 15% upside from current levels. we highlight that facebook is still our number one pick in social. we see a pathway to $250 a share for facebook. facebook, a favorite. snap, number two. taylor: stick with me on snap. one thing that caught my eye in your note is you highlighted accelerating international growth. i was looking through some of the research. revenue.users, 40% of

there are 60 -- they are 60% of profits. if the domestic user appears to be more profitable, why the tension on the international user growth? brent: i think clearly, it is a global platform, there is an opportunity to get a lot more users to this. those users are not as profitable as they are in the u.s. you are seeing that at other social companies we cover as well. i think their goal is to get into the hands of as many of the users as they can. they are selling advertising in the broader base. toigger chunk in trying reach that audience. the way i look at this is i have kids on the platform, i asked my own kids what they use. today they use it for communication. they literally spent half of their time on the map and the map tells them where their friends are. if you are a restaurant or retailer and you want to offer something to those individuals, they know where you are on the map and they can throw and offer

up. these are things i have not baked in. the international opportunity falls the same pathway that other social media companies have done. get users on the platform, they , hirewer asp, and clearly dollars to serve right now. over time, that changes. there is a ton of different ways they can monetize through video games, through content, through the map which again, i most excited when i talk to teens, when we interview teens about what they like about it. there is a big opportunity. the founder of snap says there is a tremendous opportunity on the map over time. again, i think there is a lot of different drivers in place and we have a very healthy ad market that is in place right now as evident by what you are seeing with google, facebook, a number of the companies we cover. taylor: you mentioned facebook earlier. i wonder where does snap fit in within that social media, relative to bigger companies like a facebook?

where is snap's sweet spot in terms of gaining a little bit of share those advertising dollars? brent: it is the younger audience. the midteens into the mid-20's. we think there is a big opportunity. many are concerned about tictoc taking share away from snap. when i find -- what i find as they offered through this map platform. you can export to instagram and snap through tictoc. this year.me risk does a younger audience go to the new launch that meg whitman and team are what luck -- are launching? are there more that will go to tictoc? can instagram get those users back? we think ultimately there is room for a couple of apps and there is a tremendous opportunity. taylor: wonderful. we will have to leave it there. that was brent thill of jefferies. coming up, we will look at china's information war on

taiwan and why it is heating up the influence ahead of taiwan's post -- presidential election. this is bloomberg. ♪

taylor: this is "bloomberg technology." a joint bloomberg daybreak australia to bring you the latest in global tech news. i'm taylor riggs in san francisco with sophie kamaruddin in hong kong and haidi stroud-watts in sydney. let's take a look at the top global tech stories of the day. ceo tim cook will receive an award in dublin later this month to mark the iphone makers 40 years of investments in ireland. the position may raise eyebrows the company is reeling from being hit with a record 13 billion euros tax bill from the european commission in one of the biggest state aid cases on record. venture capital company insight

partners has agreed to buy swiss cloud firm vm which is valued at $5 billion. the deal will allow the company to expand into new geographies. has backups006, it for virtual machines and helps customers manage, monitor, and run analytics or software and data in the cloud. alibaba and tencent are ranked as china's second and third best environmental citizens and researched by greenpeace. the report ranks 15 of china's biggest text -- tech firms and calls attention to the ballooning energy consumption. the winner is a little-known unicorn in waiting backed by a company. greenpeace says the majority lack in public disclosure and progress in moving to renewable energy sources. those are the top global tech stories we are watching. electione taiwanese says china has become more tech savvy in its alleged interference of the election.

>> to getting from last year, we saw china is using modern technology. in short, it is the social media interrupt intry to our discussions on the internet either through facebook or an online even mechanism. the fake news situation seems to be quite serious. haidi: let's discuss more on china's disinformation campaign. i want to bring in stephen who is live today. he spoke with the taiwanese foreign minister. what are we seeing? we are seeing at least from the dpp which is the incumbent ruling party here, that there has been increased interference by china in the selection to kind of so

divisions in society and to control the narrative. there are divisive cams here. -- camps here. different visions for the future of hong kong. one is more pro-status quo, the other one, long time ruling party, but now on the outside trying to get back into the presidential office. they want more economic integration with china. this information warfare, if you will, the low we institute says taiwan has the highest -- among the highest rates of cyberattacks in the world. get a load of this figure. the national security burial -- bureau reports approximately 30 million cyberattacks a month hit taiwan p 30 million. that is about one million a day. thatnal bureau also saying 60% of those attacks are coming from china. taylor: one is big tech in

china, and taiwan, doing about the increase misinformation? well, it is an interesting topic obviously because fake news is an issue anywhere in the world, if you want to use that term. what is really interesting about the economy right now is how it is kind of really taken over the narrative here. is bigger and better integration with china economically a plus? if you look at the latest numbers, the taiwanese academy is doing really well -- economy is doing really well with the opposition to china's candidate in the presidential office. the taiwanese economy is expected to grow last year at 2.5%. upwards closer to 3% in 2020 because of the u.s.-china trade war benefiting taiwan. more manufacturers in the tech supply chain have on short, they have come back to taiwan.

there has been lots of foreign investment as well. then there is the uptick in the chip cycle which is obviously benefiting the likes of taiwan semiconductors and the other big fabs in taiwan. hong kong is a big issue in this election, china is, but the economy playing an essential role as well. haidi: we are getting some lines crossing the bloomberg with mike pompeo saying he is said to meet tech companies in japan and south korea. week.counterparts next taking place in california from january 12 to the 15th. that comes before the phase one trade deal is expected to be signed with china on january 15. in terms of the element of tech we are talking about, we are also seeing the spreading of disinformation. in the hong kong protests. i'm wondering in the taiwan elections, how much of an impact watching what has been going on in hong kong is going to play in

the way the campaigns take place at how voters are thinking at the moment? stephen: even the foreign minister conceded when i asked him these questions. taiwan issuethe has played a role in the psyche here of the voters. because taiwan promotes democracy. even the challenging candidate of the kmt which wants more economic integration with mainland china, he has even told bloomberg in an interview in november -- in november that he supports democracy in hong kong. as long as it comes with a call or at least a law prohibiting independence from china. absolutely. 80% to 90% according to some polls, they identify as taiwanese, not necessarily chinese. that is a critical role.

as you can see, people take their democracy and their elections quite seriously here in taiwan. taylor: bloomberg's stephen engle, thank you for joining us. much more ahead. stick with us. this is bloomberg. ♪ loomberg. ♪

taylor: one more reason for elon musk to dance. the ceo was booking earlier this year when production began his new factory in china. on wednesday, shares of the electric car maker rose more than 4% to another mac -- another record. it is now more than $80 billion, more than ford and gm combined. if it hits $100 billion, the first all or nothing pay package would be unlocked. that would net him about $346

million. popular viral video app tictoc may have outlined new rules to crackdown on misinformation. it still has a big problem when it comes to politicians. unlike facebook and twitter, the viral video app does not have a robust identity verification system to certify accounts. that has led to multiple accounts impersonating the likes of president donald trump and indian prime minister narendra modi. some of the accounts of thousands of followers. joining us to discuss is our reporter. great to have you here. what kind of accounts that were being impersonated did you discover in your reporting? >> on tictoc, we found many accounts that are claiming to be public figures and important politicians such as donald trump, boris johnson, and bernie sanders. some of these accounts are parody accounts and it is apparent. the rest of them look actually pretty real, they take the real

profile photo of donald trump, and that has misled users to believe that the account belongs to donald trump's -- donald trump. why are there so many impersonating the accounts? yueqi: one big reason is that these politicians are currently not on tictoc. so there is no verified accounts with the blue check mark that can tell users that those are the real ones and the rest of them are the fake ones. another issue is that tictoc, like many of the other social media platforms, are not actively combing through all of the accounts. they only take down the impersonator accounts when those are being flagged to the company. taylor: yeah, and beyond that, what is tictoc telling you about what they are doing to help resolve these major security issues? 13,i: tictoc is ramping up

working on content, safety, and verification in california. they are hiring people from other social media platforms like facebook and twitter, who have been working on similar issues before. ae company released a nude -- new guideline expanding their policy on content verification and fixing some of the loopholes they had before. taylor: this plays right into the hands of u.s. politicians who have tictoc under review. we know tictoc is owned by another company. they claim a lot if this is around national security issues. what are some of those threats they see within national security? yueqi: u.s. politicians have expressed concerns about the safety of the data of tictoc. they are also worried about potential censorship and they worry about foreign influence from other governments, especially the chinese government. and tictoc has said that other data for u.s. users is stored in

the u.s. with backups in singapore. they are beyond the reach of the chinese government. tictoc also denied any censorship or any influence from foreign governments. taylor: yueqi yang, thank you for joining us. coverage ofto our ces, las vegas. by 10 announced a partnership with viacom, cbs, during video content directly to the 48 inch stream in their cars. the mbyte does not go into production until later this year but the company's ceo is already thinking about making money from data going in and out of the ev. daniel spoke to ed ludlow at ces. smart device.lt a i think it will become like a fourth space. we go from a to b.

it is a waste of time. with the technology we are ainging in, it will become living space. we will be able to work, we will be able to entertain and bring in content. it is the next logical sense -- a step. in a driving scenario, you don't want a movie there. or even we experience on the display is so great on such a big screen. >> what is the cost of being from a viacom? pictures,ng paramount it is huge. , andhole amount of content they are a global player. makell custom tailor content packages for our users.

recognition so we can make tailor-made packages based on individual customer profiles. that is what we are going to do. we are going to provide under relaunch the perfect content. >> what is the revenue split? does not work? >> of course there is a revenue split. the future revenue stream for car, a great great digital platform. bring in great content. and they will be willing to pay for great content. >> how do you see the revenue split in the future? others are talking about it. you get revenue from the sale of the car, the leasing of the car. how do you see the contribution of data? monetizing that data. >> without any doubt, it will become a major source of revenue in the mobility industry.

being on the move and being candid -- being connected on the move. about a perfect idea into years, i would say no. the first step is to really generate the effect. if you are going to use something in the car, in a traditional car, you would never have been able to get it. you get this effect, you are going to go there and stay there and you will be willing to charge for that if it provides you with additional value. we are focusing on the revenue generation. we are focused on the effects. >> i have been in the myte. it has a large console that expands the dash of the car. it has a cellular connection which one they should carry a 5g connection. you have looked at bringing some basically, some health data into the car, connecting it to health

apps. could we see biometrics go in? what other items could we see? >> you are right. we designed the car from inside out. this great 48 inch display which gives you great experience. completely new interface. we are going to bring in things like health, office, entertainment. for the health side, we definitely believe there is a demand for people to know about and connect their health data from the other devices. to give a simple example, the smart car could tell you you are 15 minutes early for your meeting and ask you if you want to park maybe two miles away and take a walk, in order to come up with your personal health target. that is pretty meaningful. taylor: that was the ceo speaking to our own ed ludlow at ces in las vegas. still ahead, the battle of the crop -- cloud wars are heating

up as microsoft continues to gain market share from amazon's aws. more on their targeted retail strategy next. this is bloomberg. ♪

taylor: it is no news that microsoft competes with amazon in the cloud. a new target seems to be its retail customers. i want to bring in dana beth and greg moscow is. let me start with you, what do we know about microsoft's retail strategy to further take on amazon? >> sure. we are talking about this

because microsoft ceo is keynoting the big retail show on sunday. the reason for this is retails -- retail is one of their most important sectors. generally speaking, amazon web services dominates the market. none of those retailers want to work with amazon which is one of their biggest competitors in amazon's consumer business. they do not want to live amazon's pocket. microsoft has been working with these customers from kroger to walgreens to now ikea, on a bunch of different things like store of the future kind of concepts. ways to help these companies e-commerce sites better monetize . some more advertising. things that will help these retailers do a better job of competing with amazon consumer business and at the same token, these relationships help microsoft cloud business compete better with amazon's cloud business. taylor: as you look at microsoft in your coverage, where do you see them being able to expand their cloud offerings to go more

toe to toe with amazon? greg: sure. all,ld say maybe first of to take a step back, amazon is still a terrific service. it will get larger over time. but we have consistently seen microsoft narrow the gap in terms of size. we expect that to continue. they are doing a better job disproportionately getting more enterprise business. billion contract with the dod over a ten-year period that we think will open a lot of doors. you have the retail aspect. i think it really was last year in 2019 when we first began to hear about the pitching to customers that they are the more logical presence or provider as it relates to those retail companies where again they are not in the crosshairs, so to speak, as it might be the case with aws. those would be areas where we are seeing microsoft gain

momentum. taylor: just to follow-up, you mention the dod contract. as you look at the jedi contract and other public cloud contracts that become available, is that a key area of growth for microsoft? is.g: we think it this unquestionably validates that this was not the kayla -- the case already, that it is an enterprise grade solution. this is a contract where microsoft is the sole software provider. the dod making a $10 billion commitment over a ten-year period. it is hard to get a better testament than that. we do think this is going to serve as a ray into some more government deals. by the way, not just within u.s. federal agencies, but also international governments. we think it can be a facilitator for some very large enterprise deals which they do not currently have because again, it is hard to get bigger than dod in terms of scale. taylor: some of your reporting,

talking about a revamp of the microsoft team to more directly take on flakka. what do we know about those two as they seem to go toe to to? dina: this is a different part of microsoft's cloud business. this is the part where unlike where they compete with amazon, they are the incumbent and the larger vendor which is their office cloud. the portion of that where they have not been the leader where the pioneer is the enterprise stock market where it slack created the market and microsoft has been responding. what microsoft has done to catch up first of all, a more standard strategy for microsoft, putting their teens product in the office product for free. the other thing they are trying to do is leverage the strength they haven't -- have in different enterprise. they are looking at banking and health care and figuring out what features those employees need. today, they announced a feature for retailers, for store

employees where you can press a button on your team's chat in order to turn your personal mobile phone into a walkie-talkie. that would allow store employees to talk to each other. looking at similar features like that in manufacturing and finance, and a couple of vendor -- other industries where microsoft has been strong with their cloud product. it is a way to derail slack and grow faster. taylor: as you take a look at the microsoft team's business, is slack real competition? view, slack, and our still has a best in class product. they have created a category. what we have seen is microsoft has made significant functional improvements to microsoft teams over the course of the past year. in addition, we are very confident in saying they are not going to let up. we expect them to invest substantially in teams, it is a strategic product for microsoft. we wrote a report a few months

ago and said other than azure, microsoft teams is arguably the most strategic product microsoft has introduced in the last decade. taylor: just about 30 seconds here or so, cowan upgraded microsoft based on an overlooked ad business. where do you think their ad business is and in relation to microsoft as a whole? microsoft ad business is relatively small as a piece of the pie. this is a company that is going to do over 150 billion dollars according to our estimates in fiscal 21. ad advertising is relatively small. it has been a consistent double-digit grower. they have done a nice job executing versus where things were a few men -- a few months ago. taylor: dina bass and gregg moskowitz, thank you so much for joining. that does it for this edition of "bloomberg technology." bloomberg technology is live

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>> good morning. i am haidi stroud-watts in sydney where markets have just open. sophie: i am sophie kamaruddin in hong kong. welcome to "bloomberg daybreak: our top stories this friday, iran is accused of shooting down the ukrainian 737 the u.s. and others say there is evidence of two missiles fired shortly after takeoff. beijing confirms