♪ kurt: i'm kurt wagner in san francisco in for emily chang. this is "bloomberg technology." who elevates its risk for the coronavirus as multiple country struggle to contain it. there, big-- hey

spender. we breakdown numbers from facebook. and tictoc with digital ad dollars producing eye-popping numbers. we will do deeper. but first, the spread of the coronavirus rattled global financial markets, bringing them to their lowest level since the financial crisis more than a decade ago. reporter: that's right. stocks with the worst week since 2008. it started as we saw the coronavirus fears really take over. as we see more investors repatriate their money pulling out of the u.s. haven assets, of big difference at the close, with the nasdaq turning positive. tag --as a last-minute tech bid for the nasdaq, if you can believe it.

bank stocks have been driving the market, as we see. -- a big hitter i want to pay attention to is apple, apple up us the ceo coming out and saying the coronavirus should not make a huge difference in terms of moving supply chain, but still reading concerned about revenue guidance. this.a divergence from we have seen this as the supply chain really gets hit in south korea and china. but actually seeing it turned positive today as we see the investors high had the weekend. kurt? -- kurt: that was bloomberg's pretty good debt. >> will you see schools shut

down? probably. will you see impacts on public transportation question mark sure. but we know how to do this. oft: these comments out the conservative political conference today. david, give us a sense of where we are, particularly in the state of california. you heard that announcement about schools. what's happening in california you echoed david: we have quite a lot of people in california being monitored is having the virus, but not showing signs. 8000 people across the state scattered across 50 different jurisdictions. in case of confirmed cases we have only had 33 and almost all of those have been people where we know pretty much how they got the virus. so far we only have one where we don't know where she got the virus from.

but still very troubling to everybody. it is circulating somewhere and we're not sure how widespread it might the. what about -- kurt: what about getting test kits out to people? david: that has been a real bone of contention. we had just 200 test kits and the state yesterday according to governor gavin newsom. he had just been on the phone with the cdc, which was promising to send more, but i know one of my colleagues was and found marin county did not have any. san francisco did not have any. it's extremely limited now. kurt: earlier this week there was a mystery case in california where someone contracted the virus and it was no real -- clear answer as to how. do we have an answer?

david: she is still in the uc davis medical center. as far as we know, there is no update on her condition. the state is trying to track down every single person she may have come in contact with and the federal government is sending out people to help with that tracing effort. but there's no obvious way she got it. it she did not travel anywhere in particular. the one thing people are we haveg a lot about -- seen the whistleblower out of washington where someone from federal health and human services agency was complaining the air force base in the county where this woman lived at federal workers going in and out of quarantine areas without training and might have gone in public. you've got to wonder about that, evidencer there's no

how this woman got it. kurt: thank you for tracking that. that was bloomberg's david baker. if you want to stay with us on our coverage, the effect of the coronavirus on the tech industry, we have our executive editor tom giles. tom, this is a global issue but it feels like it's particularly important to be tech industry. why is that?tom tom: you have to look at a couple different levels. the tech industry is so intertwined with the supply chain. world.s the apple of the they are intertwined with china where this originated. we see them issuing warnings. now things seem to be slowing down. now what is happening, you are

seeing this in other places of the world, korea, japan, italy, l part of apple's supply ch things brightening a little bit there, there are other parts of the world where the supply chain will be affected. is the former ceo of google europe, what should tech companies be doing to make sure their businesses are safe? this is being quite visible the last few days. example, a mobile conference has been canceled. the development conference has been canceled. canceled, and then a lot of contingency playing. there is news on both sides

of the atlantic. and there's a lot in the market -- to be honest there will be winners and losers here, not just losers. there's a lot of contingency planning. europe, italy, everywhere else is pretty confused, i think is how it works. ben mentioned those conferences. you have been to them. i have been to them. what if they don't happen yet go is this a big deal for these companies? tom: no one was to be the company or the organizer who let the organize -- you let the conference go ahead and the in that context. you bring a lot of people together from that part of the .orld, which is always the case the list goes on and on and on. no one wants to be responsible

for that. the tech industry has a way of getting its message out there, communicating with developers, announcing products in a way that does not have as much pizzazz. there is going to be less splash around it. there's going to be a hubbub. that's the reality we will deal with in the near term. you do not want to raise panic. at the same time, no one wants to be left holding the bag. if it ends up being a place where the virus spreads. kurt: yeah, not really worth the risk. this may be obvious or maybe it seems obvious to me, but when i think about who will withstand something like this, i think about the facebooks and the googles of the world, they

have built a supply chain. can you give his opinion on who is best positioned to withstand this? ben: absolutely. there's a double bucket of companies that will do better and do well. companies that have home delivery, home entertainment. one of the biggest changes in consumer behavior that is going to happen -- if you think about communication, what people will do more off, they are working from home. if you think about home entertainment, the disney subscriber service, spotify, youtube, if you think about home , there is delivery etc., so to me, there's the delivery bucket which will add extra points for a company like google and facebook.

they have joined right on time. they also have less to lose in the mobile china market. if you can expand a little on the streaming services, that seems like an obvious group of companies that might benefit as people are spending more time at home. do you have any sense of what they are doing to prepare? do they need to do anything to prepare? just keep the lights on? potentially, do more marketing. making sure they can cope with increased demand. that would probably be the big to do they might roll out awareness plans for or services that were borderline cases. but certainly, i'm sure there's a lot of people, customers, potential customers out there who might have been on the fence about getting a new service. they might invest there. tom, we were talking to

david baker before you came on about how this is impacting the u.s. matter of when, not a matter of if. do you feel like silicon valley is prepared if this becomes a widespread issue in california?tom: i think -- in california? tom: i think a lot of companies in the tech center -- amazon today talked about how they are putting limits on nonessential travel even in the u.s. for their employees. i think a lot of companies have contingency plans in place where workers cannot do their jobs from home. you can program from home. you can contribute to the front projects from all over the world and that is something they have already been able to do. my colleague talked about conferencing. the technology is at a place

network companies like ours can get by in a situation where a lot of people are working from home and that certainly the case for people working in silicon valley. round,e services that, the transportation. i discovered for my kid's school today -- we are not telling anyone to stay home unless they feel well, but we are making plans for that. kurt: right. this will not be the last we talk about the coronavirus. egg, tom giles, thank you for joining us. coming up, how the president is differentiating himself from democrats online. we look at how facebook is shaping the election. that is next. as we mentioned, the s&p 500 has tumbled 11% in the worst week since the financial crisis. we will stay on the markets throughout the hour. this is bloomberg. ♪

kurt: a quick glance at the facebook ad library shows donald trump is spending big. he's not the top spender, but he is dropping almost as much as michael bloomberg, the majority owner of our parent company. there's another advantage the president has -- sheer volume. between may 2018 in january of this year, trump ran to hundred 86,000 ads, nearly 25% more than the entire democratic field. to discuss this, we have jessica alter in miami and in washington , rebecca. jessica, i would love to start

with you. you normally focus more on democratic campaigns. you guys actually help some democrats with your campaigns, but here you are focusing on a republican, president trump. what did you find in this research? >> our actual apparatus helps democratic campaigns. but we research all campaigns to understand what is going on and what we found in looking at facebook and google at archives is trump's digital operation is much more sophisticated and integrated than any democrat other than michael bloomberg and his operation really just ramped up in the last few months. orfound he has run 58,000 variations of ads which is a proxy for how committed you are testingge testing ,a/b and he is justine rolling all democrats except bloomberg on that. kurt: i'm just going to ask,

what is the real and if it of being able to test all these different messages? you really can tailor a message to a specific group. is it just that? or is there something that is a real advantage having that volume of ads? >> yeah, it's not just about targeting. it's learning about what works and what doesn't and being able to use that. not only in your ads, but to feed it into other parts of your campaign. whether that is male or tv or a slogan or whether you are doorknocking. that's another thing he benefits from. we looked at what candidates are asking for in their ads. bernie and pete are asking for money 60% of the time. some ask for money 25% of the time. the rest of the time he's collecting information from voters on who they are and what

they like and he is using it to take the conversation off of google. he really has sophisticated voter collection operation going on. and because his digital is more sophisticated, it makes his whole campaign better. rebecca, i want to bring you in here. as the incumbent, president gets to play on a different field. how do you think the fact that he is seeking reelection versus competing with others in the primary, how does that change the game for him? a couple different ways when you can impair his campaign to the democrats. he has been building a digital campaign and relationship with the different platforms for digital advertising since 2016. yes the long-term advantage of

learning how this works. the democratic challengers are also in the middle of a much bigger fight among themselves at the moment. they are going to have to figure will gain the resources. they have to be focused much more on fundraising and the and that constitutes another major, major damage for the trump cap in. kurt: when i think of the ads can't help buti think about the one that he ran against joe biden months ago that some said was factually inaccurate. you think he is pushing the envelope of what is allowed? is this this date of play for politics? -- state of play for politics? much more moving towards the normal, the state of

play, but in many ways the term campaign was first mover. the term campaign has shown a willingness to push boundaries, to break norms that were built over decades in traditional campaign practices on television and radio and so on. the digital space is relatively new overall. we've been talking about this since 2008. still the candidates are figuring out what works in the space and they are basing their assumptions broadly on decades past, but the trump campaign showed its willingness to break norms, push boundaries and we see other candidates following suit. trump has certainly been first actor in this area. jessica, my colleague josh wrote about some of this data it yesterday -- or actually this

morning i should say. part of what came out, mike bloomberg and president trump are advertising in a way that often you would see from a big company, not necessarily a .olitician can you talk about how they are tailoring their relationship other than other candidates? >> i do not think it's a quincy event's that bloomberg and trump come from the commercial world and are the ones doing it differently. there is less pressure on trump to fund raise. that's only part of the explanation. there is a problem in the democratic party with using digital for anything other than an atm. trump and bloomberg are sort of "this is howby the we do it in politics" viewpoints, so they have taken on the way the tactic is used in the commercial world. or bloomberg is

doing is crazy or second guesses what the commercial world is using. the just confusing non-trump, non-bloomberg campaigns. the other thing i would add is there's nothing happening down ballot that is more sophisticated than the presidential campaign. so, 2020 is not just a presidential year. that is incredibly important, senate is line, the redistricting, which the state legislatures will decide and we have to be able to ring the alarm bell and say we've got to change something if we want to win. kurt: thank you. that was jessica alter and rebecca trumbull. for being your. still to come, the s&p 500 of

the longest slide since 2016. the dow jones also in the red while the nasdaq ended higher your this is bloomberg. at ♪

let's take at: look at other tech headlines. dell's rough it -- dell must be as profit forecasts came up short. they did project that resources would rebound. the company also announced plans for a billion-dollar stock buyback. the federal medications commission was to find the major own companies for improperly disclosing real-time locations of customers. t-mobile would face the day gift fine of 91 million dollars. the carriers, which include at&t, verizon, and sprint will object to the proposed penalty. possibledata makes it to identify the whereabouts of any school -- any phone in the

united states. ontiktop, advertising security risk. this is bloomberg. ♪ awesome internet.

it's more than just fast. it keeps all your devices running smoothly. with built-in security that protects your kids... ...no matter what they're up to. it protects your info... ...and gives you 24/7 peace of mind... ...that if it's connected, it's protected. even that that pet-camera thingy. [ whines ] can your internet do that? xfinity xfi can because it's... ...simple, easy, awesome. [ barking ]

this is "bloomberg technology." i'm kurt wagner in for emily chang. we have breaking news regarding the coronavirus. the u.s. telling citizens to consider avoiding travel to italy. italy reported its first cases of the virus this week. u.s. stocks have seen their worst week since the 2008 crisis as the spread of the virus rattles markets. president trump just spoke on the virus and the fed involvement. >> i hope the fed gets involved. not a big fan of the fed, you know that. involvede the fed gets

and i hope they get involved soon. countries, at other they are all putting in a lot of money. but that is up to them. they are independent. kurt: despite the s&p and the dow staying in the red, there is one sector showing a rebound. semiconductors. some of the names that finished macron, amd,vidia, and more. here to explain is our own ian king. what is happening here? fundamentally, if you believe in the way that technology normally works, you are buying companies that are going to come back, where the fundamentals are the strongest. if you believe in ai, in the

cloud, in self driving cars, then you think these chips are going to be the main beneficiaries of that. you buy these before you are expecting to see a return on them. kurt: the semiconductor industry was on a tear until last week when the coronavirus hit the markets. what was going well for that industry before all of this happened? ian: really good question. on a fundamental level, not a lot. they were dealing with inventory, production issues, so there was nothing there in terms of the earnings that was driving those gains, even though five out of the top 10 performers on the s&p 500 last year were chip stocks. of, ifack to that sense

you really believe in these megatrends, if ai is going to take over computing, something has to power that and that has to be semiconductors. kurt: it still feels a little surprising to me. it seems like the semiconductor industry would be more vulnerable to this discussion around trade with china. why do you think it was able to kind of -- despite all that contentious discussion? ian: this has been a debate amongst investors and analysts, and clearly those who believe in the scenario have been winning, but absolutely right. trade, china is the biggest market for the u.s. semiconductor industry. a large percentage of chips go through china on their way to other places. chip industry has a huge amount to lose in trade.

any disruption of the chinese , the largest market for smartphones, is going to be really bad for chips. , people arel that buying into that. kurt: that was bloomberg's ian king. i have more breaking news out of washington. president trump is nominating republican congressman john radcliffe to become the director of national intelligence. backiffe was trump's pick in august, but faced plenty of criticism over partisanship as well as intelligence experience. radcliffe withdrew his nomination and trump just announced his decision to try radcliffe again. directions, when it comes to mobile advertising, the first names that come to mind tend to be facebook, youtube, and twitter. the new kid on the block is coming on strong, tictoc, which

is claiming some pretty big numbers. in one instance, a chipotle promotion garnered nearly 4 million views and this comes on an app that only has some 145 million downloads in the u.s. here to break down the numbers is sarah frier. you wrote about the ads business. what did you learn? sarah: there's a sense of excitement whenever there is an app catching on with the teen demographic. these are people just coming into their own in their spending, building their brand preferences, so marketers want to reach them anyway they can. what is interesting is, we are seeing this huge first mover advantage, that brands including chipotle are seeing multiple billions of views on their ispaigns, which any cmo

excited about, but there is some concern. when i ask tiktok what counts as a view, they will not publicly define it. kurt: you may have gotten to my next question. if i'm going to get 4 billion views on a campaign, why are there not more advertisers flocking to this company? sarah: while tiktok is the shiny new object in advertising, they don't necessarily have all the targeting options you can get on facebook and youtube. what you have is the promise of a large audience, but you are not necessarily going to get granular about what people are interested in, their purchase history, more detailed demographic information. it will take time to build that up. that said, they are owned by a chinese company and there is a lot of national security concern around tiktok gathering data on its young u.s. users. kurt: what makes facebook advertising, instagram

advertising so fantastic is this wealth of information about people. tiktok doesn't have that yet. you mentioned concerns around china. what do they have from a targeting standpoint? sarah: you can find somebody based on their age, maybe geography, but what advertisers are getting is these metrics for engagement, that there hashtag was viewed x number of times by x number of people and you are not getting that granular information. it is kind of complicated to do ads for tiktok. it is not just about the same ad you would put elsewhere. they are this very specific kind of content. it tends to have to be funny. you have to use famous tiktok creators. it really is a lot of involved investment and chipotle told me house full ofa

kids creating tiktok videos all with millions of followers. kurt: you mentioned they are looking to push toward some kind of tech platform where an advertiser wouldn't have to deal with a salesperson. what is that all about? sarah: that is in testing right now, but it could be a self-service platform for any advertiser to go on and by ads that they want. we've seen that happen before with snapchat and instagram, when they move the platform, add prices drop. it is a little more formulaic. to reach the right kind of people, you have to have the right kind of data. kurt: so this is one of those apps that is getting a ton of traction. it is all over the radar of facebook executives. how worried do you think facebook and instagram should be that tiktok has this kind of momentum? sarah: we have a quote from sheryl sandberg that she is

worried about tiktok. she says, they are huge, they are growing quickly, they've gotten bigger numbers faster than we ever did. of course we worry about it. facebook historically is a very paranoid company about any up-and-coming properties. kurt: typically they like to either buy or copy. in this case it looks like they will be unlikely to buy tiktok. does that mean they move in the copy direction? sarah: absolutely, they are going to try many different ways, through igtd, through other creative properties, to try to capture that excitement around tiktok. kurt: tiktok from facebook will probably be coming soon. that was bloomberg's sarah frier. coming up, a coffee mug that never gets cold. a security camera that scares away criminals. we will hear from the designer

of these products and more. this is bloomberg. ♪

kurt: founded in 2007, ammunition is a product design studio responsible for iconic products such as square, lyft, and polaroid. to talk with us is ammunition founder and partner robert bruner.

he previously designed products for apple, adobe, and more. robert, thank you for being here. walk me through -- we were just talking about this. when you were designing something, how much are you saying, i need to give people what they are asking for, versus the now famous, i need to give people what they don't yet know they want? robert: it is a combination. especially when you are doing something new. you're introducing new functionality, new technology. but it needs to be in a familiar format. if you reinvent something to be entirely new, you are probably not going to get the acceptance you want. you start with what people know and draw them into it. kurt: can you give us an example of something that threads that needle? example, it uses an enormous amount of technology, it recognizes your

food, it measures temperature, it follows a script and helping you cook, but ultimately it has to look and behave like an oven. we said, this could be anything, but it needs to be an oven, just a good one. if it was something, like a ball floating on your counter, people probably wouldn't have -- kurt: when you think about design, when i think about design, the idea of real simplicity is certainly appreciated. i'm wondering, as a non-designer, how much of that is a trend, something that is hot now? how much of that is built into the way things should be designed? robert: for me it is built in. simple is timeless. simple is beautiful. is, is challenging today things are very complex. the art and process of making it

simple is very challenging. and it takes a lot to do that. and we spent an enormous amount of time figuring out how to make complex technology simple and easy. otherwise it won't be successful. kurt: you mentioned the oven. you have a coffee mug, a thermos. what is a product that is in need of a redesign? say, there's a lot of things, i see them constantly. i have six kids so i've gone through a lot. and constantly in children's products, there is just an enormous amount of bad design and nonfunctional design and waste. i think it is time to start putting as much attention on products for children and parents as we do on phones and watches and stuff. kurt: a lot of the products that i buy, sometimes the packaging is gorgeous. you would know, coming from

apple. at the same time, there are times i buy things and there is so much material that i'm throwing away, it seems wasteful. how much does the idea of the thatonment, how much does come into play? robert: all across the board. especially in packaging. we are constantly looking at how to reduce material and packaging. in general, we've reached a tipping point. in the past, it was a good thing to do if you can. usually there was a cost associated with making something sustainable. companies kind of felt it was optional. today, consumers demand it, which is great news. it is just something you have to do to be competitive. kurt: robert, thank you so much for being here. we have to jump to a little bit

of breaking news. ofre is now a second case the coronavirus in california. that is according to the washington post. the origin is unknown at the moment, but the post says the person is a 65-year-old from santa clara county. still ahead, how tech companies are weathering the coronavirus storm. our conversation with roger mcnamee, next. this is bloomberg. ♪

kurt: apple ceo tim cook suggested the iphone maker wouldn't make any quick moves out of china in light of interruptions due to the coronavirus. cook also called the situation a temporary condition. apple's china focused supply chain is facing two major tests, first from a trade war, and recently from manufacturing outages. earlier this week, emily chang

spoke with robert mcnamee about the impact of the coronavirus on apple's supply chain. >> to be clear, i am a long-term holder. that is my investment style. what i see at apple is a company that is positioned radically better than most tech companies. is aly if coronavirus catastrophic issue for the economy, if it is a catastrophic applefor the market, then is going to be a bad place to be. if you take the sort of middle-of-the-road position, that coronavirus will be bad and people will recover and move forward, then i think apple is really well positioned. business that is built around privacy at a moment in time when that issue is really becoming front of mind for more people.

i think the opportunity for iphones to take share away from android has never been better and i'm quite hopeful that coronavirus will be something the world can contain without too much damage. it comes to china, there's the supply chain issues, but also the demand issues. i'm curious how you see the impact to the chinese tech scene, which has been rising leading into this. robert: the really huge difference between today and the last time we had a pandemic is how much more important china is , not just to the world supply chain, but to its demand. i want to say it has risen by more than 10 points. as a consequence, for apple in particular, demand in china is a huge deal. in a world where people are not allowed to go out much, smartphones are going to take on a greater role. it is possible that apple could

be a beneficiary on the demand side. but if people are not allowed to shop at all, that is going to be a problem for everyone's demand and apple will suffer. china, they went strategynavirus with a of using surveillance to drive behavior in directions that the government liked. there's a tremendous article in the current issue of the atlantic by a professor at university of north carolina. she observes that it is entirely possible that the surveillance and manipulation in china blinded the government to the initial news about coronavirus, that essentially two things were going on. first, all of that data gave them a false sense of security.

secondly, all of the people who were in a position to know about coronavirus were afraid. thathe result of this was weeks or lost and coronavirus got off to a start that past epidemics did not have. hypothesis is correct, that is a real condemnation of what google and facebook are doing. they are essentially trying to replicate china's information technology strategy outside of china. anothereantime, in reminder of how connected we all are, in the u.s. political election, you've got u.s. intelligence telling senator bernie sanders that the russians have been interfering in his campaign. vice president joe biden saying they are attacking him on facebook. you wrote the book on this. now innerable are we

2020 to russian interference in the u.s. election despite all the warnings and what happened before? robert: people have been trying to raise the alarm since 2016. the bad news is that facebook, google, and twitter have not made the changes that would be required to protect elections from disinformation and interference. and the actual infrastructure for voting is every bit as vulnerable as it was in 2016. i am not in a position to evaluate the intelligence about what the russians may or may not be doing around the trump campaign or the sanders campaign. what i observed is the amount of disinformation being created actively by the trump campaign and by networks that are essentially supporters of the sanders campaign is so great this cycle that it is not clear

that the russians are necessary as an agent to mess this thing up. to me, that is what is really troubling. that we are in this environment where it is hard for any motor to know what they can believe. if they are on google, facebook, or twitter, the amount of nonsense is so great that it is difficult to get to the facts. emily: you've got the justice department in the united states pursuing antitrust investigations against facebook, google, big tech in general. how much teeth do you think those investigations have, and how much could it hurt or will it hurt these companies? robert: i think it is going to take a long time for antitrust to play out, but i tip my hat to the ftc and the anti-divisions of the justice department. in contrast to their counterparts during the obama and bush administrations, the

trump teams have really focused on this as an issue, and as a result, i am pleased with the progress they are making. takes atrust often decade. we should not be expecting any kind of immediate response, which is why stocks have not shown any concern about it at all. from a regulatory's perspective, the greater threat is in europe. mcnamee,t was roger the cofounder of elevation partners. let's take a look at where the u.s. stocks ended the day. and the500 plunged 11% dow jones industrial average careened to the lowest since june. that does it for this edition of "bloomberg technology." " isomberg technology livestreaming on twitter. follow our global breaking news network at quick take on twitter. this is bloomberg. ♪

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