emily: i'm emily chang and this is the "best of bloomberg: technology." we bring you all our top interviews from this week in tech. coming up, hibernation disrupted. u.s. markets enter bear territory as the coronavirus outbreak breached investor panic. we will break down what it means for tech with dan ives. plus, speaking of vulnerable, hundreds of thousands of working from home amid virus concerns and hackers

are seeking to capitalize on it. we will talk about the potential threats to national security. and no refunds. hotels and airlines might be refunding trips, but many airbnb customers may be out of luck. we have the details. we begin with the volatile state of the markets and the global economy as the coronavirus outbreak widens. italy went into a nationwide lockdown, u.s. fire's the dow cases spike, and the market plunged. jones entered a bear market wednesday, the s&p tumbling into bear market territory thursday after president trump took to the airwaves, announcing a ban on travel from europe. >> to keep new cases from entering our shores, we will be suspending all travel from europe to the united states for the next 30 days. the new rules will go into effect friday at midnight. tech, the forecast on how much companies like apple, amazon, google, and facebook would lose in a downturn, and

uber and lyft shares fell on the reality that customers are sheltering in place. danked wegman securities' ives for his take on the volatility. >> you need to put goal post around in terms of demand. the street has written off the march quarter. what is normalized demand looked like june, september, december, so when i look at the core names, a lot of the faang names, to me, we continue to believe these are buying opportunities and you navigate the volatility. i view it as you look upon, you know, what are normalized spending environments going to be, and even if you stress test the models in terms of an economic downturn, right here, you buy apple and you buy microsoft. emily: uber down 10%, lyft down 12%. these are names you think might benefit if people don't want to

take public transport. how bad is it for them? >> you have to separate the risk profile. i look at names like microsoft, apple, some of the cloud. cybersecurity names. i have used gold and opportunities for the next two or three years. when you look at uber and lyft, right now guilty until proven given globalks travel, obviously that will continue to get got punched -- get gutpunched across the board. they came out and said it they have not seen any changes. profitability is not going to be there, but still very volatile names. i still like them long-term, but there's no floor in terms of the ir stocks will go. emily: is there any specific name you are particularly worried about? we can look out the june, out to the fall, but we do not know what is going to be happening at that point. dan: yeah, i think that is why when you look at, let's say security, like cybersecurity,

you have to separate out some of what i view as the nonessential purchases versus what you need to spend on. you know, when i look at names in cybersecurity, those names that to us are essentially in a stress test model. you look at nonessential purchases, especially these private companies may be that -- maybe that are going to struggle, i think it will form what i believe will be a surge of m&a across cloud and tech over the next three to six months given some of the valuations we are seeing. emily: where are we going to see that m&a? and are people going to be making big buys right now? dan: i firmly believe if we sit here four to six weeks from now we have already seen a handful of m&a. because right now in terms of s, look at microsoft, google, gcp, ibm, you go across the board, adobe. right now they are continuing to look to expand their cloud

empire. and if you look at the private and public side, a lot of these stocks that are down 30%, 40%, 50%, look at the valuations. that is why i believe strategic as well as financial buyers are going to be putting in the floor of software over the coming months. emily: wedbush analyst dan ives there. according to bloomberg, the impact the coronavirus on advertising demand could drive losses of over $3 billion for google and $2 billion for facebook. and despite the frenzy to buy hand sanitizer and bleach wipes online, even amazon profit estimates are at risk. for more, i spoke to our bloomberg intelligence reporter wednesday. >> we look at it from two lenses. impact we have seen on the internet sector. january and february was none. so whatever impact china saw, we

delayedg to see a effect hit in q2. it takes a chunk out of that, but also if you look at country-specific. what does the italian quarantine mean, for example, for these countries and how much revenue they derive? as these concerns spread outside of china, u.s., germany, france, italy, the u.k., these countries account for a majority of revenues for these companies and is that is why we feel a pullback coming from key verticals and key countries can lead to the u.s. companies seeing what the chinese companies saw in 1q. the u.s. impact would be in q2. emily: on the one hand people are flocking to amazon to get hand sanitizer and bleach wipes. and you can imagine that is driving a lot of business. on the other hand, amazon is the

epicenter of the u.s. coronavirus outbreak. they just closed seattle area public schools. they are fighting counterfeit, they are fighting price gouging. people are worrying about getting front of from their amazon prime packages. what does this mean for amazon? jitendra: a lot of uncertainty on that front. if you actually look at the distribution centers in the u.s., there is a high concentration in california, the tri-state area, and seattle. but we have not yet seen the impact coming through the supply chain. the fedex report next week will give give us good insight. when supply chain gets overwhelmed, costs tend to rise. and what that all means is eventually, you know you also have to pay for employees when they cannot show up to work and things look that. the sum total of this is they are unlikely to meet profit expectations for this year. so what we see happening is expectations for the entire sector really gets probably a

reset around april, the end of april in the report, and that reset then sort of gives them the room for outperformance in the second half if we see the developments for the rest of the world follow what china did in the last two months. emily: that was bloomberg intelligence reporter jitendra waral. up next, malicious hackers are now trying to exploit fears of the coronavirus outbreak. we hear from a cybersecurity expert, next. and if you like bloomberg news, check us out on the radio. listen to us on the bloomberg app, bloomberg.com, and in the u.s. on sirius xm. this is bloomberg. ♪

emily: as the coronavirus continues to spread, hackers are trying to seize the moment. cybersecurity firms have reported surges of phishing attacks and domain name buys related to the virus. the key being malicious actors

preying upon people's fears to pretend to sell masks or sanitizers in an email to trick folks into routing them their bank account numbers are other important information. for more, i spoke to a senior vice president at a cybersecurity firm wednesday. >> what you have is a series of capable actors, both nationstates and come in all groups, who are looking to use the coronavirus epidemic to spread malware. email, because's they are adjusted and clicking on things about the coronavirus, and establishing a long-term foothold, or establishing ransomware or the like in this current environment. emily: talk to us about the threat level in cyberspace, given what is happening, the uncertainty, so many people working from home. is there a threat to our national security right now? jamil: i think there is. as we know, emily, there has been a long-term threat from intellectual property

theft, targeting critical infrastructure, and as people start to work from home, a lot more of the economy depends on highly secured cyber infrastructure. that is what we are utilizing now to conduct our day-to-day business more and more, even more the case in this environment. people recognize this is a situation, and criminal actors are starting to exploit this capability. we will see what nationstates do going forward, but we want to -- but we know they are going to use long-term hooks. emily: what are companies and individuals supposed to do if they are working from home? they may be do not have all the security protocols. jamil: one of the keys for companies is to use vpns. for individuals, you can buy vpn software and at least your information is secure. it is encrypted over a tunnel. you can also use the latest in behavioral threat detection to protect your networks if you are a company. part of this is companies working with one another,

industries working with one another in a collective defense posture to defend against these threats as we enter this new environment where we are all working from home, and recognizing this is just how it may be for at least a while to come. emily: you were at the rsa security conference in san francisco a couple weeks ago, the same conference that now three people attended and have now tested positive for covid-19. one of those folks is sadly in a medical-induced coma. this is a huge gathering for your industry. you were there. i am curious how this is impacting folks in your industry right now. jamil: sure. people are taking wise precautions. there were 36,000 people at the conference. only a handful apparently have this issue. the concern is you do not want it spreading, you do not want to be a point of spread. so a lot of people are working from home. we have seen some major tech companies announce they are going to have their staff stay home. just more generally, a better

precautionary measure. and at least for this industry, you want to be cautious and careful. so we will see what happens as this plays out. we are now about 12 days out from rsa ending, 11 days, so the incubation period is 14 days. by this weekend we should know better if there are further cases, but i think for now it is better to take precaution then not. emily: that said, the disease is continuing to spread. earlier today, the buildings of cbs in new york city were evacuated. cbs is saying, this is just crossing now, that two of its new york-based employees tested positive for coronavirus. they are asking employees in at least two of their buildings to work from home. jamil, this is certainly going to get worse before it gets better. what are you most concerned about from a national security perspective? jamil: honestly, one of the things is people over-panicking and getting too worried and not engaging in their normal day-to-day business or economic activity. look, this is a challenge, obviously. we have seen a lot of public

spaces be left behind, people sort of staying at home. but you can still get your work done. you can still participate in the economy. this is not the zombie apocalypse, as it were. the thing to do is just be safe, take normal precautions. and in the cyber arena, take smart precautions. but do not stop doing business. participating in the economy. the general variables of the like arend the good and solid. we want to avoid a panic here. emily: that said, what would you like to hear from the white house at this point? some of the panic might be tied to the fact that we are not getting a lot of information. the president has been due to unveil a stimulus plan, but that has not happened. the daily briefing today by the vice president was canceled. what should we be hearing from the white house? jamil: the w.h.o. today declared this a pandemic. 114 countries affected, over 4000 people dead. this is a huge concern. it has been a pandemic since h1-n1 years ago. we want the white house to come

out and tell us the plan. tell us they are going to stimulate the economy -- we know things are going to happen. we know the fed will continue to cut rates to the extent they are able to do so. for all we know, they will engage in quantitative easing to o. i think the economy will stay strong. i think the government will do the right thing. all we need for the white house and leadership in congress to do is to step up and say we will do what is necessary to keep the economy going and keep the country's work moving. as long as we get that i think we are in solid shape. emily: that was jamil jaffer at iron at. coming up, if you are trying to cancel a trip, don't expect a refund necessarily from airbnb. we have all the details and disgruntled travelers next. plus later, universities and schools around the world continue to shut down to prevent the coronavirus spread. how can kids keep learning at home? the push to get classes online is next. this is bloomberg. ♪

emily: travel -- one of the industries being hardest hit by the coronavirus outbreak. if you are canceling a trip, hotels and airlines might give you a refund or voucher, but if you booked through airbnb, you may be out of luck. unless you booked to stay in china, italy, or south korea. airbnb is enforcing no cancellation policies, or allowing hosts to decide. that leaves out 97 others where the coronavirus has spread. i got details from bloomberg tech's olivia carville. olivia: we are seeing a lot of frustration out there at the moment from guests, people who booked trips years in advance who really want to go.

unfortunately now, the coronavirus has spread right across the world and reached pandemic status. health authorities are advising people against travel and wereies like this one we talking about, who we featured in this article, think it is in their best interest to protect their family in terms of safety, but also to try and avoid actually spreading the coronavirus. they don't want to take the trip anymore and are trying to cancel. their airline and their hotel have both refunded them, but unfortunately, airbnb is a different position. they have told the family that according to the cdc guidelines, they could still safely travel to japan. from the family's position, they have a 10-year-old son and don't think it is safe. hearing from a lot of people at the moment you feel as though airbnb is putting their health at risk by giving them unsafe travel advice and encouraging them to continue to go i not offering a refund. emily: i have a line from your

story, airbnb's official response to this family saying if the cdc's precautions are followed, you can safely travel to japan. well, nobody knows if this family could safely travel to japan or not. airbnb has responded to all of the frustration out there, saying we are a two-sided marketplace. it is not just you travelers who are the customers, but our hosts who are the customers. tell us more about airbnb's side of the story. olivia: right. so airbnb is in a particularly difficult position here. we know the travel sector has been the hardest hit. airlines are canceling flights, hotels are closing, businesses are prohibiting travel, and events are being canceled across the world. but while airlines and hotels only have to do with the customer, airbnb is a two-way platform. so on airbnb, you have a host who will rent out a home, and you have a guest who intends to stay there. and from their perspective every

time it gets canceled, the host is least out-of-pocket. so traditionally, airbnb has always had a refund policy that was kind of up to the host's discretion. they could choose whether they wanted to have a flexible refund policy, which means you could 48 hours before you arrived, or a stretch policy, which says no refund at all if you cancel. the problem we have here is you created this extenuating circumstances policy around coronavirus that only applies to three countries. a lot of people are traveling beyond china, italy, and south korea and do not feel safe. emily: in some cases you found some anecdotal stories where perhaps the host would refund the money, but airbnb still took its fee. meantime, this is a company that was planning to go public this year at 30-some billion-dollar valuation. if you look at a company like mary at that is a $33 billion market cap, do we buy the idea

that airbnb cannot cover for these travelers in a crisis like this? olivia: we know that they have been cash flow positive and they have turned a profit in 2017 and we believe -- 2017 and 2018. we believe they did lose in 2019 but that has yet to come out. we do know that for airbnb, they were founded in 2008 during the global financial crisis. and this is the second biggest challenge the company has faced. and unfortunately, it is coming in the year they intend to go public. emily: bloomberg technology's olivia carville. tesla overtook boeing wednesday as the most valuable industrial company in the united states. the electric carmakers market cap topping boeing by $10 billion. i spoke to ed laszlo. ed: it is as much about boeing's pain as tesla's gain. boeing has a double whammy where it is dealing with the coronavirus, the impact on travel globally, people are

traveling less, definitely flying less. emily: and continuing to deal with the 737 max. ed: and we are approaching the anniversary of the 737 max being grounded. if you look at the decline of boeing's shares so far this year, that is how tesla has managed to creep up. but to be fair to tesla, it is amazing that we are even talking about them in t same eath as boeing. this legacy, huge industrial name with $80 billion of revenue last year. tesla did $25 billion of revenue last year, and it is kind of a crazy concept that investors have been talking about. they have been talking about how tesla is becoming a "real company" that is producing real things in real factories. tesla shares are up 55% year to date. it is expanding its production capacity to 500,000 new vehicles this year. and it's increasing its base of industry, already up and running in china, plans for europe next year. and perhaps a new factory here in the u.s. as well.

emily: tesla has been a real company for a long time, let's be honest. there's an irony in that elon musk tweeted last week the coronavirus panic is dumb. meantime today, tweeting about opening new factories in the united states. ed: on the coronavirus we did not know how it is impacting tesla. on the last call, january 30, the cfo said look, it will delay production in china by 1, 1 and a half weeks, but we have not heard much more. we do not know what the situation is over in the fremont factory over the water from us. elon tweets, he draws attention away perhaps from the company and onto himself. but, you know, they are looking at this new potential factory here in the united states to produce the cyber truck, and even a model y factory they hope will be on the east coast, according to another tweet. emily: and tesla has not been immune to the volatility over the past few days. the stock plunged almost 14% monday, regained about half that yesterday, down again today.

you have to think if there is a broader economic downturn, that impacts a carmaker. ed: so i guess there are two schools of thought here, right? the first is, where is tesla's demand coming from. this ties into the cyber truck debate. there are signs that the demand for this, what was once thought of as a concept vehicle is strong. in a market of pickup trucks, which is entrenched with three players, analysts raise is it just the diehards, the people that really believe in a concept and will go for it, or is it this idea that if the world is going to shift to a renewable energy, sustainable source of energy and electric vehicles, that tesla has first mover advantage? even in a downturn, even in a recession people buy vehicles. yes, used vehicles do better than new cars in a recession, but tesla is pretty much the sole player in ev's, so it depends on what kind of support to get. emily: does tesla have an advantage over other carmakers in this moment?

ed: we have done some reporting around this. part of the big gain this year comes from this idea that technology-wise, tesla could be three to five years ahead of the big germans, right? this is what is so incredible about the story. tesla's market cap is greater than volkswagen. volkswagen reduced 10 million -- produced 10 million vehicles last year. what investors are looking at is the range, look at actually the volumes they are producing. no matter how many billions of dollars these big legacy european makers are putting into ev's, they have yet to build a single viable competitive vehicle. emily: bloomberg's ed ludlow there. coming up, as the coronavirus spreads globally, workers had -- head home en masse. could virtual reality help the remote workforce? that's next. and bloomberg tech is livestreaming on twitter, and be sure to follow our global breaking news network quick take

on twitter. this is bloomberg. ♪

emily: welcome back to the "best of bloomberg: technology." i'm emily chang. magic leap, the start of that raise nearly $2 billion to build an augmented reality device, is exploring options, including a sale that could fetch as much as $10 billion. according to people familiar with the matter, the company is considering strategic options that could include a partnership or selling a significant stake before a potential listing. before news of the sale broke, ed hammond and i spoke to the chief product officer, omar khan about their technology. we have been innovating

in the spatial computing space for eight years. we are building technology for all day and everyone. including enterprise and consumers. we know the inflection point for enterprises coming earlier. the exar stage, kind of is asive of ar and vr, $128 billion market opportunity. enterprise is taking off first and then the consumer is falling in the 2023 timeframe. it has aligned well when we see the 5g deployment become broader and driving adoption across the consumer space. we are seeing early consumers adopt even today, but the inflection point for mass consumer adoption begins to happen in the 2020 timeframe. we see enterprise customers really starting to drive adoption against many different use cases. we have hundreds that are using magic leap today across training use cases, cross --

a cross communication and collaboration, which is incredibly important as people collaborate across time and space. emily: i will never forget magic leap's first demo and the early concept videos of checking emails in the air. we have not seen that yet. how transformative is magic leap 's technology, which was supposed to be magic mixed with reality. omar: truly transformative. both of the examples you used you can do today. on my to milan, i've got -- on my team alone, we've got multiple employees living in magic leap all day. i have folks who got rid of all of the monitors on their desk and they work. they have five or six monitors up, they have a video in the background. they have a video conference going with their colleagues around the world, so these use cases are what we are deploying

today, they are actually live today. we have a customer in paris, bnp estate andlarge real banking customer of ours. they are using magic leap in software called spatial to connect employees around the world. they are also using it with customers to give tours of projects coming out of the ground, and the initial intent was to become more green and reduce the carbon footprint, not getting on planes. but given the backdrop of what's going on today in the world, it is actually helping people collaborate around the world. ed: you are talking about coronavirus being a boon to the business, because people are working from home, but the consumer market is not really developed yet. how do you get the products to the consumer, because that is a deeper market than enterprise. omar: starting in the 2023 timeframe, we are starting to see that inflection point happen. we have magic leap one today

that customers are adopting and doing pilots, and they are excited about our next generation product, which is a significant step forward for the industry and for magic leap. it will be half the size of magic leap one and double the field of view of magic leap one. and it really removes the compromises you have to make in today's exar platforms from an experience perspective. we believe those products get us towards the vision we are driving, which is all day, everyone, everywhere. we are not building a helmet or a flimsy set up like lenses that don't deliver the value of true spatial computing. some of your competitors, microsoft, are building out their own products. facebook said they want to do $5 billion a year in the space. isn't it time to look at getting

some funding through the ipo market are taking on new investment? -- or taking on new investment? omar: i can't speak to those conversations. but what i can tell you is that in those eight years, we have built a significant, broad ip portfolio that has put a moat around our leadership in the exar space. and that makes it difficult for competitors to enter the market. much more costly, and takes a lot longer time for them to get there. what we've got, we've got our second generation product which continues to expand our leadership, coming out next year, and then a product right behind it in the roadmap. that gives us tremendous confidence that we can grab a share of that market and that's what our investors, our partners , our employees are excited about and confident in. emily: that was omar khan. chief product officer of magic leap.

meantime, xerox is out in the markets, trying to raise cash for the largest or what could be the largest hostile takeover in years. despite recent projections from hp, xerox is increasing its bid. we spoke to a xerox nominee to the hp board and the former ceo of cowan. no comment onve what i would do as an operating board member in terms of the operations of hp, but what i would do, assuming the rest of the board agreed, is we would engage with xerox in having meaningful discussions and whether or not this makes sense, and on what terms. >> the board has given us detailed reasons for why they rejected. do you think they were wrong to reject? >> yes. they rejected on incomplete facts. i think i have not done digital legends -- due diligence on xerox. >> they have not been able to.

>> they have not engaged and done their due diligence to find out if the synergies are real. what with the capital structure look like, what with the allocation of value be -- all of those things are still up in the air. >> some things the board or management have said would be bad or damaging about this bid, do you disagree with them? do you think it would put undue leverage on the combined company ? >> the leverage, xerox believes, there would still be investment-grade after the transaction. they are projections, i find them credible. in 2023, the leverage would be 2x, a good capital structure. i do not think there is any real risk to the capital structure. >> what about the characterization of xerox as a desperate company that needs a deal to survive? >> that is a pejorative comments, obviously, and i made a lot of those comments myself, but i never meant them when i said them. in this case, it is not a desperate company. in fact, it has got management

that is quite skilled at negotiating desperate times. i would hardly call these desperate times -- well, current times, but xerox has gone through desperate times. they have managed a declining and delivered shareholder return in the last year almost 100%. i do not think they are desperate or acting desperately. >> theoretically, you get onto the board, do you get excited about $24 a share? >> i would have to be inside hp to really get a sense of that, but as an hp shareholder, i in cash, that40 is higher than the cash was before the announcement, and half the company. i think it is a no-lose, frankly. ed: let's talk about the cash peace. xerox has reaffirmed this morning that they would make the offer as it stands. have they got the financing,

does that change in this market? as i know, a firm commitment is a firm commitment, and this will not qualify as a material adverse exchange. the banks are in and of xerox -- and xerox reaffirms they are still in. ed: when you look from the outside, you have to have conviction you would be a better steward of the capital there. the various complexities of running a business like that, and only a small piece is printing. what gives you the confidence you would indeed be better? kim: i think they are all capable people -- ed: you will have to replace one. kim: probably the weakest. but it's clear i have a different approach to the activity going on. i would probably insist it be run differently in some respects that i don't know yet. i would certainly have to make some observations. but i would certainly say a credible party has come, made an overture, wants to engage in

an industrybout that needs consolidation, and i think we should make that conversation. be a xeroxoing to deal at all cost? kim: this sounds cliched, when you go on aboard, you have an obligation. you are not working for the owners, you are the board which represents the owners and you owe it to the owners to give it a look. emily: that was kim fe nnebrasque, xerox's nominee for the hp board. parents prepare to teach their children in the midst of school closures around the world. we speak to the ceo of an online education company next. plus, how one of china's largest e-commerce companies is faring as the coronavirus spreads around the world. this is bloomberg. ♪

emily: now to the impact of the coronavirus on education. many schools and universities are asking students not to return to campus in moving -- and moving classes online. there are questions for schools around the world from preschool to high school about whether to close schools and how to keep kids learning in the meantime. i spoke to the ceo of khan academy, a nonprofit educational organization that offers online education videos to over 93 million users globally. >> there are a lot of actors who are trying to put things together so we can keep students learning, essentially. the reality is there are some districts, places internationally like japan and south korea, that have already canceled schools nationwide. in the u.s., we have already seen school closures and it will probably accelerate over the next couple of weeks.

the reality is, if they start in the next few weeks, they are likely to last through summer because we will probably not see peak cases or several weeks now. -- for several weeks now. one logistic change that could happen, although there are a lot of complexities there, is it could shift summer vacation up a few months and just resume class in the back half of summer, which could symbol by a lot of things. but assuming that is not going to happen or we see some type of hybrid, a lot of districts are thinking of how to virtualize. there's a lot of complexity there. if they can even operationally do it, but there are equity issues of, do all students have access? as a not-for-profit, we are thinking about how do we put our materials together, they are all free and accessible, looking to get as much feedback, there are even ways for teachers and parents and district officials to keep track of what students are doing. how do we make it easy to use if students are home for extended periods of time, possibly for months, so they can keep learning.

emily: how do you structure a day of learning at home? what can parents do? what can teachers do? >> my general sense is to keep it as simple as possible. if i have young kids, elementary school age, i would say if you can do two or three hours of focused learning a day, that would actually be great. i would really focus on the basics, maybe an hour of reading, an hour of math. that reading can really just be focused on the student being able to read and you as a parent being able to spend time talking about what they're reading with them. something for an hour, an hour a day. for very young kids, we have an app that has over 100 titles and has other things on math and science, social and emotional learning. it is all free and non-commercial. if you're going to elementary or middle school age, there is a reading list we can provide for parents. on the math side, we feel we have families covered from as early as pre-k all the way through high school and college,

statistics, calculus, algebra, whatever they need. if students are able to put in two 30 minute sessions a day of academy,ractice on con -- khan academy, the system will progress along and they can get their basics covered. above and beyond that, if you can do an hour of writing a day, journaling, thinking about what is going on in the world, that is interesting. for high school, we can support them for biology, chemistry, physics. we have economics and american history and civics as well. emily: do you have any lessons or anecdotes from across asia where, as you mentioned, some students have been at home for weeks, where things are working and where things might not be working? >> yeah, it is coming in bits and pieces. it first came on our radar last week when a teacher in south

korea had to virtualize and is using khan academy heavily with his students. that is when it first hit us, wow, we have to start bringing a game plan, because we realized it was our duty as an ngo. emily: if there are widespread school closures here in the united states for an indefinite amount of time, how well-off do you think our children will be? sal: it's obviously not great, it is not an ideal situation, but as much as possible, i think we can try to make it a glass half-full type of situation. where if they are able to use the types of online materials i just talked about and potentially continue through the summer, part of the glass half-full is whatever patterns we can get people learning. that will set a pattern for what what could happen over the summer, where you have traditionally what is called the summer slide, where not only are kids not learning, but they forget. so that is an opportunity of sorts. i hope that districts are able to provide some support for kids who don't have resources at home or internet.

maybe keep certain computer labs open. it would not be for all the kids, so the density of kids coming on-site will be lower, so there's less of a chance of spreading the virus. khan academy ceo and founder sal khan there. pinduoduo remains positive despite its recent sales miss. we will hear from the president of strategy next. this is bloomberg. ♪

emily: several companies are expecting headwinds to their businesses from the coronavirus pandemic, including chinese e-commerce giants like alibaba. pinduoduo, china's third-largest e-commerce platform, is no exception.

they reported third-quarter sales that missed estimates, but ,he vice president of strategy david lou, is still positive. david: in terms of impact to e-commerce, we have seen the onset of the coronavirus outbreak in china, e-commerce actually played a big part in supporting and stabilizing the lies of people. -- the lives of people. pinduoduo is actually the second largest in china in terms of user accounts, so millions have come to rely on pinduoduo for daily necessities. in trying times like this our priorities are with our users, so we have continued to provide subsidies against medical supplies and daily necessities from the very beginning when we see surge in demand outpacing the supply, and strongest array in the markets. that said, the other thing i

would point out, pinduoduo, 13% of our gross merchandise volume is actually in agricultural produce. pinduoduo has been a strong online platform for the purchase of agricultural products. as you think about people staying home and looking for food supplies, we leverage our network through this very difficult time to make sure farmers whose businesses have been impacted because of disruption of transportation are able to make other goods available efficiently to the online consumers. at the same time, we spent a lot of efforts focusing on logistics making sure goods are delivered promptly to the users in the comfort of their home. emily: but there has been a disruption to the supply chain. even alibaba has said if this persists beyond one quarter, there could be an impact on earnings and consumer spending. david: absolutely. we also expect to see a negative impact to our growth.

that said, we have actually been observing very possibly learn -- very popular trends in terms of consumer behavior as china resumes work since the 10th of february. so we are roughly about a month into the resumption of work. we have seen 90% recovery in the delivery network in china and we have seen pick up in activities among merchants and users. take february for example. we ran a three day campaign of our $10 billion r&b subsidy program. what we have actually seen is sold 50,000 iphones and 20,000 within the first 12 hours of that, so consumer demand remains very strong. our outlook for the year remains positive. >> is there a risk for smaller merchants? yes, small and medium

merchants on our platform are more exposed because of cash flow concerns and the price disruptions and higher cost of logistics. we as a platform have actually r&d inde $1 billion reserves for a subsidy program to help ease that transition back to normal. >> pdd announced its results today, but still fell short of expectations. are you disappointed? david: on the contrary, we are actually very positive on our own results. we believe the fourth quarter was actually very, very strong. first of all, we hit a new , the one trillion r&b mark in around 4.5 years. secondly, we added 50 million active users in the fourth quarter. that's about twice of our nearest competitors. so we continue to see more people coming to our platform and becoming more engaged on our

platform, and we think that bodes well for the long term. monetization, or revenue, as you say, is not our focus. our priority is improving user engagement. >> you are competing with alibaba, targeting millions -- about one billion active users by 2024. can you do that earlier? in a shorter period of time? users we added 50 million in the last quarter, and that is twice what our competitors have added in the last quarter. we see no reason why that pace shouldn't continue. it is just a matter of time. >> what is your three to five-year strategy? pdd has always been seen as a platform targeting the third tier cities. unlike alibaba, which is looking at the first and second tier. are you maintaining that strategy or will you be tweaking that to compete effectively with alibaba? david: i'm actually really glad you asked this question because

it will allow me to clarify this misconception. pdd has been designed as a platform that serves the entire population. if you look at user distribution on our platform, it is like china's distribution between rural and urban areas. but more importantly, as we begin to win more trust with our and more build engagement, we are seeing activities pick up from users in first year and second-tier cities. for example, last year in november, 45% of their merchandise volume was generated by users in first tier cities. high-end cosmetics and imported fruits. as a strategy, i would say our platforms continue to understand and promote interactions between our users, to understand what they may be looking for and make available the breadth of products and diversity, and continue to encourage them to share their experience with other people. >> black friday last year, you partnered with amazon, which was

seen as a pretty successful partnership. any reason to think you will deepen that partnership with amazon? david: amazon and us partnered during black friday to bring 1000 skus available to the chinese customers. this is consistent with our strategy of differentiated shopping experiences to our user and giving them access to better, higher quality products with certainty around authenticity and at a very compelling value. we will continue to explore such opportunities and collaborations going forward. emily: that was david liu, pinduoduo vice president of strategy. that does it for this edition of the "best of bloomberg: technology." we will bring you the latest attacks throughout the week. tune in every day, 5:00 p.m. in new york, 2:00 p.m. in san francisco. we are also livestreaming on twitter. check us out at technology. and be sure to follow our global breaking news network quiktake on twitter. this is bloomberg. ♪

david: his british father showed him the world. but it was his swiss mother and her cello who inspired him, and he followed her into music, even though she wanted him to be a mathematician because, she said, the life of a musician was so very difficult. but not for clive gillinson. he excelled at the cello and join the prestigious -- joined the prestigious london symphony orchestra. 14 years later, musicians asked him to give up his first love and save the orchestra from bankruptcy. he did just that, surprising himself most of all. he turned the ores