>> from the heart of where innovation, money and collide, in silicon valley and beyond, this is "bloomberg technology" with emily chang. i'm lee: coming up in the next hour, facebook out with earnings. announcing a new reporting structure. if you are looking on news on a

potential rebranding, you may have to wait until later this week. we will unpack the social networks third-quarter. plus we look at a trove of facebook documents obtained by whistleblower francis hagen. they portray a company losing young users and struggling to control misinformation, hate speech, and other hateful content. an inside view of the inside social network that shows even facebook's own employees are worried. tesla roared past a $1 trillion market cap after hertz orders 100,000 electric cars. in a single largest purchase for e.v.s ever. what this means for tesla. we will get to all of that in the moment but first let's get to the markets with our own kriti gupta. stocks rising to another record today. kriti: led higher by big tech. specifically i --. after you see the weight has been performing. a lot of this has to do with that deal you were just talking about, 100,000 cars.

a really big bet on the e.v. space. that is the top performer on the s&p 500, pushing it to record highs. nevertheless, the new york faang index was higher. you did not just see tesla outperform, you saw other big tech companies outperform, and as usual when they outperform. semiconductors tend to follow. i want to hit the after hours earnings story, facebook. shares up after hours. who thought. ? there is a few theories on why. let me run through the numbers. . you had a revenue maze coming in. user growth, however, is up. they are putting $50 billion more in share buybacks. they already have $14 billion in share buybacks. that could be one reason shares are up. going back to last week, there was this expectation built into the market that facebook would have pretty awful numbers as well.

that is why you are seeing facebook shares up after hours as well as its social media peers moving higher after hours. emily: all right, we want to stick with those results and bring in our analyst. a big day for facebook. not the bloodbath we saw. in fact, shares are up after hours on the back of this apple had tracking thing they were concerned about and also this trove of facebook internal documents that do not put the social network in good light. what do you make of the earnings today and why are investors seeing hope in this? guest: there is a lot to unpack. for sure. i really think a couple of things. first of all, facebook did outperform better than expected.

better than our own internal expectations as well when it comes to the revenue and particularly also in the user numbers. that is part of it. many people were expecting worse performance when it comes to how facebook was dealing with these changes you alluded to. we are definitely seeing advertisers making their own internal changes to make better use of the data they had have available to them. we are seeing facebook also providing its own tool that it is working on. and then we're also seeing some inertia from advertisers. i mean is the second largest zero publisher in the world after google. this is a hard habit to break for advertisers. we are seeing this continued momentum behind using facebook right now, even in the face of all the terrible negative news over the past couple of weeks, which, in my history of covering facebook, it has been absolutely some of the worst, wrenching information that has come out. but when it comes to the business side, i think advertisers are still pretty much wedded to facebook. emily: i wonder with some of

-- if some of these internal documents will have an impact? among them, time spent on facebook by teenagers is down, 15%. adults 18 to 29 years old are sharing less. the account created are actually duplicate accounts. is the -- if the next generation is not going to be using facebook, shouldn't that be a concern for advertisers? >> it definitely should be. it is not new news that teens and young adults have been leaving facebook, it is something we have been forecasting for several years now. that part was not new news. what was interesting was the revelations about instagram which we had believed was happening but was further confirmed by the information that came out. so that is i think where it gets concerning to me. facebook at this point, you have to accept it is a platform for middle-aged people, older millennials. middle-aged and older people.

it is not a platform that is heavily used by teens and it is not going to turn that around. instagram is the place i think we will have to pay more attention. is instagram able to withstand the threats from tiktok and snapchat? is instagram able to remain useful and interesting and engaging to teens? definitely an interesting conversation and something we will be looking at in the future. emily: i am curious what the conversations you are like. are they doing this already? or do they not see yet the value in going elsewhere? guest: you would have to divide it into two types of advertisers. first you performance have what you call the performance advertisers. the companies looking for an immediate response. whether that is sales for lead generation. then there is brand advertisers. the companies advertising on facebook simply to extend the visibility of their brand.

so if you look at the brand advertisers, they are very much still, according to the information we have, very much still using facebook. they have not moved dollars anywhere else. the performance advertisers, some of them we have heard , anecdotal evidence they have seen lower ad performance. they are considering other options. but, again facebook has the , momentum. it is very large. advertisers are reliant on facebook in a way they are not reliant on other platforms like snapchat, tiktok. these are more -- particularly tiktok, the more experimental platforms. so while they are gaining ad dollars, there are more attitudes as opposed to dollars moving from the facebook -instagram pie into something like a tiktok. emily: so much more to continue to dissect. debra ahhhhh williamson of emarketerm thank you for your

insights. i want to continue with this story, whistleblower frances haugen went public earlier this month with claims that facebook has been prioritizing profits over safety. in a redacted version of the documents obtained by a consortium of news organizations, including bloomberg news, we have learned that the social platform has been concerned for months about its declining popularity among teens and young adults. did not let on to shareholders. the social network struggling to remove hate speech and morale is dropping. our executive editor joins us now. tom, you shepherded the reviewing of all these documents. how many documents did we obtain, and how did you even begin the process of poring through them? tom: we had access to several hundred documents which constituted thousands of pages. it was a mammoth undertaking. we assembled a group of a dozen reporters and editors. myself included, and we just started digging and looking for themes we hadn't covered before

or things that had been covered but we thought we could additional valley to the conversation. it was basically, we had about two and a half weeks and it was every day. a group of people dividing and conquering. emily: what are the things you find most troubling? to be fair to what she said earlier, a lot of things -- a lot of these are things that we suspected. teens are using facebook less. we did not see necessarily in numbers provided by facebook. tom: what this gave you insight into is how deeply reflective facebook employees are about their own problems. i give them credit for taking a really hard, candid look and doing deep, in-depth research into how bad things are, where is the user growth happening? where are we failing the public? where are we faltering in our mission? they are deeply reflective about it. the problem is, what do you do about it? there is a lack of consensus, a

lack of follow-through. there is also a foot-dragging that happens internally about how best to address these things. take for example the conversation around january 6, the insurrection. there were employees at facebook taking on the cto at the time over what role do we play? to what extent are we responsible for this? and facebook did a lot of reflection and a lot of research around that, and they found that , essentially, facebook failed to police the proliferation of groups that were promoting this idea of stop the steal. promoting this false idea that trump had won the election. that is just one instance of them failing to get on top of the thing that could later cause harm. emily: to that frances haugen point, did testify before u.k. parliament and brought up this point that if you made noise about something, you were not necessarily listened to.

even as an employee. take a listen to part of her testimony today. >> when i worked on civic integrity, i felt that critical teams were understaffed. i was told at facebook we accomplish unimaginable things with far fewer resources than anyone would think possible. there is a culture that liar lionizes the startup ethic that i think is irresponsible. if you make noise, saying we need more help people will not , get rallied around for help because everyone is underwater. emily: at the same time, i've spoken to facebook employees who who have said to them it seems like more of the same, they are used to hearing this bad grasp. they look around and they look around in d.c. people working hard. so are these documents actually going to have an impact, or not? like many other scandals

or controversy surrounding facebook in the past, where we have not seen a long-term impact. the stock is already up within 10%. tom: right. it is down more than 10% give or take from when the wall street journal started rolling out the most recent series. there is a bit of overhang. the other thing to bear in mind is right now, lawmakers and regulators in the u.s. are already in the process of looking at, what can we do to rein in the power of big tech? this is giving further fuel to the conversation. and now lawmakers are calling for stricter oversight. we have not seen that play yet. there are implications there. emily: i urge our audience to check out all the stories but has written about this and number.com. tom giles, our executive editor for technology, thank you very much. we will continue to talk more about facebook. the facebook files, have the

social media giant kept crucial information from investors, next. this is bloomberg. ♪

only fish they have come to be known as "the facebook files," a trove of internal documents taken by whistleblower frances haugen and obtained by 17 news outlets including bloomberg. they paint a darker and more dangerous nectar of the social network and suggest facebook has been hiding key information from investors. i want to bring in a founder and early facebook investor, roger, who has been sounding the alarm

for years. he even wrote a book about it. i am curious what you find most alarming about these documents that have been obtained by bloomberg and also the revelations of frances haugen over the last couple of months. what troubles you the most? >> to me, frances haugen is incredibly courageous for bringing these documents out. the impact of them is that they have shifted the conversation about facebook from a focus on free-each issues, to where it really belongs, which is on the business model that essentially puts 3 billion people onto a network with no boundaries and then unleashes a business model that promotes inflammatory emotion, so hate speech, misinformation and conspiracy theories are given an economic advantage in facebook. the result is ideas from the french, things like antivirus and white supremacy have been mainstreamed. that has undermined democracy, public health and privacy. if you are an investor, facebook has been a great stock for you. but on a looking forward basis,

you have to ask, if the u.s. loses its ability to be a democracy, and if each one of us loses the ability to make our own choices because they are being made by internet platforms, is that a good trade? that is the real question. emily: if you are an investor in facebook today, it was a great day for facebook. up at the close. up 3.5% after the close on the back of these results that are mixed and on the same day that these thousands of pages of documents have been poured through by multiple news organizations. if that is not going to send facebook stock down, what is? >> i don't think the stock is a good measure of what is going on. the stock market operates on a completely different timescale. investors are making the correct judgment, which is that numbers are terrific, at least relative to what you might have expected. at snap of the impact of apple

changing privacy had a dramatic effect on snap. at facebook, they have a a lot of dials to turn. they can lower the quality of the ads they show. they can allow new users onto the site that, if you will, that are not authentic. there are lots of dials that are available to make the numbers look good. that is very short-term. investors have a short-term time horizon. the stuff going on with government is going to take time to process. you have legal issues relative to the sec with disclosure. there is a big case in delaware. six large pension plans that are accusing facebook of insider trading around cambridge cambridge analytica. -- around cambridge analytica. these things are felonies. there are department of justice cases relative to price-fixing. there should be an investigation of the whistleblower's information about human trafficking, or about the january 6 insurrection. facebook has been implicated time and again in both the radicalization of people into

qanon and into stop the steal, and then allowing them to organize the protests and the insurrection itself on facebook. it is of use management about all of this stuff, and they always prioritized profit. emily: does time spent on facebook among teens dropping 16%, does that alarm you? is that something facebook should have been more transparent about? is that something investors had known, with the stock could be continuing to rise? would revenue continued to grow? $30 billion quarter after quarter after quarter? >> i think the issue facebook really faces is that in north america and western europe, its most profitable markets, it has reached saturation in the population. there is no question tiktok is draining people away from instagram. i look at this and the bad press instagram is getting should accelerate that departure. i don't think there is anything

facebook can do about it that is legitimate. facebook is a mature company. it is not going to grow as rapidly. and if the numbers are higher in the short run, that is coming out of the future. investors just need to be more careful. emily: how big an opportunity do you think the metaverse actually is for face, roger? mark zuckerberg wants to bet the future on this, a potential name change on this. i mean, is that going to pick up the slack? >> the name change has nothing to do with this. the name change is about distracting us from the fact that the company will face a lot of legal problems and mark zuckerberg is going to face legal problems. this is a test for our system. we have allowed this company and google and others to run without any supervision. the cause tremendous harm. they have made investors a fortune and investors are

incredibly thankful, but the rest of the country is unhappy about it. are we going to restore some balance? and the metaverse is literally a dream, and amongst their horrible -- and if you look at the demos, they are horrible. to my mind, facebook is going to spend so much time dealing with the problems that are being exposed now, both in court and in congress. the metaverse, if it comes, will be very late. you will not want to wait. the name change is literally a distraction. they are just trying to do two things -- to get us to look elsewhere, than they want to find a way to insulate mark zuckerberg from legal liability for the problems that have already been created. emily: at this point, roger, what kind of regulation is realistic and right? reid hoffman, an investor in facebook in the early days just like yourself, told me he is disappointed in facebook as well, but he thinks that

breaking up facebook is the wrong approach because that will make it even harder to centralize all of these systems and the ai technology that is needed to combat hate on a global scale. what do you think? >> we have three areas we need to regulate and they need to cover not just facebook, but all of technology. we need safety regulations. something that functions like the fda. that sits there and says wait a minute, facial recognition, deepfakes have no valid commercial use. they shouldn't be allowed to market. the same way would be true for pharmaceuticals. companies like google and youtube and instagram and facebook would have to make changes to their business practices to make them safe for people. that would be something this fda would look at every year. the secondary is privacy. this whole notion that companies are allowed to use data to manipulate choices and behavior of people, that is really not an american idea.

i mean, it is basically taking away their right to self-determination. it is like child labor. it is something we should ban outright. thirdly, on antitrust, re-think the only thing is to allow for competition. if you break them up, that comes downstream, but first, you have to open up markets and prevent companies from monopolizing the way everything takes place in the economy. you saw what happened when facebook went down. the millions of small businesses dependent on facebook were shut down. that is what monopolies do and that is not good. emily: elevation partners roger , mcnamee, always appreciate you joining us to talk about this paid we could hook about it for -- we could talk about it for hours. i appreciate you taking the time to stop by and continue to help us break down these complex issues. coming up, no interest in pinterest. paypal says it is not pursuing an acquisition of the social platform. we are going to bring you the latest next. this is bloomberg. ♪

emily: a few other tech stories we are watching. paypal is not pursuing an acquisition of pinterest. paypal had approached pinterest about a potential buyout. an acquisition would have boosted paypal's ambitions to become the next global super app. the movie based on the 1965 sci-fi book dune took the number one spot at the north american box office at the weekend. the film reaping $41 million in sales, which was 10 million more than the studio projected. the second spot went to the latest installment of the halloween horror franchise titled "halloween h20." coming up, the facebook files

suggest that the social network may only catch 5% of hateful content if that. we are speaking with a long former google exec about whether it is time for government to step up its big tech --. this is bloomberg. ♪ >> they are very good at dancing with data. ata.

emily: welcome back to "bloomberg technology." i am emily chang in san francisco. facebook shares rose after third quarter earnings were reported. pressure continued to mount on the social platform over its handling of information and user trends. frances haugen, bringing to light information about facebook's innerworkings, saying that facebook does not do enough to combat hate speech, with the platform only managing to take

down 3% to 5% of hateful content in the site. >> mark zuckerberg put out a paper saying that engaging in -- is dangerous. as you saw, they are getting 3% to 5%. emily: she continued her testimony, focusing on how facebook is continuing to amplify hate across the platform. >> the question is what is facebook doing to amplify or expand hate, to amplify or expand violence. >> do you think making hate worse? >> unquestionably, it is making it worse. emily: i want to bring in the chamber of progress founder, and naomi nix, our reporter who covers facebook and has poured through these documents herself, focusing specifically on the hate speech and revelations there. the documents suggest that facebook only takes down less than 5% of hate speech.

at the same time we have heard facebook represented his say they have zero tolerance for this stuff, and also that the algorithm makes it more difficult to take the stuff down. walk us through how that is even possible? >> for quite some time, facebook has been really touting the power of its ai systems to detect hate speech and automatically take down some of it. you will regularly see facebook put out things that say more than 90% of the hate speech that we take action on was caught by our internal systems before a user reported it to the company. but they have never detailed what is the total universe of hate speech on the platform that it is or is not taking action on? what some of the documents suggest is that facebook is only taking action on less than 5%. so what we are seeing is just a story of different statistics and the ones revealed by the documents are certainly far more

dire. emily: we have been. emily:. emily: listening into facebook's earnings call. mark zuckerberg just said he believes the documents, the revelations of frances haugen paint a false picture of the company. take a listen. seeing is a coordinated effort to selectively use leaked documents to paint a false picture of our company. emily: adam, what is your reaction to that, given these are facebook's own internal documents, not one in isolation, but thousands and thousands of pages? >> i worked in companies and i don't know that any company that i worked in would love the idea of their internal documents being published. on the other hand, i do think looking in the mirror as these documents do is painful. but it can be useful exercise. i think it can make the company better. facebook is a big. global, important service, it plays a really important role in the lives of its users.

the questions about how it handles content and other issues are a matter of public importance. but i think we should treat the revelations from the face book papers reporting with nuance. one thing that comes through the documents is you see a company trying to balance values. they may not always get it right , but i do think there is value hopefully in seeing how others view them. i think that will ultimately make the company better. emily: we all wonder if indeed that is the effect that will have. frances haugen also made the case that facebook prioritizes hate each in english, specifically american english, more so than in developing countries, especially countries where they don't speak english. talk to us about how facebook efforts to handle hate speech and misinformation in western english countries compares to

the rest of the world. >> it takes resources and time to not only hire individual staffers for content moderation purposes in these various countries that facebook is operating in, it takes resources to train them to decide what is hate speech and at what point should it be flagged to facebook internal systems. what the documents suggest is that facebook has prioritized countries in the western world and, in particular, in english. there is one document that looks at the time spent, of the total time spent training each speech classifier on the platform. nearly one quarter of it is spent in english. and so that leaves potentially developing regions, regions that are more vulnerable to off-line harm because of online activity you, know, left behind some of the more advanced nations. emily: now, of course, hate

speech, adam, is not just facebook. is this because the line between hate each and censorship or hate speech and freeze each is too hard to draw, or is it because facebook in particular is not doing enough? adam: i think you would see some conservatives making that argument. you had david on last week and i think he made that argument. despite the fact that i think we tend to view hate speech through prism, morning counsel had a really interesting survey out two weeks ago that showed that 70% of voters, which is a very high number, want to social -- want social media services to have stricter content controls. you would probably see the same thing outside the u.s., your question to naomi about international. should face do more? absolutely. should services do more to reduce the amount of hate and disinformation on its services? absolutely. it is what their customers and

advertisers want. and i want to preserve the legal tool, the first amendment in section 230, that helps to do that. ultimately what consumers are , saying here is we want to have a good experience. we don't want to be bombarded with jack. so everybody, all of the social services, want to make that the case. emily: the question is, what will government do about it? will the sec step in? will lawmakers step in? will there actually be regulation? i want to take a listen to another thing that frances haugen had to say about regulation. >> right now facebook doesn't have to solve these problems. . it doesn't have to disclose they exist and it doesn't have to come up with solutions. in a world where they were regulated and mandated, you would have to tell us what the five plan is on these things, and if it was not good enough, we would come back to you and ask you again. that is the world where facebook has incentive where instead of getting 10,000 engineers to make the metaverse, we have 10,000 engineers to make us safer, and that is the world that we need.

emily: as someone who has worked on the company site for many years, do you believe regulation is needed and what kind of regulation is needed, especially given the new issues that have come to light through facebook's own eyes, from its own internal research? adam: regulation is needed. there are some good ideas out there. we should have a federal comprehensive privacy law. there is a really good piece of legislation by congressman raskin from maryland that would have an nih study of kids and technology issues. but also i think we need to be careful, particularly on issues around each. a lot of the criticism that comes facebook's way right now is really the question of content moderation decisions. they are making certain decisions about certain types of speech, most of it first amendment-protected each, which the company has made a choice to disallow, so the fact that legislation probably cannot

touch a lot of that. but also, i think we need to make sure that legislation and regulation is not driven by desire to get one company or another. usually when that happens, you end up with collateral impacts on smaller services. that would be good competition which i think a lot of us want to stimulate, as well. emily: we have been continuing to listen in on the facebook earnings call. i want you to take a listen to something mark zuckerberg had to say about young users, in particular. take a listen. >> over the last decade, as the audience that uses our apps has expended so much and we focused on serving everyone, our services have gotten -- for those who use them than for younger kids. and during this period, competition has also gotten a lot more intense, especially with apple in popularity and more recently the rise of tiktok, which is one of the most effective competitors we have ever faced. so we are truly to make serving

young adults their target. emily: so, adam, facebook makes has made the argument that kids are using technology, whether we like it or not. somebody has to build that experience for them and make it safe. there is the question of whether we want facebook to do that for our children. there is a hearing on capitol hill tomorrow focused on kids and technology -- tiktok, youtube, facebook will not be there. what is your view on who should be making this technology? should it be these big tech companies? should be completely different? should it be a nonprofit effort? should that business model driving kids in technology be different, not necessarily based on engagement or advertising? adam: i like that we have the options. i have amazon prime and netflix as an option and also pbs as an option. all of that is great, and, frankly, where there is an appetite to stimulate more

competition in kids technology, that is a good thing. frankly, our laws, particularly the kids privacy law has for a long time, disincentivized services from building for kids because they were worried about running afoul. i think one of the things you have seen the last couple of years is that things like facebook messenger kids, youtube kids all good services, giving , parents a lot of control. one of the things we need to be more honest about the fact is that when kids hit that tween age, they start testing the limits of cade-designed technology. my organization is a big supporter of this bill by congressman raskin that would ring government resources to bear on how kids are using it. parents are really struggling with it and frankly i don't know that any government is giving them a very satisfying answer right now. emily: we will be following that hearing coming up.

adam and naomi. thank you both for joining us. coming up, shaking things up in the rental car industry. hurts places a massive order for 100,000 teslas. much more, next. this is bloomberg. ♪

emily: welcome back. let's get a further look at the markets. in new york, what are you watching now?

kriti: one of the big things right now is inflation. what better way to measure inflation than yields? one of the big issues for tech here is seeing the yields rise earlier in the year because tech, especially big tech. but not anymore. a couple of months seeing tech rising together, and it really has a lot to do with tech being an inflation hedge. essentially, they are so big, they are able to pass on the costs to consumers a little better. that is the macro environment i want to think about as we go into the rest of the earnings season. let's talk about the micro, talking about some of specifically tesla and hertz, the movers of the day specifically tesla and hertz, tesla coming up with a booster , for its stock, the first to $1200 price target from an analyst from morgan stanley. on top of that, our very own erik schatzker, a 100,000 car order for hertz, a big investment in their own e.v. fleet. that helped tesla hit the one trillion market cap.

beating even facebook, emily. emily: all right, thank you so much. diving into this a little more, a big move for hertz, which is barely four months out of bankruptcy, now placing the order for 100,000 teslas, to ambitiously electrify its rental car fleet. joining us now is our bloomberg news reporter. so, a huge order for tesla. what makes it so significant? reporter: it is going to be enormous, because not only is hertz ordering cars, they have got this whole ad campaign with tom brady. tesla has never pay for traditional advertising, and now you have like this nfl star basically encouraging people to let's go electric. so there is this de facto pitch for the whole e.v. revolution, and tom brady that hertz is paying for. emily: renting a tesla from hertz, would you be able to use teslas supercharger stations? reporter: you will. absolutely. what is really important is

right now, if you don't own a tesla but want to drive one, you can try to get a ride or borrow a friend's, but there was never a way to fly to another city and rent a tesla at an airport. now you will be able to. not just in america, but in europe as well. emily: is it something for the rental car companies to do? reporter: i think so. the question is where to get the cars from? other automakers are still selling ev's at a low number. particular for business travelers. maybe their business partners will give them an incentive for the next time they travel. emily: here we are now at a $1 trillion market cap. what does tesla have going for the rest of the year? where does that number go? reporter: up, probably. [laughter] you know, tesla still has risks. like nhtsa is still investigating the autopilot. the ntsb is not happy with a policy recommendation. this is a company now going into several different markets.

fleet sales, insurance, energy, factories in berlin and austin. moving the headquarters to texas. emily: we are looking at the chart of facebook and tesla, both at the trillion dollar mark. sort of the tale of companies, the question is, what is big tech? reporter: they just keep expanding like octopuses. emily: what is going on with china? obviously, there are headwinds there, and there continue to be supply chains. reporter: tesla navigated the chip shortage better than most. they had record third-quarter sales which underpinned the strong earnings report. adam jonas raised his price target today. the chip shortage is still an issue but i think tesla is feeling really strong. emily:. emily: yet there are things tesla has not delivered on that elon musk has promised, like the ridesharing network. when is that going to happen? is that still part of the plan? reporter: it is still part of the plan.

2020 was supposed to be a the year of the robo-taxi. but we are nowhere near close to that happening. but elon keeps saying that eventually he things we will get there. emily: all right, thank you for your reporting. now, sticking with tesla, the model three was a top-selling car in europe last month, the first time an electric car has outsold rival models with gas engines. it is a major milestone for ev's and yet another sign that the car industry is pivoting away from the combustion engine. coming up, more on facebook' as third-quarter results. just how big it is getting. -- it is betting on the metaverse. we will have the latest. in as we head to break, blue origin and sierra space have announced plans to build a commercial space station in low-earth orbit. it is designed to operate as a mixed-use business park in space and has the backing of boeing. arizona state university among

others. the station is expected to start operating in the second half of this decade. this is bloomberg. ♪ ♪

emily: the focus has been on facebook, with more internal documents brought to light by many news organizations, including bloomberg, all of this as the social media company is reporting third-quarter results and earning calls on the way. we have our bloomberg intelligence senior reporter.

off of the back of this report, some investors thought it would be a lot more bloody, especially because facebook over multiple times, that their ad tracking technology was having a negative impact rather than seeing a profit, and user growth better than expected. what are you making of it? reporter: clearly, a lot was of bad news was priced in. there was pretty broad guidance, so still talking about it. but the fact is, with the changes, larger companies like facebook, like alphabet, they can somewhat navigate it in a much better rate than the smaller ones like snap, pinterest, or twitter. the reason i say that is because facebook has a family of apps. they can track user activity across those apps, and the ad effectiveness remains. i think what investors are more worried about is diversification, because the law of numbers is catching up to facebook. they will run into a difficult context. they keep talking about metaverse, but the question is if it can start ramping things

up where it can start contributing to the revenue. emily: all right, and mark -- one early investor says facebook will not be able to ramp up for the metaverse to take over. we had mark zuckerberg on the earnings call. take a listen to what he had to say. >> as expected, we did experience revenue headwinds this quarter, with apple's changes that are not only affecting our business but millions of other businesses at a time that is already hard for them in the economy. emily: do you think we are going to continue to see the impact of the apple ad tracking changes, or was this quarter the worst of it? >> no, i think you're going to keep hearing about it, and the way that this company is trying to offset it is they are trying to maximize the user time on the app. basically the goal is to keep the users on the platform for a

longer time by luring them with epayments, and that is how you offset the inability to track a user outside the app. every company is doing it. facebook is also trying to do it. basically, every company is in this ad universe is becoming a super app now. they will keep adding more functionality inside the app. emily: sheryl sandberg also speaking on the conference call, talking about commerce, saying it is no longer growing at the pace it was during the pandemic and the impacts of that. take a listen to what she had to say. sheryl: e-commerce is no longer growing at the pace it was at the height of the pandemic. these factors have been compounded by major global supply chain issues and labor shortages which have left many consumer businesses with less inventory. this has reduced their appetite to generate demand from consumers, which has impacted advertising spend. emily: what do you make of that? >> so clearly, we pulled forward

some demand for e-commerce last year. some ceos talk about pulling forward two years worth of digital transformation, or five years worth of e-commerce and digital transformation in one year. they are going to run against difficult comps for next year and they are setting up expectations. but at the end of the day, all these companies are trying to add more functionality around e-commerce within their apps. even though the comps get tougher, they will keep having more functionality with e-commerce, like i said, in the apps. emily: all right, our "bloomberg intelligence" senior analyst, mandeep singh. we will bring you more as we have it. meantime, plenty more tech results this week. tuesday we get quarterly reports from alphabet, microsoft, texas instruments and amd. ebay on apple and amazon on wednesday, thursday, and, of course, all of the details right here on "bloomberg technology." that does it for this edition

of the show. tomorrow will be joined by spencer bogart and david kirkpatrick. i am emily chang in san francisco. this is bloomberg. ♪

>> this is "bloomberg daybreak: middle east." our top stories this morning. asia-pacific stocks rise after a record close on the s&p 500. corporate earnings on president biden's economic agenda lift sentiments. even as the debate over inflation risks intensified. tesla hits a $1 trillion valuation and orders 100,000 vehicles. facebook