>> 5:00 p.m. in new york, let's take you live to new york where the jury in the ghislaine maxwell trial has reached a verdict, it is to be read shortly. the socialite has been on trial on charges she groomed underage girls sexily abused by jeffrey epstein, her former boyfriend and employer. four women took the stand and told lawyers saying the government is trying to scapegoat her for the crimes of jeffrey epstein. he died in 2019 in prison while awaiting his own trial.

the jury in the ghislaine maxwell sex trafficking trial has reached a verdict, it will be read shortly. we are tracking alibaba, in talks with the shanghai midea group who had a potential deal involving its stake in [indiscernible] china's e-commerce leader is exploring options that may include selling 30% of the social media service. it comes as beijing moves to curb the influence of china's tech giants in media spheres. a u.s. chipmakers has its production facility in a chinese city has been affected by covid curbs. tiny arteries are try to get on top of an outbreak, effectively shutting the city down. 151 local infections were reported on wednesday. it is still meeting with customer demand. samsung says the shutdown is affecting chip production. president biden plans to talk

with vladimir putin on thursday as the u.s. and its allies raise alarm about russia's troop buildup on the ukraine border. in a december 7 conversation, the u.s. president warned that russian aggression will be met with unprecedented economic penalties. russia's leader denies plans for military operations, warning nato against stationing offensive weapons in ukraine. news coming in from new south wales, a record 12,000 new covid cases in the path 24 hours. the s&p 500 reached its 70th record close of the year, it was up just more than a 10th of 1%. the nasdaq finished down 0.1%. the golden dragon index, 3.15%. the bloomberg dollar index slightly weaker. we did see the yen top 1.15 earlier.

trading just under that mark now. let's check futures coming online in a that a bit. futures pointing to a higher open, new zealand markets also higher. awaiting the verdict in the ghislaine maxwell trial, we will bring it to you live. this is bloomberg. announcer: from the heart of where innovation, money, and power collide, in silicon valley and beyond, this is "bloomberg technology," with emily chang. emily: i'm emily chang in san francisco, and this is "bloomberg technology." over the next 30 minutes, we are going to get meta-about met. first, the story behind the rebrand and the pivot to the metaverse, our discussion with a long time facebook executive on

the day of that announcement. plus, the facebook files, shocking revelations from a whistleblower and former facebook employee who went to capitol hill to accuse the company of prioritizing profits over people. and a key early investor in facebook speaks out, reid hoffman tells me he is disappointed in the social network and meet of the gets a call from mark zuckerberg. all of that coming up. facebook doubling down on the metaverse, so much so the company calls itself meta-. we spoke to the vice president of the global business group. >> we don't see it as a risk, we are coming off the company and the excitement of the company is very real and meta kept is where our company is going and the future that we want to build but our mission has not changed. our focus is around building the metaverse, continuing to let people connect, to grow

businesses in the way they have with the facebook family of apps over the almost 20 years that we have been going. it really but flex and also solve the confusion that there has been caused by a company named sharing the same name as our biggest app. facebook started as a single app and now we are a whole family of apps in services with instagram and whatsapp and so many others and meta brings together all of these apps, all these technologies under one new company brand. emily: the facebook files have revealed some of the ills of social media that facebook new internally, but from the public perspective, it appears you did not act on. that instagram was toxic to teens, only 5% of hateful content was taken down. is facebook taking a look in the mirror by now were running away or are you committing to double down and take some

accountability for these issues? nicola: what we are seeing is a court needed effort to selectively use leaked documents to paint a false picture of our company and it does not in any way reflect the company that i know when that i am passionate about and that i love working about. i am actually really proud of our record navigating these complicated trade-offs involved in operating in the services of scale. look at the actions we have taken, look at the considerable investments we have made. if i take this year, we are on track to spend more than $5 billion on safety and security. i think that is more than any other tech company even if you adjust to scale. the fact that we have 40,000 people working on safety, working on security for the company shows that we are not running away, that we understand the responsibilities that we have and against the different areas that you could look at, you can see that the progress we are making across these different areas. emily: 40,000 people survey 3

billion users. there is this question, is facebook too big to govern? there may be so many smart and well-intentioned and capable people who work there, but can you moderate every political, moral, and religious issue in every country and every language or is that impossible for any one company to do? nicola: one of the things we set out to do is be open and transparent about the work we are doing in this area. that is why we now publish four times a year the community standards enforcement report and we are opening our books up to an independent auditor to validate and look at our results. i think this is some of the most sophisticated work that is going on anywhere around the world and i am proud of that work. to your question, we are not satisfied if there is anything on our platform that could cause harm to somebody. we are committed to continuing

to get it off our platform. we might not be able to get everything down, but we are committed to do everything we can to make those numbers as small as possible. emily: facebook's core business remains the engine of growth for now. we have seen facebook and twitter and snap take a hit as a result of the apple ad tracking technology changes. apple reporting its earnings results today. they missed estimates for fourth-quarter revenue. i'm curious if you have any words for apple, as somebody who is so influential in facebook -- i should say meta's ad business. nicola: we have been warning for a long time about apple's policy and it has been benefiting their bottom line at the expense of small businesses and creators. i think we are seeing that play out, especially with small businesses, where they have small budgets. for these small budgets to work, they have to reach the customers that matter to them and especially over the last year.

small businesses that were not able to open their shops, able to reach out and find the customers that matter to them. we do believe that privacy and advertising can coexist, but without the collateral damage caused by apple. emily: there have been questions about mark zuckerberg's will let the company and i'm curious if there is any indication that he might step back as ceo, move into a chairman role like we saw larry do at google. certainly for cheryl, will she take on a different role or step back if the ad business is less important than the metaverse? nicola: nobody is saying that the ad business is less important. it is an important part of how we do business and i wish you could have seen the all hands that we just came off, mark and cheryl were on, and the

excitement that was emanating from not just mark and cheryl, but all of our leaders, sharing the vision, having fun with our employees, and going towards this next vision for the company over the decades ahead. emily: as somebody who is critical in writing the ad business, what is the ad opportunity you see in the metaverse? how effective do you think ad targeting will be, and tell us more about your own experience and what you think advertisers will get out of this. nicola: i think there is going to be a lot of exciting opportunity for advertisers. first, there will be a lot that happens in the metaverse as there is an internet today but there will be advertising opportunities. the way we build our products first and foremost is we start with people. we start with people and we make sure and understand how people are using and enjoying our products and then we go from there.

there's going to be opportunities for creators and we are going to make sure that we are building the tools that creators and developers need to help them be successful in the metaverse as well. there is a lot to be excited about. starting to explore what it is like to experiment with augmented reality. i think about the fact that you can go on instagram and try on virtually a pair of glasses, or try makeup on and lipstick. we are seeing brands start to have fun with it. emily: vice president of meta's global business group. coming up the shocking claims from frances haugen that facebook's new instagram was toxic but did not take action. there is a lot more next. first, let's hear from one of facebook's biggest competitors, the ceo of youtube about their approach to protecting children online.

this is bloomberg. >> we want to make sure that we are doing what we can to be responsible with kids in every way possible. that is one of the reasons that we have worked hard to give parents asked me options as possible for them to decide what is important for them and their family, whether that is limiting springtime, limiting the content that they have access to, even letting parents just say, these are the 10 videos, my kid can only see these 10 videos. that is important for us to give the tools back to parents for them to decide what is best for them and their family. ♪

>> i want to recognize is important for any organization to protect people, particularly children. emily: that was the head of instagram defending instagram's plan to launch a product for kids but not long after that, instagram put those plans on ice. this after a former facebook employee turned whistleblower revealed what has come to be known as the facebook files, a slew of internal documents that show to the social be a giant knew its products could harm teens' mental health, she

testified to this and more on capitol hill. >> they cannot protect us from the harms that they know exist in their own system. because it is causing teenagers to be exposed to more anorexic contents, is pulling families apart and in places like the opr, it is fanning ethnic violence. emily: some regulators like ed markey from massachusetts are calling for an update to the children online privacy protection act. they say they are getting impatient with big tech's inaction. listen to this exchange during a congressional hearing when senator markey asked if they would support an update to copa. >> you had a chance to look at the child online privacy protection updates, do you support it or not? >> we would love to talk to more about -- >> listen, this is what drives us crazy. we want to talk, we want to talk. this bill has been out there for

years and you still don't have a view on it. emily: senior counsel of global policy at common sense media joined us to talk about the impacts of social media on children. >> i cannot help but agree with senator markey. this bill has been out for the last decade. companies have had time to come back with real concerns and instead, all they keep doing is saying, we want to talk, we want privacy legislation, and they will not actually agree to anything. kids are suffering and teens are suffering. emily: what would this bill do and what if he enough to protect kids online? ariel: it will be a huge step forward to protect kids and teenagers online and that is critical. a 13-year-old is treated like a 35-year-old, they do not have any additional protections online in america. except some in california. this bill would ensure that

teens, 13 to 15-year-olds, are protected. it would ban targeted advertising to children. it would establish a digital marketing bill of rights for teenagers, it would establish a privacy position at the federal trade commission, the enforcer, and it would ensure that kids and teens are protected on the sides they are on and that sides could not turn a blind eye and put 10 like they did not have young users, which we know is how many companies operate right now. emily: many of these companies make the argument that kids are using technology whether we like it or not, so someone has to build the experience for them. who should be building those products? do think it is youtube or facebook or instagram or tiktok or should these fees -- should these be publicly funded projects? ariel: it would be better if these products and projects were not being done by companies whose business model is profiling children and teens and adults and making money off of

advertising and data mining. it would be better if we could have support for high-quality education where the purpose of the product was not to collect as much information as possible or manipulate teens or children into spending time online. emily: where would that support come from? the government? would that be publicly funded? some philanthropic donor? should the companies banded band together and fund it themselves? ariel: i think the companies can be more creative than they are being now. there are ways to create compelling children's products that do not rely on collecting personal information or taking advantage of them or psychologically manipulate them. it would be great if we got additional government funding although i know that is a touchy topic now is always and it would be great if we could see other philanthropic support step up but there is so much the companies can do and they do not -- they have so much money, they could do a lot better with kids. emily: what do you see as the

biggest problem with kids and technology today? were problems? there are many. ariel: it is hard to have just one problem. we see a lot of interrelated problems. we see kids who are uniquely runnable, who don't understand how data collection works, and who are susceptible to advertisements. they are put in this environment rather profiled by company -- companies, targeted with unique ads and messages that are specifically tailored to them and their vulnerabilities. you are 18 girl wondering about dieting, you are going to be pushed extreme dieting content. you are a teen boy, maybe you are going to go down a radicalization rabbit hole because they think that will keep you looking longer. there are concerns about popularity and how many purist get more likes than you, there are concerns about unrealistic body image, unwanted spending because they do not rely things are advertisements, there is a whole host of issues facing children online. emily: that was ariel fox

johnson at the nonprofit common sense media. coming up, we will hear from the linkedin cofounder reid hoffman, why he is disappointed in mark zuckerberg and what mark zuckerberg had to say about it. this is bloomberg. ♪

emily: as new revelations kept coming from the facebook files, one of its earliest investors decided to speak up. reid hoffman, normally a staunch supporter of his portfolio companies, told me this. reid: good for her for coming forward. good for facebook for doing the research. bad for not -- did the research, discover things that were harmful, what are you doing about it? it is not matter the fact that you said, it is complicated or difficult. once you discover something that is potentially dangerous and damaging, what we should hear from the company is, here is the way we started making trade-offs against what might be our interests to solve these problems and that is what you want to see from companies in leadership. i'm disappointed. emily: why? reid: anything -- it is ok to

have done the internal research and not reported it. this is a problem, we are fixing it. but you then start to work streams to fix that. on one hand, you say we have these reports and what do we do? we disbanded the civics integrity group he would that does not seem like you are working on it. it is not seem like the problem is fixed. it is beholden on business leaders to say, when we had these problems, we work on them. we did not know this was going to be a problem, we did not know it was going to be an issue, fair enough. by the way, we are following what customers want to because they are clicking on things, but there are consequences and we should do something. it is not mean you can solve it perfectly but you should be working on it. emily: you have this research that shows that instagram can be harmful to teenagers, yet at the same time, you are exploring building social products were children as young as five or so. what is wrong with that picture?

reid: i think there is a chance where sometimes the product is great. it can be educational, learning engagement, connectivity. but you have to study it and get it right. kids, the whole reason we have childhood as we protect them and help them grow into adults. everyone has a responsibility. emily: can we trust facebook to be building the social network for kids? reid: i think they have a lot of trust for good reasons, because you are not even responding to the crisis the right way. to begin it, they have to be extra transparent, they have to say, here is our dashboards, here are our metrics, here are the ways we are trying to work on this and do things and that is the things that is incumbent upon them -- to not say, we have problems with the whistleblower. say, here is what we are working on, we know this is a problem, we are working on it. emily: heavy tart to mark and

how do you think he is handling this? reid: not yet. i think they have a bunch of internal discussions going on. i would not want to interrupt. i'm happy to help. i think he is a learner. i have hope that he will learn from this fee would -- from this. he will go, ok, i now need to make sure that we are being fully investing in protecting children and i think that is the stand the company is to be at. emily: what is the solution for regulation? reid: there is regulation but i think it starts with, what is the dashboard facebook should be managing? we have an engagement dashboard. we should also have other things. if it is causing -- we know certain kinds of content is causing body image issues or other kinds of things. we should add that to our dashboard and measuring to make sure that we are having a positive impact, not negative.

you don't need just one variable, just as they click on it. -- just do they click on it. that is the kind of thing i would want to be hearing from facebook about, we got it and we are working on it, these are some good metrics we should work towards and we are going to improve these metrics and report on them at least to our auditors and we will work on this problem. emily: is facebook too big to govern itself? if you have a company with even the wisest people in charge, can they really be making decisions about every single moral, ethical, religious, political issue in every country in every language? is that even possible? reid: it is never going to be perfect, there are always going to be errors. take for example the issues of governance in other languages. we have ai that is getting better on linkages. it is not quite there yet but it is within two or three years,

you have the equivalent of a universal translator. that is not a solve all the issues, there are cultural issues, there is a clinical revolution here, other things going on. that being said, one of the benefits of having a central service is you can invest in these protection mechanisms the order you invest in the ai -- mechanisms. you invest in the ai, invest in the conversations. there are things where we understand other people. emily: you do not necessarily think proposal -- not necessarily think facebook should be broken up? facebook india could be at its own thing. reid: i think the wrong answer is breakup. that is not to say -- start with accountability, start with transparency, see if any regulation. maybe you need to do a public-private thing. but breaking up means you do not have the resources to invest. think about it this way, i break it up and i have lots of 4chans and reddits and it is even more

mayhem. emily: do you think the algorithm is the problem and they should be choosing people over profit more often? reid: the algorithm is part of the problem but also could be part of the solution. only maximizing engagement, only maximizing attention, you are going to have problems. they may not be doing it for profit reasons, they may be doing it for strategic or just this is what people want, they are clicking on it, they are choosing at, but part of the point about exhibiting good governance is to say, we are going to have lots of engagement , but we are also going to pay attention to good health for them based on the research we are doing. emily: after that interview, he says mark zuckerberg called him to be delayed to address his concerns. reid hoffman tells me he is still supportive of mark zuckerberg running the company and describes and has a learning ceo, saying he is open to

changing. we will continue to watch what moves mark zuckerberg makes. next, a special edition of bloomberg studio 1.0 with sundar pichai. stay with us to see that. this is bloomberg. ♪ hey, angie! you forgot your phone!

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>> five: 30 in new york, nine: 30 in sydney. ghislaine maxwell guilty of five of six felonies she was charged with. she groomed and lured underage girls of sexual abuse. guilty of five of six felonies, including the most important charge,, sex trafficking of a minor. that charge carries a prison sentence of up to 14 years. we don't have sentencing but we ve