>> 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. coming up in the next hour, twitter's tepid results. another blow to the company already fighting a legal battle with elon musk. we talk about what it tells us about the state of social media. plus, more tech companies hitting the brakes on hiring. what does it signal about the future of the economy and what does silicon valley look like when the dust has settled? and finding a soulmate comes with a cost and inflation is not helping. singles are getting creative as the dating economy suffers from sticker shock. first a snap, then twitter dragging markets down, this only

fueling fears of a recession. ed ludlow here to break down what has been a sour and to the week. ed: yeah, happy friday to you, too. technology for clear underperformer, snapping three straight days of gains, which was its best day since may. the earnings season hit us in the face hard and we are reacting to inflation, to weakening advertising demand, pulling back 12 basis points. when you see a 12-basis-point drop on the 10-year yield, you pay attention. bitcoin is also caught up in this risk off mentality, but i like to see the bright side of life. let's look at this next chart and think about where the nasdaq 100 has been. we've been swinging between losses and gains, but we have seen gains, right? there's more green on a weekly basis and there is red in the

nasdaq 100. the s&p 500, the main gauge of u.s. equities, having its best week in one month. but there are clear drivers going on here. what is interesting is snapped is not a member of the s&p 500, but just such a dramatic drop in its stock after it scrapped quarterly guidance for the current period, said it was scaling back hiring, talked about a pullback in the advertising market -- you look at that chart on the screen, you say i have not seen a chart like that in a long time. that is a two-day drop, but it was 35 percentage points. that is a steep reaction to what was painful earnings for them. it raises questions for other countries as well. look at other movers on the day. for example, meta. also, look at alphabet, the parent company of google.

talking about the same macro challenges's not dead but also uncertainty. emily: interesting indeed. i want to zoom out and talk about what all these tech results so far have told us about the state of the economy. for that, i want to bring in wedbush managing director dan ives and tech economy ceo dan fitzpatrick -- david fitzpatrick. his twitter just treading water right now? >> twitter is trading on what is going to happen in terms of the must deal, in terms of how that plays out in either settlement or the ultimate need to buy

twitter, but those metrics firmer than fear, and i think it shows, especially when you compare the snap absolute disaster blaming everything except for the wind -- for me, twitter holding a bit better than expected, but it is trading now on what is happening in terms of that court case. emily: it was snap revising its forecast this year that kick started this market meltdown. what is your take on what we are seeing him snap? >> i think in the digital advertising business, some companies are in a lot better position than others, and snap is not at the center of the industry. i think it is at risk. i don't think that is the case for some of the bigger companies. his it's interesting to me when you look at what is happening with twitter.

it is a company that probably has gained a lot from the sheer publicity of musk's efforts and they are gaining users, so it is not as bad as we expected. emily: how much of what happened with snap and what we saw with twitter signal about the overall business? >> there's obviously a big drum roll into next week. snap -- even in a good economy, snap has had a lot of difficulty getting their arms around the business. i still believe when it comes to youtube and what we will see in terms of google, pinterest, and others, media is holding up a bit at her than feared.

i just continue to not use snap is the best barometer for what is happening in the industry. emily: there's a lot of talk about if the social media business model is sputtering. we are seeing facebook pivot entirely to a whole new future with meta, in part i'm sure because of some of the weaknesses they see internally. do you think it is what we have seen so far over the last couple of weeks or the last couple of quarters, a sort of indictment on the business model of social media? >> no, i don't. i think the pivots of what used to be called facebook has a lot of causes and a lot of them have to do with reputational management. i don't think the social interest -- the social media industry is at risk of failing in any way. i think the evolution is

happening faster than expected, particularly with tiktok's extraordinary billion-global-user rise. they are not as prepared, not as fleet footed now. i think google is the best position company of all of them. emily: you think google has the biggest but in the tech sector. why? >> it is embedded in the global economy, not the tech economy, the global economy. it is so euro. the google services, many are

just inconceivable for people to live without, and i think that is a huge mechanism for them. they have put themselves in a fantastic position over decades of building an incredible -- building incredibly well and enduring and useful business. >> i agree 100% with david. to me, the tech company in cupertino is apple. that is in an underestimated demand cycle still. you have a quarter of the base that have not upgraded in three and a half years. i think some of the parts, that continues to be our top tech name. emily: even apple is cutting back on hiring, cutting back on costs, cutting back on spending for various divisions. what does that tell you?

>> i think they are being prudent. you will see that across the valley from microsoft amazon and others, but this is sort of more prudent, and i think there's also other areas they are looking to spend on. i think next week -- i view this as wit and see how it plays out with apple. emily: would you say you are expecting better than feared results next week? >> i think it is hard to predict what will happen next week, but it was on a bloomberg article this week that i read that recession is almost inevitable if it has not started already, so any of these companies that were not preparing themselves by

battening down the hatches would be pretty poorly managed. i do agree, apple has done a phenomenal job, sort of like google, in its own unique way of building businesses that just cannot be stopped, so i doubt if they would be slowed much by a global recession. emily: we are actually going to be digging into this hiring slowdown later in the show. david kirkpatrick, thank you. dan ives, always good to have you. coming up, one tech company after another slowing or stopping hiring. we will talk about that and more next. this is bloomberg. ♪

emily: big tech is hitting the brakes on hiring, from apple and microsoft to netflix and amazon. silicon valley is cutting back on growth after years of bulking up. the entire industry bracing for a potential recession. alex burns has covered tech for bloomberg news. amazon saying they overstepped during the pandemic and now have to cut back. what are the biggest headlines you have seen in this rash of news from tech companies that they are pulling back?

>> i'm seeing a lot of pointing fingers at things like rising inflation and customers of folks who sell products on amazon pulling back spending. i'm also seeing the idea of macroeconomic uncertainty hitting companies that depend on advertising for their businesses. a couple good examples are in the second quarter results we saw this week from the likes of twitter and snap, both pointing to this macroeconomic uncertainty hitting advertisers and causing campaign budgets to go down. that means the places they depend on revenue are getting smaller. snap for that company gave some hints into what a lot of these companies might be thinking about. they said the pool of money they are making on the top line is getting smaller, so we are actually looking across our business and seeing where can we

optimize our bottom line, where can we optimize profitability? can we squeeze a bit more money out, and of course, like the rest of the companies you mentioned at the top, they are being really cautious when it comes to adding more headcount and more cost and which investments they are picking because it seems like right now we are in a bit of a choppy environment. emily: indeed. it seems like we are getting memo after memo from various ceo's saying we are slowing down here, pulling back there. some of these companies have not reported yet. what do you think they are seeing that the rest of us are not yet? >> i think each one is a different story. i suspect that the big companies are not seeing terrible at spending results yet. that could easily happen in the near future. certainly in the case of

meta/facebook. they really could have their first year-over-year decline. that would be a big change for a company that has had a historic run of growth after growth after growth for really well over a decade, but the thing about meta that i think people may forget is that the big advertisers are not there primary source of revenue. they are very important, but there small business and medium business are really there bread-and-butter. at this point, i suspect smaller companies are still willing to spend to strut -- to try to stimulate business, so my guess is that meta-'s results will not be shockingly bad, although they themselves even predict a growth is slowing. we saw that user growth started

to drop in certain key geographies. they have problems all over the place. they have an identity crisis. the metaverse is predicting too soon. i'm going on. emily: there's an interesting question of how these social media companies survive a recession went most of them were not around in 2008 and facebook was only four years old. i know that's when you were writing your book, but we don't have a lot of past experience to indicate how social media will survive a recession. >> the company in particular has zero experience. i was writing my book in late 2008 throughout all 2009, came out in 2010, so this was when the economy was in terrible shape. i barely noticed because at facebook, there was no evidence of it whatsoever. there really is -- unequivocally, you could say, mark zuckerberg has never been

through a real downturn. people who are young may not realize in 2008-2009, we had a serious recession. that is something very, very new . emily: obviously, mark zuckerberg has made a lot of big acquisitions over the years but was not able to buy snap, was not able to buy twitter, if that was ever really on the table, but could m&a be a possibility? could some of these companies buy or sell their way out of this? potentially if they feel like they have the cash to do so. for mark zuckerberg, looking at facebook, i think they have this no existential threat of the macroeconomic environment. he is also kind of dealing with the threat of users wanting an experience that did not originate on facebook. the tiktok-sized elephant in the room is something all of the meta platforms, facebook and instagram, are having to contend with.

that company in particular is betting on building and changing the facebook app and instagram app to better satiate user obsession with short form videos without trying to alienate the user base that they had. you saw changes with facebook and instagram for experience this week, basically making them look more like tiktok. buying their way out of it, i think that would be a big question, and if i were on the board at these companies, i would want to be taking maybe a conservative view because if you are not putting that money toward things like headcount and bringing on people to more quickly develop things in house, i would think those dollars would need to be spent pretty presciently if you're looking for somebody to keep up with the times among these social media companies. emily: i believe you were reporting at the time of the dot-com crash based on your own professional experience. what is your vision of how this

vision of silicon valley survives? >> interestingly, the business at meta-that is most embedded is the one they get essentially no revenue from, whatsapp, and i find that ironic. i think that they really will be ok for the short-term. i think it is likely a recession will be short if we have one, and i think they will manage their way out of it. emily: interesting. what are you hearing from sources inside these companies? from some of my sources at facebook, it still seems like good times. >> yeah or at least it seems like motivated times. you have the company prioritizing things like changes to their feeds, like i

mentioned, to keep up with the tiktoks of the world. you also have that not legacy business but existing business, the ad business basically funding their ventures. the bright shiny object that mark zuckerberg has indicated is where they're going. with these hiring freezes and maybe the bad pockets we are seeing at meta, there's concern around things that really matter to people on the ground like diverse workforces and what happens when you are not hiring as many people and how do they continue to contend with the bubbling up of misinformation going into the midterms. i think good times, depending on what team you're sitting on, might be the way to look at that. are you in the group seen as the future or the really necessary changes that are instrumental to making sure that the businesses maintain cultural relevancy with the users that are so important

to advertisers or are you in some of these pockets that maybe you are starting to fall below the line and are not seen as places that internal dollars should go to kind of catapult the company to go into and through? emily: snap just shed half its value. could snap be a target? >> it could be, but the current mood in the u.s. government and eu, i don't think it is a good time to make a big acquisition. i wanted to mention, i do think facebook, meta-will get through this, but zuckerberg's comments recently about pairing back staff sounded heartless. i think they showed an inexperienced manager, and that could deter future hiring. it really sounds like a bad place to work. "we've got a lot of dead weight, let's just get rid of it."

emily: appreciate you joining. much more ahead. stay with us. we will be right back. this is bloomberg. ♪

emily: here are the stories we continue to watch. chuck schumer recused himself from legislation targeting big tech -- a group calling on chuck schumer to recuse himself from legislation targeting big tech. no comment yet from schumer himself. the comer secretary says the u.s. cannot keep relying on taiwan for semiconductors. in a virtual speech at the athens security forum, she said congress needs to pass legislation to support the domestic production of high-end

computer chips. she called the package a sputnik moment for america. coming up, apple spending big money in washington. we will have more on the tech try and's lobbying efforts and why tim cook is getting involved personally. plus the prices on everything from groceries to dating apps rising. how singles are coping. this is bloomberg. ♪

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emily: apple has changed its tune in washington.

we disclosure figures revealed i bloomberg show apple has been spending more money than ever before, this is the tech giant is fighting a package of antitrust bills. mark gurman joins us now. it is understandable tim cook might have more sway if he visits washington personally than if he sends a team of lobbyists, but what do we know about how apple is changing tack? mark: it seems this is episodic. they really need to up lobbying efforts to fight against the bills and circumstances that could really up in some of their business models, right? it makes sense tim cook would be there personally talking to lawmakers, meeting with people on capitol hill and voicing apple's concerns with some of these bills surrounding antitrust measures.

tim cook and other heads of tech companies are trying to push new privacy laws. cook arguing that apple's privacy-centered approach to customers is good for consumers but means they should not have to face antitrust bills because it makes devices more private. that does not make sense to me, but it is what apple has been pushing. emily: here's the question -- is it working? is tim cook himself going to washington making the pushes? are lawmakers hearing it? mark: there have been some changes to some of the bills and some of the language that will make antitrust bills more lenient on apple needing to change things. ridiculous he with that privacy argument. it has been working in some respects. but of course, it is not only the u.s. where apple is

centering privacy efforts. one thing they are changing is the port on the iphone do in part to some changes lawmakers abroad have pushed. apple is really taking it from all angles. emily: this package of tech bills that would potentially curb some of the power of these companies, we are expected to see potentially see some movement on them next week. any likelihood they will pass? mark: i think it is too early to tell. if i were to tell you one way or another, i would just be speculating. i personally think major changes are coming to apple platforms. there's the digital markets act, the act you have been talking about, different laws that have been pushed from different lawmakers abroad and here at home, so i do think we will see fundamental changes either way. i don't think it is about if but when.

if it's this year, next year, over the year after, there will be a fundamental shift. emily: how is apple doing compared to other tech companies? they all have huge lobbying arms. mark: i think you can take a look at the spending some of these other companies are doing. apple has spent a few million dollars on lobbying this year which is an increase, but it's about half of what you see from maybe amazon or microsoft, but just because apple is doing less or even as much as what those other companies are doing for the first time, it does not mean it is not a big change for them. what has been pretty interesting to me is how different the apple relationship appears to be with the biden administration than it has been with trump administration. i feel like when trump was

around, you saw tim cook meeting with donald trump frequent, talking about him. you saw donald trump talking about cook often, but in terms of the relationship with biden, that has been very different. tim cook participated in a biden administration meeting regarding cybersecurity. you have not seen the lobbying that tim cook did with donald trump that you are seeing tim cook do know with joe biden. it seems like the relationship is definitely not as close. emily: interesting. much to continue to follow. thank you for your reporting there. meantime, back to inflation. on top of surging gas and grocery prices, single people are finding another aspect of life is getting more expensive -- dating. as costs loom, some daters are scaling back and being more selective according to data from dating apps themselves. what are we learning about how

the dating market has changed? >> i think we are seeing people have money top of mind when they are looking for a partner and that is changing the game entirely. tensions are rising. people are scaling back and being more selective because they are finding that -- [indiscernible] one woman i talked to said she spent on average about $200 a month on dating. now she's spinning about $400. people are being more intentional about who they are dating and what they are looking for and finding that they want to be with a person who is financially savvy and offers some kind of financial ability as well. emily: i hear a lot from single

friends that dating apps are already kind of expensive and you don't know for sure if we'll will get that payoff. other costs of a subscription to get that information enough? are people paying up or is it something that is discretionary, something they are cutting off given that pressure they are seeing across the board? >> i cannot say much about specific subscription prices on dating apps, but apps are saying although some people are being more selective about their dates, they are not necessarily stopping their love life entirely. a small select few people are. they are just looking for some partners instead of going on a more spontaneous date. they are making sure that they are being upfront with what they want, which is an extension of this dating trend called hard bolling, and if someone does not

fit the bill, they are not going to take a chance on that person. instead of maybe taking someone out to a really nice dinner, maybe going to a picnic instead or going to a museum or going to a farmers market. emily: i love farmers markets. nothing wrong with that. are people changing what they are looking for? >> yeah, we are definitely seeing that evolve. you mentioned americans are feeling the pinch from inflation. finding a person that is financially savvy is an increasingly attractive quality. daters who say they keep a budget have received 16% more matches and 7% more likes in the past three months than people who did not. nearly half of daters say they would like to find a partner who earns more money than them, so i think you are seeing people that

are looking for a person that they can weather a recession with, who they know they can rely on, both emotionally and financially as well. emily: interesting. thanks for bringing us that story. find more at bloomberg.com. coming up, the ethereum merge now has a date. this is bloomberg. ♪

emily: time now for our crypto report and there are new details in the story of the developer who was arrested for insider trading. coinbase is pushing back on the allegations. is coinbase defending this former product manager? sonali: there's a lot of questions and what is at stake is securities and digital asset securities. coybase's -- coinbase did cooperate with this investigation, but what is really in question is the definition of securities and if this is securities fraud. we have paul greenwell talking in a blog post the idea of seven

of the nine assets included in the sec charges listed on coinbase's platforms and none of these assets are securities. you have different regulators coming in and offering different definitions. he has often said coinbase has a rigorous process to analyze each digital asset before making it available on the exchange, a process the sec itself has reviewed. he talks about and sites -- cites the sec commissioner talking about a striking example of regulatory enforcement, so you see that in the way coinbase is interacting with those agencies as they comply with this investigation of an issue here where securities are traded before certain tokens were listed. emily: stay with us.

i want to talk a little bit more about ethereum's next chapter, the highly anticipated merged. a date has been set and if everything goes to plan, we should expect it to happen the second week of september, more specifically the 19. so curious what your thinking is around the merge and just how impactful it will be on the broader industry. >> this is a massive piece of news for it theory him and crypto more broadly. i think this is the biggest development in the crypto space. it will transform ethereum into an asset that institutional investors feel increasingly attracted to, maybe even compelled to own, and it could be the marker that represents part of the bottoming process we are going through in crypto. we may look back on the announcement as the single

moment that turned us into the crypto winner into at least a sideways move for we go into the up move. emily: with -- we recently interviewed kathleen brightman who did not have nice things to say about ethereum. >> tech has been under pressure for the last few weeks, operating under the longer you freeze, the more you receive, but it's just inflation. >> ethereum is the new infrastructure on which these products are being built. tasers is a tiny fraction of the size and has a action of the

developer community. part of the merge is going to lock up long-term investors, which allows them to earn a yield on their investment, which takes some out of the market and should be accretive to prices. i would put a positive frame on it, and the longer the investor, you will be able to access what amounts to a venture-style investment, where you could earn a yield that could be 8%, 9%, or 10% or more. i don't think it is a ponzi scheme. i think it is the new internet of finance and we are just at the beginning of that transition. emily -- sonali: speaking about transition and tribalism, when you look at how nascent ethereum is when it comes to valuation compared to bitcoin, who will win out? >> ethereum will win out marginally over bitcoin.

institutional investors have only been in bitcoin primarily and in the future of crypto, there will be crypto, ethereum, and i would argue a wide array of assets. that's one of the reasons bitwise creates a group of funds, so it will force investors to diversify holdings, but more than that, this will be a rising tide that lifts all boats. what is happening will catalyze new, interesting crypto, new opportunities in crypto, and i suspect bitcoin and ethereum will rise side-by-side. i think ethereum's chair could increase substantially compared to bitcoin, but i suspect both will be heading up over the next few years -- i think ethereum's share could increase substantially. sonali: this is a grand test of time when it comes to decentralized finance. there is so much debate, but how you know what the issues will be moving forward?

>> you don't know. that's the risk you take. there's no risk-free reward in investing, but if you look at what took place over the last cycle, we saw the rapid emergence of nft's, we saw 100 billion dollars plus flow into stablecoins, all built on programmable blockchain's like ethereum. as we start thinking about the new products we will see in the future, we are going to see growth in the fight and nft's and stablecoins. we will also see huge growth in things like web three interaction, gaming, digital identities. i think the next market cycle we are moving to is going to be orders of magnitude larger than the last cycle. that was really just a proof of concept phase. this next few years is when crypto goes mainstream. that is what we expect from ethereum and the broader industry. emily: how much bigger do you

think the cycle will be? >> i think it is many multiple times bigger is the answer to that. again, we saw -- if you think about crypto's return, what drives crypto's return? crypto booms when it develops products people want. it boomed in the early 2010 when people developed bitcoin which was a nonsovereign monetary asset. it boomed in 2016 and 2017. the most recent was when we had nft's and stablecoin and d5, but that just penetrated 1% of the market. i think the market opportunities for all those are to next. i think there are five or six other killer products we will see in the next market cycle, so i think the next boom could be 5, 10 times bigger than the prior boom. i think it will be the moment crypto goes mainstream and your friends, uncles, cousins are all interacting with the market via gaming, ticketing, traditional

nft's or stablecoins for payments. i think it is orders of magnitude larger. it is probably still a year or two off, but you can still see it clearly on the horizon and we are getting closer to it every day. emily: always good to have you. cio of bitwise asset management. appreciate it. coming up, apple tries to unlock the ipad pro's full potential with a brand-new multitasking system. is it enough? we'll have more on that next. this is bloomberg. ♪

>> after a few years of complaints from pro users looking to unlock the full potential of their ipad pro and its speedy new chips, apple recently launched stage manager.

the feature lets ipad users run multiple apps at the same time and even works better than before. the features exposure to the latest ipads and also works on computers running mac os ventura. users can click the recent apps and quickly pop any of those programs or workspaces into the foreground, but i don't think that this new system really cuts it. it is often confusing and sometimes hides key controls behind extra menus. it seems like apple came up with a solution that dances around a full obvious one, bringing full mac os multitasking to the ipad. the ipad has 11-inch and 13-inch displays and the same chips that power the imac. it can handle and should be able to make good use of multitasking features. pro users like myself want that full flexibility to run as many

windows as possible at one time and conduct several tasks simultaneously. the good news is that stage manager built in new technologies for the ipad like multi-window support, and that mean some of the underlying technology that would be needed to fully implement mac-like multitasking is now built in. only time will tell if apple will eventually fully unlock the ipad. the good news is that stage manager today is optional, so it appears even apple knows that one day it will need a brand-new solution for all ipad users. i'm mark gurman. this is power on. emily: don't forget you can subscribe to marc's weekly newsletter at bloomberg.com. meantime, there is a new social media app in town calling itself the anti-instagram. it requires you to take a photo

within a two-minute window every day. it is called bereal, and it took the top spot in the u.s. in apple's app store three days this week with 1.7 million new installs the week of july 11. if you love vintage apple products, this is the holy grail. steve jobs' order type of the first apple desktop computer is up for auction. it was handbuilt by steve wozniak in 1976, and it is one of 200 different models. right now, it is going for 230 thousand dollars. an apple one prototype was sold in 2020 for $470,000. that does it for this edition of "bloomberg technology." we have a huge week of tech earnings coming up with alphabet, mena, -- meta, amazon, and more.

have a wonderful weekend, everyone. this is bloomberg. ♪

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david: this week was all about heat, record temperatures in europe and the united states, concerns if europeans can heat their