announcer: from the heart of where innovation, money and power collide, in silicon valley and beyond, this is bloomberg technology with emily chang. ♪

emily: this is bloomberg technology. coming up, as snap to the list of big tech names laying off hundreds of workers. two execs leave for netflix. the slowdown in revenue growth being felt across the industry. netflix turning to ads as the answer. our conversation with joe wrote -- a conversation with joe rogan. the tough reality is that -- hasn't changed much since facebook are popular in 2014. people are simply not that into it. we continue our tech series after a new poll shows less than half of americans support president biden's student relief plan. we checked with the ceo of a textbook maker who thinks and fts could be a new revenue stream. the -- let's look at the market. stocks ending a turbulent month

on the download. katie greifeld with us for more. katie: two straight days we have opened in the green. two straight days u.s. stocks finish in the red. today, the s&p 500 down .8%. big tech closing down, not as down, but .6%. arc innovation etf, the poster child for speculation, relative outperformer today. still lower. all of this coming as we continue to digest commentary from fed officials sounding very hawkish that lifted two year yields up again. the philadelphia semiconductor index really led losses this is becoming a trend. we have seen this over the past four days, the index down over 9%. those chips, just really not catching a break. let's get specific and talk about some names.

there was interesting corporate stories as you talked about. bed bath & beyond announcing its turnaround plans are going to shut 150 stores and cuts 20% of its workforce, trying to reduce cost. shareholders not exactly giving a vote of confidence. shares closing 21% lower. absolutely cratering. you can track that with what we heard from staff, also going to cut 20% of their workforce. investors clearly cheering that a little more. shares of 9%. you did see other social media stocks left as well. snap did reveal revenue jumped 8% or so in the third quarter. that helped meta-platforms, up 3.7%. emily: thank you for that. i want to get back to snap. scaling back on investments to rein in costs after a broader pullback on ad spending. staffing its sales snapchat's

parent company, the latest in waves of layoffs. let's get the latest with alex burrito. this is a pretty big cut. they are cutting a lot of businesses that were generating a lot of those. -- a lot of bugs. >> it does not just stop that headcounts. snapchat also rolled out a number of projects like the pixie drone, which flies around and takes pictures. many games within the apps. a lot of these projects are falling by the wayside, either being killed or scaled back. all of this has basically come to a head as the company said, the ceo said in a memo that revenue growth for this quarter is going to hit single digits for the first time ever since they were a public company. they are refocusing on anything that is monetize a bull.

on their ad business and any future potential places to make revenue. calling basically everything else. emily: also, jeremy gorman going to netflix. we recently had jeremy here on the show. what do you make of this? >> this is part of this restructure. all of jeremy corbyn's businesses are shifting to a new chief operating officer that they have promoted from their engineering team. i think an analyst at d&b securities summed it up best. they said, we don't really know who's in charge of the ad business. there will be another part of this process to ensure leadership at snap can show they can lean into the world that jeremy is exiting. she is a seasoned ad executive. she is strong on the ad sales side and has experience in other tech companies. they had of -- they have a bit

of a gap to fill. the business is the moneymaking arm of snap. they will not be reporting to a brand-new executive. investors are happy to see cost cuts today, but i will guarantee that is going to be a place they are watching because that is the bread and butter of snap's topline. emily: has been a lot of tumult in social media for different reasons. meta are laying off a bunch of contractors and doing a big pivot to the metaverse. twitter is embroiled in a lawsuit. tiktok is fighting content moderation. what kind of winning on engagement. can you compare snap fortunes with other competitive platforms? katie: it is interesting. snap has benefited from its reputation and prowess with the younger generations. advertisers go there to spend

money. that is one of the things that is top of mind, snap owns the generation. now you have tiktok, who has also done well to win over the down -- and the business of those younger audiences. you have tiktok leaning in and pushing in on snap and threatening their core user base. and then you have places like meta, and google search and youtube in the mix, which are a bit more dependable for advertisers. if you are looking at where is the money going, we think the last few earnings cycles are not going to snap. tiktok is a private company. we will see. meta and youtube seem to continue to rake in the cash. it is definitely a fight. i will toss instagram of the mix as well. it is definitely a battle that is region that weep -- a battle that is raging.

this kind of podium they have been on of owning gen z, owning the teens and twentysomethings, that is coming under threat in a way they haven't seen before from the likes of facebook, instagram or youtube. emily: alex barinka. thank you. as we mentioned, two snap executives going from snap to add business to help netflix launch their ad platform. jeremy gorman along with the president peter naylor joining netflix in september. here to tell us more is lucas shaw. how -- is this for netflix? >> two of the top executives in the digital add business right now. peter naylor in particular, though jeremy gorman is more senior. peter naylor helped to build the -- at hulu. netflix has spent the past couple of months, if not longer,

looking for executives to lead the charge for them. now they have two solid people. emily: at this point, what do we know about netflix's ad supported -- and how it will compared to disney? >> we know it is going to give you either -- either in the final three months of this year or at the beginning of next year. my reporting has suggested it will cost about half as much as basic netflix for think eight dollars or nine dollars. there will be advertising in some programming, but not all. no advertising in kids programming at first. no advertising and new movies. it will be before and during some programs, but not after. they are aiming at four minutes per hour. netflix, disney, hbo max are aiming for a low advertising load and they can charge a lot for those advertisements. they don't want to have much

more than four minutes per hour. easier said than done. we will have a better sense of what this looks like when these come out. emily: a couple of interesting headlines from dow jones. disney exploring an amazon prime-like membership program. another that netflix is looking to charge premium pricing for ad supported tear, which is not sara lee a surprise. what do you make of these? work of the disney news i think makes a lot of sense. they already have a bundle for their three streaming services and will charge for an annual pass where you can pay one price and go again and again, with the exception of -- disney is the one media company that has a loyal fan base. they love the brand and the characters. crying to create one bundle for super fans that people can pay

and reduce the number of cancellations for some of those services makes sense. as for netflix, i do not think that is really news. both the journal and we have reported before that they are trying for premium prices. emily: that would make sense. thank you very much. twitter has subpoenaed stanford university as part of its legal battle with elon musk. yes, a university. we will tell you i next. this is bloomberg. ♪

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emily: let's get the latest on

the elon musk twitter trial. the billionaire asking for more time to dissect the claims of a whistleblower. also, elon musk wants to talk to his alma mater stanford university. let me get this straight, we thought it was twitter subpoenaing stanford, but it is musk. why would musk want information from stanford university about the twitter field? >> we don't know for sure, but one of the twitter board members, a dr. lee, works at sanford it is one of the ai experts. it could be that. it could be he wants to check and see who she had conversations with among colleagues about problems with the deal. emily: where exactly could this lead? >> what is going on here is both sides are trying to put together

their cases for the october 17 trial. mr. musk wants to know what conversations the twitter board members have had with people about this. they are looking for material to help him justify walking away. emily: well, obviously this case is changing by the minutes. yesterday we learned elon musk wanted to get the trial pushed to november. now he is potentially trying to get it pushed further action to december. what do we know about what musk is asking for at this point? >> they are asking to push the trial to late november, early december, to give themselves and twitter folks more time to dig into the allegations of the whistleblower that have emerged. people need to find out whether his allegations are substantial or sour grapes.

this gentleman was fired from twitter as head of computer security for what the company says were performance issues. it is going to take time to dig into this. they are running out of time in terms of discovery. emily: late november is thanksgiving in the united states. that leads to potentially december. what is the likelihood in your view that this trial gets moved? when will judgment -- when will the judge make a decision? >> we do not know when the judge will rule. most believe she is going to grant more time because the emergence of this gentleman was a surprise. there is some inkling there could be other whistleblowers coming down the pike. there could be a need to push it back in the interest of justice. emily: here is the question. elon musk said he was going to

buy twitter with no diligence. that is on elon musk. why are these additional claims relevant? >> the whistleblower raised issues about lax computer security and privacy concerns. if twitter did not disclose those things to mr. musk as part of the deal, even though he didn't do due diligence, they still have legal duties to disclose things like that, representations and warranties. if the judge finds they should have disclosed those things but didn't, it could sink the deal. emily: lots going on here. we appreciate you here to give us the play-by-play. jeff ely in delaware, very busy guy for us. thank you. two of the world's most influential ship companies in the midst of their legal battle.

-- is suing qualcomm for trademark infringements after qualcomm bought a new video which uses licenses that can't be transferred without permission. armor created much of the underlying technology for mobile networks. coming up, why not even joe rogan may be able to save mark zuckerberg's metaverse. this is bloomberg. ♪

♪ >> you won't be able to have this experience in the future where you are sitting in meeting and your wife texts you, it pops up in the corner of her classes

and you want to respond but don't want to pull out your phone. that would be rude. so you kind of twitch your wrist a little bit, some super discrete motion that no one even knows you are doing and you just sent a message. >> that seems like a massive distraction. people are already distracted by their phones. people get a text message and they're like, hang on a second. you're like ok. watching someone not talking to you anymore. now they are going to be looking at these classes and thinking text messages. emily: just some of mark zuckerberg's lengthy conversation on joe rogan's podcast. three hours the interview. an opportunity to defend meta-'s pitched augmented reality. as you just heard, zuckerberg's vision is making a tough reality. there there's a lot here.

overall, what do you make of how mark zuckerberg portrayed his vision and how joe rogan reacted? >> the thing that was striking to me as somebody who has followed this for a long time is how little mark zuckerberg's metaverse, how little that vision has changed. over the last six months, we have been talking about it as if it is this brand-new saying. they are spending millions of dollars, forgetting that facebook purchased oculus, the company that seated virtual reality, in 2013. even before spending $10 billion, it had spent millions of dollars on several devices. they had a super bowl ad in february. it really has not gotten a lot of attraction, all things considered. part of the reason is what we just heard, this pitch, which is that you are going to want to put facebook inside a virtual

reality and strapped it to your face, it's just not that compelling. they really still haven't figured out a way to sell it. for three hours with joe rogan, we saw zuckerberg basically trying every trick he could think of to sell it. coming up short, i would say. emily: i had heard that texting example from zuckerberg before about his life sending him a text and how vr could be cool to help him check a text without people noticing. this one was new to me, take a listen. >> there is something that is so primal about it. i don't know. since then, i have introduced a bunch of my friends to it and that has been fun. we trained together and we wrestled together. there is an intensity to it that i like.

emily: may be zuckerberg's truck -- is trying to show his human side. but there is a naivete there, a falling flat. >> one of the most successful tech people in the world bringing the cringe to joe rogan. maybe it wasn't clear, he's talking about jiu-jitsu. mark zuckerberg has gotten into combat sports. he was trying to bond with joe rogan. i think, jokes aside, this shows this company is trying everything they can to connect with people. they tried super bowl ads, demos , and now zuckerberg is trying on this alpha male, i am into fighting sports, to convince joe rogan's substantial audience. joe rogan has the most

successful podcast in the world, to give oculus, or facebook the -- shot. emily: let's talk about what he had to say about screens, television and how we imagine all of these different innovations working together. take a listen. >> i want the time people spend with screens to be better. today, so much of it is just sitting around. in this beta state, consuming stuff. i don't know. emily: i wonder what he means by beta state. and if his vision of screens is actually what people want. >> it is hard to understand if you are trying to connect with the method and convince -- is great that you want to start out by listing -- the most popular

entertainment medium in the world. i think what he was trying to say is that television is passive and he is trying to use this joe rogan, alpha-beta meaning. but it is kind of a head scratcher. it goes to show how all over the place the marketing has been here. it works in certain ways. these -- devices have sold reasonably well as videogame consuls. in terms of trying to broaden this out into something that regular people are going to use for meetings or travel, we are not anywhere. emily: if you have three hours, that's marker berg -- mark zuckerberg on joe rogan. -- also wrote about it on bloomberg businessweek.

coming up, less than half of americans approve of presidents -- president biden's student debt relief plan. later, how entities could change the textbook industry. this is bloomberg. ♪ what if you were a global bank who wanted to supercharge your audit system? so you tap ibm to un-silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai.

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emily: welcome back. we are continuing our education tech coverage as we enter the school season. president biden's unprecedented student loan cancellation getting mixed reactions. a new political survey shows

only 48% of americans support biden's levels of forgiveness. lead ceo of the -- platform betterment. so, not necessarily a popular plan. not everyone is supporting this in there is a lot of debate. where do you stand? >> there are economists on both sides of the issue. i think we can agree that student loans are a major problem for the country. there's one point $7 trillion in student loan debt outstanding. and also, this generation is more in debt than any a generation that has come before. i think where the conversation gets tricky as what to do about it. i am a believer that what to do about it lies in technology and the federal government can play a part. but, business also needs to play a part. emily: how so?

>> the first thing that is very true is that folks are not good at saving. not good at understanding if i have another disposable dollar, where should i put it? there is a regulatory and technology conversion that is exciting where we now can develop tools and we are developing tools, to really say to a student loan holder, what should you do with your next dollar? instead of going to starbucks, what would five dollars a day do in tombs -- in terms of your debt paydown? both your timeline, cost and how can we set you up for a better future? that is one thing we can do, offer technological solutions. the other thing we can do is partner with employers. one of the other great issues of the day, a retirement, employers have a role to play in supporting their employees. emily: how do you see businesses

and employers playing a bigger role? how could that also impact the choices that students, prospective students make about how to access education? >> great question. for students that are not that excited about the current approach the government is taking, one of the concerns of this hazard issue of, are people going to make choices about their education they are going to expect to be forgiven by the government and therefore make choices that are not the best for them, similarly, we'll cosco up because the schools know they can access this incremental funding? this is a real challenge that we are poised to help with. number one, there is more legislation coming down the pike in the secure act 2.0. on the table later this year, talking about tax incentives for businesses to help potentially even with a match where you link

a 401(k) with student loan management. imagine if i can't access my company match for retirement because i'm paying down debt from a student loan and i just don't have an incremental dollar to save. here's an opportunity for the government to say ok, whether you saved by paying down debt, your employer can match that contribution and that is a powerful way for employers to be able to channel dollars where they are going to best serve their employees. emily: what would be your message to rising freshman right now considering a college education who have innumerable online learning options available to them and companies that are producing degree requirements. you've got people out there saying i do not need a true year degree. >> there is no one-size-fits-all. on average and over time,

education has helped lead to better outcomes. for society. but i think we could talk about whether that education is about starting young and getting out of the gate stronger, or whether it is it about four year college. there are vocational programs and other ways to go about it. all of these things have costs and each has a different arc. regardless of the path an individual chooses, because there are many paths and they are more varied than they were a generation ago, there is still going to be this problem of people needing to borrow to fund any of these. they are borrowing, sometimes not finishing, borrowing for that and these are costs that they need to understand how to tackle. that is the problem we are seeking to solve. how do we help employees who have taken on this debt? how do we help them tackle debt and the most responsible way to give them the best long-term outcome. emily: what what do you -- what

would you like to see next from washington? >> incentives for companies that look like the incentives for 401(k) and other retirement savings would be a great place to start. emily: sarah leavy, ceo of betterment. thanks for weighing in on what has been a raucous to date. coming, could the future of textbooks be and fts? we have pearson ceo andy byrd. this is bloomberg. ♪

emily: a new way of teaching and learning. we are talking about how and fts could change the game when it comes to textbooks. let's take a dive into that with

andy bird, ceo of pearson, one of the world's largest textbook publishers. i remember buying a lot of very heavy, expensive textbooks. explain to me how and fts to change the industry. >> thanks for having me on your show. i remember those days as well. the heavy textbook. at pearson, we are leaning into digital technology as a way forward. now if you subscribe to pearson plus, you get those textbooks for just nine dollars 99 months. it is one example of how we are looking at technology to move the whole industry, the whole sector forward. the pandemic acted as an accelerator in terms of transforming the world of education in the world of learning. i would be interested in how

technology and how pearson can utilize technology both in terms of and fts and blockchain. the notion of having a transparent ledger, the impact that would have on authors is very interesting. it also allows us to deconstruct the textbook. once the textbook is in digital form, you can look at ways of offering not just text by the chapter, but video. you see some examples on the screen now. a lot of video, animation, graphics, audio suddenly starts to come into play as you look at the way learning and textbooks are evolving. as a company i think it is very important we lead research and development in that space. emily: give me an example of how a textbook could be an nft and

how that could survive and be passed on to multiple students and how pearson could still potentially profit from it even if we are talking three or four students down the line like a used textbook good >> think of a textbook comprising of various learning modules. [please stand by] >> the author or creator of that content, it could be a video, audio, and would then be able to

participate as that learning module is then utilized down the blockchain, as it were, and the blockchain acts as a transparent ledger and make sure everyone gets paid. eventually that could lead to greater accessibility and affordability for education as you look globally emily: call me old-fashioned, but as much as i didn't like carrying textbooks around, i feel like a paper textbook -- i like reading a physical paper, a physical book, i like underlining it, folding down the pages. is there a place for that in the future? >> absolutely. we still give you the option to get that printed textbook. and we will continue to invest behind those. as an analogy, i like music, the recorded music industry. if you think of the textbook as

the vinyl record and that you text as being the cd. and of course you have mp3 players, the and you have spotify and others where you pay a subscription for access to 40 million songs. in education, up until recently we have been stuck in the cd. the great opportunity as you can still buy the vinyl record, you can still buy the textbook but the greater opportunity is how we utilize technology. i mentioned blockchain, augmented reality, virtual reality is going to lay a significant part going forward. what really excites me to be leading pearson at this moment is all of these great opportunities to harness the great technological innovations happening in other sectors like music and entertainment and the introduction of 5g and having the ability to store everything on the cloud. the way the devices are developing both in terms of

mobile phones and the like and bringing all of those together to make learning more accessible and more affordable to more people. through learning, learning for your lifetime, we will improve ourselves and our outlook on society. emily: how are you thinking about the metaverse and how that could potentially impact the textbook industry? obviously it is early days. >> i am in los angeles, you are in san francisco, we could both be in the same classroom in the metaverse. we could participate in experiments. we could go up to the whiteboard and annotate each other's notes. we could both, at the click of a button, be transported back to ancient greece and to be in a greek play. were immediately then transported into the amazon jungle.

or inside a cell structure. or if a medical student, look at procedures and practice surgical procedures without having to use real bodies. there are many applications. urban k-12, the ability to open the eyes and open the world to those students who previously had never had the opportunity to go visit some of these places in the world and have some of those experiences, the metaverse is an interesting use of technology to enable that. emily: fascinating. how much has changed since i've been to school and how much could continue to change. andy bird, ceo of pearson. >> my pleasure. emily: coming up, fears of recession accumulating. the ceo of pilot says fear not. he will tell us why next.

this is bloomberg. ♪

emily: as some analysts raise the alarm about the downturn worsening, one company says despite all the talk of layoffs and fears of recession, they have found evidence to the contrary. waseem daher is the ceo of pilot, an accounting firm that specializes in cfo services. bookkeeping, tax prep.

he joins me in studio for more. there's a lot of gloom and doom out there. we've had guests who said there would be millions of layoffs. we saw snape announce a 20% cut across the board. what are you seeing that tells you it is not so gloomy? >> great question. we saw the same stuff. all the memos in the headlines. we said, let's look at the data. we are the largest -- accountant in the united states. we have thousands of customers. we processed $100 million in transactions last year. what does the data show? we looked around at our customers and two data points emerged. in june we found that 86% maintained or increased headcount. from a revenue growth perspective, q1 was soft for folks. we saw a revenue growth to be comparable to late 2021. indicators are looking good.

emily: so, what's the discrepancy in the numbers? >> here's what's going on, especially in the early and mid-stage, two things are happening. the first is that there is definitely paying from the downturn but it is more specifically felt by companies who really have nice offerings -- and the second is the dynamics in late stage in public markets are very different than what you see in the earlier mid-stage ecosystem. emily: let's take snap as an example. 20% cut. meta is cutting contractors. alphabet is in the middle of a hiring freeze. apple, they are going to pull back on hiring and spending plans into next year. they are being very deliberate about their spending. wouldn't it be a more difficult

world for startups that are relying on whatever they have in the bank to survive? many of which are not profitable? >> you would think so but what is interesting is, let's say you are a startup. you are targeting a $60 billion market. because of the downturn committee -- maybe it is only $40 million. you are concerned about getting .05% adoption, you are not running into the ceiling. these public companies absolutely are. when there is a 20% or 30% reduction, they are going to feel that. emily: your business's interest in. -- interesting. i am interested in what you are seeing. are more companies turning to outsourcing with services like yours rather than having these systems internally because they are trying to limit their own internal headcount? >> there are two phenomenon. folks that might have built function in house are more flexible on relying on an external provider.

the tone has changed. in 2021, it was the era of growth at all costs. now you need to know your metrics and you have to be really sharp on the numbers. law firms come to us to get a better handle. emily: how are you handling the downturn? how are you making decisions? do we continue to hire? >> one of the things we feel strongly about is the amount of money you spend cannot be a function of how much you have in your bank account. you have to earn the right to spend. it is called the burn multiple, the amount of new recurring revenue you get in a recurring period, those need to stay in lockstep. we also try to precomputed. revenue trends are x, here is what we do if they are wide. we don't have to be surprised if that situation changes. emily: some investors like sequoia, bezos's expedition.

>> jeff bezos has not given me a call. [laughter] >> it has been interesting because the dynamics are highly variable depending on what the company is up to. one of the things we like is you have to be -- you have to do your accounting. even in talk -- even in tough economic times you're not just skin do your tax return. emily: does a more hawkish fed change things? >> it is interesting because i think the public market dynamics , we are many years away from being a public company. emily: the -- markets are -- layoffs. there is belt-tightening. there are companies making hard decisions about their priorities. >> it is true. if -- that hawkish eye on your bank account. now more than ever because access to capital is comparatively limited.

emily: as you look ahead over the next year, what are some questions you are going to be asking the companies you work with to give you clues about how the market is changing? maybe this is what the data says now, but maybe there is delay? >> sure. our cfo services team works very closely with a bunch of our customers who help them build out their own financial model and forecast and budget. we will also see good data about what happens in fundraising markets. there's a lot of pent up dry powder that is not being deployed. depending on -- markets we will see different results. emily: are you in the middle of fundraising? have you had conversations with investors that have led you to think one way or another? >> we -- in 2021 and have a healthy nest egg. it is going to be highly variable. emily: earning the right to spend. thank you for joining us.

>> thank you for having me. emily: that does it for this edition of bloomberg technology. coming up thursday, george kurtz will join us to talk about the state of cybersecurity. don't forget to check out our podcast wherever you get your podcasts. i am emily chang. this is bloomberg. ♪