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good morning welcome to "squawk alley." joining me today, melissa lee and morgan brennan carl is off today. also joining us this morning, walter isaacson, president and ceo of the aspen institute and shares of facebook continue to slide this morning the social network under growing scrutiny amid reports of data misuse by a political consulting firm julia boorstin is here with the latest joo yo julia? >> facebook shares are down in the 3% today on reports that the ftc is probing facebook for use of the personal data this after the stock's 7% decline yesterday. the ftc saying, we are aware of the issues raised but cannot comment on whether we are investigating. we take any allegations of

violations of our con sent decrees very seriously as we did in 2012 in a privacy case involving google the white house just this morning weighing in saying they bant to ensure americans privacy rights are protected and they're unaware of any law enforcement investigation. now in about two hours facebook is hosting a last-minute internal meeting the deputy counsel is expected to lead the internal q&a session. it is my understanding that mark zuckerberg is not expected to participate in today's meeting but he does host an all hands meeting every friday afternoon now over the past few days a range of lawmakers from the eu, uk and capitol hill have raised red flags and have asked for investigations and for zuckerberg to testify. and analysts are now evaluating potential regulation and the response of advertisers and consumers. now cambridge analytica, the data firm that allegedly illegally purchased data from 50 million facebook users denies wrongdoing, saying it was working in good faith and

cooperated with facebook after it was alerted that data protection regulations were broken facebook also denies wrongdoing. we heard no comment yet from either zuckerberg or coo cheryl san sandberg i do expect them to get more details on how everything transpired and what action they'll take next. we look forward to hearing what they have to say jon? >> absolutely. a lot of people have to hear what they want to sachlt now let's get to job lipton. >> a lot of traders and investors may not know his name but they're a lot more familiar with it. alex stamos is now front and senter in this latest controversy. he plans to step down from his post in august according to reports. in a tweet stamos said he was still employed but his role had changed to exploring emerging security risk and working on election security. facebook did not immediately respond to requests for comment. staple yo stamos tweeted several times over the weekend detailing

kaim's ukai cambridge analytica's data they said they should be alleged publicly down at facebook hq, stamos is clashing with other facebook executives about how much the company should have been disclosing about the efforts of russian backed propaganda. stamos wanted more disclosure which reported conflicted with the views of facebook's policy team led by cheryl stanberg. stamos, very familiar with the impact of russian cyber activity remember, before he joined facebook, he was the chief information security officer at yahoo. they were hit by the historic data breech in 2013. the company later revealing that all three billion of its accounts were hacked in that theft. the u.s. government later charging russian intelligence agents with master mining one of those breaches jo jon, back to you >> all right thank you. walter isaacson is with us walter, first of all, good morning.

>> good morning to you thank you for having me back >> always great to have you. really looking forward to your take on all of this, especially for now the impact longer term on the company itself. very rarely do tech giants really get sidetracked by policy issues but the stocks can be hurt nonetheless. >> oh, i think this will have a huge potential impact because facebook was founded based on trust. it was real users and real colleges you knew and then as they grew, it got out of the colleges but it was still real friends and then eventually people were no longer verified they were no longer awe thenlt indicated. so they became a whole lot of fake use of facebook and they started harvesting your data a little bit more. so that notion of trust that most important thing that was part of american express that mark zuckerberg put in the dna

of facebook is affected. so if you have to really cut back on that because of this investigation, i think it will deeply hurt the revenue model facebook is come to depend on. also, that model comes to depend on engagement, clicks, sharing things and that tends to insent more inflamatory behavior this is something that mark zuckerberg raenecently wanted t scale back on by having the news feed going back to friends, family and people you trust. so all of this comes together in this one big bang of a crisis with them. >> walter, yesterday hedge fund manager made the case that facebook should be regulated like utility what do you think? >> well, no. i think that the answer to this

is not necessarily more regulation like a utility as if it were a common platform. in fact, one of the problems is that by being like a utility it takes no responsibility, say, like a phone company or a electric company for what people do on that platform. i think it should regard itself more of a publisher. it has to take responsibility for the words that are put on that platform and this is something that is difficult for them to do but it's not something that i personally think the federal government should be involved in regulating what words get put on a publishing platform. >> walter, i agree with the notion that the business model could be changed because of future regulation. but let's say users simply do not care you know, let's say people just hand over their data just as they do now and what is funny is that everybody knows that the data is being mined and sold and yet they still do it so if there is no public

outrage, walter, would there be an impact here >> well, i know my data is being harvested by google, by amazon, by facebook. and i don't particularly mind. it gives me advertising and suggestions that are more relevant to e. and this is something i'm comfortable with i think this is gone a step further which is a massive sort of harvesting of data that is done in a way to help russian propaganda influence our election this just getting into a creepier area. i teach a course at tulane university here on the digital revolution i got 75 students. all they can talk about in the past week is oh, i didn't know facebook was doing that. so i think when you start losing the trust of undergraduates, you're going to be -- it is going to hurt your business model. and if you have more restrictions on the type of personal data you can harvest

and then sell, that will hurt the business model >> all right walter, stay right there julia has news from google julia? >> john, google is ramping up the efforts to fight fake news and announcing the google news initiative which is aimed at helping journalism thrive in the digital age by supporting journalistic outlets the search giant says it's committing $300 million over three years to helping publishers who many have in the past criticized google for giving away their content for free now google helped to -- hopes to help them generate revenue with its technologies google says it will weight search results to authoritative searches by identifying verified news sources and says it will work with news organizations to combat misinformation and to fund digital literacy campaign now to help publishers make money, google is giving them tools for everything from creating vr experiences to identifying when readers are

prone to be converted into paying subscribers now to help journalists do their jobs, google is providing a tool set to do everything from setting up secure servers to artificial intelligence to help reporters with transcribing interviews and analyzing data sets now this follows google facing criticism. as last month it was faulted for the spread of fake news after the parkland shooting when it highlighted a conspiracy theory video in a trending section. about a year ago 250 brands boycotted youtube over ads appearing next to inappropriate content such as videos promoting terrorism, drawing criticism for failing to pull down the videos faster last year google gave publishers ability to control how many times users can visit the news sites free of charge many publishers said that wasn't enough to adequately support their businesses we'll see how this he respond to the changes announced to day back to you. >> thank you, julia. walter, so you got plenty of

experience in the media category with "time" and cnn and more is this another case of lucy and the football we've seen google and facebook play this game we want to help you. but really they end up helping themselves or, you know, is perhaps google taking advantage of the heat that facebook is face right now? >> if you really want to help publishers and you want to insent real reporting and real news, you are going to need a fundamental change one of which is there's got to be some payment system for good journalism instead of 80% of the advertising dollars going to google, facebook, and the like google wanted, it could have a small revenue model just like a radio station gives out revenue every time a royalty every time a song may be played so you could have micro payments, small payments, revenue models that incentive

good journalism that, is real rather than some of the sayings that i think are just window dressing secondly, i think, you know, cutting back on the anonymity, this is poison twitter it has poisoned facebook now it has poisoned the comment section on any news. i think we have to get back to a period in which people have to take some responsibility for what they write and publish. so if i were google, i'd be looking for ways to say we're going to have some revenue sharing model where real good news organizations get curated and put up on google and can actually make a buck doing so. as you said, it's lucy and the football if you're doing all these things but you're still decimating somebody's business model, it's not going to help journalism >> yeah, maybe a little like amazon looking at those closed toys "r" us stores for their own

purposes great insights thank you for joining us >> hey, thank you for having me. >> meantime, oracle down sharply this morning more than 9% it's the s&p 500 lagger at this hour quarterly profit exceeded estimates but revenue came in just shy of consensus and guidance for cloud in particular the revenue in that segment below forecasts. mark hurd will join us on thursday. >> interesting the stock usually sold off it sold off after earnings the l last couple of times >> investors keep coming back. >> crm is up still to come, much more on facebook's data crisis and scandal and selloff means for investors. uber halts self driving car sests after the first known death of a pedestrian. what the accidents means for the automotive autonomy industry the dow is back in the black of the year with the gain of 144 points s&p 500 up 5 1/2

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facebook continuing to slide this morning as a fallout intensifies over the data scandal. joining us with more on the impact, stock impact specifically, layer i didn't remember larry hafferty. facebook is one of the second largest holding and that is 300,000. >> in the firm >> in the firm okay so what do you do here the interesting thing about what is going on with facebook is as

big as this seems, the reality is that facebook has been an underperformer relative to the market for the last five, six months or so >> if you look at last year, the tech stocks were just fine so we can give them a couple months without getting too worried. i think you have to divide this issue between the financial and the sociological if you just look at the financials, the numbers you want to buy facebook. it's just very, very cheap relative to the growth it went up 60% in the last quarter. there are sociological problems and also financial problems. the first financial problem is that margins are going to be compressed and i have a saying, melissa, if you live in the land of the cannibals, you better understand what they eat. in the tech world, they eat margin compression so what other people are going to do with the stock when margins kpre margins compress is something that i think you have to be cautious about so sociologically, you have a very, very big problem with this i think this is not an

irrelevancy but one it's hard to figure out exactly what the financial costs are. you can take the case, i think, of johnson & johnson and tylenol and really use this to move up the reputational image of the company or on the other hand, kit go t it can go the other way. zuckerberg has to own this he has to take responsibility. former naval officer and the captain runs the ship. he can't hoist off the problems on somebody he was dealing with and slipped under the curtain. >> i like how you divide into the two different buckets. don't the buckets sort of collide at some point? i mean we're thinking about facebook's growth and you're talking about the growth rate for the year on which you value the company, doesn't that come under threat at all if there is increased regulation and shou they collect data and what they do with the data >> absolutely. and i think that basically the stock is so cheap right now that

the numbers that are on trailing earning clz earnings which is where i work require it to be 25 to 30% last year it was double. that facebook has been relent unless converting dollars unlike google which builds driverless cars and science projects and the incremental margins go all over the place facebook has been a paragon of consistency. we know that has to change >> given that, given that the numbers say this stock should be doing a lot better than it is, isn't there so much riding on whatever mark zuckerberg says next everybody wants to hear from him. you know, in legislative halls around the world, employees want to hear from him there's been this theme over the past few years look how much he's gotten better at presenting himself. doesn't very to say something and announce more changes and finally get ahead of this? >> i absolutely agree with you, jon. and it's his responsibility to do it.

he's got to do two things though he has the responsibility to the employees. i think he recognizes that there is a meeting going on now. there is another one going on friday i think that's entirely appropriate. but he also has a responsibility to his investors he has absolute control of the company. so there is really no traditional check and balance on what he does however, he can signal to investors by buying the stock. the company has $41 billion in cash the numbers now suggest that purchasing it should be -- so along with this i think if i were on the board, i'd be recommending to mark zget things right with the employees right now. get things right with the users and also get things right with the market tell them that in fact the directors think that the stock is cheap by buying it. i want to sit here on the sidelines right now rather than stick my neck in the oven and see how mark responds. it can go either way it can be johnson & johnson or it can be something else

hopefully it's johnson & johnson. >> how closely are you watching the potential for the ftc to be investigating facebook they're not commenting on whether they are or not. but some reports suggesting that could be well into the billions of dollars in terms of fines >> that's very clear and that's something that we certainly are watching and i'm from the government and i'm trying to help you, you know, that really isn't very appropriate. government involvement means lower multiples. now i think you've got a lot of cushion in the valuation of the stock on the multiples but i think it's going to be like one of the tv shows mark is going to be using up the life line. he's going to be using up some of the margin flexibility dealing with the government. he's going to be using some of it to protect the users. the question is, is there enough left at this price to help people like me as investors? i think there will be. but i have to see how it's going to sort out. >> i think the show you're thinking of who wants to be a trillion air >> pardon? >> i think the show you're

thinking of who wants to be a trillionaire >> i don't know ifs it a trillion anymore i know the life lines are, you know, they're -- >> they're getting short he really had plenty of call a friends at the stock price at this level >> thank you bye-bye. >> and when we come back, grim self driving setback the first fatal crash of an autonomous car means for the regulation and the companies that have been investing so much into this technology more "squawk alley" straht ahd. ea ig

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the future of self driving cars under the microscope following the death offen with pedestrians in arizona involving a self-driving uber. phil lebeau has more from california phil zblfr we still don't know the exact circumstances surrounding that accident that led to a woman in arizona being hit and killed by a self driving uber vehicle. but this raises the question about what happens with

self-driving vehicles when they become confused. we're here at phantom auto in mountain view because this is what they do it is call remote control of an automobile it is remote operation when i get inside this vehicle, you'll see there is nobody in the driver's seat. and, yet, because our friend ben who works for fanlt om auto is doing remote operation of this vehicle, as we start to drive, whenever he hits the accelerator, the brake pad, if he turns the steering wheel, when he does something at the remote operation facility, it immediately is reflected in the vehicle as well. so as we start to go here, we'll give you a sense of how this works in terms of a remote operation. the key point being that while autonomous drive vehicles can operate on their own 98%, 99% of the time, there are tricky situations where somebody needs to step in and that's where phantom auto comes in. >> we believe that av technology

has gotten to an incredible point. we say it's 98% of the way there. but for that last 1% or 2%, you do need a human in the loop. and we are that human. it is a human sitting a long distance away. >> so for phantom auto which has been in existence offer a year, they've gone through one round of fund-raising. they believe that the future will involve a number of call centers spread out throughout the world where autonomous drive vehicles in los angeles or chicago or new york if somebody is in one of those vehicles and there is not a driver in the driver's seat, they can immediately press a button or the vehicle will let the call center know, hey, we've got a situation here where a driveway is blocked where i'm supposed to drop somebody off or a construction site. i'm not really sure what to do and immediately the driver, the remote operator can take control of the vehicle, steer them through the situation, and then

deliver the people, deliver the package, whatever it might be to where they want to go. it's those tricky situations, melissa, that's really what's going to be the biggest challenge in terms of the deployment of fleets, scores of autonomous drive vehicles. >> thanks, phil. i think i like the idea of the driver having as much skin in the game as i do so what's the ultimate impact on companies like ford, gm, and tesla who have all been developing self driving tech of their own? we're wondering this as shares of tesla sink into bear market territory, down 20% from september's intraday high. for more, let's bring in morgan stanley equity analyst adam jonas. good morning. >> thank you >> let's talk about the impact of just what little we know at this point about this fatal accident involving an uber self driving car. on the one hand, at least in theory self driving cars don't get drunk and don't fall asleep. but on the other hand, there is

big headline risk to these types of incidents, isn't there? >> so we think the biggest entry to ride sharing is capital the biggest barrier to adoption of electric vehicles is physical infrastructure, the biggest gaining factor of adoption of autonomous is morality you can't model morality as these vehicles start executing more and more miles in all sorts of different situations, no the just sunny days and nice clear nights in arizona, those situations that phil lebeau is referring to are going to keep compiling and accidents will happen and lives just large numbers will be lost. so you can't model the stuff and we think investors who are very he naenamored by the ecosy, it can generate trillions of dollars, they need to understand it's even beyond the technology, it's the legal, moral, ethical issues that you can't model that are real and will slow this

down we think if we're at 1% av penetration by miles traveled by 2030, that's a very large number >> one of the big questions, adam, that's come up from critics in the past 24 hours is whether this technology is far enough along given the fact there is this major race to get the self-driving cars on the road as quickly as possible. is it? >> probably not. and if you can engage with the folks in the public and private community as well and we do that, when we talk to the folks that are really at the leading edge of the applied ai and this big ecosystem, they use language like this might be the hardest thing humanity has ever done ever, including harder than putting a man on the moon and bringing him safely back to earth. unchartered territory of putting ai and life and death experiences on public roads. and that the x factor is when you put an astronaut in a shuttle or an orbital module, they sign up for that stuff f you work on the manhattan

project in the 1930s or 1940s, you sign up for that you have to test autonomous vehicles on public roads with real cyclists and pedestrians, innocent people that didn't sign up to are this stuff that's where we're in unchartered legal territory and a factor that needs to be considered by investors. >> i think that is something that a lot of people must focus on, add am, how many miles have been driven in that autonomous fleet? waymo has 100,000. how many does uber have? >> more. >> does this cement the lead of the likes of a wamo and uber in terms of their ability to compete with an uber which is far fewer miles driven in that autonomous fleet and now faces the first fatality of a completely self-driving car? >> i believe the number released by wa manmo is five million simulated miles. how much can be done by teleops versus real? but our best estimate and

transparency is low on this is no more than 10 or 20 million miles have been driven autonomously in the united states that's out of 3.2 trillion miles per year driven in this country. there is one death every 86 million miles of human driving and so far we have the first autonomous death in what we would estimate would be under 20 million miles. again, too soon to draw conclusions. earlier question, is too soon to say they're safe we need to be accumulate maybe billions of miles. then the next question you didn't ask is being safer than human driving ain't good enough. okay i'm not so sure the found of mobile eye which got bought by an employee, he said this technology needs to be 10,000 times safer than a human being before western civilization will accept really mass adongs ptionf these things these are big questions. >> adam, quickly before we let you go, in light of this conversation that we're having

here right now, the safety hurdles, fact we could see an extend extended time line for self driving cars for adoption, is this good or bad for carmakers >> it depends. i'd say overall categorically, it's probably good in that, you know, you're applying a lens of safety and slow adoption anything that happens rapidly, a quick adoption of avs, a quick adoption over a five-year period that is really disruptive for the cultures of our companies. to the extent it's more gated out and you give them more time to work it out, we would say categorically better saying that though, a lot of people own gm on ai. and that's -- maybe that needs to be dialed back bate. >> all right adam jonas, morgan stanley, thanks >> thank you for having me now let's get over to dom who has a market flash >> enterprise software, jon, we're talking about mulesoft it is up 22% reopening after a

trading halt on the heels of a reuters news report citing sources saying that sales force.com is in talks to purchase mulesoft. that's according to people familiar with the matter those particular headlines driving those shares up pretty big right now. so we'll keep an eye on morgan on those shares. but a big move higher in thenlt prize software space back to you. >> dom, thank you. time for a news update let's get to sue herrera back at hq. >> good morning. good morning, everyone here's what's happening at this hour. united is suspending the shipment of pets in airplane cargo holds. the company is studying improvements following the death of a puppy in an overhead bin and mistakes in handling other dogs last week orbitz says they identified and fixed a data breach. names, birth dates, addresses and credit card details were likely accessed. the current orbitz.com web silt was not involved fedex announcing they'll open 500 more stores insidewall

marts across the country it already had 47 locations in walmart stores as part of a pilot program. and on this first day of spring, check out what strong winldz, high waves and freezing temperatures can do to a house on the coast of the baltic sea nicer weather won't come to denmark until late may or early june we're not going to have it that bad, although the east coast is getting hit and the west coast is getting hit i suggest we all move to hawaii. that is the news update this hour back downtown to you melissa? >> i'll move there any day of week i don't care what the weather is like on the coast. >> exactly >> sue herrera when we come back, a former facebook insider joins us to othda snde tacaal stay with us

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hnch we continue to follow the fallout at facebook. john harwood is in washington and kayla has the legal ramifications. we first get to michelle. >> more bad news for cambridge analytica. this is the uk-based political consulting firm that washgd for donald trump's presidential campaign and at the center of the facebook controversy last night channel 4 aired several pieces of video which showed the ceo alexander nix speaking with a undercover report wloer he thinks is a potential client

>> we can set up fake ids and web sites. >> in a statement, cambridge analytica explained that conversation this way. assessing the legality and reputational risks associated with new projects is critical for us we routine lay tape conversations to tease out any unethical or illegal intentions. the two cambridge analytica executives at the meeting humored the questions and actively encouraged the client to disclose his intentions they left with grave concerns and did not meet with him again. cambridge analytica has some powerful backers, hedge fund manager and top republican robert mercer is a major investor mercer's daughter and steve bannon who worked in the trump white house are on the board congress was already interested in facebook's control of

personal data and now this connection, however distant to the profile names can raise more interest >> thank you, michelle let's get to john harwood with reaction from washington >> everybody's watching how this is going to play out, of course, a lot of it is playing out behind closed doors because robert mueller is conducting an investigation to which this is relevant but there are few points to be made about what cambridge analytica did and how that compares to other campaigns. first of all, it is common for campaigns to he mass information about voters, try to build a picture of who their target voters are and use that to mobilize and turn out their voters in election campaigns before there was social media, they would buy subscription lists from magazines, member shp lists for clubs that, sort of thing. there is also the question of how did you obtain that data did you get it legally by asking voters for it? and they give it to you voluntarily? do you purchase the data or did you obtain it through

hacking? over the weekend an obama campaign official from 2008 sent out a tweet saying there is a big difference we didn't commit theft to do our ground breaking work the question is how did cambridge analytica get the data and then finally, there is the question of what do you do with the data once you obtain it do you use it to send truth if many information you use for persuasion and mobilization or do you use it to send fake news or still another question is did z. th that information get passed to a third table that did something or the table a question in the mueller investigation is was cambridge analytica working with the russian operatives who hacked the democratic e-mail accounts all of that is under investigation. but important to put in context that the building of information itself, the core of what cambridge analytica was doing is common in political campaigns. they want to know as much about the electorate as possible and use that to focus their efforts. >> all right

thank you, john. tell us what you're hearing about the ramifications for the regulatory environment >> jon, lawmakers want to hear from a mark zuckerberg himself we're seeing reports that facebook agreed to brief lawmakers tomorrow unclear who is briefing. and what they will be -- which lawmakers they're talking to the general counsel of facebook came to washington in october to testify about 2016 election influence. they noted progress on the corporate side where they were make changes to their business model to adjust for this senior members of the judiciary committee, they want to hear from the top brass of these companies. and say what happened is inexcusable. here's california senator dianne feinstein. >> the industry won't solve these kinds of problems themselves we'll have to solve them with legislation. and i don't think that's the most desirable course of action. but you can't have 50 million

people lose privacy of their data this way. >> the senate's attempted regulation but ithasn't gone anywhere the honest ads act would have required social media companies to disclose who's buying the political ads, similar to what is required for print, radio and tv europe is stricter social sites face deep fines without removing posts within 24 hours and they're preparing a regulatory action plan for april based on recommendations released last week the american public though is divided on whether to regulate social media while a majority of respondents say it is problematic. 49% supported regulating the sites. so we'll see whether these cries from washington to bring legislation gain any more steam and what the company tells lawmakers tomorrow guys, back to you. >> we certainly will see thank you. i should note, facebook down about 5% now we're at session lows.

for more on the market impact, let's bring in jeffreys international analyst and former facebook product manager antonio garcia martinez, now a contributor at wired the new column is "the noisy fallacies of psycho graphic targeting. antonio, you used to work at facebook you have an intermat understanding of the platform, technology, policies are you surprised to see us at this point in terms of a data debacle like the one involving cambridge analytica at facebook? >> i'm not the reality is when you have an open platform with lots of user data, you get data leakage ings that the reality. take my phone, for example, i can almost assure you that every app on my phone is misusing any data in some form or another i'm not terribly surprised it surprises me that it took facebook so long to shut them down this has been the story for the past year or so the data story is actually typical of the sorts of internet platforms. >> you ugs the term psycho

graphic targeting wlachlt do you me what do you mean by that >> there is a lot of snake oil in the advertising world and psychographic taurgtinrgeti, there is a certain lifestyle that a user has. in the cambridge analytica mod l models were sort of psychological stakes that would predetermine whether you were, you know, particularly -- you had an afin if i tore trump or hillary or certain issue the idea thak in general if somebody is in that psychological state, they're willing to buy a product or endorse a certain view the problem with that sort of targeting, when i get into the column, it's great to build a not will and say this guy is going to vote for trump. how do you find that person on the internet facebook doesn't let you target psychological states there is no way to do that so the point of my column was that sure, maybe they did shady stuff. i think facebook should be embarrassed. i don't think it was effective

in getting people to vote for trump. >> brent, you have a buy rating on facebook. shares are now down 11% week to date are you sticking with that rating >> we're sticking with that rating over long term. i think short term obviously the stock is going to trade side ways until the dust settles. this is just another brick in the wall of worry given the commentary in the fourth quarter about the changes to the platform and the concern over deceleration of revenue and operating margin which is among the best of many of the internet names. so we think that short term clearly we've got to get more data points to assess the next leg of this. but ultimately, i think the stock is in our view about $12 away from troughing out right around 10 times that would put it on par with ebay and expedia and facebook is going to grow way faster than those companies and has a better franchise so ultimately, you know, we think in the short term, again,

we need more data points to get more constructive. and i think investors are looking at this too. they become very overweight the stock and you're seeing money flow to companies like adobe, amazon and google in the short term >> so, brian, what is behind the big decline that we're watching in today's session of at which timer? twitter shares are down by 10% yesterday twitter shares held up fairly well in light of this facebook fallout yet today they're dropping like a rock it is -- are we xpenlding facebook's problems to at which timer? is there something else going on >> i think it's the overhang of regulatory, melissa. that is really the biggest issue that facebook is going to have increased regulate story overhang at which timer is also going to have that. snap may have that as well and ultimately, i think money is flowing to other names again, you see adobe up today. you see other names that are up. they're perceived to have not as big a regulatory overhang. i think the second overhang that we're addressing with investors is the fear of amazon's ad

business so amazon's pushing harldder in the advertising business and can they take share in the time of turmoil? that is the single biggest question we address is amazon going have a big impact on those platforms going forward on their ad business? >> antonio, your book "chaos monkeys" was a colorful look at facebook's culture granted, it was some time ago. maybe we get a sense of the bones of it. do you think the company has internally in the culture fund mentally address how they hand out data and fix the core issue? >> i think so. the company i knew was protective the user data, especially on the ad side. facebook has combatted the meme of facebook sells my data which is not true. and they're conscious of that meme they combat it by being very restrictive on the ad side of

the platform the app that cambridge analytica bultd, built, i think the policy is a little different facebook, it might seem odd to say it, but, you know, at facebook the user came first and they care less about the money side i think they're going to be focusing on being way more aggressive on policing their own platform >> antonio, before we let you go, do you think given the fact that facebook revised the privacy policies in the last couple years, do you think we could see something like this happen again >> definitely. i can see it aggressively policing the platform development a lot more again, why did they wait two years to kick cambridge analytica off the platform the company i knew would have done that way faster and way more aggressively. i can imagine change coming forward as facebook tries to take on the challenges >> gentlemen, thank you. brent and antonio, thank you as we head to break, the dow is up about 106 points

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coming up, what happens to the bull market if tech loses its leadership spot in we'll debate what could happen next. plus, what box ceo said about tech companies and regulation. we'll ask him directly in a cnbc exclusive u interview and a man

who says your facebook data is way more at risk than you think. he'll tell wrus the next leak could come from. morgan, see you in just a bit. >> we will be tuning in. if you want to make a living playing video games, listen up, advi fm arcerost gamer, ninja, is up next we'll be right back. hi i'm joan lunden. today's senior living communities have never been better, with amazing amenities like movie theaters, exercise rooms and swimming pools, public cafes, bars and bistros

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big tech is placing bigger bet on the future of gaming and

e sports amazon, facebook, google, not among those vying for increase ed rev revenue at the game conference in san francisco. after playing fortnight with drake, we were joined by tylie blevins. also known as ninja. >> a lot of the income is coming from amazon and twitch prime subscribers. we hit 5 million on youtube and instagram just hit over a million and i'm almost there on twitter. the combination of those thipg, just the collective revenue coming from. and i mean, this deal that amazon prime and twitch prime have together is incrediblncred. twitch prime allows people to claim and collect loot with specific games and they did a deal with fortnight, the hottest game right now that is actually one of the main reasons of influx of subscribers to my stream >> lot of attention to that

interview. he's got quite a social media following. we had none fun. not having fun in morning, oracle, down almost 10%. twitter down about 9.5%. >> so is snap chat >> not having that bad a day >> i think you're see iing the blowback from facebook play out in the twitter and nap chat shares right now >> with that, back to hq for the half our top trade is hour, loss of leadership, what tech's takedown means for your money. can the bull market survive if that sector keeps slip iping with with us today, joe, steve, jon, we'll begin with the market as always. tech stocks bouncing today follow iing the sector's worst y in nrn a month nasdaq has been down four of five days. it has turned negative but steve, what are your thoughts here? this is the tried antr