good morning it's 8:00 a.m. and facebook headquarters in menlo park, california, 11:00 a.m. on wall street and "squawk alley" is live ♪ ♪ ♪ ♪

♪ ♪ ♪ good friday morning. welcome to "squawk alley." i'm carl quintanilla with morgan brennan and jon fortt. senator blumenthal going so far as to say that big tech with no longer be trusted as the social network tried to ignore and tried to conceal russia in 2016. new 52-week low down 37% from a high in july joining us for his take on what he plans to do in the senate is the vice chair of the senate intelligence committee mark warner, democrat from virginia senator, good to have you back good morning >> thanks for having me on this morning. we touched base with you when some of these executives went to the hill a and now we've got the times and a lot of viewers might

be wondering, whether or not the information the times uncovered could have direct impact on the trajectory of legislation. what do you say? >> well, i have to tell you, i was disappointed with the management of facebook who were slow to ak untcknowledge the run intervention and when they appeared before our committee we got it we understand how important this is and we want to work with you yet at the time they were making the promises in public with the committee they hired a political hit team to try to undermine the committee's credibility and the good news is they tried to do that in a bipartisan fashion and they'll take on both republicans and democrats, but i'm not sure that that's a check in the right direction. so i think that what facebook is going to do is i've laid out a series of ideas from data portability to questions around user authentication to new, competitive tools. for example, if we knew how much

data facebook or google was collecting on each of us and how valuable that was data transparency, i think there are ways they can find common ground, but they've got to come to the table so far what they've said is we want to work with you, but when we get the specifics there's not been a lot of give on their side, and i don't want to kneecap these companies and they're great innovation companies and, but the nation that the wild, wild west days of no regulations at all, no guardrails just can no longer exist. they ought to work with us, though, to get the appropriate guardrail. >> what has this report and the other information you've gotten in recent days changed in your calculous about working with these companies. is it informing your understanding of their commitment to focus on getting this done versus protecting their own reputations? what's the real difference here?

>> well, one of the things whether it's facebook or google, when they lay out these broad mantras that they want to do no evil or only connect the world they set themselves up, frankly, on the higher standard of most other businesses and when you see them basically go out and hire a political hit team to try to undermine the committee that's tried to work with them, that leaves a sour tieaste, but you know, we're all adults and it's a tough business. what i want to see from facebook now is a real willingness to engage on substantive policy areas. i've laid out 20 separate ideas, they don't fall democrat or republican and there's a lot of interest from a lot of colleagues and frankly, we're trying to educate many of our colleagues because a lot of them don't understand how social media work, but the more they're willing to come to the table in a substantive discussion the recent blips can be put behind us, but if they continue to

basically stonewall and say oh, yes, we're for some level of guardrail, but don't really engage then i think you will see congress act perhaps precipitously and if we don't have an engagement, chances are we'll get it wrong >> let's talk details of the regulations that are put in place and the guardrails, so to speak. do you think you can actually get them through congress? >> well, they indicated that there was a lot of interest. let me talk about a couple that i've seen broad based interest in should we have a right to know when we're being communicated with on a social media platform whether the person or entity posted that message to us, is it a human being versus a computer or a box there's nothing wrong with automated messages, but at least having that knowledge might make us better discerners of information we're receiving since it appears that on the commentary side a lot of the activities generated by foreign bots, should we be able to know

that they're posting out of new york that the post is originating in st. petersburg that there would be a geoindicator, indicating that this is not originating where the user says it is and you're getting no validation and there's a bucket of issues around privacy and frankly, the fact that the europeans have taken the lead on this when generally america takes the lead on technology policy i think has been a mistake and then there are these series of areas around data portability, and data transparency and pricing transparency that might encourage more competition in the marketplace if, frankly, if americans realize that these services are not free, but they are taking enormous amounts of our personal data and selling it to advertisers i'm wide open for a market-placed solution and we can't have that market-placed solution if we don't have the data and pricing transparency. >> there's a sense among some that big tech issues are

facebook's issues, and i wonder if you think that's fair, if the locust of your attention, at least, is on this particular company? >> listen, facebook received a lot of the attention, and facebook is the vehicle of choice for 2016 and zuckerberg and others when we first started raising these concerns dismissed that there was any there there, and obviously there was a lot of there there and more importantly with creating these fake accounts and i don't think you can take twitter off the handle, as well and i give jack dorsey credit and he's in recent months been more aggressive to work with us on policy solutions and the real disappointing company, as well has been google and google didn't even fend the senior leadership committee and as it becomes more and more evident, frankly, as more and more evidence comes out that the

real place where fake accounts are manipulating a lot of the foreign activity, not just russian, but chinese, iranian and others have headed on the youtube platform where more lateralization goes on than frankly, facebook and so far google has been absent, but i think what these companies have fought for so long and both companies have glorified them and i don't want to underestimate the good they've done and there was a dark underbelly being created, as well and we've now exposed the dark underbelly and for a long time the companies thought that if they just kept their heads low they'd go away this problem is not disappearing it's only increasing and americans are getting more and more concerned >> senator, another one of the narratives here beyond just the issue of data and manipulation of foreign entities is just the influence of big tech. amazon has just announced that they're coming to your state in a big way. 25,000 jobs and some of them

feel that the process of picking a place showed the imbalance of power between these big tech companies and government that that's also a task with regulating them while giving them a lot of concessions. is there a need to further articulate the tech and government and what really the corporation's social responsibility should be we're not just talking data here and we're talking about how government engages with this in a positive way >> that's the subject of the conference right now, that goes beyond tech that goes to basically, can we make capitalism work for more americans? can we look at rewarding companies that actually invest in human capital we have a tax code that gives you a rnd tax credit if you spend $1,000 on a computer and you put an asset on your balance sheet you spend that same $1,000 on a human being and it's a cost

and liability and no place that in a sense, book that investment we live in a world where people aren't going to have the same job for 35 years we have a social safety net if you're a full-time employee and we need a portable benefit system and we need -- and the tech companies have been good at this and they escaped the tyranny of pressure on short termism because the tech companies, usually their founders had a separate class of stock that didn't make them as subject to the ups and downs of the market and there are broadly-based questions to play a role in capitalism that works for a broader group of people. that's one area. there aren't real questions about their power and i would say this, though, as a former governor where i tried to market virginia and was successful a number of times, the fact that we're adding 25,000-plus jobs

and adding 150,000 a piece, that is going to have a ripple effect and i think it will be a great benefit to the whole capital region and the whole commonwealth of virginia. >> senator warner, i want to go back to this idea, because i know you called it the new oil and this idea of being able to control your data as a consumer and have it be more portable, it sounds really great and i can't help, but think the cat is already out of the bag in terms of what's out there with people and not just with companies who are controlling it and also hacks, et cetera how do you actually control data >> well, first of all, there's an analogy, a bit of an analogy and i was a telecom guy and was in the wireless business and co-founded nextel. it was a pain in the neck to move from one telephone company to another congress mandated none of the portability and one of the things that we can look at is

data portability so the companies would have to make it easy to take all of the accounts of facebook, and if you want to move it to a different platform and make that ease of transition simpler than it is today and that would be one area where you can add a level of competitiveness and the social media platforms might end up saying come to us because we will provide more protections. i think one of the areas around data transparency, americans think are free services you get from google, facebook or twitter, it's not free these companies are milking enormous amounts of personalized data from us and selling it to advertisers. there's nothing inherently wrong with that, but i think more transparency so people knew the value proposition so data transparency and pricing transparency would be terribly important and again, these are market-based solutions and not simply regulatory-based solutions. >> finally, senator, last question, regarding facebook, what kind of grade would you

give them in managing information flow going into the midterms and can that be used as a test case now? >> you i think i would say much improved going into 2018 from where they were in 2016 and the companies have gotten better and our intelligence community has gotten better, but here's why we say what we have to keep an eye on and i think when you have a white house going out making unsubstantiated claims about voter fraud, georgia, florida and elsewhere with no basis in fact i think we ought to watch the level of foreign activity trying to reinforce this nonsense coming out of the white house as we go through these voter recounts basically trying to undermine americans' trust in the system at the end of the day they want us to lose faith in our political system and when this president goes out and attacks recounts without any basis saying voter fraud, he plays

right into the russian playbook, and i think you will see in spite in foreign-based activity trying to accent that message coming out of the white house and that's where i think the platform companies need to be on guard in the next couple of weeks. >> senator, thanks for the time. always good to check in with you. a, appreciate it very much >> senator mark warner >> thanks so much, guys. the senator is not the only one speaking out about facebook. four more senators including amy klobuchar asking the department of justice to expand its investigation into facebook. julia boorstin has more on how that can impact the stock. julia? >> facebook shares dropping to the lowest point since march 2017 today as critics examine the mismanagement described by "the new york times" in that expose, senators klobuchar, coons and hironno urge into cambridge analytica.

facebooking to significant steps to undermine efforts to hold them responsible including hiring partisan political consult apartments to spread disinformation about people who have criticized facebook facebook denying the allegations behind the senators' concerns including hiring definers to attack its critics sheryl sandberg responding, quote, to suggest that we weren't interested in knowing the truth or we wanted to hide what we knew and whether we tried to prevent investigations is simply untrue, but there is a growing expectation of regulation cfra scottes itler is saying we think the details and timing make more likely additional, sharp scrutiny and regulatory oversight and we still see it as attractively valued and there are calls for management change, despite the fact that zuckerberg's control of the company make that unlikely and excluding a major management

change, facebook is potentially looking at a multi-year reputational turnaround fraught with execution risk. >> as for how all of this impacts ad dollars, while their clients have not pulled back ad spending now they're watching to see how consumers react. back over to you >> i think everybody is watching to see how consumers react thank you so much, julia boorstin moving on to chip stocks those are getting slammed this morning, as well shares of nvidia are plunging 15% after the company fell short of analyst estimates and issued weaker than expected guidance. applied materials also moving low or weak forecasts. so where do the semis go from here let's bring in ubs apple and semiconductor analyst bill curry and nomura shaw, good morning to you both >> good morning. >> good morning. >> tim, i'll start with you. it's been now, i guess, you could say a series of

disappointing earnings reports from the semi space. what is the read through here? are we looking at a bigger, broader, more painful slowdown for tech >> yeah, look, our thesis has been that you have had some demand that got pushed forward because of the tariffs that got put in place and in the broader semiconductor space, things were not as good what they were reported to be the past couple of quarters and i think there is digestion happening right now and on the side of semicap equipment, i think that they're also feeling some pain, as well. memory pricing has been down and capex is being cut and i think it will last a few more quarters. >> do you agree with that? >> i think so. i think a big screen factor is the china-u.s. trade issue if that escalates from here, i think the fundamentals for the group could get a lot worse. if you could get resolution, then i think we could be getting back to more normal growth rates

and fundamentals within a quarter or two >> a couple of the biggest chip stocks, intel and qualcomm are both up this morning while others are suffering and going back to nvidia and that's the key one. it has just been a rocket and not only did they miss on revenue in the quarter they reported, but also guidance was weak what's going on here is this a moment possibly that we're going to mark when things took a dramatic turn because there was a slackening of demand that people didn't see coming or was this just a blip >> look, this is not the first quarter they got it below and this is the second quarter in a row. this time i think there's some -- there's some channel issues that they didn't really see. i think a lot of us saw that there was inventory in the channel and for some reason they didn't see that, and i think that they're being bitten by

some it is a hangover effect from this cryptocurrency boom, really, and i think that they're doing the wise thing to basically cease all shipments into the channel to basically let the channel clear itself, and i think you could see a better april quarter as things snap back a little bit, but i think that the narrative now is that, look, these guys have guided below two straight quarter and if you look at the data center business, data center also was a little bit weak and it seems like they were being clipped a little bit by the slowdown in data center in capex, as well >> before we let both of you go, i just want to get your thoughts given what we've seen in chip stocks more broadly. is there anything you would buy at these levels? tim, we'll start with you. >> the stocks we love, we love broadcom in here and we think that broadcom is fairly well insulated on this and we like

the semicap equipment corps and it was an advertisement for clap and those are the two stocks i like right now. >> i would recommend intel we upgraded the stock into early october. i thought their report and outlook was among the best we've seen in technology they just announced a very large buyback. it's a low multiple stock, so intel, i think is a great place to hide. >> gentlemen, thank you. >> thank you >> thank you so much and when we return, we will continue to be all over this facebook story and the fallout cisco's chairman emeritus john chambers joins us next on what mark zuckerberg and sheryl sandberg need to do to turn thin aunand gsmot later, steve case will join the program with his thoughts on big tech right now. our show still ahead stay with us ised it means in my kitchen. so, that means no breakfast? voya. helping you to and through retirement.

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at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. welcome back facebook continues to be in the spotlight. mark zuckerberg pushing back on the new york times investigation, saying the reality of running a company of more than 10,000 people is that you're not going to know everything that's going on that, of course, drawing heat from the media and also congress so what's the way back for facebook from this reputational crisis let's bring in cisco's chairman emeritus and ceo john chambers now running his own venture firm, jc2 ventures good morning. >> it's great to be back with

you. >> john, this does look more like a reputational crisis for facebook right now versus them missing or technological wave that their rivals caught so what's the way back from here >> well, i think when disaster strikes and i wrote about this in my book a little bit, i've seen this movie many times before and it's not a question when companies get knocked down and how when you get knocked down you can take a step back, your currency is based upon three factors. first, people's trust in you secondly, your track record and third, the relationships you've built off of those first two when you get knocked down it's classic in terms of the facebook you use and how much is reflected in this market and you want to determine how long it will last and how deep it will be and be deeper than you think? you then position to your shareholders, through your

employees and to your critics and your supporters what you're going to look like when you come out of this and how you will address the issues that have been raised and then you put in place a program to regularly update on your progress. when we talked about this before and almost a year ago when i was writing the book, i focused about the tremendous benefit and i've seen that movie with the internet, but the danger if the leaders of this group did not understand the downside of job distraction and the legitimate need of government i know senator warner, you had on earlier very well and senator byrd, the republican worked very effectively together and one of the lessons we learned at cisco that i think we did very well on is we worked very closely with government in terms of very legitimate needs on internet and security and was in 2000 to 2010

and we also worked on on. >> john? >> go ahead. culturally, when we read "the new york times" account, taking it for what it actually says, the ways that the leaders responded to hear that they were facing challenges from russian interference perhaps at levels they hadn't expected and they're trying to protect their reputation and deal with the problem at the same time perhaps they got the balance of that wrong how do you correct for that once that becomes public as a leader? >> well, i think when something becomes public, you have to deal with it very quickly and you have to get everything out on the table and you also have to, and this is important, we are playing out this chess game and we're jumping, john and carl and morgan right into the middle of the chess game you need to start before the game starts and develop responsibility and we won the responsibility award and it's the largest tech company when

the obama, clinton administration with condoleezza rice and it's important to give it back and when problems occur which they inevitably do, you sit down and you logically discuss it through, and if you make mistake, you've got to admit it because it's all going to come out any time anyhow and you've got to then paint the picture for what it will look like when you come out of it so it's very important that these large companies now understand that there are tremendous benefits to what they bring, but you have to deal with the issues squarely and you have to deal with them one time and paint the picture and get various progress updates >> john, before i let you go, how do you think mark zuckerberg and sheryl sandberg are handling the situation in light of this week we have more actions and more steps from them and all very reactionary to that new york times story and you have folks saying that maybe zuckerberg shouldn't be chairman anymore and sheryl sandberg should

leave. are they justifiable by critics? >> i think leadership is lonely and i've been with that through the dotcom bust in 2001. i think they're still a very, very good company and you were talking about amazon and jeff bezos said the same thing and i think it's very important that we're careful about addressing the issues and not drive a solution that's going to cause real problems both to the company and to the growth in the long term, but i think it goes back, government and business have to work closer together i think when we don't communicate back and forth we have a lot of problems and it's a great time to be involved with start-ups are where the job creations will occur it's important that our country also get back to the basics. we will destroy a lot of jobs with the technology being back to the market and we have to create the new jobs, as well >> indeed, and i know you're hard at work on that john chambers, chairman emeritus of cisco thank you. >> thank you all very much

when we come back today, why jeff bezos is saying amazon is not too big to fail, but take a look at the major averages first. the dow has been dipping in and out of gains here and the s&p down one we're back in a moment

♪ ♪ good morning, everyone i'm sue herera here is your cnbc news update at this hour. a federal judge ordered the trump administration to return the white house press credentials of cnn reporter jim acosta the white house pulled the credentials last week following a combative press conference between the president and acosta japan and the european union jointly proposing a resolution critical of north korea's human rights violations to a u.n. committee in new york. the resolution urges prompt action to resolve the abduction of japanese nationals. >> considering the long years of enormous sadness and suffering experienced by the abductees and

their families, i would like to emphasize the urgency of this issue and call for the immediate return of all of the victims of the abduction. >> a layer of smoke is smothering the west coast as the camp fire continues to rage on in california. the air quality dipped in portland, oregon, as well as the smoke from the fire filtered north. the air quality concerns continue in northern california, as well, where many schools and colleges are closed. you are up-to-date that's the news update this hour carl, i'll send it back downtown to you >> sue, thank you very much. sue herera europe about to close here and headlines including what are driving the action and wilfred >> they have appointed stephen barkeley who was a brexiteer, but i have to admit not a high profile one which talks to the fact that she didn't get her first choice replacement, but nonetheless, back to the market,

the reprieve up half a percent because there have been no more high-from fiprofile resignations and we are down 11% since the highs of the year since april. not for some of the most brexit leverage stocks if we look at the banks and property companies and barclays is down half a percent and lloyds down half a percent and still suffering today and they suffered way more than that yesterday and that's highlighted by the week to date chart of ibs which has the biggest of all of the uk banks and it's down another full percent today, 14% for the week, but still some ugly action on some of those stocks those are more leveraged and if we have the ftse 250 for the week as a whole down 2.6% for the week in full some companies as we talked about yesterday, those exporters that benefitted this week like bp for the week as a whole and well off the lows from earlier

in the week. back to the snapshot and the european markets as they closed, much more calm today than the last couple of days and even green for germany and the week to date performance is probably not as bad as you might think and the ftse down about a percent for the full week and germany down 1.5% and italy, the two-week chart for you of the two-year yield and steadily increasing and the risks are picking up, but nothing blowout and the headlines this week is probably worth for the financial markets and back to brexit, though, and coming up on "closing bell," we will be joined by the old one. david davis will join us at the top of the closing bell live today. back to you. >> a big interview, i'll be there with you and i'm looking forward to that. although maybe no more cricket analogies? >> he'd probably like that i don't think our ep will. enough, i'm not sure if we should do it again if she's

watching. >> thank you >> meantime, chip stocks are today's big movers with nvidia and applied materials both getting crushed following disappointing earnings results and josh lipton is taking a closer look at the sector and joins us now with more hi, josh >> nvidia delivering a sales forecast that's sending investors just running for cover here today remember, people use its graphics card to use the complicated recruiting work and those digitalien currency, leavg the chipmaker with excess inventory and the company offered disappointing q4 guidance of 2.7 billion and here's john talking about the quarter on the earnings call. >> to sum up, the crypto hang over has left with excess inventory and it will take one or two quarters to work through it this is an unexpected near-term setback and doesn't change the

fundamental dynamics of the company. >> that's not comforting investors with nvidia, crashing this morning and also check out the smh, near bear market territory that includes intel that's actually in the green today and amd which is in the red. was it just nvidia applied materials delivered a weak forecast and it makes machinery used to manufacture semiconductors and craig riley's craigelis sa craig ellis, and trade tensions with china and the smartphone slowdown and pressure in memory chip pricing guys, back to you. >> josh lipton, thank you. the dow is up about 20 points right now. we have more squawk alley after the break. really want to be there,

but you can't. at cognizant, we're helping today's leading media companies create more immersive ways to experience entertainment with new digital systems and technologies. get ready, because we're helping leading companies lead with digital.

ea> right after this quick brk, outspoken facebook shareholder scott stringer sits down with us here on post 9 when we come back hi. this is the man that's going to check your eyes grandma. cognizant ai solutions are helping healthcare companies advance diagnostics and prevent blindness in patients with diabetes. everything looks good. you have beautiful eyes. ♪

i'm scott wapner here's what's coming up on the halftime report. today we're debating stocks and the fed and when the central banks should hold off on a december hike. plus the call of the day and our own jim cramer calls devastating this morning we'll discuss what you should do with shares now of home depot and the latest on the facebook fallout and those shares falling further into bear market and about 15 away. we'll see you then >> shares of facebook hitting a more than 52-week low today, trading down back to march of 2007 as the pushback continues as the new york times investigation about the company's leadership vice chair mark warner joined us earlier. >> i don't want to kneecap these companies and i don't want them to be replaced by alibaba and

baidoo and the days of no guardrails just can no longer exist. they ought to work with us, though, to get the appropriate guardrails. >> investors continue to speak out. joining us this morning at post 9 and a cnbc exclusive scott stringer has the $995 billion pension program. we've had you on before and we talked about governance and the company and did the times story do anything? >> it confirmed our worst nightmare which is you basically have one or two individuals who feel that they don't have to report to the board and reveal information like russian investigations and perhaps withholding that information from the board for a year and i think miss sandberg and mr. zuckerberg have to start thinking about separating the responsible its responsibleities of this large

company so that we have a ceo and we have a chair of the board and we start having some oversight at facebook pip think this has now gotten to a point where even the most sympathetic facebook supporter realize there has to be change >> they put out a statement saying the suggestion there was anything is grossly unfair you're not getting through to the board, at least not yet. >> things are moving in a direction where i believe they'll have to take stock and ultimately own the situation you can't think that share owners are not going to keep demanding answers when the board did not have any knowledge according to the times that there is a russia investigation going on this is something that the whole country is talking about and facebook has to own up to it now. what's the best practice you separate the chair from the ceo and there are two different responsibilities somebody has got to oversee the work of mr. zuckerberg and miss sandberg by the way, i agree with senator

warner we're not trying to kneecap a company. we're trying to bring it into a 21st century government structure so they can succeed and what's my agenda i have to get a return for teachers, cops, firefighters and the people i represent in a public pension fund. >> do you think that would actually happen? how likely is that to happen with the company zuckerberg has control and he's the chairman, ceo and the founder and he's basically made it clear that that's not going to change any time as far as he's concerned >> a lot of change comes over time, and i think the case is building every single day. the times investigation, i think is very damaging to the reputation, and i think today we don't want to see stocks fall. we want to see prices go up and not down, but i think the board at some point has to sit down and say, look, we have to take some action that will actually make facebook more valuable and also, by the way, they have to answer for some of their conducts and they're hiring companies that will go after george soros how do you not issue a statement

saying we made a mistake this is no accountability. >> it seems to me that if facebook separates the chairman and ceo roles, zuckerberg's the chairman and sandberg is the ceo. they've done it. does that really solve the problem? >> a lot of companies have done this, and larry ellison is the executive chairman and he's got a couple of ceos and he still runs the company when you have a controlled company like this, does that go far enough or is there some measure in place to get some kind of accountability >> i can't micromanage that, and if you have independent directors on the board start acting like independent directors and that doesn't pass the smell test something must change. we've been sailing this for months and months and when you do have separation you have best practice and the companies that are doing better and right now they're starting to get themselves caught up in the scandal game and it's starting to show. >> advertisers have given little

indication that they're under by this the way some investors are. are you getting any difference on it? >> look, there are people who think the trump presidency is going nat rigin the right direcd say that may not be the case i'm a long-term investor, but i also think long term politically. you don't have to win today. you have to make a case to share owners you have to make a case to the board and ultimately to mr. zuckerberg who i've always said and someone i admire who built the company and should be congratulated for that, but with a big company comes great responsibility it's about national security it's about civil rights issues within the company and the case continues to build >> okay. quickly, bottom line any of this that will cause you to sell the stake in facebook? >> our job is to stay and make sure these companies create the greater return that i need to do my job >> we'll talk to you about this soon again >> scott, thank you so much.

scott stringer let's bring in steve case to this conversation. aol co-founder and chairman live from washington. good morning >> good morning. good to be with you. >> so what was your reaction to the revelations about the way facebook's leadership responded perhaps didn't respond directly enough, in a way they've admitted that to the problem they have with the russian manipulation and what do you make of their response to the new york times report. >> well, the new york times report was obviously very troubling and it's a great company and i know mark and sheryl did a fabulous job on building one of the most valuable companies in the world and one of the most impactful companies in the world and have a significant impact in business and society nin terms of politis and hopefully they will make the moves necessary and they have the right intent and they've been clear and a lot of people

are looking for the actions now to follow the intent and hopefully in the coming weeks and months we'll see more of that >> and what kind of -- what kind of moves do you think would be most beneficial to the reputation and not just of facebook, but of these themselves to hold such sway over our everyday lives? >> well, some of this backlash, i guess, against big tech, backlash against silicon valley i expected for several years as these companies become more and more important to have more and more impact engaging more on the policy level is going to be critical and the next wave of innovation of policy issues, regulatory issues whether it be on the platform side of the internet or in health care or other sectors of our economy, the entrepreneurs, the innovators need to engage with the policymakers they don't like to do that because they like to have freedom of action to move quickly, and that's understandable the nature of the kind of issues

we're dealing with, the opportunities we're trying to deal with does require more of that engagement. facebook is seeing that. google is seeing that. other companies will as well that's going to define, i think, the winners in the next 10 or 20 years, the ones that are innovating, moving quickly, but doing it in a way that is understanding they're living in a broader context and are more respectful of the role of policy steve, is all of this going to cause a labor problem for facebook what i mean is all these scandals, the damage to the brand right now. they're spending a lot of money to address some of the issues. are employees going to want to work at this company >> facebook is a great company, google is a great company, they're still going to be a magnet for talent. it does become more difficult. as you get larger, it becomes more difficult everybody felt proud to be associated with facebook the reports suggest a little more anxious

we've seen that with other large companies as well. some of that this comes with a scale of going from a startup to one of the most important companies in the world which is one of the reasons they need to recognize they have significant civic responsibilities, and if they implement those appropriately, they'll be able to attract and keep people and attract and keep customers and that's a key part of what they need to focus on. steve, you mentioned the work you've done we're familiar with the rise of the rest trying to equalize the venture capital and now we have this amazon headquarters decision whether it was a lost opportunity for rural america and the company. what do you think? >> yeah, well, again, great respect for jeff bezos and amazon and have watched them grow aol was started in northern virginia not far from where one of these headquarter sites will

be in the virginia area. the broader d.c. region. i was disappointed the other site was new york city it could have been columbus, denver, dallas in tech that would have sent a signal there's talent everywhere the challenge is creating opportunity everywhere that's what we're trying to do, level the play field so everybody has a shot at starting a company. they go to the coast and, indeed, we hope to see a boomerang of people. it was a missed opportunity in terms of what we're trying to achieve and we'll keep at it and trying to keep that sense of momentum, sense of possibility start and scale in the middle of the country and more can stay there and consider moving back >> along those lines, steve, how much do we buy the explanation it just wasn't possible to do the kind of talent ramp that

they wanted in an indianapolis or a columbus? here is a company, amazon, built out logistics infrastructure from scratch that's talking about delivering packages by drone, but they can't help build up a tech workforce in indianapolis really >> we've been to indianapolis and columbus and part of the effort we're in the list of top potential of the top 20 finalists. these are cities seeing tremendous momentum. in indianapolis you mentioned a company, their target was acquired by sales force at the time they had 1,000 employees, now three or four years later 2,000 employees and it's the second largest site for sales force it's a great ecosystem we saw half a dozen other multibillion dollar software companies. columbus is where innovation is happening. pittsburgh is where uber's

driverless cars are not in silicon valley but are in pittsburgh these cities are rising. there is talent there. we need to keep the talent there which means investing there, investing in their growth plans so people growing up there can stay there and people left because there was an opportunity there. now is the time to move back it's going to happen i'm confident the rest will rise we want to move it along faster to create more hope and opportunity in more places more quickly. >> we know you're continuing to push thank you, steve case, aol co-founder and author of "the third wave." the dow trying to hang on to some gains just can't do it s&p is down eight. you have facebook trying to hang on138. walmart below 98

let's get over to deirdre bosa with breaking news on airbnb in a memo shared with the public airbnb says it recognized substantially more than $1 billion revenue in the third quarter making it its strongest quarter since the company was established in 2008. now this comes ahead of an anticipated ipo next year. this is the first time the home

sharing startup has ever released a revenue number. now other large, private companies have started to release more of their financial information out of their own public market debuts airbnb has held back the company would not comment on profitability or other data points airbnb is on track to be profitable for the second straight year. in 2017 posted $100 million in profit on $2.6 billion in revenue according to the source. the ceo has said the company would be ready to go public by mid-2019 they haven't decided when. >> deirdre, thank you very much. watching the markets and seeing how nvidia's the worst s&p name, all morning. something to watch given the price weight usually moves the needle on the index.

>> next week more earnings to watch. >> i would mention the follow on to sap's buy, survey monkey is up almost 5% >> black friday a week from today. let's get to the judge thanks, carl i'm scott wapner is the u.s. economy slowing faster than the fed thinks is the case growing for jay powell to resist raising rates remember this? >> my people have been in this game for 25 years! and they are losing their jobs, and these firms are going to go out of business and he's nuts! they're nuts they know nothing! this is a different kind of market and the fed is asleep. >> is history about to repeat itself it's noon and this is "the halftime report. is the economy faltering and is the fed doing