a second part gdpr has been a work in progress is we are still trying to get which version of gdpr. to get specific, there have been letters and infections of the called the article 29 working party that lay at certain things you need to do but those are not actually part of a decision yet. for a lot of our members it's what we need to comply with, how do i do it, but most important, how do i communicate it to my users whether they be in the united states, whether they be based in europe, or somewhere else entirely? we are still trying to work through the elements of gdpr from the compliance perspective. what i do like about gdpr, it's an attempt to establish a new dialogue between the people who collect data and the people they collect the data from. in a sense that part of it, let's call the aspirational side of gdpr is something i think my members are all embracing. the part when he to take out how we manage is okay, that sounds great, how do i put into practice, how do i comply? >> how other grappling with this practical and uncertainties? are you senior members either pulling a

the second part of gdpr has been a work in progress. we are trying to figure out which version of gdpr to get specific. there have been letters and advice from the article 29 working party that layout certain things that you need to do. those are actually part of a decision yet. for a lot of our members is, what i need to comply with? how do i do it? but most importantly, how do i communicated to our users? whether they be based in europe, the united states, or anywhere else entirely. we are still trying to work through the elements ofgdpr from the compliance suspected. it is an attempt to the establish a new dialogue between people that collect data and the people they collect data from. in a sense, what is called the aspirational side of gdp are is what i think my members are all conversing about. how do i put into practice? how do i comply? >> how are they grappling with those practical uncertainties? are they pulling away from europe or avoiding that market? how do they approach this question? morgan: unfortunately yes, we have had

i'm also certain those people have not read their e-mail box full of gdpr notices. that tells me we're not doing a good job communicating with the user. that's part of a need to fix. >> what does a solution to that look like? >> we've seen some good first attempts. apple kind of led the way with just-in-time notification. in other words, instead of handing you a 14 page document that tells you the possible uses of your data, and the just-in-time notice on your phone when you get the pop-ups that says this application would like access and it does it at the moment. or your microphone or data. not early, not late, but asks you at the time we are most likely to care. just at the time it impacts you. that has been a big change. elements like the purple triangle that tells you when location is turned on. little notices and using a lot of feedback, human feedback to engage with you where you are rather than where your lawyer is. >> we saw california lawmakers test this month has seen a consumer privacy law in that state. what is your take on the approach they took which h

gdpr is really the broadest, because it's across europe, right?s really the broadest implementation of a regulation in this space, and it actually has teeth to it, right? there are actual financial penalties for companies that don't protect your data, that don't protect your privacy. laura: if you're in the e.u., though, i mean-- christy: it doesn't just apply to--if you are a u.s. business, and you have employees that came from the e.u., if you have customers in the e.u., if people are taking your products to europe, or you have europeans coming into the region and using your service while they're here, so i think it would be a mistake for a u.s. business to look at gdpr and think that that doesn't apply to them. in fact, i think they should see it as a early warning for probably one of the more mature frameworks we've see. because a lot of different countries have experimented in this area, but you're going to see more, and you're going to see them get tougher. scott: even small companies, small websites that sell, but do sell into europe, those

. >> do you see gdpr will be the standard. >> i think having gdpr will be the standard. i know they would like to do gdpr. if other companies start doing that, then what you will see is gdpr is about to become the standard. i think you can go back to mobile telecom when the eu had gsm. they got together and agreed to standard. and it wasn't meant to be the global standard but ended up. eventually when the u.s. joined in, that became the global standards. and when we came to 3g, we decided to go to wcbma, for example. i think it could be the gold standard. but it's by no means guaranteed. it depends on what the u.s. and other countries do. they say actually we like a lot about gdpr or do they use gdpr as a template or do they come up with their own ratings. >> where is the european silicon valley? >> we have a number of different areas. and, for example, we have -- it depends. in london we have developed a number of tech firms around old street in london. we have -- some people say we have a silicon blend. for example, in parts of scotland. other parts say they have a the

gdpr of the eu says you actually need to accept the terms of service freely.lly freely accepted if you have to accept them or can't use facebook at all? to many it is an important way of socializing and keeping up with friends and getting news. many feel that you, come -- that the eu, come 2019, isn't right. we could see more nuance. you can find that you could use facebook and then they cannot use their data. what then of targeted advertising and their growth? emily: fascinating. from the outside, it appears google has benefited from gdpr because they were able to expand their resources to get compliant, hurting smaller competitors. caroline hyde in young than -- in london, thanks. there's one more big tech company you have to watch for, that is apple. we will discuss next. ♪ ♪ >> this is "bloomberg technology." it has been a wild earnings season so far, with any negative sentiment sending shockwaves through the market. coming up tuesday, apple will report its results, and a lot is on the line. for more, the managing director at citigroup in new york, and in

there is health, the sms contracts, gdpr and not a lot of compelling reasons driving users to twitter. that is what we see as the key problem. emily: the irony is you have trump treating multiple times a day. if anything was going to widen twitter to a more general audience, wouldn't that be at? >> one of the things i pointed out -- wouldn't that be it? >> one of the things i pointed out is you have one of the worlds most recognizable people using this as a major communication platform. if you can't have the president who is a polarizing figure one way or another, if he cannot drive more usage, what would. you could do all of these things to clean up the network and do things we think are actually important to do, and i think it helps the users there, but the challenges, why should someone new come to twitter? we have not seen a lot of compelling reasons and i do not see them for the foreseeable future. >> you talked to several analysts who thinks long-term, it will help twitter's regulation with advertisers who want to reach high-quality users . tell us about that. >> getting in fron

emily: facebook put a lot of the blame on its results gdpr. what are people saying about whether or not gdpr and european privacy laws really are to blame and whether we'll see similar fallout with other tech companies? >> i think thus far the proof has been that facebook perhaps was hammered. but gdpr has been affecting the likes of alphabet asle and it's been a boone to their business. they went to alphabet's google because they didn't trust the rest of the other advertising areas to ensure you're targeting the right user base, are actually gdpr compliant. facebook and google were most meant to benefit for that reason. it seems as though only google did. really facebook fell out of favor because of -- this is the real first tell tail quarter of whether or not it affected users' desire to be on the platform and exposed to targeted advertisers. in europe you're unable to opt out of facebook. they lost a million users overall. it's still a drop in the ocean compared to how many users they have across the board but still people -- from europe th

do they use gdpr as a template or come up with their own regime? >> where is the european silicon valley? >> it depends on area. in london, we have something called the silicon roundabout. there are a number of firms on old street in london. some say we have a silicon glen in scotland. there is no one silicon valley. part of the reason is because i think your silicon valley has been much better of attracting the best talent from the world. you don't insist on american innovation being created by americans only. for far too long, in european countries, when they talk about european innovation, they assume it will be european innovated as well. most of the immigration policy tends to be inward looking between free movement -- with free movement between european countries, rather than attracting the best in the world. you go to silicon valley, you don't have a record doors. we are not good at attracting people from the rest of the world. >> 10 years from now, how is tech going to look differently in the eu? what innovations will we use on both sides o

other countries will impose rules that are not that dissimilar to the gdpr. think facebook has to change the way they relate to their users and they are starting to do it, but not fast enough. emily: buzzfeed published a memo from the facebook security chief who was on his way out the door , talking about how we need to build user honesty and not just optimize to get clicks. there is interesting data about spikes in usage, around things like target breach, icloud hack, u.s. presidential election, but how do you think user behavior around privacy is going to change? is this something users will pay for? or that they will expect for free? david g.: some people are willing to pay for privacy read some people expected for free. in the u.s., about two years ago, privacy was something that only technology geeks cared about. today it has gotten mainstream. if you look at the apple app store in the top 50 most popular apps, you will see facebook, twitter, instagram, and others. among the top 50, we are the only privacy and security related product in the u.s., it sig

see as being the impact from that >> it's a great question they're there were fears that fwshgs d gdprd be a maker jish fiss google and it's been negligiblne if you look at the fine, it's noise and a head wind, but investors have looked through that and feel the worst is behind from a regulatory perspective in terms of the fines. the overhang is removed and gdpr, the bark was worse than the bite in terms of google's business i think you saw that last night. >> talking about gdpr not being such a problem as people anticipated, you mentioned there's feathers in the cap of bulls. which numbers will they point to those critical of the share price, which one will they be highlighting in. >> they'll focus on regulatory that's a longer term risk. in terms of margins, margins as we talked about, that's going to be the issue in terms of the valuation. the bears will argue that they're not going to be successful on cloud. you have amazon and microsoft too many miles ahead of google they're spending in a situation where they can't gain share. those are the areas that the bears will point to as we

ishe g gdpr relel game changer th d dat privacy?eeen cooratee entiti firirsts they have to negotitie remits to cicide rules.s. -- agreemements to decidide rulf who is the g gated contrtrollera met -- it takakes time. this is a way to compete for data ownership. nonot only aboutut privacy butut competition.n. >> padua -- - have europeaean authororities targeteted the rit areas?s? >> they haveve created a n new world.d. we had thohose rules fouour yeas ago,o, 20 years ago, the e lackf harmrmonization. we have new w procedures today n order to i impose compananies tt fofor p privacy and r regulatoro agree toave a sing v voice i eurorope. andsesers of socialal n networs any tech compapanies are beieing told they y have to reviview and acceptpt these new conditiononsr have theheir accounts s shut do. do these cosost reminderss on as getting through to members of the public? >> it i is a way to i inform yof your situatition and the u user data. not t a new wayayo consent becae u u have n choice if you do noacaccepthe terer andondiditis, t

they actually missed a little bit this quarter due to some gdpr-related issues.ger-term, radio is a $25 billion market globally. there is room for spotify. emily: talk about the competition with apple. we are still waiting for apple to report, but this is a company that obviously has really deep pockets and really long-term relationships with artists that spotify has to compete with. justin: right. it is a great question. apple does have a platform advantage. it can push apple music to all of the iphone owners, ipad owners in the market. that said, if you look at the global market, apple has a small marketshare share relative to android, relative to other devices. that market share further fragments when you factor in that amazon echo is the dominant speaker. so when you look at what will be the winning factor for streaming business, it device ubiquity. every device on and is starting to build up a data advantage that will be difficult for others to compete with. emily: but amazon also has its own music service they are trying to push on users. justin: it does. i

they have been working for several years to become gdpr compliant. in fact, it appears that it has helped their bottom line because it has become more difficult for smaller organizations to become pr compliant. in our phone call, ruth porac, did talk about that. -- ruth porat, did talk about that. we are interesting, seeing many of these regulations coming from europe, perhaps as an effort to spread the wealth a little bit, but in this particular case, it has concentrated the wealth in the hands of google. emily chang, thank you so much. she is the host of "bloomberg technology" in san francisco. we will speak with chief analyst bob o'donnell in about half an hours time. todi: jump tweets managed rock the markets. su keenan is joining us to put it all in -- to put it all together with bank earnings. beent probably would have a down day with the market hugging the line throughout the session. let's go to the snapshot. we did see dollars gain. the 10-year was lower. financials.e s&p that was the strongest index in the markets today. the s&p 500, you ca

>> it is they mentioned the full impact of gdpr was unknown.t was just implemented towards the end of the quarter based on our checks, the work we've done, we think gdpr will be a non-issue for google an alphabet overall >> do you change your recommendation and/or your price target based on the results last night? >> i can't discuss my estimate changes or price target changes, but i th benefit from many factors they are also talking about loom and wing, two projects coming out, a beta project status and approaching full commercialization this year or next year. so multiple tailwinds. the wind is towards afshlphabet back >> the market is rewarding it. thank you very much, victor anthony. coming up at the end of the show in your rbi, a stat on google that you have got to hear. >>> more on the markets and your money. in the bond market we're not seeing a huge reaction again the ten-year yield, despite the record highs for the stock market, is not above 3%. 2.95%. overseas, something interesting happening in the chinese markets last night japan, it

the thing about the gdpr rules, they impact everybody.everybody's going to have the same type of struggle, companies like facebook and alphabet will be able to absorb those costs a lot better >> give him a 20 multiple, you have a $4400 stock which is higher than it is now. >> coming up, more on alphabet we'll get the first reaction from a number of analysts. in the meantime, here's what else is coming up on fast. >> up in the sky it's a bird, it's a plane. >> no, it's just bit coin and something happened today that suggests there could be more gains to come. >> one surging industrial is up 9% in one month. and guy adami says it's going even higher. he'll give you the name in his pitch when fast money returns. you always pay your insurance on time. tap one little bumper and up go your rates. what good is your insurance if you get punished for using it? news flash: nobody's perfect. for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch and you could save $782 on home and auto insuran

everyone is very keen on data security, gdpr, that kind of thing, so security, gdpr, that kind of thingardware. and it absolutely relies on us hardware. and it absolutely relies on us trusting those devices, because we have our lives on our phones, you have a password to login, whatever biometric data to login, whatever biometric data to login, but if there is something relatively simple, potentially your life could be exposed. yeah,, and this may not be malicious, just a softwa re this may not be malicious, just a software error where something has gone wrong, and it is unlucky that it has happened to samsung after their hardware issues in the past, but if it is notjust photos, confidential e—mails, anything else like that, we have a problem. this is what you had to say, old—fashioned comedy says it is softwa re old—fashioned comedy says it is software rushed to market, it needs to be tested. not thisjeremy, anotherjeremy says, i don't trust anything connected to the internet if it has a camera and a microphone. somebody says you cannot blame the bones, we put the trust in the companie

facebook's dailying ative u inas dropping because of the combination of gdpr and other factors.ut looking forward they say gdpr and facebook prioritizing privacy will have an impact on revenue growth going forward >> the one question that i i had has been lingering over all of this is the cambridge analytica scandal and whether that had an impact the company seemed to suggest in the u.s. that that part hasn't but in many ways it has because of what they have to do around the investment side in terms of privacy. in terms of user growth in the u.s., what's your take on that >> i think it's interesting that daily active users in the u.s. was flat so there's concern about that daily active user in north america because it is flat if they had really been able to buck any of these concerns about cambridge analytica, maybe it would have grown i think we're seeing the investment in security and safety, that's impacting profitability, but we're not seeing growth in daily use in north america. it's worth asking whether they would have been able to grow if they had not had all those negati

i'm not sure it is gdpr. some been called differently, but it will be something of the like. use the that people can without control is something that has to come to an end. players arethe big doing everything they can to avoid to have the privacy breached but, we must go once a further. i believe the consumers should receive a share of advertising spendings. if i'm using your name, i'm using your address, i'm sending you messages, and you are opening those messages, you will end up, maybe by buying a from the client, you deserve to be paid for that in receiving a share. --re is no reason the money >> all in one direction. i like that. i get paid to be me. >> it will not only be you, but it will be you. >> that he so much for joining me. back to you in york. scarlet: ed hammond, of bloomberg news, joining us from sun valley, idaho. while they were speaking, croatia has said news. julie: croatia has done it, it is advancing to the world cup finals. scarlet: obviously disappointment in england. croatia versus f

gdpr is a way of ensuring everything is compliant by giving it to google or amazon.ra: alex webb, thank you so much. bloomberg opinion columnist. let's shift to asia and what's been happening in the markets. japan's benchmark bond yields climbing to the highest since february on report central-bank will discuss possible changes to its ultra-loose monetary policy. yields pared their it after the boj offered bond purchases at 0.11%. any change would be the first since 2016 and its introduction of yield curve control. fx, commodities, and rates at j.p. morgan private banks is still with us. looking to the boj, what are you expecting from the policy meeting? >> we still focus on the fact that the bank of japan is committed to yield curve control because inflation is still low. even though actions you saw today on the backs of market aeculation there will be change policy, the bank of japan committed to their yield curve control policy. even if they were to be thinking about change over the course of the next year, it is likely to be gradual. levels, itt these seems like

somemissed this quarter do -- due to some gdp are--- gdpr -related issues.lk about the competition with apple. we are still waiting for apple to report, but this is a company that has really deep pockets and really long-term relationships with artists that spotify has to compete with. justin: apple does have a platform advantage. it can push apple music to iphone owners, ipad owners in the market. that said, if you look at the global market, apple has a small marketshare share relative to android and other devices. that market share for their --gments wayne you see that when you see that amazon echo is the dominant speaker. device works on every and it is getting a data advantage that will be difficult for others to compete with. they are all china to push here. it is a unit -- they are all trying to push here. it is a unique situation. spotify is the market leader. by looking at each one of those businesses, they do one device well, but not every device well. none of them are optimized to work on one another's devices. spotify works well on every device in

gdpr is an interesting, how to say it, movement.ve orbe able to to be engaged on a platform you have to opt in. i have noted, there has been some discussion in washington that this is something, that congress should look at. i am not really sure. we saw a minimal impact from .dpr regulations on ad spending as regards activity for the individual users, i am not sure on the metrics. i would look at them afterward. ramy: thanks very much. john o'donoghue with the latest analysis out of facebook. for breaking news wherever you are, we have tictoc by bloomberg. the first global news network on social media offering live video coverage and updated top news reports verified by us. make sure you follow tictoc. this is bloomberg. ♪ ramy: welcome back. the latest business headlines. bank ceo is talking expansion again after spending his first four months cutting jobs, reducing risk and building capital. he said the bank can now grow in the second half. shares fell after the key business of fixed income reported its weakest second quarter sinc

another interesting thing we discussed was gdpr.t seems as if google has benefited more from r impacting the bottom line because smaller businesses have had a tougher time complying. they are having concern that google would see a negative impact from gdpr. but ruth porat talked about how privacy is one of google's main values. they have been working on getting compliant for a long time in continuing to add new transparency tools. another thing we need to pay attention to is capex. we saw it go up again this quarter. last quarter capex because of that big piece of property they bought in chelsea in new york city, she talked about how they are going to continue to invest in the vig growth opportunities -- the big growth opportunities that the sea, that we should expect to see those capex numbers continue to rise over time. julie: if you look at how the shares are performing, up 4% in after hours trading. scarlet: you have been pointing out if they open at these levels, this would be a record high for alphabet shares. having said that

that the goalposts have now shifted, and under the new law and the new data privacy law in the eu, gdpr increased, and it could be as much as 4% of annual turnover. it is one of many regulators in the eu which have been looking at facebook, and the issues raised are not just looking at facebook, and the issues raised are notjust looking at facebook, but they show more systemic problems with facebook, cambridge analytica, and a number of other companies including data brokers operating around the world. so this isn't just brokers operating around the world. so this isn'tjust in the uk, it is a global issue. in sport, the football world cup final takes place this weekend, with france playing croatia. after the balkan state defeated england in the semi—final 2-1. defeated england in the semi—final 2—1. sporting events like the world cup had given a big boost the advertising, and according to a report, it will overtake tv advertising this year in the asia—pacific. 0ur correspondent spoke with a company which provides technology to help companies advertise online. they started by discussing

today everybody is saying that the eu is leading on gdpr because data is important. back and see where this is going. when the internet was created, you know, everybody thought that actually there would be no monopolies on the internet because it was free, you would have competition if anybody did well, new entr t entrants would come in and nobody would make super normal profits. one thing was not foreseen that is that people made money on the internet essentially from advertising. leave aside netflix, the subscription model, the way to make money on the internet is advertising. that means you have to collect data on customers. that data, the europeans say that data is the property of the customer the consumer many of these tech companies, facebook, amazon, netflix, google, they considered that data the property of themselves. what we foresee at global data is that data will be segregated from software. so it's no longer owned by alphabet or facebook, it is owned by the consumer. and they can switch from one internet ecosystem to another. and if that happens these co

facebook missed projections on revenue and global daily active users, particularly in europe where gdpr and the cambridge analytica privacy scandal impacted user engagement when it comes to the ad revenue, also below forecasts and the company expect revenue growth rates to decline by high single digit percentages going into the second half keep an eye on this trade when u.s. markets open. royal dutch shell announced a 5 $25 billion share buyback program which will see them purchase $2 billion of their ow shares each quarter. the figure missed market expectations you are seeing shares off 1.6% production also declined in the first quarter of 2018. speaking to cnbc earlier, the ceo gave us his take on the firm's results >> our earnings are solid. there's a number of things in there. if you look at integrated gas, very good quarter. twice as good as the same quarter last year. upstream, good, solid quarter. four times as good as the same quarter last year. downstream is lower. bear in mind downstream had one of its best quarters in q2 now we see a tougher environment for refining and tradi

subctcted to the it is notot onlyy complying,g, but to compmpete wh otother coanieies outside ofof e gdpr scope. >> do think k most companinies l bring their new busininess model into compliaiance, or willll wee signs threreatened? the first yearbe of a appcation. regulators wilhaveve tlearn. they have huge powers and y not be mature enoughn the procedes, litation agnst the mpany. they may tart the bigarket playererfirst to gigi examples ofheirir per. we see ding g th next 2-3 years hohowuch it can be balanceanand more secure as aenenviroent. we are eing mordata brches in mpanies d busisses arod the e rld. esese relationonrequire compans toto rort reaches faer. will they y do anything g to ree the number?? reduce.e.not this transnsparency is a a way o ededucate everybybody. yoyou need to bebe aware that tr babank, your government, is s nt securere and youou have to be ea player i in this policicy. >>>> bond regulation, atat ould individualso o to ptect eir privacy? >> u uerstand, decide,ead d an decide. ey shohod use thsesettin not ly for the benef o of th service theyouldld le to use, bu

we did not limit what gdpr would allow. we think it is a good rule.ough we are leaving the european union, we are going to keep it because we think it is a good balance between privacy and innovation. caroline: some of the most innovative companies have been born and bred in the u.k. what do you think about the consolidation within the media space? matt: i certainly see it happening. i am the quasi-decision-maker. in some of these mergers. i am very careful to ensure that decisions are taken clearly and objectively. we obviously had a very detailed process, looking at the fox takeover of sky. the final details of how that can work without causing problems in terms of media plurality are out for consultation for the next week or so. that is before we come to a final decision. also, the comcast proposed takeover we looked at and decided that did not raise concerns. now, there will be a takeover contest, should that proceed as billed. and i think the position we take in the u.k., that the government doesn't take a strong view on these mergers generally,

we see that the market is turning to capabilities in order and weerly manage gdpr can get that builtnto our standard solutions which is becoming very attractive. you a quick one on how think the market perceives your business. there are 28 buy ratings on your stock. it is up 27%. businesselling me the is accelerating, the cloud business is accelerating. how much more gas have you got drivingank in terms of this business forward? the market likes what it is hearing, there is a lot of buy ratings, how easy is it to satisfy expectations? this company built and a sustainable sense for the long run. our portfolio is extremely modern. our majority of our revenues is basically posted by solutions that are in the market for seven years or less, think about our corey data and our many otherhink about solutions that are in high demand like digital supply chain management solutions, risk management solutions. i think we have a great amount of hassan in the tank to further accelerate and one of the reasons we have even raised our 2020 ambition in the cloud up to 8.7 billion euros in revenue is t

change the conversation and they know full well that they're running into some large numbers and also, gdprterms of the impact and engagement i think that is a critical question to how this plays out and i understand that concern and keep in mind, they just rolled out europe as they roll out to other countries will weigh on the optimism in the next couple of months. >> why do you think wall street and investors missed the impact of gdpr on europe? >> they told us it was going to happen last quarter. they couldn't have been more clear and the reason why they missed it is when they've said negative or cautionary comments in the past they always blew right through them and so as a former analyst that covered facebook, you would look at that and say they're just trying to keep the barlowe and the analysts simply ran ahead and there will be models that will have more moderate, dau and mau growth for the next few quarters >> another adjustment to the model, would that be spending and 40% and 60% and facebook hit it right in the middle. >> the adjustment i'm talking about is bringing some of the,

beating numbers. >> except that they let you guys believe that they were not seeing an impact from gdpr or data privacy how can you believe that they are still giving conservative guidance at this point >> on the quarter i would say say the gdpr quarter was small and they said that wasn't a large factor there's a couple of other factors such as pushing stories more, such as the privacy issues they are going forward with. >> let me wrap it up aaron, you first is this facebook a good investment today, a better investment today than it was yesterday, or not? i'm going to ask the same question, brian, to you. is it a good investment sean it better today than it was yesterday? >> it's a good investment today. company is trading 20 times at earnings there's still growth growing we think about mid-20s next year. ending this year around 26% growth for a company still growing mid-20s, 20 times earnings that's pretty attractive our fundamentals, sure, but the valuation has been down. >> brian, do you say good investment or bad? >> depends on your time horizon. the business is not going anywhere i

. >> what the gdpr says that information companies gathering about you, not just your name and addressnd driver's license, also the information that be linked back to you personally has to be deleted if you no longer need it and if you ask them they need to show it to you and delete it. >> as a security expert should we have that kind of legal protection here? >> absolutely should california has just announced they will have a new privacy law for california residents by 2020 probably going to happen everywhere. >> we know that congress has started the process of looking in on this, pressing the ceos of apple and alphabet which is google's parent to know things like is your known listening to you, and if it is, what are you doing with that information? >> and that's really -- that's really important for congress and other governments to be asking those kinds of questions because google, amazon, apple, big companies are gathering information about us and exploiting it and getting value from it and we need to have them delete it if we ask. >> how easy would it be for google or apple to ma

prevent other scandals like cambridge analytica as well as to comply with european privacy regulation gdpr, giving up profits in the near-termo protect the platform's users because the stakes are high. >> if they don't get theth security o platform right it's all over and they have a lot of issues about this earr.er this y so they need to get this right. i think that they will. if they can, this is the opportunity to buy t stock here. >> a key measure of facebook's success with these investments is how well it protects the security of the platform aroed upcoming midterm elections. consumers and investors alike will be watching closely for any si of election manipulation. for "nightly business report" i'm julia boorstin in los angeles. >>> it would not surprise you to know that facebook is a popular holding among fund managers. if you don't own the stock upright you are probably still invested in it in some way. facebook is % ownedy institutional investors, meaning investment adviseut,l funds and pension funds. vanguard, fidelity, black rock,o state streetl advisers are all top holders of t

there is awith gdpr good chance they've got more traction, they've gained market share.is the cost at which that is coming. for the that the bill behavior and that is something they are going to foot this quarter. vonnie: what do we anticipate hearing about capex? i have a chart here which shows the rising level of capex to sales? it will be interesting to see how and where they are spending that. , chipsre investing more are the most expensive part of r&d. to ensure google is the browser of choice, they pay apple, we think a few billion a use safari, the default search engine is google. those may be increasing as they are unable to lean heavily on android going forward. acronym wedpr, that use for the more stringent data privacy rules. how has that affected google's business model? >> i think they might benefit. they have a huge amount of the value chain. they are insured complying. they have been going to their customers and saying if you use our system, you are not exposed to compliance risks that you might be if you use different people. that might be an advantage. i

then you have these bigger issues around the company like gdpr.like the company has grown, where it could potentially grow and it will be a harder message at this point going forward. nejra: where is the growth going to come from? ones, instagram and whatsapp, phenomenal acquisitions. they are harder to monetize and they are younger businesses. the company will have to play catch-up to make up for the fact that growth has stalled. the product is used by everybody and has not changed very much in the last couple years. they will have to go back to the drawing board. tom: thank you so much. greatly appreciate it. news, this has been expected. -- $2 billion gift and compensation. james with us. did you own facebook? you are not a facebook guy. did you have a bad night? shares,ve facebook underweight position because of the risk associated with a model. i have three takeaways. first. revenues were disappointing. second. cost is up. i was struck by the lack of control by management in the call. it was not orderly, the ducks were not in a row. this is w

. -- gdpr. and ensure they will not get any fines coming from the e.u..oks like it's been a benefit to googles bottom line rather than undermining control of the market, which is exactly what the e.u. generally wants to do. it doesn't want to reinforce duopoly's, it wants to ensure that competition is wide and varied. emily: let's not have short memories ourselves, let's remember that netflix earnings results were not great, and we are still waiting for facebook, amazon, apple. could we have any unwelcome surprises? let's definitely. these companies, particularly amazon and facebook, they live or die based on the rates of revenue growth. there's lots of concerns about facebook, a company that's been basically in a pr crisis for two years. the question is, to what extent does that begin to hurt its advertising sales, if ever. investors are really anxious to see whether facebook can continue to shrug off a two-year pr crisis in every corner of the globe. i think that is an open question, at least on the user front, starting to see some slowing growth rates

talking about the headwinds and that people are changing their privacy settings and blaming it on gdpr it is a good time when there is negative news the pylon all of the news and really let investors understand the risk that facebook has faced all along. facebook is in over its head. expendituresting growing faster than revenue. that is never a good thing. headcount is up and all of the numbers seem like necessary investments given that facebook needs to fundamentally address some issues with the platform. concernedtart to get is on the revenue side. you bring up the new regulation in europe and how that is and we seesers active daily users go down in europe read -- europe. the regulatory risk is coming to there is a huge erosion of trust because of the timing between some of the .ssues to election interference between when investors were asking for answers and the company knew there was a problem, and when the users discover there was a problem. it was nearly a year from when beforeted fighting it nine months later we learned 126 million americans were viewing russian propaganda over

not really cambridge analytica but the implementation of gdpr the way people went through the process not as onerous as the worst case scenario so we think minimal impact we think this should be a good quarter for facebook >> we saw facebook shares rise on the back of that report are investors right to sort of project the good quarter that alphabet had onto facebook >> i mean, look. i think you were coming off of a negative quarter for netflix that put fear into faang then you came off a good quarter for facebook which is the most underowned of all the faang stocks the idea is, okay, you make sure you're long facebook and amazon. that's probably the setup here the question will facebook is actually cost. all the checks suggest that it is going to be good. how much legal cost did they take on in the quarter will they break that out separately they talked about a high level of both operating and capex growth this year and it being particularly back end loaded it's a question of what's going on at the margin we're looking for earnings to be up 34% they may miss kind of the top headline,

through to broader implications for tech stocks on one hand we had alphabet earnings, didn't see the gdpr those earnings were well received, youtube looks to be going strong on the other hand, netflix had some growth issues when it comes to how many people are using the service versus expectations and are the valuations for the stocks being valued on growth getting too high >> jon, i think that's the core question because when you look first at the issues that are facebook specific and why did we not see any ripple effect inside google or ripple effects inside twitter, to me the issue on fundamental facebook has been staring us in the face for awhile relative to alphabet, the business is more diverse but the issues that are getting facebook in trouble are just as true of alphabet, they just represent a smaller part of business eventually you're going to see the market reach a level, i mean, we're ten years into this economic cycle we have rising interest rates, we have all kinds of uncertainty on global trade. from a tech perspective, those things are terrible. and you look at it and it s

business here is what she had to say about gdpr we still think it is too early to comment on the longbusiness we've always been very committed to privacy and have great privacy tools every day. we have taken a number of additional steps such as improving user transparency so it is easier to understand the information we collect switching gears, asked about youtube. certainly when you talk to analysts on the street, they would love ruth porat to start breaking out youtube but when i asked ruth porat about that, no clear indication if she is thinking about breaking out youtube that is coming in the near to intermediate term. she certainly didn't give me a time table of when that might happen head count, that was an interesting metz metric too. up 18% i asked where they are hiring and she said we have a lot of additions in the growth opportunities in terms of functions, it continues to be generally engineers and product managers in areas, longest drive in hiring was again in cloud. and finally certainly the story last time google reported by capex. so i asked her about that this quarter.

we had issues and we know that the gdpr is crimping a little bit.eryone who wants to be on facebook is already on facebook. there is little room to grow at least on a user basis. what they really need to do is find a way to squeeze in more advead inventory. instagram is something they are pushing hard and doing instagram stories. the stock is down a lot largely because despite the miss it tends to be priced for a beat, if anything. the fact that it didn't quite do that is hurting it even more. it is still a growing product. >> mike, before we get too dramatic, they still had an 11% increase in daily average users and monthly average users. also, the bull case on facebook is they have other levers to pull whether instagram or other acquisitions. >> even if usage intensity or number of people using is close to peaking, demand for digital advertising and to reach the eye balls is not -- pricing should adjust. it's not the end of growth. >> if in the next quarter or two we saw the same thing happen in the u.s. as has happened in europe would we see more

>> yes, i'm familiar with gdpr. >> okay. basically if i'm correct it's now the policy in the european union that consumers must opt in to the dissemination of their private information that is carried by one of your organizations. is that a fair statement, ms. downs? >> there are consent requirements in gdpr, yes. >> and what do you personally think of this regulation in europe? >> we very much support a goal of protecting the privacy of our users and we are happy to continue to work with congress on that here in the u.s. as we do with the european union for europe. >> i agree with you. i think the privacy of most americans and people -- consumers should be something looked at by not only your companies, but congress so that the consumer is protected because we all know and have heard all of the stories about how our private -- we think it's private information -- is not private at all. it's disseminated by your organizations to people we don't even know and so that citizens, users, should at least know where that informatio