david kirkpatrick, joining us in new york.pple's asian suppliers are expected to take a beating this thursday morning after the company's earning and the cutting of the guidance. where do use it in this debate, is this a story about china and the macro bearishness? is this story about apple? mark: it is about all of those things. it comes a day after we had confirmation of just how much the chinese economy is slowing. tohad another sub 50 pmi follow the official one a few days earlier. are clear signs the chinese economy was in trouble. this apple news reconfirms the fact that there is a serious slowdown going on as well. we still have not finished discussing trade between the u.s. and china as well. all of these things are coming together at the same time. the mood which is already the nervous, the first day of trading for the year, it has been compounded. there is no relief whatsoever. you are beginning to see its spin out into the risk of trades as well. in thesevere moves yen. it waspoint today trading in the space of 30 m

joining us from new york, david kirkpatrick. and michael pervez. ese numbers are above better than people thought they would be. what is your take? david: i think there are two parallel stories. the numbers will continue to be great, because advertisers don't have another place to go. it doesn't mean there is not a separate story that is still quite unattractive about their inability to govern their systems properly. i think it is telling that just today, there was another story of a privacy problem in the way they are handling their apps. it is a weird yin and yang thing. facebook as a spectacular business. in many ways, the best business that anyone could imagine. emily: to give more detail, what happened is that facebook had a research app that it was paying users to use, including teenagers, in exchange for their data. apple has said this violated the terms of service for this particular app. they have revoked facebook's enterprise certificate, which means facebook can't use its internal ios apps. employees, we have heard, are panicking, because

to bring into the conversation, david kirkpatrick. he is the author of the book "the facebook affect." if you look at how facebook shares have moved since the third quarter results, they have moved sideways. they have gone down to as low as 124, as high as 151. pretty much back to where they started. has the picture for facebook changed much? has there been a user reform -- revolt? david: i don't think there has been a user revolt. to they -- to a degree, there has been a significant behavioral shift away from core product toward ancillary product. instagram is booming. facebook's core product is actually growing rapidly in developing countries. not in developed countries. from a user performance point of view, facebook is doing ok. the question surrounding facebook is much more to do with macro policy questions and how they are handling abuse on their platform, how much they are spending too remediated. joe: what are you most interested in hearing from facebook? paul: on the revenue side, monetization. outside of facebook.com. we kno

. >> david kirkpatrick who wrote "a history of facebook". >> you had privacy on facebook. >> says users shared a lot about themselves on the site but they felt safe doing it. >> people put their photo, their cell phone number. their e-mail address and a lot of personal information on the service because the only people who could see it were their friends. it was the first service that worked that way. >> there was nothing else on the internet that really allowed people to share information about themselves in a trusted environment with the people they already knew >> from harvard the site expanded other ivy league school, within two month, 20,000 users at twenty colleges by 2006, 2,000 colleges and 25,000 high schools. fresh from dropping out of harvard zuckerberg had a big dream. >> the goal was to change the world. >> move fast and break things. we're the geeks that should and will control the world >> facebook kept evolving. and its designers believed in imposing new experiments directly on users and then watching the impact. that was the approach for a wildly successful and controve

david kirkpatrick weighed in on that yesterday. here's what he had to say. apt --alance, i modestly optimistic, but to say they couldn't get worse, given the incredible uncertainty in the landscape right now, that's risky. looking at the fundamentals that are still strong in the stock? shannon: we kept our buy because at this point there is a concern -- a compelling story about active devices, effectively the in stock, 1.3 billion in the last 12 months. that is what's driving the service revenue. they grew the service revenue in light of these results. what apple is shifting from is a hardware based and again, it's still a hardware-based company, i understand that, but they have this installed base, a platform with concern about netflix moving, the numbers given for netflix were too high, frankly. apple past the first year of subscription only charges people 15%, which isn't that much to have your product on a platform. and the cash flow side of things, based on the shares that were repurchased, it seems like apple pulled back a little bit after seeing these