tv Bloomberg Technology Bloomberg May 4, 2021 11:00pm-12:00am EDT
plus, analysts are reporting results. we have a roundup. poking holes, attorneys for apple go to work on epic games. we have the highlights of his cross-examination from day to in this massive antitrust trial. neighborhoods have become a crucial information hub in the year of the pandemic, but pose vaccine, as people go back to work, what is the next chapter in keeping communities connected? that and more -- elusive conversation with the next-door ceo. we begin with the u.s. markets selling off, sparked by inflation fears. text getting caught up in the crosshairs, mega caps like apple seeing shares fall. let's get more from katie. >> stocks are seeing red today, led by the tech sector, down over 2%. s&p 500 down by .9%. nasdaq 100 more than double that stock as big banks fell.
comments from janet yellen did not help. she said that higher rates might be needed to prevent overheating in the economy. though she let her walk that back. tech also felt the crunch with the philly semiconductor index dropping for a third great day. that weakness is turning into a trend. if you look at the semi index against transportation stocks, railroads, airlines, usually the two typically track each other, but they have started to break apart. transports are at a record high and climbing, but the semi's index has fallen for three weeks as production constraints start to pinch. that is taking those shine off of growth stocks, which is why you are seeing etf's on fire. one was on fire, up 150% in 2020. daily output flows are really starting to build aztec continues to lag, and the etf fell another 3% today. we could see more outflows from here.
>> you mention a lot of the macro stories. let's talk about earnings. we list earnings, shares are up after hours. a lot has to do with the loss not being as bad as analysts were expecting. you also have cash.com right in the middle, revenue boost right there as well. i want to hit zillow really quickly. the housing boom driving web traffic to the site. not doing it right intraday, i want to hit him what katie just talked about. we are going to use a video to show a video -- down 3.3% and that slowed into automakers. let's look at some of the automakers. electric vehicles that drive etf's. we also have other tech stocks really taking that in stride as well, for example amazon, apple,
the biggest heavyweights in the s&p 500 really dragging it down. snapchat in the red. crypto also in the red. the big story is broad-based selling wherever tech has attained. -- it's hand. emily: thanks for giving us a broad roundup. appreciate you both. i want to move on today to in the high-stakes antitrust trial happening from apple and epic games. the cross-examination of the epic ceo was aimed at weakening his argument that apple's app store is "a wildcard". that puts onerous conditions on users. our own reporter has been listening to every step of the trial. give us the highlights from the cross-examination. did apple's attorneys succeed in undermining sweeney's case? guest: thank you for having me. to some respect, apple's lawyers did have a successful time undermining the argument of epic
and the ceo tim sweeney. one of the key arguments that apple made today was actually getting sweeney to admit that the 30% cut apple gets from the app store is similar to other consuls. that raises the question as to why epic is going after only apple, and suing only apple over this 30% cut, when every other platform that he provides his software on does take the same cut. the difference i do want to tell you, is that while many of these consuls to take the same cut, if you look at a comparison between apple and google, google take the same 30% cut, but there is a key different -- difference. they have two different app stores. one that google provides post in google play, or another from another provider which may take a slimmer cut. emily: in your view, has tim sweeney and epic been persuasive
in making that case? that apple really is different, and as you mentioned, all of these players take a 30% cut. guest: i think thus far, i have not seen anything from the epic side to say they are making a persuasive argument to the judge", including in their evidence, cross-examination that apple is doing anything not par for the course. one interesting tidbit i heard this morning was apple's lawyers basically questioning sweeney about the typical home and how many devices they have, and which devices they have, really going to the crux of the issue. the problem came down to the box -- v bucks. ? virtual currency that you could buy. epic to not want to pay the 30% cut for purchasing v bucks so they created their own payment system. apple does allow you to port over v bucks without giving
apple a commission since you already bought those on android or playstation. they basically got sweeney to admit that there are other devices you could have bought them on. emily: what is on tap for tomorrow? guest: tomorrow you see continued testimony from other expert witnesses. you should see people from microsoft and nvidia testifying on behalf of epic going through concerns of apple's business model. emily: mark gurman. listening into that trial. we have every angle of it covered, thank you so much. coming up. a $350 million criminal industry. ransomware attacks are plaguing major corporations, government and health-care providers around the world. we go -- we talked to a palo alto senior vice president about high the by demonstration should be tackling cyber threats next. this is bloomberg. ♪
emily: a new report finds cyber criminals are demanding more money than ever, but the highest demand going up to $30 million in 2020. they've also taken advantage of the pandemic to target areas organizations, particular those in health care. this as the justice department in the u.s. has created its own independent ransomware task force, signaling a growing awareness inside the government of this now decade-old threat. joining us now to sit -- discuss is wendy wetmore. thank you so much for joining us.
how is ransomware and ransomware attacks, how are they evolving and staying ahead of the security giants trying to catch them? guest: let me set the stage. in many cases during the pandemic, technology saved us. we relied on it to move to the rapid transformation of a remote workforce. unfortunately, during that same time, ransomware has become an epidemic. ransomware operators take extra time on their hands to ultimately refine their business processes, and in many cases mature their operations. what that has meant as they have now outsourced so many of their operations to experts, enabling them to be even more effective about the data they are stealing, and ultimately, it's really an epidemic type proportion at this point for businesses, health care and state and local government. emily: i want to give an example of a recent attack. test one happening out of a company on taiwan, which
supplies components to major companies like apple, like samsung, like microsoft. in this particular case, they're asking for money. i wonder if they know that they are targeting a company that has customers with pocketbooks this deep. are they targeting to maximize their profits? guest: they absolutely are, there is no doubt about that. they had mature their operations in a big part of that is the actual ransomware operator can now focus on their objectives, which is exactly what you are talking about. finding information i can steal is going to give me the biggest return on my investment. this is no longer a scattered type of attack. this is very targeted, very specific. i would say ransomware operators are often now using the type of discipline we have largely seen from nation state actors. emily: this was by a company
called our people, talk about about what you are expecting to see more of from nation states. guest: i think the real question is, is how involved are they with ransomware? the reality is is that it is not necessarily matter today whom the attack is coming from, because the significance of needing to defend your network, the ability in the supply chain for all of these type of actors is so critical. we used to as a business, i have been doing these investigations for over two decades, please to focus primarily on nation state actors. now you have economically motivated i'm groups who are specifically causing even more damage in some case than the nationstate actors are. emily: let's talk about where the fighting administration is. this ransomware task force has submitted a work to the administration with 48 different
recommendations ranging from cryptocurrency regulations to requirements for disclosure. where do you think the biden administration should begin, if in fact the government has not done enough? guest: palo alto networks is a significant member of the task force you mentioned, and we are really focusing on a number of areas. deterring the attacks, disrupting attacker infrastructure, as well as preparing and responding. i think it is incredibly encouraging to see the government really focus at very senior levels in identifying and recognizing that these threats are a problem to businesses, governments and organizations worldwide, and it is going to be a multifaceted of roach for us to significantly impact them and a positive way moving forward. emily: understanding the threats his mom thing, but doing something is another. in your engagements with the administration, have you seen
the willingness to put resources and manpower behind these efforts, to the extent they are really needed? guest: i think we are at the early stages at identifying and looking at ways to solve it. from the administration standpoint, we are seeing a lot more opportunity to understand technology plays such a huge place in ensuring we are innovating, able to detect these threats. i think there is more willingness to look at, how do we deter these types of threats as well? how can we disrupt attacker infrastructure and make it more costly for them to conduct these attacks, and how can we work with other countries to make sure we do not have safe havens for these types of actors who are continuing to perpetuate these types of attacks? i am cautiously optimistic about where we are. emily: fascinating, you can go down a rabbit hole reading about all of these individual attacks. so many interesting threats. thank you so much for joining
us. coming up. next-door is stepping up its content moderation with new antiracism notification. will it work? the ceo joins us next in an exclusive interview to talk about this new policy, and trends on the neighborhood apps that have kept so many communities connected through the pandemic. this is bloomberg. ♪
interview to talk about the growth and this new policy. i want to start with the big picture, because our communities have never been more important as they have been over the last year. what trends have you seen on next-door and trends that may have surprised even you? guest: great to be here. this is a place you go to plug into neighborhoods. . that matter to you. one of the trends we have seen, people come to us for trusted information, public agencies, u.s. government. they come to give and get help. i would also say that did not surprise me but it surprised me a little, how much people leaned into that need. another thing is to build online connections that take them off-line. we have a sneak peek hitting the presses on monday. we see things like [indiscernible] they're still a bit nervous about what the economy,
particularly if they are female or living in a rural area. that said, they have shifted a lot to e-commerce, and are doing things like food delivery and grocery online delivery, and it does not look like that is going to end. emily: this is part of your insight series, where you are learning more from the credible content on the platform. people are buying more hours cars. tell us what you can learn from the information. guest: today nextdoor is in one in three households and in 11 countries. that gives us access to a huge population to go out and survey, how are those trends shifting. as we do that, number one we are tapping into a really unique audience. one of the things i love about nextdoor, they typically have not been on another social media network.
even 20% haven't been to facebook. i gives us a very interesting angle. things like food delivery apps. we saw a huge surge, doesn't look like it's going to stop. it's definitely younger population doing more of it, but the big jump we see is the 35 and above want to stay on the food delivery trend. similarly, with grocery shopping. people still want to do curbside pickup, so they are not going to retrench back into the store. in fact, texas is the state where we see the biggest rise, 77% of neighbors saying they want to keep up curbside pickup. emily: as wonderful as the community building has been, not all neighbors are nice, tender has been a problem with racism and this rumination. you are announcing a new policy. how confident are you can get this product under control when companies with massive resources
like facebook, twitter have not been able to do that? guest: you're right, it's a problem we take really seriously. it's going to always be of all the. there will be no end to it because of the fact of how neighborhoods and neighbors interact with one another. that said, we do believe that we can continue to cultivate a much more welcoming platform. we started way back, you will recall about kindness reminder. deeply steeped in social science, it's all about slowing people down by putting a little pop-up in the app, if you are writing something we think is not going to cultivate kindness in your neighborhood. we have taken that one step further with an antiracism notification. if you are posting phrases like all lives matter or clue lives matter as a retort to someone saying black lives matter, we are helping educate why those can be very hurtful, and are not at all welcoming, particularly to our black neighbors. just today, we are taking steps
on banning a lot of hate speech and hate symbols on the platform. we want to stay out in front of this and hope other platforms will follow, because we think this is how we build a much stronger and more welcoming community over time. emily: the antiracism notification rolled out a couple of weeks ago. are you seeing an actual reduction in use of racist language as a result? guest: we did know for sure we have an impact. kindness from wider saw about a 30% reduction or change in the post itself. often times people don't even realize they are airing into something that comes across as offensive, hurtful. that quick reminder is enough to have people change what they are writing. for sure, what we do know is that a lot of the neighbors on our platform, when they see us take a stand on the product itself, that is what really makes a difference and starts to
help lay down the groundwork that this is a platform that welcomes everyone. emily: facebook has been testing its own neighborhood product. does that concern you, especially coming out of the pandemic when maybe we won't need our next-door app as much as we did when we were stuck at home, and just needed that outdoor engagement? guest: i think local can never be more important. many of the trends help the platform. think about those people who would have been leaving home to go work in the city, for five days a week and now they are doing a hybrid from home alongside shifting to a different neighborhood. in that regard, we continue to stay front of mind. i think we have also become a daily habit, recognizing there is huge utility people --. helping front a plumber, babysitter or wanting to help voting on community. i think everyone recognized during the pandemic this power
of local. we are set up to be the only platform that can do this. our graph is a local graph, it's not a runs and family graph. we are the place that people turn to when they care about the local perspective or when they want to find out what is happening around them read. emily: we know you know how to turn a company into a massive moneymaker. can you give us an update on how much revenue the business is generating and your plans to get closer to potentially an ipo? guest: for sure, the last couple of years have been very good in terms of our overall growth rates. in 2020, ever daily active users grew over 50%. that is our northstar metric. if you people are coming to the platform, are they finding us to find the daily habit. we have become much more useful for advertisers.
i talked earlier about how unique the platform is. more and more advertisers are finding next-door as the place to get their message out, and we also work extremely well for small businesses. not just the big local businesses like a walmart or home depot, but also the mom-and-pop street owner, local coffee shop. revenue has tracked with that number, and we really like the momentum we are seeing overall in the business right now. emily: is an ipo in the cards? guest: could we raise money and put it to good use? absolutely. are we ready to be a public company? we are working on that. i think we are there. i know what it takes to run the gauntlet. how we do it remains to be seen. i want to [indiscernible] it's about can be be a great public company. emily: thank you so much for joining us. always good to have you here,
emily: welcome back to bloomberg technology. chipmakers getting our attention. looking at tech more broadly, i want to bring in katie gupta. what are you watching? >> we have seen outperformance we know there is a global chip , shortage helping stocks. until last month you saw this , major underperformance, compared to the s&p 500, trading sideways, accelerating that drop. you can see on the right side of
this chart. not just big tech, but chips translating into that story. i want to show you this is largely a function of the earnings story. last week is where the selling began, broad based selloff. chipmakers are down 2%, compared to the other tech indexes, so this is something to watch to see if the underperformance continues or demand pushes stocks higher. emily: thank you for that roundup. one tech entrepreneur cofounded a marketing company, until fired as ceo, because he admitted to taking lsd before an investor presentation, but that is not the whole truth. the story was recently profiled by my colleagues and now joins
us with his side of the story. i want to take a step back. you say you were fired abruptly because you shared with one of my colleagues that you had taken lsd before board meeting in 2019. from your perspective, what happened? >> the story was never about taking a substance in 2019, but speaking up and sharing my journey as an asian-american founder and ceo. it was supposed to be a story about overcoming obstacles and raising a very healthy valuation, but instead, it became about the price you have to pay for standing up and speaking out as an asian-american. emily: you make the allegation that this might have something to do with your race, a strong allegation.
your backers have backed a number of companies with asian founders, and declined to comment for this story, but what evidence do you have there was discrimination at play? justin: the fact is my performance as a ceo and leader is high. the feedback i have gotten is not about my performance, but the values i hold, looking for consensus, not choosing conflict first, and really about the values i have as an asian-american, and discriminating who i am, versus looking objectively at the performance as a ceo. emily: talk to us more about your relationship with your investors. did you feel like it was strained? justin: i did.
it has been over one year. there has been a lot of criticism, and i did not understand why, because the metrics performance was good. , as i got down to it, we had a meeting in a park last june, where an investor called me out of the blue, we are on track to be public, there are very few people who look like me, asian-american, so you're thinking about protecting your investment, versus what is best for the long-term of the company. emily: now, i know you believe this is bigger than the lsd incident, but to be fair, that incident is getting a lot of attention. many people don't understand why you would take lsd before a meeting or why should investors tolerate it. why should they tolerate it? why do you think the action they
took was unfair? justin: the root of the lsd experience was to heal trauma and stress associated with this role. part of this experience, especially in asian-american communities, we are told to eat the suffering, and i was at a point where i needed to heal, so that was out of a need to do so, something i had learned from other entrepreneurs around the use of healing substances, jobs, bill gates, and it has changed my life. our company has 4x valuation, and the culture is thriving, by all respects, after that healing. emily: it is no secret micro dosing has become a trend. it has been written about on tech blogs.
there are ceos and founders who talk about doing this regularly. is it something you supported? was that a one-time thing? or this is a problem in the industry more broadly? justin: it is something i did one time in 2019. i would prefer to have access to a therapist who understood this medicine. it is difficult to find. it was only through reading books that i understood it. the way i did it, i don't recommend it, but something i had to do to make sure the company is in a good place. i am not an expert on lsd. there is a lot of good research. from my experience it has , changed my life, changing my relationships, how to process emotions as an asian-american, founder, and ceo.
emily: i understand and empathize with the struggle and lonely journey of starting a company and scaling a company, which i am sure is incredibly challenging. one of the things we talk about in the article is you talk about how investors early on are looking for "weird" was looking for people to fund early on, but as the years passed, the desire for what they want in leader changes. can you explain that to me? justin: yes, the conflict i had with my series a and series b investors who invested five or six years ago, so they are vc funds, ending the end of their time, so they're looking to sell the company and move on, where i trying to build a am company for the next 30 years. this company is my life's work and i have put everything i have into this company.
to this day i have not sold one share. really you are seeing a conflict in terms of the time horizon, so it came from that. emily: when you look back on the decisions you made over the years, and if there was just that one time, do you have any regrets about how you handled the situation, whether it was just that situation or other situations? justin: i think certainly there are things i can improve on. i am open to feedback. i would have talked to more people sooner about the stresses earlier. i tried to take everything on my own shoulders, so i hope my own story can inspire others to not have a situation that has happened to me, which is very unfortunate.
emily: your co-founder has been appointed ceo at this time. do you think it is a mistake? can the company keep growing as fast as it did without you at the helm? justin: we have known each other for almost 10 years. we are best friends. i am supposed to be at his wedding in a couple of months. the way this happened is dramatic for all of us. -- traumatic for all of us. andrew loves working on product. he is an engineer. he is, this is the first time he is managing anyone, so you go from engineer and managing 420 people, so i don't think it is the right thing, but having my co-founder in that relationship and situation. emily: i would assume your investors and you and your co-founder probably want the same thing, a strong company growing fast with focused leadership.
do you think there is something your investors or community could have provided to have made that happen and help other founders? justin: i think it is providing space for founders, asking founders and ceos how are you really doing, and providing more mental health support, and really understanding where they are coming from. three weeks ago, i disclose for the first time to my investors that experience i went through, the lsd experience, hoping to understand that this was solely for helping the company and the funding in 2019, and this is from the perspective of this is my life's work, so i think making space and empathy for that going forward would be helpful in the community. emily: what will we see you do next? justin: i am recovering from all this. i'm trying to talk to as many
people as possible. i am taking time off. it has been eight plus years. i miss everyone there. i miss the people. i miss you all. thank you for everything you do. now i am trying to process this. it is very traumatic. it is quite an experience, so it is time to just reflect. emily: will you be going to the wedding, the cofounders wedding? justin: i am going to the wedding. andrew, i still love you. you're my brother. emily: fascinating story. you can check out more and bloomberg businessweek. coming up, a new piece of technology helping one self-driving startup go the distance. we will talk about the new system giving his company the
does not require any supervision by a human. it offers photorealistic imagery all around the car. it can see up to and beyond 400 meters. it is a compelling sensor that will allow us to operate safely on all types of roads. ed: is this a technology for your cars, or one you will sell to others? >> we might sell it one day. we certainly will look at selling it in verticals adjacent to automotive, but it is a competitive advantage for our autonomous vehicles, so we will be looking at opportunities seriously, but it is a huge competitive advantage for us. ed: you testing a lot of u.s. cities and jurisdictions, but you have also expanded to germany. tell me about that. >> we are testing in six cities in the u.s. today, the largest test footprint out of all the companies, and we are expanding
to europe, so with our volkswagen investment, we have an engineering office in munich and will scale out across cities in the coming years, and invested in a sizable test track in munich. ed: do you think you deployed commercially in the u.s. or europe first? >> we think the u.s. will lead. the regulatory environment is set up to allow commercial department of autonomous vehicles, but europe is a great market, and we are definitely interested in seeing how that develops. ed: are using meaningful progress in europe on the regulation side? >> yes, we think cities understand the benefit autonomous vehicles provided to manage congestion, route planning to alleviate congestion, the safety benefits, the ease, access, and democratization of personal mobility for people who do not have it today.
there are a ton of benefits and cities are waking up to that. ed: you talked about the big names, volkswagen and ford, it is a capital-intensive exercise bringing autonomous vehicles to market. what are your financing plans views on going public? , >> we will be raising money this summer from some of the capital markets. we will be looking at an ipo in the future as well. i think that it is one of those things where we don't know the exact source we will take the funding from next. we are looking at a bunch of options, but we are excited how that will keep us going to be able to scale out autonomous vehicles. ed: what about spac's? there has been attention on stocks and focus on automotive and automotive technology sectors.
is an option for you? >> it is. there are different takes on it. it is not a new instrument. it is democratizing early-stage investment to every investor, and i think spac's are a useful route that a lot of companies can take advantage of the public markets in the capital available. it is allowing an investor access to transformative companies, like hopefully our company someday, and others, where those may have not been available in the past. the key with a spac, it is important that folks are upfront about realistic projections when they go out and speak to the market. it is important those investors understand what they are getting into. emily: that is the ceo of argo speaking with ed ludlow. you can catch more online. coming up, is dogecoin gaining,
i think folks when they come into the space, i think it is a feature, not a bug, that these different assets or nft's great momentum that is helping to bring the space to new levels. so it is a great thing overall. emily: that was the ceo of coinbase talking about the evolution of cryptocurrency in different options like bitcoin, and dogecoin. and entities. she spoke earlier at the bloomberg wealth summit.
the price of dogecoin increase d 50% tuesday. recent rallies continue the trend that has seen the value of digital tokens search. my guest joins me. does this have to do with elon musk on snl or something else? guest: it is anybody's guess what is driving the specific price action. it is a meme coin. it is a functional network that does work. there are no real users, developers building on it. i have never taken an investment pitch. i'd look at this as analogous to the gamestop saga, except that gamestop had more going on. emily: so, why does elon musk love doge so much?
>> he likes jokes. he is a fun guy. he likes memes. dogecoin is the perfect target. in i am not surprised it has the current market environment i am not surprised it has caught the eye of more than one market participant. emily: ok, so let's talk about the other rallies and how do you separate what is happening with dogecoin versus everything else? >> fundamentals would be the easiest way to do it. again, if we think of dogecoin as gamestop, we can think of etherum as something else. closer to an amazon of crypto finance or digital finance broadly. whereas ethereum has seen of fundamental traction and developers building on it, dogecoin does not have it. that is where we separate the wheat from the chaff. who is actually getting developer and user adoption. ethereum is at the top of the stack.
emily: so, talk about ethereum and what is happening. obviously, we're seeing a massive rally. when this happens, so many folks don't understand why. what is driving it? >> ethereum has had a fantastic run recently. there are some near-term price catalyst people are watching, so a few improvements of protocol that improves the user experience in terms of transaction fees, and has the net effect of putting upward pressure on price. that is one upcoming catalyst. there is also the rollout of the ethereum scaling solutions, which have been anticipated for a few years now. those are on the horizon and getting real-world deployment. we have the transition to 2.0 on the horizon as well.
those are all on people's minds but getting back to , fundamentals, the story about ethereum is that this is the primary driver of growth in adoption within the ethereum ecosystem, that is decentralized finance, digitally native financial applications built on top of ethereum that have seen traction in the past one year or two years. emily: either way, we have seen a lot of volatility now. are we going to see that volatility continue, when perhaps one might think, especially after the coinbase listing, that maybe we would see more stability? >> listen, all of these assets, we were having the conversation about bitcoin, when it would become less volatile, and it is still volatile less volatile , than it was, ethereum is that the relatively early stages of approaching gigantic markets, global financial markets around the world, this is some of the
biggest opportunity, and it is showing incredible traction. we should expect to see volatility going forward. the longer the track record it establishes in terms of building developer and user traction, the more we can expect that volatility to decline. i don't think that will happen over the next 12 or 18 months or anything like that. emily: thank you so much for joining us. so much to discuss. much more to talk about tomorrow. we will speak with our guest from galaxy investment partners. also tomorrow, lift president john zimmer, the day after they reports losses. reporting losses narrower than anticipated. writers are starting to return. revenues decline, but it was up 7% from the previous quarter. shares rising after hours. again, john zimmer, tomorrow. that does it for this edition of "bloomberg technology." i am emily chang in san francisco.
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