tv Bloomberg Technology Bloomberg October 5, 2021 5:00pm-6:00pm EDT
>> from the heart of where innovation, money, and power collide, in silicon valley and beyond, this is "bloomberg technology" with emily chang. ♪ emily: i'm emily chang in san francisco and this is "bloomberg technology>' profits before people. -- is bloomberg technology." frances haugen tells congress facebook knows it is hurting
teens around the world, but chooses growth above all else. plus, facebook's vice president of content policy joins us live. we ask her to respond to haugen 's disturbing allegations. how will facebook restore public trust? where are their plans for a social network for children now? even on the back of a massive outage that wiped facebook and instagram off the internet for several hours, facebook shares rebound with the rest of the market. are we seeing the beginning of a long-term correction? let's go first to the market rebound and bring in ed ludlow. it does not look like a tech rally that is dying, at least not today. ed: the nasdaq 100 up by 1.4%, biggest gain since august. over the last two days, a massive selloff monday, a recovery on tuesday. 82 out of the 100 stocks on the
nasdaq 100 in positive territory. even a technical correction and tech stocks would mean broader trouble for markets. you can see what i'm talking about. tech has such an outsized influence on the broader equity market, you can see tech and the communication sector waiting the s&p 500 cap. if we are going to get a correction, it seems we will be holding for the time being. let's talk about bitcoin briefly, breaching the $51,000 mark on tuesday. a bank of america strategist saying bitcoin is "too large to ignore" and skeptics might be surprised by the opportunity that lays in cryptocurrency. you can see the rebound we have had since october. interesting to see that from bitcoin, especially all the concern from regulation and discussions on capitol hill. some of the stock movers, equity market specific names on the move.
netflix, strong performance on tuesday. a survey was doing of 2500 people who basically agreed netflix has the best content. are you guys watching "squid games?" pretty good. facebook up 2% despite the focus on the whistleblower. very quickly, two stocks that lagged on tuesday, zoom and booking holdings, two different sides of the stay-at-home trade. emily: ed, thanks so much. i want to get to facebook again. a climax on capitol hill. the whistleblower who sparked a series of damaging stories about facebook testified before the senate, making a series of disturbing allegations. >> they can't protect us from the harms they know exist in their own system because it is causing teenagers to be exposed to more anorexia content, it is pulling families apart. in places like ethiopia, it is literally fanning domestic
violence. emily: joining me to respond is facebook's vice president of content policy. the allegations that frances haugen made were many, but they had one theme, that facebook chooses profit over people. how do you respond? >> that is not true. i have been at this company for nine years. my background is in child safety and law enforcement. i was a criminal prosecutor for a decade. i would not be here as long at this company if this company did not prioritize safely. we invest billions of dollars. we have more than 40,000 people working in security and safety across the company. unlike the former employee, she by her admission did not work on these issues. she did not work on the subjects of the documents that she stole. i do work on them. i am proud of the work we have done at this company.
emily: the question becomes what other trade-offs are you willing to make to choose safety over growth and over profit? would you be willing to give up engagement based rankings? monika: let me explain how the ranking works. there have been a lot of mischaracterizations out there. when people say the ranking algorithm, what that is is a way of ranking the order that you see content like the friends and family you have chosen to follow. you can always turn that off, and some people do, but most people use it because we try to rank the content that people are going to want to engage with that will make for a positive experience. emily: why not make turning it off the default? if you turn it off, it is more chronological. people use these apps mostly with the default settings. why not make the chronological
ranking system the default for facebook and your other platforms? monika: most people prefer the ranking system. i can tell you why i personally do. the ranking system helps me connect with the information that will be most relevant to me rather than say an old high school friend messaged an old high school friend. the algorithm, people can opt out. i want to be clear that we do down rank engagement based, clickbait, sensationalist content. that is all information we publish. we know people want to understand how the ranking works. we just a few weeks ago published our content distribution guidelines that explain how that works. emily: you disagree with much of what frances haugen said on the stand today, but said if you can agree on one thing it's time to create a standard set of rules
for the internet. what does facebook propose those rules should be? monika: we have been calling for regulation for the past 2.5 years. working with policymakers and regulators around the world to help craft thoughtful regulation, i think it has to begin with transparency. it is hard to set the best practices or standards that the industry has to meet until policymakers can actually see how companies are performing. we started to lead the way by putting out our community standards enforcement reports, which we begin in 201 -- began in 2017 and now do quarterly. policymakers have to find our -- find out a way of ensuring accountability. how do they report on that? how do we make sure that reporting is accurate? those are serious issues.
it will take serious conversation with regulators and policymakers that we are there, we think ultimately the industry -- the regulation that holds the entire industry to high standards can be a good thing, for us and the public. emily: i think parents in particular are really disturbed by some of the revelations she made about children. as a mother, this common and particular from frances haugen -- in particular from frances haugen i found terrifying. frances: i am very scared about the upcoming generation because when you and i interact in person and i say something mean to you and icu wince -- i see yo u wince or cry, that makes me less likely to do it the next time. online kids don't get those cues and learn to be incredibly cruel to each other and they normalize this. i am scared of what will their lives look like? emily: will facebook consider
raising the age that teenagers can join to 15 years old or 18 years old? and if not, why not? monika: we do talk to safety advocates and make sure we are doing everything we can to be responsible, both about the age people can join, and what that experience looks like. i am a mother as well. i also prosecuted child safety offenses for years. i raised two girls. i know that these issues of social comparison and anxiety are very real things in the off-line world as well as the online world. we can talk about how social media can make things worse. that is why we do this research. we want to understand it so we can build tools to mitigate that , but we also need to remember what the research says about how social media makes things
better. in fact, if you look at the stolen documents that have been mischaracterized, this is not peer-reviewed research. we put out a lot of peer-reviewed research. this instagram use survey is not that. it is a survey of instagram teens struggling -- who were already struggling with wellness issues. if you look at that survey that we published, on all 12 issues, anxiety, sleeplessness, body issues, self-harm, for both boys and girls, a majority of those teens said instagram either makes things better for them or does not have a material effect. we have to keep that in mind when we think about the negative experiences. even one negative experience is too many. that is why we do this research, so we can launch tools and features to make the experience better. i can list a number of those.
hiding likes on an instagram post so you don't have to worry about being judged and if you are popular by your post, or giving teens features to prevent people from following them who could harass them. it is not just our policies, it is the tools we give young people. emily: the concern is your own research shows there is a significant number of, let's say teen girls, for whom they say instagram makes things worse. i wonder how you are thinking about combating that. the instagram for kids product, you paused it. what are the chances you are considering actually ending that permanently? monika: we paused that because we want to continue to engage with real experts in the safety space. that is something we do on a regular basis. some of them we have hired into
our company. we continue to work with those safety partners because they help us craft the thoughtful approach we have. we will continue to get better. people have bad experiences off-line and online. we want to understand that. if you look at the instagram survey that is being mischaracterized by this former employee, what this research says is the majority of teens either find instagram makes these issues better for them or does not have an effect. if you look at anxiety, more teens say instagram makes things better for them than makes things worse. we published those survey results. that is something people can see for themselves. emily: what about the mistakes? frances haugen talked about this idea of moral bankruptcy and called on facebook to admit the
mistakes it made, to take responsibility on some of these matters. are there any issues facebook would be willing to take more responsibility for? monika: i'm the first person t o say we are not perfect in our enforcement of our policies, and there is more we can do. i think we have shown how serious we are in the level of investment we have made, millions of dollars, tens of thousands of people, partnerships with hundreds of researchers and safety partners around the world to try and get better. i also think this is a company that has been a leader on safety issues. when i first joined the company, we were already helping to lead the industry on child safety. that has grown to include the approach to terrorist organizations, to influence operations. we have been a leader in this space and the transparency of these safety efforts for years. emily: mark zuckerberg has been vocal on some of the facebook
scandals and controversies in the past. we really have not heard much from him since the wall street journal started publishing these stories. how vocal has he been internally? how involved is he in the response and dealing with the reaction facebook is getting in washington? monika: mark is involved in conversations about safety at our company every day. i work regularly with mark. i think publicly we have seen him not only with his many congressional testimonies, but we have also seen public statements from mark, including his very early call for regulation 2.5 years ago, him saying we should not be making these decisions on our own, we think government should have a say. that continues to be the case. emily: monika bickert, vice president of content policy at facebook. appreciate you taking the time to debate.
conversation again. >> why? >> facebook understands that if they want to continue to grow, they have to find new users. they have to make sure that the next generation is just as engaged with instagram as the current one. the way they will do that is by making sure children establish habits before they have good self-regulation. by hooking kids. emily: that was facebook whistleblower frances haugen talking about the likelihood the social network will restart its work on instagram for kids. our guest recently come out -- came out with a note that surveyed social media users. you are listening to that interview with facebook's monika bickert earlier. you heard her answer about instagram for kids. facebook is under about a lot of scrutiny and pressure today. what did you make of her response? >> it looks like facebook is taking the gloves off.
they are responding in detail. to facebook's credit, there were two detailed surveys they did on the impact of instagram on teenagers and they disclosed both of them. i went through those powerpoint presentations. i thought they were pretty impressive in the depth that they looked at those 11 different social issues that young adults, the boys and girls in this country deal with. i give them credit for releasing the results and for studying it. i wonder how many other outlets did that work on the impact they have on teens. i do think, to facebook's point, i will give them credit on one other thing. the take away that instagram is toxic for teenagers, i don't think that is in the survey results. but for a portion of teenagers, yeah, for those that come in with pre-existing conditions, or with social anxiety, in some
ways instagram can worsen that. facebook needs to step up a little bit more. they are obviously a powerful platform. there is more they can do. i'm glad they are starting the issue. they should be more aggressive about finding improvements. this is such a widely used media platform by all teenagers. emily: you have been a guest on this show for years. time and again we've talked about these facebook controversies and scandals and the stock has continued to go up. it went up again today. do you think that has to do with the broader tech reality, or do you think facebook will defy public sentiment once again and continue to rise? mark: i think it will continue to rise. this is the third major crisis i think we've looked at with facebook over the last four years. there was cambridge analytica in the spring of 2018. last year there was the brand controversy in the wake of civil
unrest in the u.s. they had a bit of a boycott. this issue has come up. i do think investors look at this. if you look at the documentation, it isn't as black and white as it has been portrayed. i think a lot of investors realize there is good to social media in terms of being able to connect, stay in close touch with friends and family. yeah, i think there is a lot of benefit to social media. i don't think i am that much of an outlier in saying that. that is why facebook and instagram have skewed high in terms of popularity among u.s. internet users. i think a lot of investors realize that. if the controversy causes user growth to turn down, investors would be worried about that, but it hasn't in the past. because of that, advertisers are
not leaving the platform either so investors will stick with them. emily: we have not even talked about the hours long outage that took all of facebook's properties off the map yesterday. facebook saying this does not appear to be the result of anything nefarious or a hack. does it at all concern you that i platform that large -- that a platform that large can disappear from the internet in seconds? mark: yes. maybe there is no internal bleeding, but that is a black eye. it obviously highlighted how much society and how many people really rely on whatsapp, on facebook and instagram to get through their normal day. there was a surge in use of other messaging applications. there is a fair amount of competition out there. the longer whatsapp was not working, the more people
switched over to other messaging networks. you would not expect that from a company like facebook with the outage yesterday. emily: mark mahaney, so much more to talk about. we will continue to debate this for years to come. much more on "bloomberg technology" when we return. stay with us. this is bloomberg. ♪
increasing its staff after a series of user complaints. tesla has been ordered to pay damages after a jury found the carmaker turned a blind eye to racism in the workplace. a black former contract worker accused of the carmaker of subjecting him to a racially hostile environment at the plant in fremont, california. the award is among the most significant verdicts of its kind. tesla told employees the company is not the same now as it was when that worker was harassed. coming up, supply problems could be about to get worse. labor shortages are causing chokepoints at u.s. ports and stretching leadtimes for manufacturers, all ahead of a spike in demand leading into the holidays. we look into the numbers and if companies will be able to keep it up, next. this is bloomberg. ♪
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emily: oh come back to "bloomberg technology." i want to get back to support the strength that are getting even tighter as retail and shoppers try to stock ahead of the season. taking a closer look of what is going on. >> is about jobs, a lack of workers. where technology cannot save us, we need people to do it. when i was in lai was told there are half is made from drivers as we need to get containers off of ships come onto the docks, and
moved onto the next point. this is market demand for they market, when the index is climbing, that means that it is a higher market. the shortage of drivers is because they are shutting down driving schools. the consensus is that tightness will continue into 2022. rising costs to bring in more drivers is costs to companies. why do we not see this coming? that is a good question. the gap between top openings and the number of hires being made has been whitening for months. it has been whitening -- widening since we got over the shock of the pandemic. why are we so surprised by this? it is the urgency that is being faced.
we see the percentage of job postings which are listed as urgent. in that seven-day period, it was 10.2%. a year ago it was less than 9%. -- 1%. one number that is in on this chart, the number of workers seeking jobs has fallen by two percentage points. that is a bit of a headache when you're preparing for the holiday season. emily: for more on the global supply deadlock and the role that chips are playing in it, we are joined by renate james, ceo of empiric computing's -- empiric computing. what is the latest on the chip shortage? how much longer does it last and when does it let up? >> thank you for having me back on. i wish that we knew. it is going to depend on which
part of the business you're in. each part of it, not all chips are the same some require specialized substrates and other constraints. there is the actual system thats that are needing a bunch of small parts. it is throughout the supply chain and it has impacted all different segments of semiconductors from mobile to data centers, to automotive, etc. the chip shortage will depend on as capacity comes on for the supply constrained segment that you are in. some of -- some ceos say it will get better, both had some on that say it last until 20 of the two. -- 2022. it depends on the business you are in. i believe in an 18 months we
will see capacity come back online. emily: how are you responding and building capacity to deal with seasonal demand? especially ahead of a busy holiday season? renee: we build products for the data center, that translates into people shopping online, buying things online and needing more data center capacity. or even entertainment online. what we have done is what many semiconductor companies do which is forecasted a rise in the end of the year. we have begun placing orders a year ago for now, we are placing for 18 months-two to four months out. if you have not place those orders it is difficult. -- if you have no place for orders, it is difficult.
economically, that is good news for semiconductors. the silver lining is that the semiconductor industry is growing. there israel demand and it is going to be sustained growth for the foreseeable future. emily: you work intel for many years, we see an evolving hierarchy in the chip industry. amd seems to have success breaking into intel monopoly when it comes to cloud servers. arm is entrenched in forms -- phones. i know you're are coming up at your forward -- i know you're coming up on your four year anniversary. renee: that is a great question. we are coming up on our fourth year. the data center business is set to double in the next four years. new entrants alike ampere have a great chance to grow share while incumbents maintain position.
that is the good news. you're making great progress. this is our newest chip. we are four years old and we built this 128 core ultramax product we are shipping now, it is the second product in four years. it has 55 billion transistors on it. it is a testament to the u.s. semiconductor industry's ability to innovate. a company like ours could be billed -- built four years ago and have this in major data centers, products that people know and love and use on their computers and cell phones run by this chip. it is based on arm. let me tell you what i think that is important. data center growth from what we have today, that requires if you use legacy technology, as victims times increase in demand for power. -- a three times increase in
demand of power. with hours, it would only be a one times increase in power. -- ours, it would only be a one-time increase in power. thank you for inviting us to talk about this. four years is not long. emily: interesting to hear how the chip industry is continuing to innovate even as moore's law slows down. we have one company that says it is not scope -- concerned about supply chain issues. dell's ceo spoke to "bloomberg businessweek" earlier. >> given the importance of all of these industries to the future and everything that is going on in 5g, having
government support to create the infrastructure for our technology future. semiconductors are at an enormous part of that. i would be in support of that. we have had supply chain strength in our company for decades. i think it has proven itself well during the last year or so. a lot of companies outsource things. they also outsource in many cases a complete understanding of all of the components that go into these machines. you are saying instances where $50,000 product is held up by a one dollar part. you have to have 82 understanding of the entire supply chain in order to run it efficiently and effectively. emily: coming up, microsoft
emily: after a month of testing microsoft is ready to roll out windows 11 to mainstream users. it will give your computer a fresh new look. some new ways to multitask and a few performance enhancements for gaming as well. it is great to have you back with us. talk to us about the unifying strategy behind them. >> is great to be here with you.
we are excited. it is a big day for us here at microsoft. we feel it is ushering in a new era for the pc, a markham -- a more personal computing experience and death was for developers and creators. it is about how we empower productivity and inspire connectivity that is the big thing with windows 11. yusuf: the new app store does not make developers pay you for in app purchases. why take this approach? renee: we want to have the best platform for apps. we have three big things i'm excited about. for the first am ever going to bring android apps to the platform imagine being able to be in your flow and not being able to call -- now being able to call an over.
the second is what you talked about. new policies so that people who want to create apps can keep all of their profits. he will see the epic games store, like the amazon store, that is a first compared to most stores. a whole new store with all new experiences, all sorts of new apps. it will be a great way for people. emily: one of your colleagues testified in the apple and epic case. the judge ruled in favor of apple except in the one count involving sharing. yusuf: we can only control the products. i think we are happy about the ability to build a great store on windows. for xbox and our stores there, there are ways you want to get those games out to people and the more that we can do that the more that is good for the industry. emily: what are you seeing in terms of the impact of the chip
crunch and how that will affect your products. especially over the holiday season? yusuf: we are in an unbelievable time, demand for pcs is at a all-time high. covid at a remote work at a remote learning has made the pc essential in people's lives. we will see a lot more man than we will supply. i think the greatest mobilization of the pc ecosystem i have seen. across chipmakers, device builders, even software makers. we are doing everything we can to make sure we can get great pcs on the shelves for people to get to. if you cannot get a brand-new windows 11 pc, we will provide a free upgrade. your current pc, the vast majority of pcs, we will upgrade those for free as well. emily: thank you for joining us and giving us the rundown. coming up, undermining the basic
presidents of democracy, that is what elizabeth warren has to say about facebook's current practices. our interview with her, up next. tuesday marks 10 years since apple cofounder steve jobs passed away. the company replaced the homepage with a tribute to jobs and published a letter from his family. he would have been eager to see what the company developed and. --. this is blue -- nexxt. next. this is bloomberg.
on capitol hill today to crypto. sen. elizabeth warren: right up until the federal government was put in the position of having to back up the money markets or watch the economy go farther over the cliff. now we have got something called stable coins, unregulated, surely they are safe, but no regulation around it. no controls around it. as more money flows into it, the parallel to what happened back with money markets at least has to be in front of the regulators. we need regulators who are willing to step up and exercise the regulatory tools. david: which regulators? we have heard jerome powell say they were like water -- money markets. where is the best place for the
regulations to come from? sen. elizabeth warren: they have authority to do some of what they need to do. i believe the fed should step up, the sec should step up, they trading commission -- the trading commission. the treasury has the working group around this, digital currency, bitcoin, all of the pieces. i also think that the consumer financial protection bureau should be there because of the risk that trading on unregulated markets can post to individual consumers. this is a time where we all are regulators to get smarter, faster. david: we heard from a whistleblower for facebook. i'll of disturbing claims about what facebook knows what it does. give us her insight into regulating a social media company. -- give us your insight into regulating a social media company. the disclosure, is disclosure
the way to go out this problem? or do we need content regulation? sen. elizabeth warren: i'm going to back you up before the 30's, i want to get back to teddy roosevelt. that is how i look at this. he talked about break them up. you break them up so that you have got multiple competitors. also -- multiple competitors can offer different kinds of services. that is not true with facebook. your phone number, we do not have to be on the same foot exchange to call each other with a phone number. if you want to access somebody facebook's page, you have got to use facebook. the monopoly that grows. the point that teddy roosevelt made about this is to get markets to function and to insulate them from pressuring washington for protection is break them up.
we have lots of competitors in this market, no one deborah nights -- no one dominates in the same way. david: keep them from pressuring washington. we have seen a fair number of hearings on capitol hill involving facebook and other social media companies. asking for a lot of information gathered. we have not seen a lot of activity. where is the market's failure in that? do you think we will see activity and when? sen. elizabeth warren: it is facebook and the other corporation, the higher the lobbyists, they make the big campaign contributions. they fund the dark money. you do not even see their fingerprints on it. there they want to undermine basic premise of democracy. that everyone is welcome here. that everyone has an equal voice. we are saying that play out right now. -- seeing that play out right
now. emily: what we have learned about frances haugen's testimony and the reaction from lawmakers. kurt, one of the testimony takeaways is centers acknowledging differences but they need to agree on how to rein in facebook. i thought that was pretty startling. kust: who knew that the one thing -- kurt: who knew that they want the neck of bring washington together was the shared animosity towards facebook. it is easy if you are an elected official to say i am drawing a line in the sand when it comes to our children's safety. it makes me think that maybe this time around there might actually be some repercussions. we have not seen a lot of actual punishment for facebook for the things that they have done the past couple of years. emily: take a listen to what frances haugen had to say about
fred -- zuckerberg in particular. she indicated, no many how -- no matter how many people are involved in facebook, the buck stops with him. frances haugen: he holds over 55% of all the food insurance for facebook. -- of the voting shares for facebook. in the end, it stops with mark. emily: what do you make of the fact that we have not heard from mark zuckerberg yet? kurt: it is relatively striking. you have not heard him address it too seriously, he has been going out of his way to show that he is not worried. he was out sailing this weekend, senators pointed that out. i think it is telling to a change in strategy.
around cabbage analytical, the election, mark was front and center. he was out apologizing and try to defend facebook quite often. there is some frustration because i do not think that work. i do not think people heard from him and said ok, we are going to think about facebook any differently. their approach of putting mark out there does not move the needle for us. what is the benefit? that is why you see him go out all of the time and be much more visible. that is a strategy that they have not had to test with him being the face of facebook in the past. emily: monika joined us earlier. i'm curious about what you thought about her response and about this idea that frances haugen brought up in her testimony. our hope is that more pleasing to company -- now more employees at tech companies come forward.
very few people are talking to people on the outside. i wonder if we will see a wave of people coming forward. or if the people on the inside are happy? kurt: i think people are coming forward. we have seen that over the past couple of years. when people leave, they used to leave and fade into the background. we are seeing activists, former facebookers who are going on panels and sharing their experience. there has been a change there. so much of what happens at facebook or all of the other to companies is -- all of the other tech companies are behind closed doors. you are scrubbing to find employees who -- scrambling to find employees who will talk. to get perspectives from all over the companies. they make it hard to do that.
you rely on what you can get. that is often people who are willing to go public. those people are not super happy. that is why companies come out hard and aggressive. emily: is facebook's argument, is that gaining traction in washington? or have lawmakers made up their minds? kurt: i think people have made up their mind. all i have seen is people push back and say this is just spin. there does not seem to be a lot of benefit of the doubt for facebook. that is their own problem. they have built that over the past couple of years. i think a lot of people are set on where facebook stands. emily: we will see if regulation, what kind of legislation comes of it. thank you. that does it for this edition of "bloomberg technology."
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haidi: a very good morning. welcome to "daybreak: australia." i'm hiv-aids made in squid -- i'm haidi stroud-watts in sydney. shery: from new york i'm shery ahn. the top stories this hour. u.s. stocks rebound as investors rushed back into tech. the s&p 500 rising back above its 100-day moving average easing concerns of a market correction.