'Bloomberg Technology' Full Show (02/02/2023)
NEXT THREE GIANTS OF GLOBAL TECHNOLOGY, THREE VERY >> DISAPPOINTING EARNINGS REPORTS. >>WILL IT PUT AN END TO THE RUN-UP IN TECH STOCKS WE HAVE BEEN SEEING? LET'S GET TO THE JUGGERNAUT, APPLE, REPORTING THE FIRST REVENUE DECLINE SINCE 2019, FALLING SHORT ALMOST ACROSS-THE-BOARD PRODUCT WISE. >> THE RALLY STALLS AFTER HOURS WITH ALPHABET FEELING THE SLOWDOWN IN AD SPEND. WE SPEAK TO THE CFO. >> AMAZON PROJECTS LACKLUSTER SALES AND SLOWER CLOUD UNIT GROWTH WITH SHARES FALLING AFTER HOURS. LET'S CHECK IN ON THE MARKETS. AS WE FALL AFTER HOURS, IT WAS A DAY OF GREEN, ED, ACROSS THE BOARD.
IN FACT, REALLY BULLISH SENTIMENT COMING IN ON THE NASDAQ OF MORE THAN 3%. THIS IS NOT JUST A DAY OF MICRO. IT IS MACRO. THE ECB, THE BANK OF ENGLAND, AND EUROPE TRY TO SEE SOME TOUGHNESS -- SOFTNESS IN TONE FROM CENTRAL BANKS. AS FAR AS HOW FAST AND THEY
HIKE THE RATES. EUROPE WAS IN THE GREEN. META-PLATFORMS IS A STANDOUT. MAYBE THIS IS WHY THE NASDAQ WAS ON A TEAR, THE BIGGEST POINT CONTRIBUTOR TO THE S&P AND NASDAQ, 23%. THE BEST DAY SINCE 2013. LET'S LOOK AT THE CRESCENDO TOWARDS WHAT WAS SO CLOSE TO A BULL MARKET.
THIS IS THE WRONG CHART. WE WERE REALLY LOOKING AT WHAT WAS HAPPENING. >> BELOW ESTIMATES IN THE FOURTH QUARTER. I SPOKE TO THE CFO. SHE BASICALLY SAID UNDERLYING RESULTS REFLECT MACROECONOMIC HEADWINDS. SHE TALKED OF THE RESILIENCY IN THE CORE SEARCH BUSINESS WITH BIG EMPHASIS ON AI AND IT IS BECAUSE AROUND ALPHABET LAYOFFS.
AMAZON DOWN 4%. IT WAS NOT JUST WEAKNESS IN E-COMMERCE IN TERMS OF WEAK OUTLOOK FOR THE FISCAL FIRST QUARTER. ALSO SLOWING GROWTH AT AWS. IT'S WORRYING INVESTORS. APPLE DOWN FOR PERCENT. IT'S A MESS OVER ALL IN TERMS OF THE TOP LINE BUT PUT NUCLEAR -- PARTICULAR WEAKNESS IN IPHONE, MAC, AND WEARABLES. LET'S BRING IN THE JULLIARD PRINCIPAL ANALYST FOR THE -- FORRESTER WEAKNESS. DEEP WEAKNESS IN THE HOLIDAY PORT OF ARRIVAL PERHAPS BECAUSE PRODUCTS WERE NOT RELEASED UNTIL THE NEW YEAR.
WHAT WAS YOUR TAKE AWAY FROM THE PRINT? >> I AM NOT A FINANCIAL ANALYST BUT EXPECTATION IS THAT SALES WOULD BE NOWHERE. WE HAVE 71% OF CONSUMERS TODAY IN THE U.S. CONCERNED ABOUT THE GENERAL STATE OF THE ECONOMY. THE NUMBERS ARE HIGHER IN EUROPE. 38% OF CONSUMERS ARE CUTTING
BACK SPENDING ON NONESSENTIAL GOODS. WHILE WE DID HAVE A HOLIDAY FORECAST UP IN THE U.S. 6.1% IN 2022, OR 2021, A LOT WAS STILL FUELED BY INFLATION.
SAVING RATES ARE DOWN AND THERE ARE A LOT OF ECONOMIC CONCERNS CONSUMERS HAVE TODAY. THAT IS ONE FACTOR IMPACTING THE NEAR TERM. CARRADINE: TALK TO US ABOUT WHETHER THIS IS A FOCUS ON SERVICES THAT WILL EVENTUALLY BEAR FRUIT OVERALL IN THAT RESPECT. DESPITE SOME OF THE MISSES WE ARE SEEING COMPARED TO ANALYST EXPECTATIONS THE CEO TIM COOK TRYING TO TALK ABOUT THE STRENGTH, RESILIENCE, THE AMOUNT OF 2 BILLION PRODUCTS IN PEOPLE'S HANDS, THE FACT SERVICE IS AT A RECORD REVENUE RATE. IS THAT SOMETHING TO BE
OPTIMISTIC ABOUT? JULIE: ABSOLUTELY. ONE OF THE OTHER LONG-TERM FACTORS WE HAVE NOT TALKED ABOUT HIS VERY INTENTIONALLY, APPLE, LIKE OTHER SMARTPHONE MANUFACTURERS, SMARTPHONES IS THEIR NUMBER ONE SOURCE OF REVENUE AND THEY ARE INTENTIONALLY BUILDING DEVICES CONSUMERS CAN KEEP FOR LONGER. THERE IS MORE FOCUS ON SUSTAINABILITY AND RIGHT TO REPAIR. THEY ARE SUPPORTING DEVICES FOR LONGER. AS WE FOCUS ON SOME
ENVIRONMENTAL FACTORS LOOKING TO THE FUTURE, CONSUMERS WILL HAVE SLOWER UPGRADED TIMES. APPLE WILL HAVE TO LOOK TO BUILDING OUT AN ECOSYSTEM OF PRODUCTS AND BEING MORE FOCUSED ON SERVICES REVENUE, A SMALLER PROPORTION OF OVERALL REVENUE BUT THEIR HIGHEST MARGIN BUSINESS. ED: I WANT TO GO BACK TO THE IDEA OF NEW PRODUCTS AND TIMING. IT IS A TOUGH COMPARISON BECAUSE IN THE HOLIDAY QUARTER OF 2021, APPLE CAME OUT WITH A OF MACBOOKS. THEY DID NOT IN 2022. HOW DEPENDENT IS APPLE ON CHURNINGC OUT GENERATION AFTER GENERATION OF NEW HARDWARE TO DRIVE SALES GROWTH AND INTEREST? JULIE: ABSOLUTELY THEY ARE. NOT ONLY THE MACBOOK CYCLE.
THE TABLET CYCLE, AND MOST IMPORTANT A THE SMARTPHONE CYCLE IS EVERY SIX MONTHS, ONE OF THEIR LARGEST COMPETITORS, SAMSUNG, WHICH ROLLED OUT ITS NEWEST DEVICE YESTERDAY. LITERALLY, THEY NEED THE NEXY LATEST AND GREATEST THING EVER YEAR WITH EVERYONE OF THE PRODUCT LINES BECAUSE THEY HAVE STIFF COMPETITION FROM OTHER GEOGRAPHIES AND APPLE HAS A STRONG FOCUS ON PROFITABILITY. IT DOES NOT HAVE AS BIG OF A PROFIT -- PRODUCT LINE AS SOME OF ITS COMPETITORS THAT MAY BE ABLE TO SELL DEVICES AT NOT THE SAME PROJECT -- PROFIT MARGINS OR ANY PROFIT AT ALL. YOU LOOK AT FACTORS LIKE R&D,
BRINGING PEOPLE BACK TO THE OFFICE, INNOVATION, ALL THAT IS KEY. ABSOLUTELY PRODUCT RELEASES, NOT ONLY KEEPING UP, BUT STAYING AHEAD OF THE COMPETITION IS CRITICAL YEAR IN AND YEAR OUT. CAROLINE: IT IS CRITICAL TO MAKE THESE PRODUCTS. I KNOW YOU ARE MORE FOCUSED ON CONSUMER DEMAND TRENDS WEATHER THAN THE MINUTIAE OF SUPPLY CHAIN IN CHINA BUT SUPPLY CHAIN HAS BEEN A HEADACHE FOR APPLE, PARTICULARLY LAST QUARTER.
LOOK AT SOME SUPPLY CHAIN SUFFERING AFTER HOURS. SKY WORKS, TMC DOWN AND FALLING AFTER HOURS AS WELL. ARE YOU HOPING THIS IS A COMPANY THAT CAN REMAIN DIVERSIFIED TO MAKE THE PRODUCT AT THE RIGHT RUN RATE AND GET IT INTO THE HANDS OF THE CUSTOMER? JULIE: YES. IF YOU READ THROUGH THE QUARTERLY AND ANNUAL REPORTS I THINK APPLE HAS A GOOD HAND ON THE RISK FACTORS. I THINK TRUST IN WHAT TIM COOK IS SAYING, EVERYTHING HE IS SAYING IS ABOUT DIVERSIFYING THE SUPPLY CHAIN AND LOWERING THE RISK OF BEING DEPENDENT ON ONE COUNTRY AND GEOGRAPHY FOR SO MANY CRITICAL COMPONENTS THAT GO INTO THEIR CORE DEVICES.
CAROLINE: THANK YOU JULIE ASKED. FASCINATING ACROSS THE BOARD. WE HAVE TO PIVOT NOW. THERE WERE SO MANY KEY NAMES. JOINING US NOW IS THE PRINCIPAL ANALYST AT FUTURE AND RESEARCH.
WE HAD A CONVERSATION EARLIER THIS YEAR. YOUR INITIAL TAKE AWAY ON ALPHABET AND YOUR WORRIES ABOUT CLOUD GROWTH AND TRYING TO TALK ABOUT -- TALK OF AI PROWESS. >> THERE WERE MISSES ACROSS THE BOARD.
I THINK THE FED WANTS TO SEE THINGS BREAK. IF WE LIKE DOVISH TALK FOR THE MARKET, YOU HAVE TO FIRST SEE BIG COMPANIES RUNNING PRETTY SUCCESSFULLY EVEN THROUGH THE DOWNTURN LAST YEAR START TO MISS. THAT IS A SILVER LINING. AI TALK IS A MASSIVE CONSIDERATION NOW. YOU CAN TELL GOOGLE WILL HAVE TO LEAN IN BECAUSE OF WHAT MICROSOFT IS DOING WITH OPEN AI. THE CLOUD BUSINESS, THE
ADVERTISING BUSINESS. EVERY PART OF THE COMPANY IS AT RISK IF THEY DO NOT FIGURE OUT A WAY TO COMBAT WHAT MICROSOFT IS DOING. SO, THIS IS A BIG PART. YOU SAW THEY EVEN HAVE NEW REPORT AND THEY ARE PLANNING TO START IN THEIR NEW REPORTS COMING UP AROUND AI TO GIVE MORE CLARITY TO INVESTORS ABOUT HOW THAT IS TRANSPIRING. SO, IT WAS A TOUGH ORDER FOR ALL THESE BIG TECH NAMES. I THINK THE SILVER LINING IS IN THE FACT STARTING TO MISS IS THE INDICATION WE HAVE REALLY HIT A BOTTOMING. PEOPLE HAVE BEEN WAITING FOR. ED:
I HAVE BEEN ON THE PHONE WITH CFO RUTH PORAT. SHE FRAMED THIS QUICKLY AND CLEARLY. THIS IS A RESET. WE ARE COMMITTED TO REENGINEERING OUR COST BASE TO LONG-TERM PROFITABLE GROWTH WAS HER REST BONDS TO THE LAYOFFS. ARE YOU CONVINCED? IS THIS ALPHABET SAYING I MET THIS IS IN THE YEAR OF DISCIPLINE? DAN: THIS IS A THEME ACROSS TEXT. THE REDUCTION IN FORCES, LAYOFFS, IT'S A MOMENT OH COMPANIES ARE TAKING TO RESET.
DURING THE PANDEMIC THE TECH INDUSTRY HIRED TOO AGGRESSIVELY. A LOT OF DIGITAL TRANSFORMATION PROJECTS COMPANIES WERE DOING WERE MORE BODIES BEING THROWN AT GROWTH, REVENUE, AND DEMAND DESPITE DURING THE PANDEMIC. NOW COMPANIES ARE LOOKING AT SOME OF THE HIRES THEY HAD TO MAKE WAY OVER MARKET VALUES AND ARE TRYING TO RESET SOME OF THOSE AND GET BACK TO A MORE FAVORABLE SITUATION. THAT COMES WITH ANNOUNCED REDUCTION IN FORCES AND LAYOFFS IN THE MARKETS AND MARKETS FAVOR THESE DECISIONS BECAUSE THEY ARE GETTING BACK TO THE ROOTS OF RUNNING THE BUSINESS IS. I SEE THIS AS A MOMENT.
IS IT ENOUGH? THE SIZE OF GOOGLE IS LARGER THAN A YEAR AGO, EVEN AFTER 12,000. THAT IS THE CASE WITH MOST TECH COMPANIES. THEY ARE REDUCING ENFORCEMENT. THEY ARE LARGER THAN ONE YEAR AGO. MANY DID A LOT OF HIRING. IT IS A START.
IF THE NEXT QUARTER DOES NOT LOOK GOOD I WOULD EXPECT TO SEE MORE. ED: ALPHABET CONFIRMING A CHARGE OF $2.3 BILLION AS A RESULT OF THE LAYOFFS. THE TALK ABOUT AI. EXECUTIVES WILL BE QUIZZED ON AI. RUTH PORAT TOLD ME BASICALLY A FLEX, DEFENSE, SAYING WE HAVE BEEN WORKING ON A ON -- AI FOR A LONG TIME AND WE ARE EXCITED ABOUT MOMENTOUS BREAKTHROUGHS COMING FROM THEIR RESEARCH TEAM. GENERATIVE AI, A BIG EMPHASIS ON RESEARCH. FOR ALPHABETIC'S NOT YET OUT THERE IN THE REAL WORLD.
DO YOU EXPECT ALPHABET TO BECOME A REAL, COMMERCIALIZED, AI PLAYER THIS YEAR? DAN: I THINK ANYTHING BEHIND THE CURTAIN WILL HAVE TO BECOME MORE EXPOSED. I THINK THE OPEN AI COMMITMENT, CHAT GPT'S POPULARITY AND THE CONCERNS ABOUT WHAT THIS COULD MEAN FOR A SEARCH OR WORKSPACES WILL FORCE GOOGLE AND ALPHABET TO REVEAL ALL OF THE RESEARCH IT HAS DONE. TO BE CLEAR, AS A INDUSTRY ANALYST WE ARE -- ANALYSTS WE ARE CONTINUOUSLY IMPRESSED BY WHAT GOOGLE IS CAPABLE OF IN THE AI SPACE. THEY HAVE BEEN INNOVATIVE AND INVENTIVE BUT THEY HAVE NOT DONE A GREAT JOB COMING OUT IN FRONT RECENTLY EXPLAINING HOW THEY PLAN TO COMBAT WHAT OTHERS ARE DOING. AND IN THE CASE OF OPEN AI, IT CAME OUT VERY QUICKLY. MICROSOFT'S LARGE COMMITMENT AND INVESTMENT.
NOW GOOGLE IS IN A SITUATION WHERE THEY HAVE TO BE ABLE TO SHOW THE MARKET, YES, WE HAVE A PLAN. WE HAVE TECHNOLOGY. WE WILL NOT LET -- YET A CHATBOTS OR WHAT OPEN AI IS DOING SIGNIFICANT LATEST OUR ADVERTISING BUSINESS. THERE IS A BIG RISK TO THAT PART OF THE BUSINESS CRITICAL TO LONG-TERM SUCCESS. CAROLINE:
WHAT IS AT THE RISK TO THAT PART OF THE BUSINESS FROM REGULATION RATHER THAN COMPETITION? DAN: I THINK REGULATORS ACROSS THE BOARD CONTINUE TO LOOK AT GOOGLE AND, OF COURSE, THE DISPROPORTIONATE AMOUNT OF AD SPENDING. I DO NOT THINK IT IS THE BIGGEST CHALLENGE REGULATORS HAVE. I STILL FIND A LOT OF WHAT APPLE DOES WITH ITS CAPTIVE APP ECOSYSTEM, FOR INSTANCE, A BIGGER ISSUE. YOU SEE AMAZON COMING OUT WITH 20% GROWTH IN ADVERTISING BUSINESS NOW. YOU SEE WHAT CHAT GPT CAN POTENTIALLY DUE TO THE EVERYDAY SEARCH THAT FEEDS SO MUCH OF OUR ADS THAT IS NOT REALLY COMMERCE SEARCH. YOU SUDDENLY SAY, DOES GOOGLE'S LONG-TERM MARKET STRENGTH? I DON'T KNOW IF DOMINANCE IS THE RIGHT WORLD -- WORD.
PREVAIL WITH NEW AI AND TECHNOLOGY IN THE MARKET PLACE. REGULATORS WILL CONTINUE TO REGULATE. EUROPE WILL BE VERY TOUGH ON BIG TECHNOLOGY. IN THE U.S. WE HAVE LEADERSHIP IN THE FTC CONSTANTLY LOOKING TO REGULATE. HAVING SAID THAT, I DO NOT THINK GOOGLE IS THE BIGGEST FOCUS, NOR SHOULD IT BE. I DO NOT THINK REGULATORS WOULD BE DOING ANY FAVORS TO THE MARKET BY HARMING GOOGLE.
I THINK THAT WITH ALL OF THE APPLE ID, APPLE IS ANOTHER SCARY ENTRANT TO HAVE A DOMINANT OPPORTUNITY IN ADVERTISING AS IT CONTROLS SO MUCH OF THE FLOW, AS WE SAW WITH META. CAROLINE: MANY WOULD SAY AMAZON IS COMPETITIVE IN ADVERTISING AND AS A JUGGERNAUT WHEN IT COMES TO CLOUD SERVICES. AWS SHOWED SOME SLOWDOWNS. WE WOULD HOPE TO -- ABOUT -- WE WILL TALK ABOUT THAT IN A MINUTE WITH OUR NEXT GUEST. DAN: THE LOSSES HAVE NARROWED AND I BELIEVE GOOGLE HAS THE OPPORTUNITY WITH ITS CUSTOMER BASE, ITS BROAD USER BASE, AND A LOT OF ITS TECHNOLOGIES AROUND DATA, THAT IT HAS BECOME PART OF THE ENTERPRISE'S LARGER CLOUD ECOSYSTEM, THE MULTI-CLOUD ECOSYSTEM.
GOOGLE HAS BEEN A CONSISTENT GROWTH ENGINE BY ABOUT 32% THIS QUARTER, RIGHT ON PAR WITH AS YOUR --AZURE AND FASTER THAN A WS. YOU HAVE TO LOOK AWS AS AN OVER $80 BILLION BUSINESS. SLOWING TO 20% IS SIGNIFICANT. BUT, THE BUSINESS IS SO MUCH LARGER THAN SOME OF THE OTHER CLOUD PROVIDERS THAT I STILL THINK EIGHT OF U.S. IS IN -- AWS IS IN A REALLY GOOD POSITION. GOOGLE WILL HAVE TO CONTINUE TO GROW TO HIT AN ECONOMY TO SCALE TO BE PROFITABLE. I DO NOT THINK MAKING MONEY IS
ITS BIGGEST FOCUS, BUT IN THIS TIME OF AUSTERITY WE WILL -- THEY WILL HAVE TO GET THERE QUICKER THAN THEY MAY BE WANTED TO. ED: FUTURUM RESEARCH ANALYST DAN NEWMAN BREAKING DOWN A BIG REPORT FROM ALPHABET. COMING UP, WE DIVE INTO AMAZON'S LACKLUSTER RESULTS. WE ARE DOWN 2.5, 4% NOW.
THAT IS AMAZON. I'M TALKING ABOUT QUALCOMM. 2.5% LOWER. THAT'S A PRETTY WEAK FORECAST. AT FIRST IT WAS NOT THAT MUCH OF A DECLINE BECAUSE WE SAW THAT COMING, A SLOWDOWN IN THE SMART PHONE MARKET. LISTENING TO WHAT EXECUTIVES HAVE TO SAY ON THE CALL, THE LOSSES ARE ACCELERATING POST-MARKET. THIS IS BLOOMBERG. CAROLINE: THE EARNINGS COME FAST ON THURSDAY. AMAZON WAS AMONG THEM. EARNINGS SHOWING SOME LACKLUSTER FORECAST COMING THROUGH DOWN THREE POINT 7% IMMEDIATELY AFTER HOURS. SLOWER CROWD UNIT GROWTH, AWS.
LET'S TALK TO THE COFOUNDER AND PRESIDENT OF PACK VIEW, ALL ABOUT MAKING THE BEST OF E-COMMERCE PROVISIONS AND MARKETING, AND ALSO A 10 YEAR AMAZON VETERAN. YOU KNOW THIS BUSINESS, PARTICULARLY ON THE E-COMMERCE SIDE. LET'S START THERE, MILLICENT. LOOK AT THESE MACRO ECONOMIC HEADWINDS. ARE THEY NAVIGATING IT, FOCUSING ENOUGH ON TRIMMING COST AND GROWING GROWTH IN THE WAY YOU WOULD LIKE TO SEE THEM? >> THEY ARE DEFINITELY FOCUSING ON THAT. I WOULD SAY THEY ARE FOCUSING ON PROFIT AT THIS POINT.
AMAZON IS FAMOUS FOR CHANGING QUICKLY. THEY CAN GO FROM DRIVING GROWTH THEY'RE DRIVING PROFIT AND THAT IS WHAT THEY ARE DOING NOW. Q4 WAS A REALLY INTERESTING QUARTER. THERE WAS A SLOWDOWN IN DEMAND. CONSUMERS WERE COMING IN TO BUY DEALS AND DISCOUNTS. THE GOOD NEWS IS AMAZON'S ALWAYS KNOWN FOR HAVING THE GREATEST PRICES. THAT WAS SOMETHING GOING FOR THEM.
UNLIKE IN YEARS PAST, AMAZON IN Q4 HAD MORE INVENTORY. CONSUMERS WANTED TO BUY DEALS. THEY CAME IN AND BOUGHT DURING BLACK FRIDAY AND CYBER MONDAY. AMAZON IS FOCUSED ON COST CUTTING AT THIS POINT, EFFICIENT PROFIT MARGINS IN THE FACE OF A LOT OF SLOWER DEMAND. CONSUMER DEMAND. ED:
ON THE CALL, THE CFO IS TALKING ABOUT LAYOFFS SAYING THIS ROUND OF LAYOFFS IS OVER. TALKING ABOUT THE CHARGES AND IMPAIRMENTS. AMAZON IS STILL BLOATED, IT SEEMS. STILL A BIG BEAST. DO YOU EXPECT OF THE COMPANY TO BE MORE NIMBLE IN TERMS OF HOW IT EBBS AND FLOWS IN HIRING AND PRODUCTION GOING FORWARD? MELISSA: THEY HIRED .5 MILLION PEOPLE IN 2020.
18,000 EMPLOYEES IS NOT A HUGE AMOUNT. AND IN THE FACE OF SLOWING GROWTH AND SLOWING DEMAND, IT IS SOMETHING TO THINK ABOUT. THEY WILL HAVE TO LOOK AT THEIR BOTTOM LINE. CAROLINE: WHERE DO THEY LEAN INTO AT THE
MOMENT, MELISSA? WHERE ARE THEY ABLE WITHIN THE FOCUS ON PROFIT TO DECIDE WHERE TO ALLOCATE CASH FOR GROWTH? MELISSA: THE TWO BUSINESSES AT AMAZON THAT ARE VERY PROFITABLE OUR ADVERTISING AND AWS. THOSE ARE AREAS WHERE THEY PLAN ON CONTINUING TO INVEST. CAROLINE: AWS IS SLOWING. ARE YOU WORRIED BY THAT? MELISSA: THEY ARE DEFINITELY BOTH SLOWING. AND ABSOLUTELY. AWS MARKET SHARE DROP FROM 43% TO 40 -- 34% AND THEY HAVE A LOT OF COMPETITION WITH MICROSOFT AND GOOGLE. RIGHT NOW ALL COMPANIES, EVEN OURS, ARE LOOKING AT CUTTING COSTS. ONE OF THE FIRST PLACE IF YOU
GO TO IS AWS. THAT WILL BE A BIG CHALLENGE THIS YEAR BECAUSE COMPANIES ARE LOOKING TO CUT AND THAT WILL IMPACT AWS. ED: MY QUESTION IS, HOW LONG DOES AWS REMAIN THE BANK ROLLER OF THE REST OF THE BUSINESS? THAT IS THE SITUATION, RIGHT? AMAZON HAS THIS JOIN OUR MESS, -- GIGANTIC COMMERCE BUSINESS, THERE IS PRIME SUBSCRIPTION, VIDEO AND CONTENT, BUT IT'S ALL DEPENDENT ON THIS CASH COW. YOU HAVE BEEN INSIDE THE COMPANY AND KNOW HOW IT OPERATES. DO YOU THINK THEY WILL EVER CHANGE OR SNAP FREE OF THAT BUSINESS MODEL? MELISSA: AMAZON HAS BECOME A SERVICES BUSINESS.
IT'S OVER 50% OF THEIR REVENUE ACROSS AWS, ADVERTISING, AND SUBSCRIPTIONS. THAT WILL CONTINUE. ONE THING AMAZON IS WELL KNOWN FOR ITS INNOVATION. THE THING THEY CANNOT CONTROL IS DEMAND AND THE COST CUTTING OTHER PEOPLE ARE DOING.
THAT IMPACTS A WS. I THINK ADVERTISING IS A GREAT START. THEY ARE DOING SO MANY THINGS THERE. PRIME VIDEO FOR THE FIRST TIME SURPASSED NETFLIX AS THE TOP STREAMING SERVICE. AMAZON TALKED ABOUT 100 MILLION VIEWERS WATCHING LORD OF THE RINGS. THAT MEANS MORE ADVERTISING REVENUE FOR AMAZON. THAT'S A BIG START FOR THEM.
CAROLINE: WE TOUCHED ON IT WITH ALPHABET, BUT THE REGULATORY OVERHANG. IS THERE ANYTHING THAT WORRIES YOU WITH AMAZON? MELISSA: THE DOJ DEFINITELY HAS AMAZON AS A TARGET. IT IS HARD TO CALL THEM A MONOPOLY WAS SO MUCH COMPETITION.
WE HAVE SLIPPING MARKET SHARE INAWS, BUT IT'S NOT TO SAY IT WILL NOT BE A DISTRACTION. THAT SOMETHING THEY WILL HAVE TO ANSWER. THIS HAPPENED BEFORE WITH PRIVATE LABEL. THEY HAD TO ANSWER TO THAT. IT WILL CONTINUE TO BE SOMETHING THAT ALL OF THE TECH COMPANIES ARE DEALING WITH. BUT, I SEE LESS OF A LEG TO STAND ON. ED: PACVUE COFOUNDER AND PRESIDENT MELISSA BURDOCK.
THANK YOU FOR BREAKING DOWN AGAIN ANOTHER CHALLENGING EARNINGS REPORT FROM AMAZON. THE SEC IS CRACKING DOWN ON WALL STREET'S USE OF WHAT'S UP. JUST HOW MUCH TROUBLE ARE FINANCE FIRMS IN? LOOK AT HOW MEDA PERFORMED AFTER ITS STRONG EARNINGS. THE BIGGEST JUMP SINCE 2013. A COMPLETELY DIFFERENT STORY SINCE WHAT WE SAW IN THURSDAY'S AFTER OUR SESSION. WE WILL GET INTO IT NEXT. THIS IS BLOOMBERG.
CAROLINE: ONE OF THE MOST READ STORIES ON THE TERMINAL AMONGST OUR CLIENTS TODAY. SOME MAJOR HEADPHONES WERE ASKED BY U.S. REGULATORS TO REVIEW CERTAIN EMPLOYEES PERSONAL MOBILE PHONES. WHY?
A BIG PROBE OF WALL STREET'S USE OF UNOFFICIAL MESSAGING PLATFORMS. BASICALLY, THE USE OF WHATSAPP TO DO DEALS, BROKER POTENTIALLY M&A AND THAT SORT OF THING AND ULTIMATELY WE ARE HEARING THE SEC ASKED STEVE COHEN'S, POINT72, KEN GRIFFIN'S CENTER DELL AND OTHER FIRMS AS WELL. -- CITADEL AND OTHER FIRMS AS WELL. WHAT SORT OF DATA MIGHT WE END UP UNFOLDING IN TERMS OF HEALTH, FINANCE? ED: THE HEDGE FUNDS YOU HAVE NAMED, NOBODY HAS BEEN ACCUSED OF ANY WRONGDOING. THEY ARE LITERALLY ASKING THEM TO REVIEW THE DEVICES FOR ANY TRANSACTIONAL STUFF, BUSINESS STUFF BEING DONE ON THEM INAPPROPRIATELY. THAT IS THE REALITY OF WHAT IS
BUYING OUT ON WALL STREET. CAROLINE: WE HAVE ALREADY SEEN FINES EXHORTED ON BROKERAGES -- EXERTED ON BROKERAGES AND BANKS AND WE ARE SEEING ASSET MANAGERS PUSHBACK. BIG TECH EARNINGS THICK AND FAST. AND MIXED REACTION. WELL I'M A THEY ARE ALL LOWER AFTER HOURS. CAROLINE: LET'S GET YOU UP TO SPEED WITH AFTER HOURS EARNINGS REACTIONS. WE HAVE SO MANY. LET'S START WITH APPLE. COMING OUT WITH THE FACT IT HAS
BEEN SUFFERING BECAUSE OF THE MACRO ECONOMY IS SLUGGISH. SUPPLY CHAIN ISSUES ARE PERHAPS SOME OF THE PHONE SALES THEY WANTED TO SEE. A BLEND CURRENCY EFFECTS AS WELL BUT OVERALL THEY ARE TALKING UP THE FACT SERVICE HE -- SERVICES ARE GROWING FASTER THAN EXPECTED. DOWN 3.7% AFTER HOURS.
APPLE UP BY 3.5% -- OFF BY 3.5 PERCENT AFTER HOURS. THESE COMPANIES ARE TECHNICALLY OVERBOARD FROM A RELATIVE STRENGTH INDEX. AMAZON IS OFF BY 3.5%. EVEN THOUGH WE SAW SALES GROW 9%, 149 BILLION OVER THE HOLIDAYS, AWS, THE WEB SERVICES PROFIT DRIVER, THE CLOUD BUSINESS IS FALLING SHORT. WE ARE SEEING THEIR FORECAST FOR OVER AN ALL REVENUE AT $126 BILLION FOR THE QUARTER WE ARE IN AT THE MOMENT BELOW WHERE ESTIMATES HAD BEEN. ALPHABET IS DOWN HARD, MORE THAN 5% AFTER HOURS ON THE BACK OF THE FACT THE COMPANY IS SEEING ADVERTISING HEADWINDS SLOW DOWN ON YOUTUBE, FOR EXAMPLE.
OVERALL IT IS A COMPANY THAT SEES MACRO ECONOMIC HEADWINDS AND SOME OTHER BETS PAYING OFF. ED, YOU SPOKE TO RUTH PORAT. WHAT DOES SHE HAVE TO SAY ABOUT THE NUMBERS? ED: SHE BASICALLY HAD TO SAY THAT THEY REFLECT THE UNDERLYING RESULTS, THE MACRO ECONOMIC HEADWINDS OUT THERE, RIGHT? NO EXCUSES. REVENUE BELOW ESTIMATES IN THE FIRST QUARTER. THE SEVERITY OF THE DECLINE IT IS HARD TO PICK OUT WHAT THE STREET IS FIXATED ON. SHE STARTED WITH AI, A PRESSURE ON ALPHABET BECAUSE OF WHAT MICROSOFT IS DOING WITH CHAT GPD. THIS QUOTE IS FROM A PHONE CALL WITH HER AFTER EARNINGS DROPPED.
SHE IS EXCITED ABOUT WHAT IS COMING FROM RESEARCH. THIS IS THE CONVERSATION AROUND ALPHABET. WHEN DO THEY REVEAL TO THE PUBLIC WHAT THEY ARE DOING WITH AI AND BRING IT INTO THEIR OWN PRODUCTS? THAT IS WHAT THE STREET IS FOCUSING ON NOW. THIS COMPANY HAS DONE RECORD LAYOFFS AND THEY WILL BOOK A CHARGE OF $1.9 BILLION TO $2.3 BILLION. RUTH PORAT FRAMES IT AS A RESET WHEN IT COMES TO THE GROSS NARRATIVE. WE ARE MEANINGFULLY SLOWING THE
PACE OF HIRING THIS YEAR. THIS COMPANY STILL HAS 190,000 EMPLOYEES. I ASKED HER, YOU NOTED UNFORESEEN CHARGES IN YOUR EARNINGS. DOES THAT MEAN MORE LAYOFFS? NO, SHE SAID, IT DOES NOT. SHE SAID THE ACTION WE HAVE
TAKEN SO FAR IS HAPPENING IN THE U.S. FIRST QUARTER BUT INTERNATIONALLY IT WILL TAKE LONGER TO NOTIFY THOSE AFFECTED. THIS COMPANY STILL SEEMS TO BE FIGHTING ITS FEET. CAROLINE: THE TALK OF A REFOCUS ON EFFICIENCY HAS BEEN BROUGHT ACROSS THE ENTIRE TECH SPACE. WE HEARD IT FROM YESTERDAY. WE ARE HEARING IT FROM HE PLAYERS TODAY. LET'S DIG INTO COST CUTS AND LAYOFFS.
PUT ON GOYA -- POONAM COYLE IS WITH US. EDIT TALKING ABOUT THE RESET AT AMAZON, BEING MORE DISCIPLINED, COST CUTS. AMAZON SEEMS TO BE SAYING COST CUTS, WELL, THE LAYOFFS ARE NOT DONE. ARE THEY RIGHTSIZING THE WAY THE MARKET WANTS? POONAM: THEIR LABOR IS DOWN 4% ON A YEAR-OVER-YEAR BASIS. COULD THEY DO MORE? SURE. BUT MAYBE THEY ARE WAITING TO SEE HOW THINGS UNFOLD.
AMAZON IS A BUSINESS WHERE MANY PARTS OF IT ARE STILL IN RAPID GROWTH MODE, WHETHER THAT IS ADVERTISING AWS OR EVEN ON THE THREE-PIECE SIDE WHERE THEY ARE GROWING FASTER THAN EXPECTED. ED: TOM, I WANT TO PIVOT TO APPLE. WE KIND OF SAW THIS COMING. WE KNEW DECEMBER WOULD BE
REALLY TOUGH. THEY MISSED ESTIMATES BASICALLY ACROSS ALL PRODUCTS. THE MARKETS ARE REACTING PRETTY NEGATIVELY. IS THAT A SURPRISE? WE THOUGHT THEY WOULD BE WEEK. TOM: WE SAW HEADLINES OUT OF CHINA AND KNEW THERE WOULD BE SUPPLY CHAIN CONSTRAINTS. WE SAW THE LOCKDOWNS AND THE IMPACT.
APPLE IS ABSOLUTELY FEELING IT. IN ADDITION TO SUPPLY CHAIN CONCERNS, TIM COOK ABOUT CURRENCY HEADWINDS. THAT HAS TO BE TAKEN INTO CONSIDERATION. BUT ALSO, REMEMBER WHEN CLINTON WAS RUNNING FOR PRESIDENT.
IT IS THE ECONOMY, STUPID. THE ECONOMY. AT THE ECONOMY IS HURTING APPLE. IT IS HURTING DEMAND FOR IPHONES. THE ECONOMY IS AFFECTING DEMAND
FOR ADS ON ALPHABET. THE ECONOMY IS AFFECTING DEMAND FOR AWS CLOUD SERVICES AT AMAZON. ALL THOSE THINGS. THAT IS THE SAME BETWEEN ALL THESE THREE COMPANIES TODAY.
CAROLINE: I LOVE HOW YOU BRING THEM ALTOGETHER. THERE IS DISCIPLINE, FOCUS. FOR APPLE IN PARTICULAR THERE ARE SUPPLY CHAIN HEADACHES. DID THEY SPEAK TO THAT? DO WE HAVE AN IDEA, THE CHINA ISSUES, WHETHER THEY ARE TRYING TO BROADEN OUT OF FOXCONN, WHETHER THAT WAS HINDERING IPHONE SALES? TOM: GREAT QUESTIONS. FIRST, THINGS HAVE CHANGED DRAMATICALLY IN CHINA SINCE WE HAD LOCKDOWNS LATE LAST YEAR.
WE ARE SEEING AN OPENING UP. SO YOU ARE NOT SEEING THE HEADLINES OF PEOPLE JUST LOCKED IN THEIR HOMES LITERALLY. NOT GOING OUT, NOT BUYING. PEOPLE NOT EVEN BEING ABLE TO
GET TO WORK TO MANUFACTURE PHONES. THAT IS CHANGING. WHAT IS NOT CHANGING HOWEVER IS QUESTIONS ABOUT JUST HELP WHITLEY'S DEMAND OVERALL, GLOBALLY, GOING TO COME BACK. IT IS NOT ROARING BACK. THEY HAVE HAD TO SLOW DOWN THERE HIRING. EVERYBODY IS TAKING DIFFERENT KINDS OF AUSTERITY MEASURES. I SORT OF PUT OUT A TWEET ABOUT HOW ALL OF THESE COMPANIES, MAYBE, THEY SHOULD BE TALKING ABOUT HOW ZUCKERBERG DID THAT 2023 WILL BE THE YEAR OF AUSTERITY. YOU ARE NOT HEARING IT AS
AGGRESSIVELY AS WITH META-. META-TALKED ABOUT AUTHORIZING A BACK -- BUYBACK. THAT IS ANOTHER REASON YOU MAY NOT SEE THE RALLY IN STOCKS YOU SAW WITH META-PLATFORMS EARLIER TODAY. ED: LET'S GO BACK TO AMAZON, THE BROADER ECONOMY.
POONAM, YOU HAVE WRITTEN ABOUT BIFURCATION TRENDS, PARTICULARLY THAT A WS TRACK, THE MACRO ECONOMIC ENVIRONMENT, COST SAVING. WHAT DID YOU LEARN FROM AMAZON'S COMMENTARY? POONAM: THE CALL IS STARTING AS WE SPEAK. WHAT I HAVE SEEN THEM SAY RECENTLY ON THE CALL IS THAT CONSUMERS ARE TRADING DOWN. THAT IS A CONCERN BECAUSE WHEN YOU START TO SEE A TRAY DOWN -- A DOWN, YOU GET THE FIRST SIGNAL THE ECONOMY IS SOFTENING. THERE ARE POCKETS OF WEAKNESS WE NEED TO LOOK AT AS WE MOVE INTO 2023.
OVERALL, WHEN I THINK ABOUT AMAZON, AMAZON IS NOT JUST A ONE KEY BUSINESS, IT'S A THREE KEY BUSINESS AND THEIR THIRD-PARTY BUSINESS IS VERY STRONG. IT IS A VERY ATTRACTIVE PLATFORM FOR NEW INDENT -- AND EXISTING BUSINESSES TO GET EYEBALLS THEY WANT. ONE P MAY STRUGGLE A LITTLE BIT THREE P IS ON FIRE. CAROLINE:
THREE P, THIRD-PARTY, WE LOVE THE LINGO. ACROSS IT ALL ITS EFFICIENCY, EFFICIENCY, EFFICIENCY STUPID. POONAM GOYAL AND TOM GILES, THANK YOU. LET'S PIVOT OUT OF EARNINGS TO FTX.
WE HAVE AN EXCLUSIVE INTERVIEW WITH THE FORMER FTX U.S. PRESIDENT BRETT HARRISON. WHAT WENT WRONG FROM AN INSIDER VIEW IS NEXT ON BLOOMBERG.
ED: IT HAS BEEN LESS THAN THREE MONTHS SINCE FTX COLLAPSED. A FORMER TOP EXECUTIVE IS EAGER TO GET IT BEHIND HIM. FORMER FTX U.S. PRESIDENT BRETT HARRISON INSISTS HE DID NOT HAVE A CLUE WHAT SAM BANKMAN-FRIED WAS UP TO. HE SAT DOWN WITH SONALI BASSETT
IN AN EXCLUSIVE INTERVIEW. BRETT: THERE WERE PRIMARILY DISPUTES I WOULD ATTRIBUTE TO THE GROWING PAINS OF ANY HIGH-GROWTH COMPANY. YOU KNOW, PROBLEMS AROUND INTERNAL COMMUNICATION, STRUCTURING THE COMPANY FOR PROVIDING BETTER GOVERNANCE. ESPECIALLY, AS WE ARE GROWING LARGER. AROUND HIRING ENOUGH DEVELOPERS AND OTHER SENIOR STAFF THAT WE NEEDED TO BE ABLE TO ACCOMPLISH MANY OF THE GOALS WE WERE SEEKING TO ACCOMPLISH. AND, WHEN I WOULD TRY TO BRING UP THESE CRITICISMS INTERNALLY AT THE COMPANY THEY WERE NEVER MET WELL.
AND, AT SOME POINT, WE TRULY WERE NOT SPEAKING MUCH TO EACH OTHER OVER THE COURSE OF THE LAST PART OF THE TIME I WAS THERE. SONALI: THE DISPUTES WERE NOT JUST WITH SAM BANKMAN-FRIED. YOU MENTIONED THEY WERE WITH OTHER MEMBERS OF HIS STAFF, HIS DEPUTIES. HOW ELSE DID YOU -- WHO ELSE DID YOU FIND IT DISPUTES WITH? BRETT: THEY WERE PRIMARILY AROUND SAM, BUT MANY PEOPLE AROUND SAM AGREED WITH HIM ON INTERNAL DECISIONS, ESPECIALLY TRYING TO GROW INTO SEPARATE THE STAFF. THERE WAS VERY MUCH A SEPARATION BETWEEN THE GROUP OF PEOPLE THAT WERE THE EXECUTIVES IN THE BAHAMAS AROUND THEM, LIVING TOGETHER, MAKING THOSE KINDS OF DECISIONS VERSUS THE PEOPLE ON THE U.S. SIDE WHO WERE SYSTEMATICALLY
LEFT OUT OF MANY DECISIONS. SONALI: TO THE EXTENT YOU BELIEVE, A NUMBER OF HIS DEPUTIES HAVE ALREADY COME UP AND PLED GUILTY TO SOME CHARGES WE ARE SEEING AGAINST FTX. BRETT: SURE. SONALI: WHAT DO YOU THINK ABOUT THOSE CHARGES? DO YOU THINK THERE IS ANYBODY ELSE THAT WILL BE BROUGHT INTO THEM? BRETT: I AM NOT SEE IF THERE WILL BE ANY BOOK -- SURE IF THERE WILL BE ANYBODY ELSE THAT THIS POINT.
I THINK THE CHARGES ARE TRULY SHOCKING. TO SEE THE DEPTHS SAM AND HIS CLOSE ASSOCIATES WENT TO TO TRY TO CONCEAL THIS FRAUD FROM THE PUBLIC AND PRIVATE. AS A CUSTOMER OF THE EXCHANGE MYSELF, AS IN THE MANY WHO WORK EXTREMELY HARD TO TRY TO BUILD OUT THIS GREAT BUSINESS ON THE U.S. SIDE, WHO HIRED EXTREMELY TALENTED INDIVIDUALS, INTO THE U.S. COMPANY TO BE ABLE TO ACCOMPLISH THOSE GOALS, IT WAS REALLY SAD TO SEE ALL OF THAT COME TO LIGHT. SONALI: YOU SAID FRAUD. ARE YOU COOPERATING WITH AUTHORITIES AT THIS TIME? BRETT: I CANNOT SPEAK TO WHETHER I AM OR AM NOT INVOLVED IN THE INVESTIGATION. I AM VERY HAPPY TO COOPERATE IN
ANY WAY I CAN. AT THIS POINT IT IS WAIT AND SEE. WE WILL SEE IF MORE DETAILS COME TO LIGHT. IF ANYONE ELSE IS BROUGHT IN THAT ENDS UP PLEADING GUILTY OR NOT. WHETHER THE CASE ACTUALLY ENDS
UP MAKING IT TO TRIAL. THAT IS SOMETHING I AM WATCHING AND WAITING AND INTERESTED IN THE WAY EVERYONE ELSE IS IN THE PUBLIC YOU -- IN THE PUBLIC. SONALI: HAVE YOU BEEN IN TOUCH WITH SAM SINCE HE LEFT? BRETT: NO. SONALI: HAVE YOU BEEN IN TOUCH WITH ANY OF HIS OTHER DEPUTIES YOU DISPUTED WITH.
IF YOU HAD THE OPPORTUNITY TO TALK TO SAM, WOULD YOU WANT TO END WHAT WOULD YOU SAY? BRETT: NO TO THE FIRST QUESTION, AND TO THE SECOND WHAT I THINK NOTHING. AT THIS POINT I THINK IT'S BEST FOR EVERYONE, THE MEDIA, THE PUBLIC, INVESTORS TO MOVE ON FROM SAM AND FIND A WAY TO MOVE FORWARD WITH CRYPTO AND THIS INDUSTRY. IT'S TIME TO TURN THE PAGE. CAROLINE: BRETT HARRISON THERE THE FORMER FTX U.S. PRESIDENT. ED, IT'S GREAT SONALI IS STAYING LATE TO TALK TO US ABOUT THIS EXTRAORDINARY CONVERSATION. ULTIMATELY SOME ALI, GIVE US YOUR TECH -- SONALI GIVE US YOUR TAKE ON THE FACT THAT HE IS TRYING TO TURN THE PAGE.
PEOPLE ARE HEADING HIM MONEY. $5 MILLION. THAT'S A LOT. FROM INTERESTING PLAYERS. USING HE CAN MOVE ON? SONALI: IT'S NOT AS MUCH AS HE INITIALLY WENT OUT TO RACE. HE STARTED THE PROCESS AFTER LEAVING FTX BEFORE IT IMPLODED.
RAISING IT FROM THE LIKES OF ANTHONY SCARAMUCCI WHO HIMSELF FELT WRONGED BY FTX, WHO SOLD A PART OF HIS OWN FIRM TO FTX VENTURES. CAN YOU MOVE ON? HE IS TRYING TO HIRE FORMER EMPLOYEES OF FTX. HE HAS HIRED ABOUT FIVE, HE SAID. HE SAYS HE WANTS TO MOVE ON. HOW LONG DOES THAT TAKE? THE QUESTIONS STILL REMAIN. HE SAYS HE WAS MISLED. HE SAYS HE HAS KEPT RECORDS OF HOW HE WAS MISLED. BUT, AND TO THE END OF THE DAY,
IT WILL TAKE A LONG TIME. EVEN JUST THE RESPONSES ON TWITTER. PEOPLE WILL NOT FEEL LIKE THEY CAN MOVE ON FROM FTX UNTIL THEY START TO GET THEIR MONEY BACK AND GET RESOLUTION TO ANSWERS BREWING ABOUT THE SITUATION. ED: TERRIFIC INTERVIEW. GREAT TIMING AROUND THE CONVERSATION. THE OTHER BIG HEADLINE OF THE DAY IS ACCORDING TO BLOOMBERG SOURCES, SILVER GATE IS FACING DOJ PROBES OVER WHAT HAPPENED WITH FTX AND ALAMEDA. SONALI:
U.S. PROSECUTORS IN THE JUSTICE DEPARTMENT'S FRAUD UNIT, THIS IS A CRIMINAL INVESTIGATION IMPORTING -- ACCORDING TO THE REPORT, STARTED FAIRLY RECENTLY. SILVER GATE STARTED IN 2018. IT WAS THE BANK OF CHOICE FOR A LOT OF LARGE CRYPTO COMPANIES. WHEN YOU TAKE A LOOK HERE AT
THIS INVESTIGATION, IT COMES ON THE HEELS OF CRITICISM FROM LAWMAKERS AS WELL TO DESCRIBE MORE OF THE RELATIONSHIP BETWEEN SILVER GATE, FTX, AND ALAMEDA AND WHAT SILVER GATE REALLY KNEW ABOUT WHAT WAS GOING ON AND WHETHER THEY HAD APPROPRIATE DISCLOSURES. SILVER GATE IS A CALIFORNIA-BASED BANK THAT IS STILL USING A DEPRESSION ERA BACKSTOP FOR THE WAY IT OPERATES. IT HAS A SHORT-TERM FUNDING THAT ALLOWS IT TO OPERATE IN THE WAY IT DOES.
IT IS ONE OF THE MORE CLEAR LINKS TO THE TRADITIONAL FINANCIAL SYSTEM WHEN YOU ARE LOOKING AT HOW THE CRYPTO INDUSTRY IS FINANCED. CAROLINE: WHAT IS INTERESTING, WHETHER OR NOT PEOPLE CAN MOVE ON, SOME PEOPLE ARE TRYING TO MOVE ON BY THE FACT THE -- PRICES ARE RALLYING AGAIN. THEY ARE NOT ANYWHERE NEAR THE HIGH OF 69,000 BUT STILL BITCOIN IS HIGHER. NUMBERS OUT OF MICROSTRATEGY, ONCE UPON A TIME, A SOFTWARE COMPANY THAT BECAME A BITCOIN BET. HOW ARE WE SEEING THE COMPANIES
SUFFERING FROM LAST YEAR BUT LOOKING FORWARD? SONALI: ONE TO THINK THAT IS INTERESTING IS ON THE WAY DOWN SO MANY PEOPLE LOST SO MUCH MONEY LAST YEAR. WHEN YOU ARE LOOKING AT MICROSTRATEGY, COINBASE, OR PLACES LINKED TO THE CRYPTO INDUSTRY YOU HAVE AN INSTANCE WHERE PEOPLE ARE LOOKING AT, OK, HAVE WE BOTTOMED? AS PRICES OF BITCOIN START TO RECOVER. IF YOU ARE LINKED BITCOIN IT IS AN EASIER WAY TO PLAY THE INDUSTRY THROUGH INFRASTRUCTURE THAT IT IS TO -- ZAN IT IS TO REALLY BENT ON OTHER TOKENS AND COINS IF YOU ARE AN INSTITUTIONAL INVESTOR. MICROSTRATEGY IS A PUBLICLY TRADED STOCK. IN MIAMI-DADE CRYPTO PLAYERS. I SAW SCARAMUCCI. BIONOVO GRATZ WAS THERE AS WELL. THE INDUSTRY IS STILL SEVERELY
BRUISED BUT THE BALANCE YOU TALK ABOUT GIVE PEOPLE THE POWER TO COME SAY, WE ARE SURVIVING. ED: SONALI BASAK, THANK YOU. I WANT TO STICK WITH THE CONVERSATION AROUND CRYPTO. ARKK INVESTMENT MANAGEMENT'S CATHIE WOOD SPOKE TO BITCOIN EARLIER ABOUT WHY SHE IS STICKING TO HER STRATEGY. CATHINE: THE CONFIDENCE WAS STRENGTHENED LAST YEAR. LAST YEAR WAS A TERRIBLE YEAR
FOR EVERYONE IN CRYPTO. THINK ABOUT WHAT HAPPENED. IT WAS THIS CENTRALIZED OPAQUE PLAYERS THAT WENT BANKRUPT. FTX, CELSIUS, THREE ERRORS CAPITAL. -- ROSE CAPITAL. WHAT DID WE SEE FROM BITCOIN? BITCOIN IS COMPLETELY DECENTRALIZED AND TRANSPARENT. IT STARTED BECAUSE OF 2008,
2009. THE LACK OF TRANSPARENCY IN THE TRADITIONAL FINANCIAL SERVICES ECOSYSTEM. WHEN WE DID OUR RESEARCH, ARCHEWELL EFFORT -- ART LAUFORD TOOK US THROUGH WHAT BITCOIN MEANT TO HIM. WOW, ART. THIS IS A RULES-BASED MONETARY -- A RULES-BASED DIGITAL MONETARY SYSTEM THAT IS GLOBAL. AND, THERE IS NO HUMAN INTERVENTION. THAT'S VERY DISCIPLINED.
IT'S MATHEMATICALLY METERED. TO TOP OUT AT 21 MILLION UNITS. IN THE LAST YEAR THE RESPONSE -- THE LAST THREE YEARS, THE RESPONSES TO COVID. THE FISCAL AND MONETARY RESPONSES THAT, YOU KNOW, IN MANY COUNTRIES, ARE CAUSING HYPERINFLATION, AND FISCAL CRISES. WE ARE SEEING PROTESTS, RIOTS ALL OVER THE PLACE. WELL, WHERE DO THESE PEOPLE GO FOR AN INSURANCE POLICY AGAINST AN IMPLOSION IN THEIR PURCHASING POWER AND WEALTH? IT IS IN SOMETHING LIKE BITCOIN. CAROLINE:
NEXT, WHAT WE KNOW ABOUT THE INCOMING PASSWORD SHARING RULES FROM NETFLIX. WHAT WE KNOW HAS A LOT OF PEOPLE CONCERNED. THIS IS BLOOMBERG. CAROLINE: NETFLIX PASSWORD SHARING. WHY ARE WE FREAKING OUT? LAST YEAR NETFLIX TOLD US MORE THAN 100 MILLION HOUSEHOLDS CURRENTLY USE NETFLIX MEMBERSHIPS BUT DON'T PAY FOR IT AND WANTED TO CRACKDOWN ON THIS PASSWORD SHARING COMING INTO EFFECT THE END OF THE FIRST QUARTER, PROBABLY BY MARCH. WHY ARE WE ALL FREAKING OUT NOW? BEFORE FINDING -- IN LATIN AMERICA, PERU, CHILE, COSTA RICA, THEY PUT OUT A HELPFUL ARTICLE TO TELL USERS IN THOSE COUNTRIES ABOUT SOME OF THE CHANGES. BUT THEY PUBLISHED IT IN EVERY REGION AND THAT'S WHY WE ARE WORRYING ABOUT IT.
WHAT ARE WE SEEING TRIALED IN THOSE COUNTRIES? USERS ARE BEING ASKED TO SET A PRIMARY LOCATION FOR WHERE THEY USE NETFLIX ON THEIR DEVICES AND THEN NETFLIX WILL TRACK IP ADDRESSES OR DEVICE IDS. ACCOUNT ACTIVITY TO SEE IF ANYONE OUTSIDE THE HOUSEHOLD IS USING THAT PASSWORD. YOU CAN BE INCENTIVIZED TO ADD MEMBERS TO YOUR OWN HOUSEHOLD IF YOU WANT THEM TO BE USING IT. YOU HAVE TO PAY UP. NOW IN THE U.S., TAKE A DEEP BREATH. NOTHING IS EXACTLY HAPPENING AT THIS MOMENT. BUT, WHAT IS CLEAR IS NETFLIX WILL HAVE TO USE ALL OF ITS STORYTELLING SKILLS TO GET YOU AND I ON BOARD WITH THESE CHANGES.
ED, THE FUROR, THE OUTRAGE ACROSS INSTAGRAM. NETFLIX HAD STRONG NEWS WEDNESDAY. THEY WANTED TO TALK ABOUT NETFLIX SPATIAL AUDIO.
IF YOU HAVE THE PREMIUM NETFLIX SUBSCRIPTION. IT GOT DROWNED OUT BY THIS. ED: WE THOUGHT THE STORY WOULD BE AN AD SUPPORTED HERE BUT 2023 IS ABOUT PASSWORD SHARING. GREG PETERS BEFORE HE WAS PROMOTED TO CO-CEO WAS RIGHT TO PRACTICE PROBLEM. THIS WAS REALLY FASCINATING REACTION. CAROLINE: IT WAS.
NOW WE WILL HAVE TO HEAR FROM NETFLIX ABOUT HOW THIS MIGHT BE ENACTED. THE TRIALS. WHAT IT WILL MEAN FOR YOU AND ME EVENTUALLY IN THE U.S.. IN 2017 THEY WERE SAYING IT WAS ALL ABOUT PASSWORD SHARING. NOW IT'S A DIFFERENT MATTER. THE EARNINGS TODAY. WHAT IS AFTER HOURS REACTION? ED: STILL LOWER ACROSS ALL THE MEGA CAPS. WE ASKED OUR AUDIENCE, DID YOU THINK AFTER META-PLATFORMS THIS WAS US TURNING THE CORNER FOR TECH STOCKS? EVERYONE ON TWITTER WAS BEARISH.
NO. THIS IS A DEAD CAT COUNTS. -- BOUNCE. CAROLINE: WELL, THEY ARE RIGHT. WE ARE COMING OFF THE LOWS AFTER HOURS. TUNE IN TOMORROW FOR WHAT THE NUMBERS LOOK LIKE AND HOW THEY PERFORM IN TECH STOCKS. THAT DOES IT FOR THIS EDITION OF BLOOMBERG TECHNOLOGY. 92 TWITTER SPACES FRIDAY
MIDDAY, 12 NOON.
2023-02-03 22:07
