'Bloomberg Technology' Full Show (10/28/2021)
From the heart of where innovation money and power collide. In Silicon Valley and beyond. This is Bloomberg Technology with Emily Chang. Welcome back to Bloomberg Technology. I'm Emily Chang in San Francisco. Coming up in the next hour out with the old and in with the mayor. Mark Zuckerberg goes all in on the metaverse doubling down on immersive reality and rebranding the entire platform even changing Facebook stock ticker. We'll talk about all of it with MIT US Global Business Group vice president Nicola Mendelsohn this hour. Plus Apple and Amazon plummeting in late trading. Amazon projecting holiday sales that fell short of
estimates indicating a pandemic boom for e-commerce could be over. Meantime Apple iPhones and Macs falling short of estimates along with fourth quarter revenue. We will break down all the results. And big tech bands together to build a more diverse workforce. We'll talk exclusively with the chief diversity officers of SNAP Uber and Spotify to talk about a new plan to make workplaces more inclusive across Silicon Valley and the global tech industry. But first the social network that we've all known as Facebook for the last 16 years now has a new name. And it is mega CEO Mark Zuckerberg announced the name change during the company's Connect conference. Take a listen.
This is the most definitive signal yet of its ambitions to focus on virtual reality and the metaverse over the next 16 years. Will the new name distance the social network from the onslaught of criticism that it prioritizes profit over people are at. Ludlow has been outside headquarters of the company now known as Metta in Menlo Park California. An ad you saw that same change happened that big change right there over your shoulder. Yeah. Nine seconds off to talk about it. Stop speaking. They just ripped off the canvas and that was the new science. So clearly they've been thinking about it for a while. A change of
name the same corporate structure no change to the Facebook properties including Facebook Messenger WhatsApp and Instagram. That will remain. But is the biggest signal yet that Facebook will now matter is staking his future on the metaverse. And naturally one of the bigger changes is that the stock taker will change from SB to NPR s on December 1st.
All things being equal. This is not just about gaming. They revealed this new Oculus headset and a range of use cases which were fitness and health. A big surprise with virtual health fitness classes gaming of course a new grand theft auto for virtual reality but also business. Mark Zuckerberg said this would be big for the economy but also big for the environment. Imagine a situation where instead of flying across the country for a meeting you both where your Oculus headset and your one on one in a virtual space. So that is the vision that Mark Zuckerberg outlined. But he was candid. This will take a decade at least before it has mass reach. Emily Chang. All right. As Ludlow thank you so much. A little later we're gonna be speaking with Nicola Mendelsohn vice president of Matters a global business group right here on Bloomberg Technology. Want to take a look now at how investors reacted to this news. Hour critic Gupta joins us with the details. Kitty
how did the market take it. Well Emily Facebook shares positive on the day but let's take a little bit of a step back here and put this into perspective because it's been about two months of really share pressure two months where Facebook has been trying to deal with those of course Apple advertising talk about growth concerns. And of course that whistle blower testimony. What I really want to point out though is what this new move to the metaverse essentially is going to do to its bottom line. Twenty seven billion dollars that's how much they're expected to jump in costs in 2022. And just for some perspective. That's actually one quarter of Facebook annual revenue. So going to potentially hit their bottom line for this longer term investment like at Ludlow talked about. I want to hit those earning stories though because Facebook isn't the only mover on
the day we have Apple earnings and Amazon earnings let's kick it off. With Amazon down four point three percent after hours putting a poor holiday sales forecast attributing some of that to supply chain concerns but also the fact they're going to have to hire even more delivery workers. And that's going to cut into their profits. So missing estimates on that front and really taking it on the chin. There are now four point three percent after hours. It was down almost 6 percent after hours. Looks like it's paired some of those losses. Let's get to Apple though because that seems to be the big story dragging down its entire supply chain. Looks like Skyworks and Broadcom have paired those initial gains but they were down or when the headlines first
came out. And this coming after Apple also missing on their total revenue their iPhone revenue and their Mac revenue. What did well though Emily it was there iPod revenue. So the question here is do you start to see them come back up going into the holiday season. And what does this look like regionally. China seem to be the out performer but the rest of the world not so
much. All right Kristie thanks for that. I want to stick with Apple results and bring in Julie. Ask a Forester research. Julie what's your takeaway. You know obviously all companies all retailers dealing with a lot now supply chain issues but with you know makin an iPhone sales missing that's kind of a big deal right. So I don't think it's a bit I don't. So I think certainly Missy is missing your expectations missing investor expectations that Apple still grew in double digit growth. They continue to deliver double digit growth year in and year out. I don't think
anyone stressed about Apple. I think if we look at most of Apple sales still come from hardware. While yes most of consumers over 90 percent of consumers may own a smartphone or a computer only half on a tower maybe a third of the smart speakers smartwatch. There's still a lot of upside for Apple on the hardware side. Certainly Apple's target audience tends to be a fluid. They're
going to be less price sensitive. They still have a lot of confidence that we're about to go into the holiday season which is one of the biggest seasons of the year. Apple is doing really well to bring consumers and sell into their ecosystem sell services. Their marketing is very sophisticated. And I think certainly if we look at you know according to Forrester 44 percent of consumers are very concerned about the values of those brands from whom they buy. I think Apple stores really well there as well. So I don't I don't think anyone's worried about Apple even if they've missed expectations of this quarter.
Tim Cook on the call right now saying demand was very robust despite supply constraints. Does that mean you're not concerned about supply constrained. I mean we've we've reported that Apple could cut production of the new iPhone by as many as 10 million units. Yeah. So I think there's certainly some risks like the semiconductors our rare supply chain is a risk. As you talked about the cost of labor whether it's in stores or for delivery is certainly a risk. But I think we're also talking to me getting within Romaine Bostick we're talking about a company here that they may be missing expectations they may not sell as much as quickly but it's still a very strong company that continues to perform amazingly well you know throughout the pen. With or without a pandemic we're still at home working. We're
still at home with education. We're still at home the streaming media and apple selling goods and services and all the places that consumers are buying today. Meantime sales in China almost doubled to 15 billion dollars. What do you make of that. So why would people not an expert on the Chinese market. I do think that Apple does a better job as one company selling devices selling services whether it's pain or its music its media its entertainment. They do a better job of bringing
consumers into that ecosystem keeping them there and yet worrying about the lifetime value of a customer is very high for them. And that's something that I think the Android ecosystem doesn't compete very well with. So I think that would be one of the reasons. All right Julie ask a forest to research. Thank you so much for joining us and weighing in. Meantime a story we're continuing to watch and that is Activision Blizzard. CEO Bobby Kodak has asked the company's board to cut his compensation until the videogame maker meets its gender equity goals. Kodak made more than one hundred fifty four million dollars last year
most of it in stock awards. His new compensation would be a little more than sixty two thousand dollars. Last week Activision failed to convince a California court to temporarily halt a sexual harassment and discrimination case against the company. If we all work at it within the next decade the metaverse will reach a billion people host hundreds of billions of dollars of digital commerce and support jobs for millions of creators and developers. Mark Zuckerberg is all in on the metaverse at its Connect conference. Facebook unveiled Horizon Home an addition to the Oculus quest to virtual reality headset. But its biggest news is of course a total rebranding. Zuckerberg unveiled the company's new brand name brand new name I should say. We talked to Metta
Global Business Group vice president Nicola Mendelsohn about the company's game plan next. This is Bloomberg. It is time for us to adopt a new company brand to encompass everything that we do to reflect who we are and what we hope to build. I am proud to announce that starting today our company is now. There we have it. After weeks of speculation Mark Zuckerberg has made it official. Rebranding Facebook to Metta decoupling its
corporate identity from the social network mired in controversy over its toxic content and highlighting a shift to an emerging computing platform focused on virtual reality. Zuckerberg called the metaverse the next frontier. And on December 1st the Facebook stock ticker will be changed to end the IRS literally. To better understand this big shift we are joined by Nicola Mendelsohn vice president of Met US Global Business Group. Nicola thank you so much for joining us. Just a few hours ago you were a company. Just a few hours ago you worked at a company called Facebook. Now it is mad at you are even changing the stock ticker. And even Google didn't do that. Given that the vast majority of the company today doesn't work on the metaverse
at all why take this risk. Well first we didn't see it as a risk and we're just coming off a company all hands. And the excitement at the company is very real and metal really captures where a company is going. And also the future that we want to build. But our mission hasn't changed. Metis Focus is all around building the metaverse but continuing to let people connect to find communities to grow. Businesses in the way that they have with the Facebook family of apps over the almost 20 years that we've been going. And it really reflects and also solves the confusion that I think there
has been out there caused by a company named sharing the same name as well as our biggest app. And as I said you know Facebook started as a single app and now we're a whole family of apps and services with Instagram and WhatsApp and so many others. And matter actually brings together all of these apps all of these technologies under one new brand new company brand. Give us some
color on what the Horizon marketplace looks like. Is it going to work like an app store. Will there be a subscription model. How will people make money in this new world. Oh lots of questions. So her first stop with Horizon. Well that's the social platform that we're going to be building for people to create and interact in the metaverse. So with Horizon Worlds well that's where you can build worlds and you can jump into them with your friends with your family with your colleagues and to discover new places that you might want to go meet together in or play games in or get to know different members of your community with different avatars that you might have. An horizon home is really our early vision for the home space in the Metaverse and Horizon work rooms which is already up and running. Is that the collaboration. And you know
I was just in the meeting last week and that feeling that you when you're sat round a virtual table and especially in this world today where we're all working in a much more hybrid way it's very different just from having a one on one straight into the screen like you and I are doing now. You actually feel like you're sat around the table. You do turn left. You do time right. Depending on where the audio is coming from. So it's a very different audience. It's an enhanced if you like social experience. But what if the metaverse and are in VR don't make the world
more social at all make us more disconnected more antisocial and replicates so many of the criticisms that face Facebook today. Well that's not the case from the experiences that I've already been enjoying and already having it in. You know when I've been into the when I'm playing games or actually when I'm meeting I'm hanging out with people. So I've been to the moon. That's probably the first person that you've got is saying I've been to the moon with my colleagues and we took with our avatars. Virtual SD against the get back drops of the sun and backdrops. But I think also at the heart of your question also as well is as making sure that we're addressing and building responsibly for the metaphors. And I think there's a couple of things here
that are really important to point out. One is that no one company alone is going to be building the metaverse. Many different companies many different developers businesses are going to be building together. What I do think that is important is that we're building in the principles of safety and security right in from the start. And that if we have these principles right as a society then we're going to be so much better at tackling the new challenges that inevitably come along with new technologies as and when they arise. The Facebook files Nicola have revealed some of the ills of social media that Facebook knew internally. But from the public's perspective it appears you did not act on that. Instagram was toxic to teens. That less than 5 percent of hateful content was taken down its Facebook. Taking a longer look in the mirror right now or running away. Or
are you committing to double down and take some accountability for these issues. You know what we're seeing right now is a coordinated effort to selectively use leaked documents to paint a false picture of our company and it really doesn't in any way reflect the company that I know and that I'm passionate about and that I love working about. And I'm actually really proud of our record. Navigating these complicated tradeoffs involved in operating in a services of scale. And I would say look at the actions that we've taken. Look at the considerable investments that we've made. If I just take this year we're on track to spend more than five billion dollars on safety and security. And I think that's more than any other tech company. Even if you adjust the scale and the fact that we now have 40000 people that are working on
safety that are working on security for the company I think shows that we're not running away that we absolutely understand the responsibilities that we have. I'm against the different areas that you could look at. You can see that the progress that we're making across all these different areas. But you're 40000 people serving three billion users. So there's this question is Facebook just too big to cover. And there may be so many smart and well-intentioned and capable people who work there but can you moderate every political moral and religious issue in every single country and every language around the world. Or is that just impossible for any one company to do. So one of the things that we've set out to do is actually set out and be very open and transparent about the work that we're doing in this area. And so that's why we now publish four times
a year. The Community Standards Enforcement Report and we're even opening our books to E. Why as an independent auditor to be able to validate and look at our results. Now I think this is some of the most comprehensive most sophisticated work that is going on anywhere around the world. And I'm really proud of that work. But to your question we're not satisfied if there's anything on our platform that could in any way cause harm to somebody. And
so we're committed to continuing to get it done off of our platform. We might not be able to get everything done but we absolutely are committed to do everything we can to make those numbers as small as possible. Meantime Facebook score ad business remains the engine of growth for now. We've seen Facebook and Twitter and SNAP take a hit as a result of the
Apple ad tracking technology changes. Apple's reporting its earnings results today. They actually missed estimates for fourth quarter revenue. But I'm curious if you have any words for Apple right now as somebody who is so influential in Facebook I or I should say matters ad business. Now we've we've been wanting for a long time about Apple's ISE 14 policy and the
fact that really it's been benefiting Baron bottom line at the expense of small businesses and at the expense of creators. And I think we're seeing that play out now especially with small businesses where you know they have really small budgets. And for these small budgets to work they've got to be able to reach the customers that matter to them. And especially over the last
year we've seen how vital it was for small businesses to be able to you know if they weren't able to open their shops to be able to reach out and find the customers that matter to them. And at its heart we do believe that privacy and advertising can co-exist. But without the collateral damage caused by Apple. There've been questions about Mark Zuckerberg continuing role at the company and I'm curious if there's any indication he might step back as CEO move into a solely chairman role like we saw Larry and Sergei do at Google. And similarly for Sheryl Will. Will she take on a different role or take a step back if the ad business is less important than the metaverse. Nobody is saying that the ad business is less important at Facebook it is an important part of how we of how we do business. And I wish you could have seen me be the all hands
that we just came off that both Mark and Sheryl were on. And the excitement that was emanating from not just Morgan's show but all of our leaders at the company sharing the vision exploring it having fun with that with all of our employees and really toasting towards this next vision for the company over the over the decades ahead. So as somebody who is so critical critical in running the global ad business I'm curious what is the ad opportunity that you see in the metaverse. How effective do you think ad targeting will be there. And tell us a little bit more about your own experience and what you think advertisers will
get out of this. So I think there's gonna be a lot of exciting opportunity for for advertisers but I think first and foremost there'll be a lot that just happens in the metaverse for free as there is on the Internet today but there will be advertising opportunities. But the way that we build all of our products first and foremost is that we start with people. We start with people. And we make sure that you know and understand how people are using and enjoying our products. And then and then we go from there. I think there's going to be opportunities for creators and we're going to make sure that we're building the tools that both creators and developers need in order to help them be successful in the metaverse as well. So I think there's a lot to be excited about. I'm already seeing businesses you know starting to explore what it's like to actually experiment with augmented reality. So I think about the fact that you can go on Instagram
today and you can try on virtually a pair of rape glasses in the Rayburn Shop or Charlotte Tilbury where you can try makeup on and lipstick. So already seeing brands start to start to have fun with it now. Nicola you're having lots of conversations with advertisers every day. And I have to ask you are they concerned about the social media onslaught. Are they concerned about the claims and revelations of the whistleblower. Francis how. Because the critics wonder how any advertiser right now can justify advertising on Facebook platforms. Yeah. So I'm having what I would say is very thoughtful and considered conversations with advertisers. And what they're acknowledging and what they're seeing is the thoughtfulness of the approach the
investments that we're making and the considerable progress that we have been making over the years. They recognized how the how the conversation has been taken out of context. They recognize why it's right for a company to do research about its products to understand how to constantly improve them. And they understand that. And they think that's an important part. And
they also see our commitment to the work that we do with organizations like Gombe and on the MRC as well. And that's where we stand by and is really important to us. All right Nicole Mendelson from Matter I almost at Facebook Nicola joining us on a late evening in London. Thank you very much for joining us and sharing the new vision. We'll be back with more of Bloomberg Technology after this quick break. A few other stories we're watching Mark Cuban's basketball team the Dallas Mavericks is having a giveaway for fans but it is not your typical bobblehead or tee shirt freebie. The Mavericks have announced a five year partnership with Voyager Digital and fans
that sign up with the cryptocurrency trading platform in the first 48 hours will get one hundred dollars in free Bitcoin. And Microsoft is getting back into the personal computer game business. The maker of the X box video game console has come out with age of empires for the first installment of the series in 16 years. The Microsoft executive in charge said If you want to speak to gamers you have to go beyond the console and speak to PC gamers as well. Coming up Shopify six year earning streak comes to an end. After the break I'll speak with the company's president about what he needs to get that back. And Apple CEO Tim Cook is speaking on the earnings call now.
Take a listen to what he had to say about Apple TV. Plus in just its first two years Apple TV plus has already proved itself to fans around the world. And I want to congratulate the incredible actors writers storytellers producers and everyone else who's behind the scenes work has made that success possible. Welcome back to Bloomberg Technology AM Emily Chang in San Francisco and to get back to tech earnings are critique. Gupta has been following all of the reports coming out Kristie. Take it away. Well Emily after hours let's just kick it off with
Facebook. They did report earnings but they did have a major change in name now called Meta. You are seeing four shares up 1 1/2 percent intraday after hours about flat. But it's really Amazon Apple that's taking the cake because they both missed their earnings estimates up. Amazon I should say actually putting a lower than expected holiday forecasting the supply
chain costs and those labor shortages are going to affect their holiday numbers. And they also have Apple of course missing on total revenue iPhone revenue and Mac revenue. Only their iPad revenue was up. So of course both those stocks under pressure. I want to hit from big tech in the US too big tech in Canada because Shopify also reported their earnings today and they actually missed their estimates. But the stock ended up higher by 7 percent on the day. And it was all because analysts said well yeah they missed their earnings but they also have this major long term potential and you can kind of see that year to date. That has really been the sentiment because Emily not only is shop of a higher on the day it's higher on the year by this year higher on 20 21 outperforming the Canadian benchmark which is the largest member of but also outperforming Apple Amazon Facebook and even the S&P 500. Emily. All right Kristie thanks for that. I want to stick with Shopify and its rare earnings Miss Talk. Joining me now president of Shopify Arlie Finkelstein. OK Hala it had to happen at some point but why did
it happen now. Well look I think just let's just level set here for a second I think we are sort of in this new normal post pandemic. But I don't think there's anything average about what Shopify and merchants are building. I think that 2020 will forever have an asterix by it in history books. But as things begin to settle into sort of this new post pandemic trend our
merchants and shop they're growing at an extraordinary speed. Emily it took us 15 years for the merch our merchants to get to two hundred billion dollars of GMV GMV and just 16 months double that GMV was up 35 percent for the quarter 41 billion. When you look at revenue we hit one point one billion in revenue up 46 percent. So what we are seeing is more merchants come into Shopify. They're launching more merch and getting larger on Shopify and they're taking more of our services. And I think what is becoming clear in this new world is that we are really building the essential Internet infrastructure for commerce and we expect Q4 to grow substantially faster than the retail sector overall. OK. How is the supply chain issue challenges that seem to be smiling everyone. How. How is that affecting Shopify and all of the businesses that rely on you. Yeah. So we did not see
a material impact from supply chain. We saw that inventory levels and delivery times had not changed materially from Q3 last year to this year. What I would also say is on the supply chain it seems like every single year the small businesses and the merchants that you Shopify they seem to always face these new challenges whether they're you know things like the pandemic or a supply chain in this case. And what we noticed is that our merchants are really really good at being resilient. We also have a very diversified merchant base across verticals geographies channels and many of those soaps source locally and have room in their margins. To absorb some of these shocks you have to sort of remember that most of the merchants on Shopify they use the direct to consumer model which we think is going to be the mainstay in retail. They're not like these big box retailers operating on razor thin margins. And so when you combine the fact that a lot of them do have a direct
relationship with the end consumer. A lot of the make their own products. We have not seen a major slowdown. Now that being said if supply chain does become a long term issue I think merchants will need Shopify more than ever before to find efficiencies to go direct. I'd mentioned on the call earlier today that we saw brands like Loxley Tan and Moody and Spanx and Dockers and Tupperware and FTD 100 year old flower company all signed up for Shopify this past quarter. We're seeing them go direct more in a way they haven't they haven't done in the past. Shopify is a huge partner of Facebook now. Mehta What do you think. What do you think of the new name the Metaverse Future
and how influential will Metta be in the future of commerce. Look Facebook has been an amazing partner to us. I actually kind of like the new name. I think I know there's some people are unsure about it. I think it's a great name I think and it better articulates what they're at least what I saw today and their developer conference what what they're planning. The key for us though is that we do. We believe that the future of retail is going to be retail everywhere. We think it's going to be online offline. We announced a partnership a week ago with Spotify. Now we're
embedding commerce right into Spotify. So artists who are also entrepreneurs can sell more easily. We've a partnership with tech talk but when Facebook launched Messenger we were the launch partner for commerce for the launch partner for Instagram Commerce. And on Facebook we're now putting Shopify pay into Facebook for both shop merchants and non Shopify merchants. So if the metaverse is a place where shopping happens and commerce happens we're really fortunate that Facebook has has been incredibly he's been a great partner for us over the years and we suspect we will be the launch partner for commerce inside of Facebook. Or better. Harley Finkelstein president of Shopify thank you for joining us. All right. I want to go to Amazon now
lower in after hours trading after giving a forecast for holiday sales that fell short of estimates. New CEO Andy Jassi warning that supply chain issues could cost the company several billions during the busy holiday shopping season. Joined now by Melissa Burdick co-founder and president of Parkview an e-commerce platform that helps companies like Amazon with ad sales and Intel. And of course she used to work at Amazon for many years. What do you what's your take on this this holiday quarter. And is the pandemic e-commerce boom over. Is the e-commerce boom over. It's the crazy growth of it might
be over but that was pretty unsustainable. And if it's true that there was some disappointing guidance there are so many headwinds this quarter. There's labor supply shortages from warehouse refers to tech workers the need to pay higher wages. This global supply chain issue some other things that happened this quarter too was there was no big tent pole that so they pulled prime day from Q3 to Q2 and June. And then the other thing and talking to some brands was there was a higher return to store shopping this quarter as well. So more vaccines and people actually went as you go to shop in stores. Go figure. So
is there anything there. Is there anything that Amazon can do to deal with the supply chain issues. You know especially in the shopping season. And how do you expect them to weather. You know obviously you know we've seen Amazon weather many challenges. But but this one in particular seems like a hard one. What Amazon does so well is their third party marketplace. And so they use the third party merchants to be able to fill in selection. And that's where some merchants may have issues with supply chain but not everybody does. They have the biggest marketplace. And so these sellers can fill in selection gaps. And that's one of their secrets to success. And then if you need
something you can always buy an Amazon gift card if you can't find what you're looking for. Okay. Well that was my next question is should we as customers temper our expectations for what we can get this holiday season. Should we start buying now for our friends and family. That's what everyone's been saying. Amazon started Black Friday deals on October 4th. So I think what we're going to see is just kind of constant deals throughout the quarter. People buying holiday gifts. And that's really what the industry has been saying is if you wait to the last minute like many people do every year you may not be able to find that especially in consumer electronics and toys.
All right. Melissa Burdick CAC co-founder and president thank you for joining us. Coming up calling for more diversity in tech. We're going to be joined by diversity equity and inclusion experts from SNAP Uber and Spotify to talk about their latest efforts to lay out a roadmap of how we create a more inclusive tech industry. That is next. This is Bloomberg. Well the number one word is ambition. We're not where we need to be. About 120 countries have put in new commitments to 2030.
About 70 of those are improvements. But we are not going to get under current plans to where we need to get to which is a halving of greenhouse gases by 2030. So it's great that more than 100 heads of state are coming. They need to raise their game. Some have already raised it. Others need to do so. Phase out s front. President and CEO Andrew Steer there with a dire warning ahead of the COP 26 U.N. climate change conference in Glasgow. You can catch more of that interview on this edition of
Bloomberg Technology tomorrow. More diversity in tech is needed sorely. As we all know a collective action needs to happen now. This is according to the new report. Action to Catalyze Tech or ACT brought by 29 leading diversity equity and inclusion experts from academia and the tech industry. They call on tech companies to commit to action to solve systemic inequality in technology which they say is an industry wide challenge that must be tackled by working together. For more on that I want to turn to our panel. I'm joined now by NIKKEI vice president of Diversity Equity and inclusion at SNAP Bo Young Li chief diversity and inclusion officer at Uber and Travis Robinson global head of Diversity Inclusion and belonging at Spotify. Thank you all so much for joining us.
I've been looking forward to this conversation. I want to start with you. You are all part of a group of companies that's now banding together to improve diversity in the workplace. How exactly will you at various different companies be working together. Donna. Well essentially what the ACT report does is sign a stop to taking collective action. Because you know we win or lose DTI diversity action inclusion together in products quite often or with the tech products we create we win or lose on our own. That's not the same with the eye. And you know chief things
really strike me. I've spent two decades A.I. five years in tech. And these are the two things. First the tech industry has failed on the ISE. And second I've seen with my own eyes a passionate committed clever people in the tech industry that really want to change. So the actual core is full and it lays out a roadmap for that change. It shows us how we can all come
together and also adds a bit of inspiration. If people want to know the answer to the question that the expert group spent one year answering how to transform the ISE in the tech industry it's applicable to all industries then I hope they'll check out the report. Meantime you're all competitors and the war for talent is brutal. Poaching from a limited talent pool is a huge problem. And I wonder Travis why align yourselves rather than trying to get all that diverse talent on your own. Sure. And I think it's an opportunity for us as a system we can impact change. The more we come together the more opportunity we can to attract and recruit individuals into these amazing opportunities here at Spotify. We just announced our work from anywhere a program where we are democratizing the access to opportunity beyond the major cities of New York Los Angeles or London. You
can work from anywhere. And we believe that this is one angle and one opportunity that we believe that talent that are all across the globe can get into tech. So we're trying to identify ways across with our partners. Unknown though we believe together we can come together to increase the not only the attraction to the tech industry but also democratize and develop ways for us to increase access into different opportunities. So the mindset of this distributed first workplace that is the way of the future and for us to think about different ways of working. The only way that's going to be possible is we if we come together as an industry to be able to solve this problem. And I believe that's what the ACT report helps us to. So tell us more about what your companies will commit to doing specifically to boost the talent pool and open up access.
Absolutely. So I think at the core of this and it's spelled out in the four recommendations in the ACT report really is it's about both modeling and incentivizing that inclusive talent and the leadership. And we are all going to share what we are doing to incentivize RTX. How are we modeling it. We're going to operationalize it. And I think at Uber we've we've demonstrated
that we have been able if you look at our pay equity which we published in our annual People of Culture report Uber has been able to achieve pay equity for the past three years without making any major substantive changes. And that's because we made changes in our in our hiring process in our development process as well as our promotion process and then sharing DNA data. Again it's so important for us to be able to be really transparent about where we've made progress but also where we failed. It's only in that transparency that we'll all learn together. And then finally it is really about you know and Travis really talked about this. It's expanding the pool because right now we are all trying to get our unfair share of a very limited pool because there still is a lot of stereotypes that prevent us from seeing talent in other avenues. And so it's about investing growing that pool of talent. And that's the only way we're going
to address the underlying challenges within the tech industry. I wonder what discussions you've had with your CEOs about this report and about these issues for example. Have you talked to Evan Spiegel. You know is he committed to making DNR DTI a chief company business imperative. And what do you expect from him. Yeah absolutely. I mean this whole initiative actually came about as a result of a comment he made to me because I was saying hey look here isn't the plan. And you know in many of these rich transfer strategies we will have. And it's about you know how to get more inclusive workforce product culture. I said to him the thing is no one leader no one company can solve this. Right. So if we really wanted to do it right this needs to be
across industry approach. He was like well then that should be the strategic priority. So we actually start from that conversation. We come to this at SNAP from a position of complete humility. I mean you know our point is we don't have all the answers but if we are to ask the questions together that's the way we're most likely to find success and accelerate what has been agonizingly incremental progress. Because to the earlier points we have to address some of the root problems at the moment. What we do is play like divesting musical chairs. That's kind of like the best we say the West is. We're just preaching each other's like my best. I hate that phrase. You know I mean and at the end of the day we have to expand the actual pool of that talent itself by addressing educational inequities and other systemic barriers.
Well and as you say there's a huge disconnect between what executive thinks executives think about their workplace and what workers think about their workplace. For example research found that 75 percent of exacts believe that women and ethnic minorities feel a sense of belonging in their organizations. That belief is actually only shared by 24 percent of women and underrepresented minority employees. Travis how do you start addressing this. Yeah that's a great question. And the research shows and even in this in this current state you have to think about connectivity and community building when it comes to this sense of belonging. It has to be intentional and you have to shift mindsets and behaviors. And as I mentioned that this is paramount to what this this coalition of individuals are coming together to address. The old way of
doing things is no longer the way of the future. So we have to come together to think strategically about how do we establish community in a distributed first workplace workplace but also be intentional in realizing the data shows that individuals from the historically excluded communities are having a different experience. But are all first starts with the data and that will help us think about strategies and solutions. But once again if we come together it can accelerate the diversity it can infuse the inclusion and be able to amplify bonk belonging in a meaningful way. And the only way to do that is actually be intentional with the steps that that it takes. You know one of the big advancements in the last decade is
companies reporting their diversity statistics. But sadly when you look at those statistics the numbers don't move that much every year. Sometimes they even backtrack. So what's it going to take to see real change. Is it going to be years. Is it going to be decades. Well I hope it's not decades. I hope it is. It is years. And you know Ruba is a really great
example of a company that actually has been able to make progress since 20 19. We've seen it over 10 percent increase in women in leadership. We've almost doubled the representation of underrepresented people of color in our leadership as well in the last two years. But what it will take is not just simply putting simple bandages and putting in programs so to speak. It's about fundamentally redesigning the culture that exists within tech. You know Emily you wrote a book a few years ago Brad Stone talking about the fact that the tech industry culture is really defined by this very like hyper masculine culture. And
that is not welcoming. It doesn't create along for women for people of color LGBTQ people with disabilities. And so one of the things that's really important that I think this group of tech companies is we're saying we're going to work together we're going to find solutions together and we're going to truly address the underlying cultural elements that makes it so hard for people like all four of us to feel like we fully belong. That this is our natural home in the tech industry. Well I hope it doesn't take decades either. And I appreciate you taking the time to join us to share your work. Very important work indeed. Luna King vice president of Diversity Equity and inclusion at SNAP Bo Yung of Hoover Travis Robinson of Spotify. Thank you all for taking the time to join us.
Coming up meet Madoff. Facebook changed its name after a live virtual presentation about the metaverse and how they're working on it. We'll have the latest. And as we head to break more from the Apple earnings call CEO Tim Cook has been talking about how the supply chain crunch has affected business. Take a listen. This is Bloomberg for this quarter. We think that the primary cause of supply chain related shortages will be the chip shortage. It'll affect ISE. So it is affecting I should say pretty much most of our products currently. Let's get back to Facebook name change to Metta and our own ad Ludlow outside the company's headquarters in Menlo Park California. The New Meadows sign right over here right over his shoulder. And Ed what's been the reaction to Mark Zuckerberg.
Big reveal. Is it took seconds for them to whip off that canvas and reveal the new logo right after Zuckerberg made the announcement. Hundreds of employees have come out to take selfies. You've got to remember the groundwork for this has been laid over several quarters. We know that they've been ramping up their investment in Facebook Reality Labs a division that works
on augmented and virtual reality. And they made this kind of big announcement in earnings this week that they will ramp up CapEx to between 29 and 34 billion dollars next year. Doesn't was doubling CapEx. So they're really putting their money where their mouth is. And what's really interesting is all the reaction on social media to this. Right. Some people will most
believe it's not real but Zuckerberg was pretty candid. I felt about how distant this is from being sort of a mainstream thing at the end of the decade. It could touch a billion people but we're only talking hundreds of millions of dollars of transactions taking place in the metaverse. Right. But Facebook making a huge investment 10 billion dollars. And the big question remains how is Madoff going to build the metaverse. The other big takeaway right was the new hardware announcement. This next generation of Oculus for the first time during that presentation we will understand what is actually the metaverse. If I'm a customer how do I experience it. And they kind of
outline you know the real interesting healthcare and fitness scenarios. Imagine doing a fitness class right. But instead of on your peloton or using another product you're wearing Oculus headset. You're seeing the people in the class with you. But they're virtually you know you might be on the East Coast. I might be on the West Coast. We have the same
hardware but we're sharing a common place. And Facebook really or I should say Metta is going to take some getting used to really stressed this broad use case. Right for the hardware and the platform itself. It's not just gaming. It's how we do business enterprise e-commerce interact with each other do a business meeting. So I don't have to fly to New York for one and save the planet essentially was Zarqawi's argument by cutting the carbon footprint. So they kind of set this out but candid. This is a long way away from being real. I spoke to Matt as now Nicola Mendelsohn earlier in the show and asked if this is this is Facebook running away from something she said. Absolutely not. Do we think this is going to change
the conversation at. This idea was first reported on October 19th. Investors have had time to digest and they've been commenting that this does not sweep under the rug. The issues around content moderation the issues around child safety on the various platforms. And this is a change in name only. The corporate structure is the same. The
Facebook properties are the same. How the business is run is the same. Reid Hoffman for example told you. What does this actually change. We shall see. I'd love Low on the ground for us in Menlo Park. Thank you Ed for your reporting today. And that does it for this edition of Bloomberg Technology. Make sure you tune in tomorrow. We're gong to be joined by MicroStrategy CEO Michael Saylor and Geoff Lawson CEO of Twilio. I'm Emily Chang in San Francisco. And this is Bloomberg.