♪

reporter: president trump said the scourge of opioid addiction will end under his watch. >> terrible people and we have got to get tough on those people. because with all the blue ribbon they mean we have, nothing if we do not get tough on the drug dealers. we are wasting our time. remember that. and that toughness includes the death penalty. mark: authorities say a serial bomber could be to blame for the

four explosions in boston this month. two men were wounded on sunday. police say the explosives were detonated by a trip wire that show both a different level of skill. in new york, i am mark crumpton and this is bloomberg. bloomberg technology is next. caroline: i am caroline hyde in london and emily chang is off today and this is bloomberg technology. silicon valley drives the losses on wall street as the nav ax falls the most in six weeks. we are taking stock of the tech driven selloff. facebook is leading the drought. we bring you the latest. heus, uber stops the baton

autonomous car tests. first, face look returning with the worst performance of 2014 with $24 billion wiping out. this after the official neworking giant faces pressure from u.s. and european officials demanding answers to report for the political advertising firm that retained information of up to 50 million users without consent. the selloff sparked pressure on the tech stock today. in one day there both the one-month rally for it. reporter: it is pretty amazing, caroline. it was a pretty extraordinary day, considerably opened up lower

this morning started off with slow trade. midmorning and midday, those losses accelerating. than 3%,q, down more the worst day on the close, down 2.7% s ince february 8. that was during another period of big volatility that came out of nowhere. facebook certainly seemed to be one of the triggers on that story were talking about. the data breach. the uder data -- the user data by cambridge analytica. facebook will be executing a forensic search into the company. up a risk fort the other tech companies. facebook did have its worst day since march of 2014 with flows finishing off 8%, of the 2012 lows. the risk off tone, continues

with microsoft, also that and cisco, as well as many others. at these are looking high-tech names which have done very well. there could be more pain to come. take a look at the technicals on btb1606. and look at g# the buyers have been mainly in control, but we have this tightening coil. in on action today, check that out. a lot of black space between today's open. and the 200 day moving average, finishing just above it. all of this suggests we could see more bearish action from fac ebook. that could suggest more bearish action could be ahead for not just technology, but the major averages. some of this contagion fear around facebook is leading into stocks overall. caroline: interesting if you

look at analyst recommendations on facebook, only two say sell. many say this is a buying opportunity. will be contagion continue, do you think? >> at is a good question and many investors say this is an early inning. investors dislike uncertainty, so if there is any risk of a real issue here, a slump on the part of facebook, you could selloff andhe stock the stock that does go below is low in february, $167. aboveoints to a decline $140. that would suggest that the bleed will continue on facebook and if that happens, i would think the contagion would move into tech overall. but time will tell, caroline. doolittle,bigail thank you. let's continue our conversation

on facebook. ando o avid kirkpatrick, founder of the facebook effect. talk to us about the timeline here. the data misuse, it was known that cambridge analytica. had this data back in 2015, but they thought they got rid of it. facebook putht, so out this blog post on friday, saying it had received new information that might lead them to believe that cambridge analytic cut did not have this data. what they were referring to there is the news report that out.set to come the guardian observer explains this data is still in the hands of cambridge analytica.

that was all cited to this whistleblower. it unraveled from there and faith came out and that, we do not actually know if cambridge analytica has the data. we have got to to an audit. cambridge analytica agreed to do the audit. they will look at the servers and see if they deleted this data. this is unraveling as lawmakers inside the u.s. and britain call for mark zuckerberg, sheryl sandberg, somebody from phase look to come out and take responsibility and explain what happened here. totally fascinating in terms of the company reaction here. david, what about mark zuckerberg and sheryl sandberg and how they are responding at the moment. they have been bombarded with the realization of how far they have come. it is the cover up

and not the crime. they might not have done anything wrong. technically they may not have, though technically, it could be the case that they should have many of the user some time ago that their personal data could have been acquired. these are very complicated questions. one thing not complicated is int many ofutte and in so the recent controversy surrounding facebook, we have not heard the voice of mark zuckerberg at all and rarely that of sheryl sandberg full my own opinion is that is a strategic error on their part of the highest proportions, that they seriously underestimate the degree to which people are upset about this. and they are basically hiding with their heads in the sand. talking about voices, you are saying we are not hearing from phase

leadership. but we are hearing from analytica's ceo. it says, i must openly state ca's notbridge analyti engaged in any. do you expect mark zuckerberg to be called out in front of you at government lawmakers in front of european lawmakers. will he take to the sand, do you think. >> i want to clarify that the quote from cambridge analytica is in relation to a channel 4 news undercover operation when they went and spent time with ca and theynalytic reported that they used those methods. asked becausey they might have to. zuckerberg's strategy seems to have really shifted over the last few months. he wasbeginning of last

being very emphatic about wanting to be open about what his take was on user questions, about traveling to different parts of the country and trying to understand. , very much to himself, same with sandberg. they have not really come out and talked about this issue in eye.ublic i think one of the reasons might be that facebook has not confirmed on its own whether these reports are true based on its own data. and the report they put out, or the blog posted that on friday, it is lending weight to be these reports that then later they were not sure were true. bunglingny is really the response of this right now. and i think they will have to higher level response. once they get the facts clear on their and falls rishaad: i mean,

we have seen an emphatic voicing made on the market. i just want to dig into the bloomberg terminal now. if you got one, type in g g#btv. they have not only got facebook, what does the company realized its own size and influence. i think one of the problems facebook has had, even to the day is that they still internalized themselves as a scrappy startup. and they think sort of, we are struggling for success.

they do not realize they are bigger than most governments in influence, they are completely unregulated. they are completely transparent. the world is seriously worried about how the systems work and just does not have the howrmation to assess problematic they are and that is for facebook to remedy. they are only starting to realize that. and i think the fact that they do hide behind facebook phaages veryn indicative tweet is a do not want to engage with the other serious questions right now. rishaad: thank you, david kirkpatrick. stop we are watching, reporting third-quarter earnings and revenues in line with

analyst estimates. the sales of the new software licenses declined and this is the company transitioning to cloud-based computing projects. they have sent recent years trying to transform it by myself. this will be transformed into a cloud contender. has a growing suite of cloud applications. see thisnot want to from other citizens. breaking margins will continue to expand. we continue to bring you for out, thelines coming company has stopped the autonomous testing. but what now? ♪

>> they self driving car has killed a pedestrian that could be the first death with a autonomous vehicle. modear in autonomous struck her. uber has suspended all of the vehicle testing. for more, let's bring in our bloomberg technology reporter from san francisco. any clarity on exactly what happened and uber's swift reaction? mark: not much yet. we know that the tragedy occurred last night around 10:00 p.m. a woman who was not in the crosswalk was walking out -- the car was in autonomous mode. we do not know if the car identified the pedestrian and did not stop in time or if the car did not identify the

identifyn, or if they the vestry in and could not move out of the way. there are many unknowns. and at this point, companies are waiting to see what regulators and the public do or how they respond. caroline: you cover alphabet significantly. do you think gm will have to take similar steps in reaction to what happened to this uber car? mark: it is unclear. the city of chandler has not changed the policies. has been testing without a safety driver in the front seat. weuber's case, as far as know, there was a safety driver inside the legal last night. at this point, they have announced they will roll out the commercial service to the public at some point this year. caroline: what about consumer confidence? how much does this get knocked back?

this is what many advocacy groups will be highlighting, concerns about the so-called safety of these vehicles. in the longer term, there is hope that this technology can drive safely. mark: that is what every company is working on, and every engineer believes this is the sabr alternative to human driving -- this is the safer alternative to human driving. consumers do not know how they work ultimately and there is the qeuuestion of public trust. there was an incident two years ago with tesla autopilot software. it does not seem that has set the industry back in any serious way. we will see how this changes things. caroline: thank you, mark bergen. coming up, ibm made a.i. a reality. so, what is the company predicting for the next five years in tech?

find out next. this is bloomberg. ♪

caroline: ibm is getting ready to make the big predictions for the next five years int ech. from advances in cloud computing to tiny microscopes monitoring the pollution in the ocean, this is all going down in las vegas conference. let's welcome the director for ibm research. thank you for joining us. i have got a look at your five technology focuses and trends for the next five years. you are talking about cryptographic messages to stop counterfeiting, counter computing and blockchain's. candace added to ibm -- can this add to ibm's profile. reporter: the answer is yes.

this will help with global shipping or food safety. with the top line and the bottom line. we think with quantum computing, this will be mainstream within five years. this implies it will be a commercial entity. industry fordy an us and will continue to expand. this is all part of our strategy. the technologies that underline these challenges are already contributing. they will contribute to the bottom line. world-renowned for the platform. will the watson platform be able to work across cloud computing computers, or does it have to be with ibm? about -- alk reporter: when you talk about accessing the watson service, you can access the cloud

services. watsonl out to the service and get the answer back from the application. many customers use it on premise, not just in the cloud. you begin to see it is a multi-cloud journey that comes up and watson plays the role within that multi-cloud journey. caroline: multi-cloud is an interesting one, particularly with partnerships and i am thinking of aws working with vmware, they have a partnership there. having something you are to respond to? are you looking for partnerships of your own? arvind: we have many partnerships of our own. we have 1400 clients who work on our public cloud. in addition to which we have thousands of more on the private cloud.

wes is an aspect of what call the hybrid cloud. many enterprise governments, health care, banking will have this on the premise, they will run private cloud, public cloud and run multiple clouds and the aggregate environment has got to it becomes a world of coopertition. [laughter] rishaad: these are big players in comparison to yourself. how do you really try to win over a startup, for example, was looking at the multitude of offerings? what makes you different? : well, something will be different based on how much regulation is in the industry, based on sensitive data and what the cloud is good for. if they want to do work on blockchain, or iod.

if you look at a startup wanting to make sure that the data is always encrypted. aspects.king at those and then you can come out way ahead compared to anybody else. day, thee end of the quality of the services, the resilience, the overall security and disaster recovery, as well as data regulation -- residency, which comes about due to regulation. the cloud centers give you a flexibility in terms of what geography the data has presented. these play a role with how we function within the cloud. caroline: we will see how that competition and cooper tition continues. thank you for joining us from las vegas, ruchir sharma -- thank you for joining us from -- vegas, ruchir sharma arvind krishma. we have coverage from our big

story, facebook. on will see what i am seeing the bloomberg. we have technical indicator saying the selloff could continue. below thes trading 200 daily moving average. this is bloomberg. ♪

reporter: beautiful evening over the break apple there as we get into midnight, clear skies. though, when you look at the equity markets with futures pointing down and the nasdaq is a little bit lower. when you compare that to the s&p, that comes down to facebook with the drop overnight. a future drop within the markets. we are looking over new york. fromat tokyo, reopening the lunch break. the dollar-yen, at the moment, we are weaker on the japanese currency.

106.25, we are looking at a fairly risk obsession in the region here. we are led by japan, but we are getting weakness from the markets in tokyo. the stories have been leading hong kong and china. we are looking at the press conference for the earnings day here in the city. i'm david ingles here in hong kong and you are watching bloomberg markets: a chef. let's look at the headlines here. paul? chinese premier league pressding the national conference at the end of the national people's congress. he says he plans to raise scrutiny of monopolies. measuresized the carried out so far, adding that monopolies are the enemy of innovation. the donald trump is putting pressure on american allies to work against china in exchange on relief from u.s. tariffs

steel and aluminum. five conditions have been laid out that countries must address for exemptions. they include actively addressing china's policies and property with the u.s. and cases against beijing. posting an informal two day meetings, key wto seeking solutions on food security. india and other food developing countries are wanting to ensure they are not challenged by the trade body to offer incentives for the farmers to grow staple crops. big oceans -- negotiations found a deadlock. saudi prince says he has already moved on from the crackdown on corruption. they were held for weeks at the ritz carlton in react. some gained their release. the prince told bloomberg that he does not fear a grudge.

exclusivetch our interview later on daybreak: middle east and that is at 2:00 p.m. sydney time or ne midnight at new york. global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. caroline: this is bloomberg technology and i am caroline hyde and let's return to the top stories. facebook lunging after the performance in four years. selloff guest says this is a big buying opportunity for investors. the analyst from tiger's, joining us from new york. ivan, why the buy? the business think model is still intact and they will have issues like this with

data and the things people post, but when the stock sells off, i have said many times, it is a buying opportunity. problemhis specific seems to be a problem with cambridge and look at the and not specifically a facebook problem. it was a misuse of data by a vendor. i think facebook might have recourse for that vendor. caroline: interesting, it seems that many of the analysts out there might agree with you. i see that nearly everyone is a by. we only have two sells out there. target seeing the price remaining lofty. i want to get your take therefore, within these price targets. , moreulatory reaction oversight, is that akin to those price targets, do you think? really's price targets, but i believe the stock is cheap and there are many things that a's book can

continue to do and is doing to further monetize basically the user base. facebook is a selling advertising to the user base to find what they are interested in and what they like and to provide targeted advertisements to them to further engage them. the one thing about facebook, if you do not know what the product is, facebook offers their user base to advertisers and helps advertisers to better target people who would be most interested in purchasing their products. and there is a huge migration of advertisers that are going away from the traditional media, which is broadcast to a broad audience. and using tools like facebook and facebook's analytical tools to better target customers that would be most interested in their products. caroline: we are seeing a backlash with regards to instagram, for example, many feeling they did not like the

algorithm, the way they were targeting them. we have seen other startups and social media companies do rather well. do you think we could see any slowdown in user growth. algorithm, the way they were with that hit the business model and your view on why investors would purchase this? they have a huge penetration into the population -- they have over 2 million users on facebook overall. and facebook will continue to figure out how to better engage those users. at some point, facebook could have a tiered service that offers a free service to the basic user and offers a more deluxe service with more features that they start to charge for. the, through advertisements, there could be an opportunity for facebook users to pay for the subscription with click throughs. facebook is using artificial intelligence to better find the more likely customers for

specific products and better tailored things that he might be interested in because people do like to see things that they are interested in. ivan feinseth, great to have you here. talking is through why now might be the buying opportunity for facebook. we have got to get a take on this latest news surrounding facebook. of know him as the cofounder paypal. build manyed businesses. he is on the board of yahoo!. you put transparency at the very heart of the ethos of your business. how do we such as facebook also have to look at transparency and at the privacy of people's data? >> i think that is exactly the core lesson to be learned here. fundamentally, privacy information disclosure, or lack

thereof, is a personal issue and the things that differentiate a good and bad experience is when the company makes clear to the users what the data could be used for. we are axing for some fairly personal information, your income sometimes, back -- bank account data could be used to give you a better price with credit. fundamentally though, our goal is to protect the data and to make it very clear what the data collected will be used for. move forward, every company will be held to a higher standard. i was looking at your twitter profile and there are recent tweets you put out on march 1. it was regarding a study put out for 2018, showing the trust in the u.s. has fallen away. and in particular, it is interesting that you noted then, that technology companies, the technical industry is the most followed up there.

do you think the tech industry might because less trusted. could it lose that payload? max: i think the rumors of the device of trust has been greatly exaggerated, at least according to the study i was loading. my take is that responsibility is what matters. we could try to lead the way and do the right thing. i am focused on making sure that our firm remains a trusted company and i hope other companies, other ceos take that lesson to heart. caroline: let's talk about pushing forward. we have made announcement today. you have the new affirm in the store. how are you want to be tackling rifles such as the actual credit card. t other up agains

providers. from in-store and online as well, we are very specific -- we lend money to create the honest, transparent loan specific to the purchase. those younies like have mentioned are fundamentally about personal loans, refinance your debts. those are always abusing credit. are focused on is making sure that you do not get yourself into trouble. or at least understand very clearly what he will pay and what something will cost you if a firm to finance it. one thing really important in retail i think, and it is changing. the rumors the retail are all greatly exaggerated. but it is changing in a very big way. what used to be a separate set of experiences, you shop online and then you pick it up -- they have been blending very rapidly. as a way ofbegan

offering credit to folks, helping somebody with a hard time exploring cash. over time or, the other way around and they would start off line, change their mind and change it again. yese conducted a very, very and this product today, really answer the question of, are we where the customer wants to buy? and i believe we just answered it with, yes we are. caroline: talk about being everywhere, you mentioned at how amazon is perhaps eating at the heels of retailers. is this a competitor you are keeping an i on.

keeping an eye on? max: i spend a lot of time thinking about what we could do for the customers. >> peter teel said he does not like san francisco. would you ever consider moving to san francisco. reporter: you know, my company is in san francisco, my employees, my friends. i am pretty well-established here. i tried to contribute what i can . -- at the moment, i

am going to stay in san francisco. it is really difficult to hire here, i have got to say that though. caroline: some of the tech companies might be into getting into fin financial services. what about american express getting in on the ground floor to offer some of these loans. are they coming in on your space. using the old ones can reinvent themselves where the biggest difference in factors between us we built thears, company around the notion of being clearly align with our customers. we don't make money on our customers from beginning state. complete transparency, honest. and a lot of the traditional financial services for the fundamentally built on this idea, what you do not notice, we can pocket.

i think it is really difficult for a lot of income. to say, we will see what an to half of our profit line and give that up. especiallyt's like with other companies saying, it is ok, we do not have to make. it's a difficult to take. i am concerned about people saying they will fundamentally fundamentally realign ourselves with our customers amazon is not looking to keep the famous brand alive, but instead users, seem to be making spaces to create branding locations.

amazon put into breaks and mortar or three stories. and another headline to bring you, the washington post is reporting that president trump is said to be preparing $60 billion in china terrace by friday. we will continue to monitor this story. this is bloomberg. to all what are you matt: even after facebook and

look at asked them to delete the information. what does this mean for facebook? raise the money with the 1.7 3 million users worldwide. it is also an partner of facebook. are you worrying about the ways in which facebook looks after i'm or notda ught: no, would not say i am worried about it. facebook is very protective of their data. they have api for integrating with thems, the application places. so in a moment, you think

regarding the bar, they seems that they learned that a company regarding the gym and llllaskfjdlf you think this is that of a have changed the time i think the way storyhich i look at this is, the way in which this essentially retains information is you go through the app you want a convenient way to rochester and login. you see that anyone of that on -- your where to think

can see pictures of your friends this is thegoal of convenience. you.ally in they like to the users that securitycebook provisions. you cannot blame the user because they took plays a role. but it was not something like a data breach were facebook added them information and the information they do obtain is pretty limited. that is the example of basically getting photos to show you with your phone call. that is one of the prime examples of how that data is used. david: this is how the story needs to be told more freely. it would seem maybe address those specific targets. are you, as partner,

worried there could be regulatory backlash here that regulators could weigh in and we could start to change the way in which the business model really works? for facebook and also you? there is certainly a lot of talk about that right now for the added is he has been largely targeted. industrylargely in the itself. they are forced by firms like bloomberg, i think facebook, , i think thempany regulation is faster. the government regulators trying to respond to rapid shifts in technology. focus when even more for the these types of focuses.

facebook regulates this. no one ever sees that. self-regulation works. mark douglas, thank you for having our time on the show. facebook fortune drops. up next. ♪

facebook posting the worst day of trading the 201412 u.s. and european officials demand answers as millions of social network users' information was retained without consent. mark zuckerberg is definitely feeling the pain. fortune drops by 1.49

billion dollars. this is a widely read story. tom metcalfe covers billionaires working for us now. am, i mean, you saw significant drop-off here. but how has is played out? tom: he was about $4.9 billion down today. basically, this was the second-biggest decliner. this was led by the sentiment that the story around facebook rocks. most tech stocks were down. caroline: only $71.5 billion left to go, clearly. but what about going forward? what does this mean for him? philanthropic big

effort as well? what do you think this means in the mind of the big billionaire he is? , hey, 99%nk he says of my fortune will go to charity and so, when facebook underperforms, less money goes into his foundation and the initiatives behind that. a big drop, but as you say, $71 billion he has a bit of wiggle room. top four,out of the now number five. tom: exactly. caroline: these billions of dollars can make the mind boggles. that is it for this edition of bloomberg technology. we have more of the follow-up from the facebook data story on tuesday's show. the conservative lawmaker here in britain, the mark zuckerberg to answer questions from lawmakers.

and in reminder, we are live streaming on twitter. check us out at 5:00 p.m. new york time and 2:00 p.m. in severances though and 9:00 p.m. right here in london. -- and 2:00 p.m. in san francisco and 9:00 p.m. right here in london. .his is bloomberg ♪ retail.

under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver.

>> a lead exclusive. in his first interview since being released, the billionaire businessman says he has zero guilt. yet -- yes, we, do have an understanding with the government going forward. >> u.s. markets are dragged lower by facebook scandal and a corporate nightmare asian equities