Transcripts For BLOOMBERG Bloomberg Technology 20180221 : vi

BLOOMBERG Bloomberg Technology February 21, 2018

A group of students who survived that School Shooting are on a 400 mile state trip to the capital to pressure lawmakers to change gun control laws. They plan to hold a rally and it will mark one week since that mass shooting in parkland, florida. A londonbased lawyer, alex van der zwaan, admitted he misled investigators about the last time he spoke with rick gates, a former associate of asked Trump Campaign chairman, paul manafort. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am alisa parenti. This is bloomberg. Bloomberg technology is next. Emily i am emily chang and this is Bloomberg Technology. Russian bots take on u. S. Gun control. Butia is in during it Twitter Campaign against america. Plus, walmart margins hit record lows. How investors are reacting. A potential gold mine for advertisers looking to cash in on the newest era of connected cars. But first, to our lead. Russian bots were caught following certain hashtags following last weeks florida School Shooting. Just one way to widen divide among the u. S. Electorate on how to handle gun control, making compromise even more difficult. This happened with past issues like the nfl and then debate and the 2016 president ial election. And, allegedly telling in the election. Twitter and facebook are facing renewed pressure. Are these tech giants doing enough . Welcome selina wang, covering the story from bloomberg. Also, a Senior Policy Adviser for the counter extremism project, who joins us from d. C. You have done so much work on counterterrorism. What do you make of how these russian bots are approaching this new particular tactic . A big week with the pressure on tech. Not only did you see their russian bots, but last week of the mueller indictment. Twitter and youtube all mentioned. That is because the Tech Companies have a number of problems on their hands. Afterts, which came out the florida shooting, with divisive rhetoric and fake news, conspiracy theories. This is not new. But the concern is that the strategy will be taken again in the midterm elections and also by terrorist organizations on this platform. I think what we are seeing is another issue of a tragic School Shooting, they are trying to exploit and a saw the ability to do so, despite reforms that have been made. Emily walk us through this. I spoke to the researcher of the hamilton project that has been tracking this. He says it is almost exactly the same as what happened in vegas. Day one, the bots are retweeting breaking news. Day two, they are trading tweeting implications of the most extreme and divisive issues and opinions on guncontrol. By day three, this is when they start to promote conspiracy theories. And they want to start to destabilize American Trust in public institutions, saying the government, the media, the police are all lying to you. This is something we have seen over and over again. You mentioned earlier the nfl and them issue and the president ial election. There are fears this same playbook will be applied to the midterm elections coming up. Emily how big of a concern is it that this could move not only from sowing discord on social media, but fabricating reallife events . We now know the russians were behind creating a reallife islam protest in texas. Could we see more about . Absolutely. This is right out of the russia playbook area they will repeated because they do not need to employ a lot of resources. It is easy and they have been effective. What needs to happen is that Tech Companies need to take steps not only to get down content that violates their terms of service, but there are other measures they can take. Obviously, you not going to be able to control what every individual writes online if it , does not cross a particular threshold. With ad buying, there are specific measures that congress is pushing them to take going into the election. On bots, companies are not in favor of these and trying to crack down on it. Why are there so many bots operating on these platforms . That is a measure that if twitter was serious about i have seen Different Levels of reporting, i have seen that 50 of accounts are bots. In any case, there are enough messages ofing the the fake news, russia up again do counterintelligence , operations that may influence our midterm elections. So if the companies are serious, there are clear measures they can take to crack down on some of this and make a real dent in the problem. Unfortunately, we have not seen that happen yet as evidenced by , what has been going on this week. Emily you cover twitter and know extensively what they are doing and not doing. How are they actually cracking down here when we know a lot of bots have been kicked off the platform, but there is no more than enough. Selina twitter is doing all they can, but there are more they have multiple constraints. They have had financial issues. They only recently just reported profitable real quarter. They are dedicating as many engineers to this issue as they can. But we have not heard them take steps to address the problem. Even though these algorithms twitter has are Getting Better and better, they are changing their tax it changing their tactics faster than twitter can keep up. I have spoken with people who work at twitter or worked at twitter who described it as a whackamole problem. The moment twitter changes their algorithms to address spam and bots we see a new pattern , emerge. That is the challenge theyre up against. They have made steps for transparency. Dhey are starting an a Transparency Program for the 2018 elections. They are trying to make sure they keep it as clear of russian meddling as possible. Emily do you agree, or think twitter can do more with the Financial Resources and power it has . I think you hear that rhetoric from all three of the big players twitter, facebook, google, you hear them repeatedly saying they are doing all they can. But if you look at these companies and the amount of money in the companies, they are technical wizards. They are able to do a lot with your data when they want to do a lot with your data, and i think they can do a lot more to address these problems in society from terrorism to , russian meddling to other nefarious foreign actors that are trying to be meddling in very us ways as well. Particularly when the line is being crossed and laws are potentially being violated, which is what is happening in terms of ad buying. If they dont fix that, that will continue to be a violation of the real World Campaign election finance laws. I dont think the Tech Companies are going to have the luxury any longer of being able to operate in this free space where laws are potentially being violated and things that would not slide in reality are able to fly online. I think what is going to happen here is you are going to see not just the public start to get fed up with this, but you are seeing other parts of the private sector, most notably advertisers. You have the unilever executive a week or two ago threatening not to buy ads on these platforms because to be frank, ad companies do not want baby product ads or ben jerrys ads running on platforms where there is jihadist content, russian bots undermining our election. It is bad form for advertisers. So i think you are going to hopefully see the tech company step up. There have been a number of hearings on capitol hill and i think you are seeing pressure out of the u. K. Grilling tech executives a week or two ago and you have seen them being grilled on capitol hill. Emily Robert Mueller has indicted three companies, 13 individuals with relation to , russian meddling in the u. S. Election. How is that related to the activity we are seeing now . Are these the same parties who are behind it . We are seeing, what russia has been doing is much more wellfinanced, wellorganized, and sophisticated than what congress could have even imagined. I definitely think that has created fear among lawmakers. And these Tech Companies themselves. They can be well organized themselves to combat this issue if they had operatives in multiple countries. They had very sophisticated measures to try to cover their tracks. They were buying servers in the u. S. , computers here, doing sophisticated tactics to cover up what they were doing. There are many tactics these companies could employ, which are not doing. Someone who has testified many times says that twitter should ban all social bots. Knowing what twitters mission is, this is not something they would do. But there are more obvious drastic measures they can take. There are calls these Companies Need to integrate and talk to each other more and have some sort of shared database about a of these foreign influence networks and bots and influence how to more easily and effectively target them together. Emily tara, what is next . I mean, the midterm elections are coming up. Are they going to be potentially another disaster . Tara potentially, they are. They are coming up quickly, and i dont think we have seen the amount of reform that would be necessary to prevent the same type of meddling we have seen happen on these platforms. Our best Case Scenario is we will see more of the same and that people will be more aware of the problem so they will not perhaps fall victim or pray to the narratives that russian bots or russian intelligence operations are trying to carry out online. People might look better at the information that is coming to them, but i dont think we will see a dramatic change unless the Tech Companies undergo dramatic measures over the next year or so. What is troublesome is, it is not just about the midterm elections. I mean, this is about potentially any significant event or issue area in american domestic politics when we see this happen after terrorist attacks, after School Shootings. We see terrorist groups exploiting these albums as well to help radicalize people. This is a problem. The same technical issue is at the heart of it, but it is permeating a number of really important issues right now, and im hoping youll see a groundswell of movement by the companies. I think for the next election what we really want to hope for is that there is no hacking into our election systems, which we have been lucky enough to not have anything dramatic on that front because that would create ra that would create real h avoc. It did not successfully interfere with peoples voting or vote counts or anything like that. So a best Case Scenario unfortunately will be more on the same on the platforms and nothing that directly hits the election system itself and the infrastructure. Emily this is something we are going to continue to discuss. Tara and our very own selina wang, thank you both very much for joining us. A loss for at t in its proposed time warner deal. A judge has ruled the u. S. Justice department does not have to identify whether the recommendations between the white house and attorney general jeff sessions. At t has suggested president trumps dislike of time warners cnn swayed the Justice Department decision to oppose the takeover last year. An antitrust trial date has been set for march 19. Coming up, walmart is falling behind in its efforts to keep up with amazon. We will bring you the latest on the retail giants ecommerce slowdown, next. If you like Bloomberg News check , us out on the radio. You can listen on the Bloomberg Radio app, bloomberg. Com, and in the u. S. On sirius xm. This is bloomberg. Emily walmart fell the most in over two years after delivering a disappointing annual profit forecast. The drop says the once hot ecommerce unit begins to decelerate, sparking fears in traders about walmarts chances to battle amazon. Bloombergs matt boyle covers the Worlds Largest retailer. Gadfly also with us, columnist. What caused the slowdown in web sales . The slowdown in web sales was caused by some holiday snafus. It took us a while to get the truth out of them over the course of this analyst call, but Ceo Doug Mcmillon did say eventually that the influx of all the holiday related gifts and toys just through their their system out of whack a little bit. And that prevented some orders of basics paper towels and the , like, getting to customers. Another part of it they came up , on the oneyear anniversary of the acquisition of jet. Com. Us the growth rate was certainly going to slow. They had guided to a 40 growth rate for this fiscal year. But i dont think anybody was expecting a number as low as 23 and the shares certainly reacted to that. Emily talk to us about the jet. Com acquisition and how that factors in. You would hope that more of this growth would have happened organically, but how much of it was coming from jet. Com . I think that is the big question that todays results have posed to us. Walmart has been telling us all along that the core of their improvement they have seen the last three quarters have been organic sales from their own walmart. Com website and netjet. Com has been a nice additive but has not been a heartbeat of the growth. This raises questions they will hit his 40 growth target in the fiscal year ahead. How are they going to do that with a stumble this quarter . Emily lets talk about the how, matt. What are the bright spots that walmart has going for it when they are going up against a company that is all ecommerce like amazon . Matthew their biggest price spot is very clear, it is food. They are the nations biggest grocer, lets not forget that. And they now have curbside on grocery pickup. Where you dont have to go to the store. You place your order online, drive into the parking lot, alert them you are there on your walmart app and a friendly employee trots out and puts it in your car. They have it in 1000 stores. So about half of the u. S. Store based will have Curbside Grocery pick up by the end of this fiscal year, and that is a huge advantage over amazon, who are still figuring out how to do food online despite the acquisition of whole foods, which got so much attention. Lets remember online food, walmart is the 800 pound gorilla here. Emily so if that is the right spot, what is the dark spot . Matthew lots of other categories. Apparel is a business walmart has never really gotten right. They have been trying to get back at it. We had a story friday about them launching some new clothing brands. Bonobos,ght modcloth, so they are making some inroads. In the case of the food, people are shopping for price, for convenience. Amazon prime is a huge benefit. Walmart has countered that by saying, if you order 35 or more, you will get free two day shipping. Lets remember, this is a marathon, not a sprint. Walmart has had quite a few good quarters in a row. They had a bad one today, but this battle is far from over. Emily we are talking about the last year. What does the next year look like for walmart. Com from your perspective . Sarah i think we should see some interesting innovations of them in the ecommerce space that will hopefully tell us more about their longterm prospects. One is the implementation of smart card technology, where essentially you get a discount for bundling your orders as opposed to rapidfire firing off orders for individual items at a time. It helps the retailer with profitability. Walmart will try to roll that out more broadly this year. Itll be interesting to see if consumers respond to that, particularly the classic walmart consumer who is budget conscious. Emily obviously something we are going to continue to follow. Sarah, thanks so much as well as our own matt. Thank you both for weighing in. Coming up, qualcomms offer much to broadcoms chagrin. The latest twists and turns explained, next. This is bloomberg. Emily it was a busy day for dominoes as the pizza maker reportedly fourthquarter earnings reports. They matched wall street expectations but announced the first revenue miss since 2016. About half of domino sales is done online. But, ceo Patrick Doyle says the percentage of Digital Sales is less important than working with a customer. He spoke with bloomberg earlier. Ultimately the percentage of sales is less important than what you do with those customers once they are there. If you got a great analytics group, which we do, you are finding ways to drive more sales from those customers once they have signed up with them. Our Loyalty Program i think has been terrific for us and our customers. Emily qualcomm has raised the bid for semiconductors by 16 to shore up support from shareholders. The new allcash offer is valued at 43 billion. Qualcomm is fighting off a takeover attempt. It rejected a 121 billion offer from broadcom. Joining us now, ian king, who covers all things qualcomm. Walk us through the new developments that happened over the weekend. The weekend did not start off well for qualcomm. This morning, the two Investment Advisory services that work for the big investors tell them you should look at it this way, or vote this way. They came out strongly against qualcomm and in favor of broadcom than people have been expecting. Emily how so . Ian they did not give broadcom the full flight, but they said the managing is much better. Glass lewis went even further. Emily what does this mean for nxp . I feel like it you and i have been talking about this for a year. Ian it has been more than a year 14 months. ,this has been a Regulatory Approval thing. But what qualcomm did was go out and say, ok, we are raising our bid for this. This is money to bring in all of the investors like elliott, all of those hedge funds trying to hold the deal up and ask for more money. Appears to have gotten over that hurdle now. Emily how did qualcomms effort nxp affect their effort to buy broadcom . Ian that is a good question and complicated. Emily shakespearean what is going on here. Ian broadcom told qualcomm dont do it. Our bid for you is contingent on you paying 110. Now they are paying 127. Obviously that does not look good. B

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