Gatess former boss, paul manafort, maintains his innocence. His charges were revised after gates s plea. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. Im alisa parenti. This is bloomberg. Emily im emily chang, and this is bloomberg technology. Coming up, dropbox files lead the charge for big tex ipos in 2018. Our look at a game plan and the players involved in the storage providers public listing. Plus, amazons brickandmortar craze. The ecommerce giant makes another play for the struggling Convenience Store industry with plans to open more cashless stores. The next round officially begins in the fight for the future of the internet. Will go inside the opposition mobilizing against the fccs plan to end Net Neutrality. But first, the hourly. After months to our lead. After months of spec elation, dropbox made it official by filing for an ipo. The number is a placeholder that is likely to change. With the stored value provided we could be looking at one of the biggest tech ipos in recent years. Ar more, i want to bring in report of roslyn following this story and our guests and has not been on the show in a while. Lets start with the numbers. They raise the devaluation years ago, but they are more likely to target a 7 billion were 8 billion valuation now. What did we learn from this filing . Confirming some of the numbers they have laid out. That they have 5 million users. When i start Digging Deeper in terms of what investors will be looking at, yes, that 1. 1 billion revenue number looks great, but when i didnt to the specifically, 500 million registered users is a number that was thrown out in march of 2016, but only 11 million of those users, only 2 , are paying users. What i think about what investors will be grappling with a state decide whether or not to buy into this ipo, is a big question dropbox has continued to have. Users. Ve all of the free how do you get them to open of their pocketbooks and pay the company for the products it is providing . Emily Revenue Growth is sliding but profit losses are narrowing. I think we have to look at the other storage provider, which is box. It is not very different. The numbers are the same. They have to percent on their user base paying users. Same with dropbox. No they surprise there. I would say that the big challenge for them is to convince more people today for this. That is not an easy task, but it is also not an impossible thing mostly because the wind is on their back. All trends are leading to more demand for online storage. Yes there is more competition. There is box itself. When you see the challenges keep coming up, in reality, people love dropbox, the ease of use of dropbox trump a lot of stuffs google and apple have to offer. Emily box filed for an ipo and you did not have a high outlook for them. Do you think drop pass will fare better or are they the same . Om i think when i came on and set the stock will be a big challenge, it has been challenged. I dont think dropbox will be any different. The stock will be challenged because the growth is not going to be that easy for them just like it has not been easy for box. I did not say it was a bad company, just a lot of challenges ahead for them. Emily tell me about the risk factor. Alex competition is one of them. Dropbox is trying to distance itself from them. It flags google and apple. Their share letter, basically some fighting words think out. They are scaling, moving quickly, a lawless back at the incumbents, and income is where designed for a World Weather was supported thing you ever did was Pretty Things out, so dropbox is trying to distance themselves. Will investors be able to buy into this vision of teamwork and collaboration and cloudbased workspaces that dropbox is laying out to potentially distance it self . Om so far, all of their efforts to be a workspace have not worked. All of the paper and they started the mail application. Alex the photo at. App. Om as a storage company, you can dress it up anyway you want, but it is still a storage company. Is fighting amazon, which offers free storage with prime. It is fighting with apple, which has an easy conversion. Same with google. Google drive and google docs arent easy are an upsell. The only thing going for dropbox using dropbox. It accounts for a lot in my books, but not more than that. Emily the brand and the recognition of that. This could be the largest tech ipo since snap. What else is in the pipeline this year . Alex spotify obviously not an ipo, but a direct listing and when we are paying attention to. There seems to be a lot of movement on the ground. People talking about listing. The markets have had a little bit of turmoil, but enough stability that advisors are saying to go public when you are ready, so those companies as well as a number of bigger enterprise names are the ones i would Pay Attention to in the pipeline. Dropbox will be one that people will Pay Attention to because it has decent financials, some flowing revenue, some things investors will not like, but it is indicative of the big version of the bread and butter tax ipo looks like. Emily thank you. Om, you are sticking with me for a few more blocks. We have breaking news on warren buffett. He will entire retirethe end following the end of the upcoming shareholder meeting. He decided to retire as the decreases his travel commitments. Remember, in his annual letter to Berkshire Hathaway shareholders, that comes this saturday. Coming up, it has been a week of chaos for social media platforms. And a crisis is unfolding after videos and tweets emerge labeling a florida teen as a crisis actor. If you watch Bloomberg News to me the check us out on the radio, on Bloomberg Radio app, and sirius xm. This is bloomberg. Acquiring 6 of a chinese 140operator for 88 million. The move is part of a larger brickandmortar retail move in a race against rival alibaba. Both companies are investing in physical retail to ramp up production of the digital wallet. Companies like facebook and twitter have been in the hot seat for some time now and the problems continue to pile on. Just a week ago, Robert Mueller unveiled the details of a Widespread Campaign by russians to influence the u. S. President ial election in favor of donald trump. 13 russians were indicted. Since then, Cell Phone Networks have been facing a backlash. Twitter is not verifying accounts of some of the outspoken student survivors of the parkland shooting. Facebook and youtube removed some of the consumer videos. Here to have our heads around this chaos are our guests. Selena, bring us uptodate. Every day, there is something new and some new problem for these companies to deal with. Absolutely. The aftermath of the parkland theting shows how ritual of Companies Need to be about managing the systems and make sure they rid them of automated bots and malicious fake accounts. We are seeing that every time there is a tragic event, anytime there is any breaking news, these malicious actors find a window to promote divisive content to push conspiracy theories. They will take every chance they can to get it, and the result of this week show the social Media Companies have not solved their problems yet. Emily you have been really following closely the evolution of social media. It seems like the tide is turning against facebook, twitter. Om i really think the tide is turning against them. Have not reacted as much to social media as the media itself and the socalled 1 . I am being very candid about that. Most people outside of the bubble we live in do not really care. Emily but that is the problem, isnt it . Om what it is a problem or not, i cannot find, but i can tell you these companies, whether it is twitter or facebook or any other company, is driven primarily by one motivation. That is revenue. They cannot be thinking about cleaning up their feeds first. They are thinking about revenue first. When you start to parse that statement, you think this is not as important to them, cleaning up their feeds or looking for trolls or fake news. That is a very important because if they start doing that, they thedeclaring themselves editorial operations, and they will come under the same rules and regulations. Emily what do you think the intentions are . Are they good or bad for people running facebook, twitter, youtube . Om deliver growth for their shareholders. That is primarily the goal. I mean, there is no other way to think about these companies. These are publicly traded listed companies in the business of making money. As fortunate as it is, that is a harsh reality of these companies. Emily facebook has been making changes to what it shows to advertisers. There was something new about actual versus estimated metrics. Tell us about that. Selina they have been focusing on transfers for the advertisers, making sure they tell them what is estimated and what is the actual return they are getting from the investments. A great pointes that up in of the day, but they are maximizing for his maximizing revenue, and that makes the experience not driven for consumers but for advertisers. Oftentimes, the quick break clickbait divisive material mix into the top. Wayperson suggests the only to change the issue is facebook to be a substitution model because only in that case would be incentives change, but it seems highly unlikely that would happen. Emily with that ever happened . Om i dont think so. If you want a change in facebook or twitter or google, go after their advertising operations and regulate those. Not the companies themselves, but regulate how they use data, how they collect data, and what they do with it. I think doing so will lead to better policies and managing the chaos of social platforms. Emily i want to talk to you about your thoughts on the Robert Mueller indictment because at one hand you can say it is always facebook of , the fact that much of the ads were purchased after the election and that these people actually use Fake Identities to quite masterfully cumvent any of the anything in the facebook profits that would have cut them. Om i think when i saw their indictment, i said this is the latest testimonial for two entities. One is the Internet Research agency being the best Advertising Agency in the world to actually deliver what they promised to their customers, which is trump elections. Right . The second is actually facebook where is it promises it can work. You can hyper target individuals and create and change their behavior. I think fundamentally, if youre going to use a system for such granular and National Level targeting and microtargeting, you will be a platform which is open to abuse. Ronald goldmans published a series of tweets where he said he was excited about the molar indictment and share facts that he feels misunderstood about how this all works, tweeting the majority of the russian ads happened after the election. We shared that fact but very few outlets have shared it because he does not align with the main media narrative. Even facebook is not believe there was collusion. What do you think about ronald goldmans speaking, whether or not he was out of turn, speaking about this on twitter and not facebook . Om first of all, not out of turn. This is a very careful part of media strategy. This was with the blessing of media people and Senior Management at facebook. Emily that is your theoryemily emily that is your theory. Om they will fire a contractor for speaking out of turn with a roommate, and you mean to say they will let a Senior Vice President of advertising make such a fiery statement publicly without approval from the Senior Management . I dont think so. Good news is i dont do what you guys do. I am no longer in the media business. But i think facebook has the best media organization, the best pr team, and they know how to spin the stories in their favor, and they do a very effectively. So i am very cautious of what comes out of facebooks spokespeople. Selina interesting. I happen to think they shot themselves in the foot with netsuite. That tweet. They could not have seen read trumpng it seen donald read tweeting it. Y have a very strategic this operation was with more sophisticated than we could have ever imagined and the target was much broader than simply donald trump. It was about creating social discord in society at large. Unfortunately, by the time he got to that point, his initial tweets have been retreated so far that has following statements of doing more about this was already drowned out. Emily selina, thank you so much. We will begin to this later in the show and talk about tech addiction and more. For the deception by amazon in the brickandmortar seen. How the tech giant will roll out six more amazon go stores, next. This is bloomberg. Emily amazon plans to open as many as six more Cashierless Stores this year. Giant is considering locations in los angeles and seattle. Amazon go is the companys most ambitious effort to change the way people shop and a play for the struggling 550 billion u. S. Convenience store industry. Alik. How optimistic are you about these stories . Om i am impressed by what they have built. Clearly, we are lagging behind in these kinds of cashierless experiences. The japanese and chinese have been doing it for a little while, so it are very surprised to see it in our backyard. I think in reality this is likeure on big chains walgreens and cvs and folks like walmart, 7eleven. Those are the folks that will be under pressure from this decision of amazon. Emily how do you think amazon is going to change the brickandmortar experience . Not just with these Convenience Stores, but also the grocery efforts. Walmart is still the leader in online groceries. Om amazon is all about frictionless shopping and cashierless stories is as frictionless as you can get. Dont have to talk to anybody or stand in a checkout line. In and out pretty fast. You monetize way faster. So in theory, it makes a lot of sense. Of course, it does a huge damage to the Civic Infrastructure of the city. They dont have as many people working at these stores cities become very homogenous and polarizing in an economic sense, so i think that is definitely going to be an issue, but it will be an interesting next five years for the retail industry, which has been frankly lagging. Emily we have been railing on facebook, google. We have been talking about apple and the disappointing iphone x sales. Amazon seems to have a halo around it right now. What do you think amazon achilles heel is . Om i think their problem will be with regulators and the antitrust bodies will be looking at them very carefully. And they should because amazon as for the scariest of them all right now. Emily why . Om they have their hands in everything. They have their hands in the entire digital infrastructure. They are building logistical systems and defining what brands succeed in markets like who is going to sell more products. There is no way amazon and apple kiss and make up without apple sellto send more more on amazon. Com. I think that is their biggest challenge, regulation. I dont know why people think apple is doing poorly. I think it is doing great. It is a Great Company doing great work and Building Products it knows how to build and sending them in a lot of volume selling them in a lot of volume. Same for facebook. Facebook is selling a lot of at ds. A huge amount of ads. We may hate them or dislike them, but they are doing right by their shareholders. Emily we had guest on recently who said amazon could at some point in the next few years surpass facebook in Online Advertising with google still remaining on top. Om i would not know how to answer that question, to be honest. I think with whatsapp and instagram hardly monetized, facebook definitely has a lot more room to grow. Emily so of these companies, which one are you most worried about . Om nobody. They are just very highly efficient tools of capitalism. The machines are working so effectively in creating a lot of money. If there was one company, if you would twist my arm and forced me to pick one, i think it will be google. Emily why . Om google has a severe addiction to one business model, which is search and advertising based on search. Unless they can figure out how to expand that revenue model, it will be difficult. Emily all right. You are sticking with me. Thanks for not making me twist your arm. You twisted it yourself. Coming up, we will talk about the growing dangers of tech addiction and what is being done to curb screen time, particularly for children. This is bloomberg. You are watching bloomberg technology. Florida gov. Rick scott has proposed tightening begun state laws following increasing pressure in the wake of school shootings. Let me repeat, we will require all individuals purchasing firearms to be 21 years old or older. There will be exceptions for active duty and reserve military. National guard members and law enforcement. Calledrnor scott also for trademark enforcement at every school before the start of next years school year. President trump says he will let chief of staff john kelly decide whether or not to allow Jared Kushner to keep his security clearance. Among dozens of white house aides weapon working without permanent security clearances for the better part of the year. President trump said he would consider rejoining the Transpacific Partnership with the u. S. Can negotiate or favorable terms and spoke at the white house during a joint News Conference with australian Prime Minister malcolm turnbull. Trump noted he prefers bilateral deals to multination agreements. The number of european citizens looking to work and live in britain is falling ahead of brexit. Migration and those leaving is less than 100,000 for the First Time Since 2013. India and canada reached an agreement on education sectors