Intel. We hear from the ceo in a bloomberg explosive. We find out why twitter growth did not translate into sales. We hear from the ceo. In latehares plummeted trading after reporting thirdquarter earnings. For the first time in over two years, the Company Reported a decline in quarterly profits, most notable from the report, amazon issued a week forecast for the busy Holiday Quarter, likely sparking worries the Big Investments in oneday delivery are not bringing a sales boost investors were hoping for. Also fell. Ces i am joined by our guests, thank you both for joining me. Breakdown what happened to the bottom line. You are still turning a profit, but the growth was slower. Why . A lot of angst around cost. We knew oneday shipping would bring variability and cost with it for a couple of quarters. Lso, they are spending a lot on content. There is a spending cycle going on, which makes the next couple of quarters the anxiety continues. Youre clearly seeing a sales impact happening on the retail side because of oneday shipping. It will pay off longerterm in terms of market share and Revenue Growth, but as far as concerned,ility is it will continue through the quarters. Taylor are you concerned about the rate of spending and the impact on the bottom line . Or should we just brush it off with one quarter . I dont think it is one quarter, but it doesnt concern me that much. Amazon proved to the market they could drive profitability. They pulled on profitable roddicks products. In 2019, use the increased spending on things that will drive more customers to use amazon all over the place. Oneday shipping, getting the product so matter what they are back on the shelf. I think what you will see on the time overtime is, the strategy is world domination. Anywhere you can buy a product, anywhere online, they want to offer that and monetize it in other ways, advertising, etc. Taylor is market share dominance the right strategy even though it is not translating to the bottom line . Have proven it does work. If they wanted to work, it will work. Want it to work, it will work. Billion, andof 36 infrastructure is market cheerleaders. That doesnt concern us. If you look at the advertising division, you saw a growth exploration this quarter. What we saw happening is now advertising will slowly taking center stage. Is slowly taking center stage. Taylor im showing a chart here in our terminal showing the Revenue Growth for amazon web services. How concerned are we that this is slowing . Think there is concern it is slowing, but there is a big market out there for them continue them to continue to go after. Microsoft is doing a good job and google is investing heavily in web services, but amazon has a big leg up. Microsoft brought up microsoft will structurally benefit more from the shift to the cloud, him and so than amazon. Are we beginning to see Amazon Services and other cloud products losing market share . Im not sure about that. In terms of amazon losing to microsoft, yes. The cloud, they have been. Uccessfully executing the market here keeps growing at a healthy pace. There is in a from for three players, but google is also stepping its game of quite a bit in the last couple of quarters, really. You will see the results. At the same time, amazon can ,old growth over the 30 range like advertising disclosure disclosure of advertising, will become more critical. They can be significantly bigger than what they are right now, they have better targeting in many ways, but they are almost just before the decision plays. I have potential. As a business gets bigger they have potential. Suddenly theaws, profitability perspective for the company was changed, now, the weight will shift more and more on advertising as aws plays more defensive and holding. Taylor if that were true, why are we looking at a lower than forecast fourthquarter if they have that advertising . Probablyk they are looking at Consumer Spending and making sure they are being conservative for what is usually a really big Holiday Season for them. I do agree that when it comes to the areas of market share and the investments they are making, and their ability to juice more sameue out of the transaction for advertising, i think they have a lot more opportunity. Taylor in an interesting conversation, are their hardware products, thing like things like alexa that should enable more shift in Revenue Growth to the cloud . Do you see them continuing to integrate the hardware with the software . I do. The way to think about that online, on their website, is that still only about 12 of the products that amazon sees come from research that somebody paid for. You can imagine, there are so many opportunities to grow that online. Once you start integrating voice foods, you can add to the Customer Experience taylor you can forget the grocery business taylor you cant forget the grocery business, the foot business. Food business. Expectation for that business remains single digits. They are performing in single digits. Reflective it is reflective of the expectation. The fourthquarter revenue dipped in concern about International Growth slowing down because of holiday ships here and there. That may play a role in dig to get and they deeper the reasoning behind it. If you look at this quarter, the way material shipping is driving acceleration and regional spending in rachel spending, it is actually showing signs. Retail spending, it is actually showing signs. Everybody is trying to get to one day, as well. Amazon will have already invested and sort of have the lead to protect their turf. Wantr if they do indeed to protect against competition, i want to take a look at another amazonr chart here, shares going back one year, underperforming the broader retail index. Is it a regulatory overhang . What is it that we are seeing these shares drive higher given their dominance . Given the natural antireaction, whether it is labor strikes, regulatory concern, i think those are all factoring into it. A lot of the underlying fundamentals come along terms of the business, long terms of the business, are still strong. Taylor thank you both for joining me. Fiscal First Quarter results were better than expected and boosted analyst confidence. Microsoft is up 16 since june, trading near an alltime high. Googleup, employees say the company is trying to keep them from speaking out, using Google Chrome to do so. We have the details, next. If you like bloomberg news, check us out on the radio, the oromberg app, bloomberg. Com, in the u. S. On sirius xm. This is bloomberg. Google, once famous are encouraging its employees to speak out against things they thought were wrong, is now being accused of trying to crush worker dissent. Employees claimed the giant has created a web browser enabled tool to monitor workers attempts to organize protests and discuss labor rights. This come amid comes amid confrontation between management and employees. Lets bring the Global Executive protect, tom giles. What are employees saying in this instance . Tom there is a memo that has been circulated, we do not know how widely. The concern that has been raised is that this tool, and you extension for the chrome browser you center lenny used internally, this one sense of a red flag, some kind of a flag, when somebody organizes a meeting that occupies a certain number of rooms or involves a certain number of people. Threshold,ches that it gets liked. Flagged. Google has come back and said to us, look, the memo misinterprets this, this is something that we put in place to cut down on meeting spanning certain space. There is a scarcity of office , like,r concerns about is the stuff being allocated correctly . However, in the google setting, where there has been escalation, as you pointed out, in tension between employees and management over organization, over protests, over management decisions, there have been walkouts that involved dozens of people. The concern is, is this an to tamp down organizing, keep us from raising protests . Taylor to be fair, i want to bring up googles statement in response. It is a popup reminder that asked people to be mindful before auto adding a meeting to the calendar with a large number of employees. What does this take from googles perspective . Tom this memo is misinterpreting the intent of this tool. But, what we have done as reporters, we have spoken to people who are familiar with the situation, were familiar with the contents of the memo. They have done some research. Engineers are google who are good and what they do, they have looked at the tool, they have done their own analysis of it, and they have raised some of those concerns that were outlined in the memo. Taylor mchugh said, there has been growing tension, if you will, between google and the employees. Remind me some of the recent heightened tensions we have been dealing with. Was concern about payouts for executives come a particular executives who walked away with a lot of money after being accused of misconduct, sexual misconduct, with an google. That was one of the things that raised a lot of eyebrows. Employees also raised concerns about googles willingness to go use contracts, Pool Technology for the military. Intelligence,al facial recognition, those kinds of technologies, are those going to be used for purposes that people within the rank disagree with . Taylor is this perhaps not a global problem, but a broader Silicon Valley problem, increasing frustration between employees and management . Tom there is increasing willingness for companies throughout Technology Industries the technology industry, Silicon Valley and beyond, to protest, to walk out, to raise how this about, technology, is technology being used for the red purposes, to make the world a better place, or to make the world more violent . These are valid questions. We have seen an increase in the andness and in the frequency of employees raising these questions. Taylor bloombergs tom giles, thank your for joining. Coming up, micron has a new chip they say will make data Source Centers faster than ever. We discussed with the ceo we discussed this with the ceo. He is next. This is bloomberg. Senators are. S. Calling for the chineseowned viral video at tictoc to be investigated. Tom cotton and Senate Minority leader Chuck Schumer say its growing properly recreates National Security risks. Growing popularity creates National Security risks. Calling for it to turn over the data it collects. For the first on this quarter, declineshowing a and downloads. Micron today announced it is forging ahead independently with , a new Memory Technology type of chip they previously produced with intel. Form storagewill drives and data centers that will provide faster access to data that existing models dont then existing models do. Who better to tell us more than the micron ceo . Thank you so much for joining me. Talk to me about this new chip. Happy to be here. It is a kind of memory that is thang you faster speeds flash memory. Chip densities that are higher. Suited fory, ideally bullet memory is less storage. This is to accelerate deep mourning workloads, high speeds. What we are being introduced today is a solidstate drive that is the fastest drive in the world. Taylor is this really banking on the future of the cloud . Sanjay it is a technology that works well. Of course, it is a technology, int can also be deployed other applications, such as mobile or other intelligent devices. No doubt, datacenter is a big portion of it, the chances of Artificial Intelligence today , with the ability to process a lot of data, gain from inside of the data, that means insight of the data, that means you need memory solutions, which is what micron makes. Data, accesstore the data, process it fast, it needs the kind of solutions micron makes. Grown out only in cloud applications, data center applications, but all the intelligent devices, from smartphones, to automobiles. Taylor you have previously been working with intel lobbyist, why the move to go with it . We have to control our own destiny. Technology,to we had partnerships before. Now, we have an opportunity to bring the technology to a broad application. Manageager technology our technology, roadmap, and manufacturing and capabilities in line with our business objectives. Taylor you talk a lot about smart phones, how much of a tailwind are we expecting from 5g . In your corporate that into your analysis . It will be a growth driver for many years to come. Not only about smartphones, it is about machine to machine. It will bring about many devices that will be connected with each other, intelligent devices that are able to collect more data. Within smartphones, no question they are high, speeds, are able to give you access to data and give you rich experiences. Immersiveee experience, to what different perspectives of a game being broadcast to you. In order to manipulate all of that on your smart phone, it needs more memory and more storage. The smartphones announced in february of this year, and the terabyte of storage. Taylor one of the phones that has 5g already is huawei. How is your relationship with huawei right now . With respect to the u. S. China trade relations, it has impacted huawei. They are an important and Large Customer of micron. We are very global. We have engaged with very diversify sets of customers. We have solutions that go into very many different markets and opportunities. Less than itt is would have been if huawei taylor are you actively working with the Trump Administration to clarify any confusion about how to get around some of the export bans . They also said in our september earnings that we apply for licenses, of course, licenses of session have not been granted yet. Grantinghat without the licenses, it will potentially lessen our opportunities with huawei in terms of future business with them. Companyt is, we are a with a diversified portfolio and a very broad set of customers all across the globe. Taylor i want to tie that into a chart i am showing in my bloomberg terminal to our audience, which shows your total revenue, and of course, a portion of that just under half or so coming from china. You say you are a global company. Where else can you start to shift that revenue given all the headwinds coming from china . I think what is important is we are a global company, a lot of our customers based outside of china, they the numbers you are looking at are related also to that aspect. If you look at chinese headquartered companies, as we our revenue is approximately 20 . With respect to huawei, they have been the largest 12 . Mer, approximately we have a very diversified set of customers. Iny have their supply china, but we are engaged with them, as well. Taylor in your business, it all comes down to the prices. Im going to show one more charts for our bloomberg audience. Prices have been diverging. Bottom, do we start to see prices start to pick up higher . Give us some new news. Seeing pricetarted increases. Nand markets, more solidstate drives are being used. As well as the content. Market demand drivers continue to be secular in nature whether it is the datacenter or smartphone or pc, or even industrial applications, automobiles, etc. You are needing more. Yes, there ishat some excess supply in the market right now, but what is important lesshe supply growth is than the demand growth. Which means that it is now coming down, it is a matter of time before place. Taylor thank you for joining me. Coming up, we take a look at all of the amazon Earnings Call at the amazon Earnings Call. That is next. This is bloomberg. Devices are like doorways that could allow hackers into your home. And like all doors, theyre safer when locked. Thats why you need xfinity xfi. With the xfi gateway, devices connected to your homes wifi are protected. Which helps keep people outside from accessing your passwords, credit cards and cameras. And people inside from accidentally visiting sites that arent secure. And if someone trys well let you know. Xfi advanced security. If its connected, its protected. Call, click, or visit a store today. Taylor this is bloomberg technology. Back to our top story ecommerce giant amazon missed analyst estimates, posting a profit drop for the first time in two years. Amazons forecast for the allimportant Holiday Quarter also gave investors more to worry about. Ir more analyst reaction, have two guests joining me now. Great to have you here. After this, you run to the call. What would be your first question . Yes, thanks for having me. If we look at the results for the Third Quarter, there were some really strong points. Revenue came in at the highend of guidance, operating income above the highend of the guidance which was 15 of the 19 past quarters. Flipsidepoint on the was aws growth and if you look at the after Market Reaction of the stock, it was down last i checked about 6 or 7 , primarily because aws revenue to 35 decelerated yearoveryear versus , buttations in the street of we think investors were expecting some deceleration. The question was around is their focus greater on the Enterprise Sales partnerships, which are larger contracts and could pressure Revenue Growth. I pose the same question to you and in doing so, i show you a chart on the terminal which shows the rate of growth of amazon web services, which as weve said have continued to climb sequentially, now down to about 35 percent. Is this your biggest concern . Absolutely. Increasingly as aws goes, amazon stock rose, and that is what analysts are looking at. Looking back to the last quarter, that was the first time we saw the growth rate dip to below 40 yearoveryear. I called it the potential canary in the coal mine and we have seen a potential continuation of that trend, dipping even further to the mid 30s, so it is really something to be concerning. On the other things, we saw this really strong topline momentum. The <