Did the ecommerce giants 800 Million Investment into one day delivery pay off in the latest Earnings Report . Details, ahead. And twitter misses thirdquarter revenue estimates. We find out why new user growth did not translate into ad sales. Facebook dominated the week in tech with Ceo Mark Zuckerberg defending his social network before u. S. Congress on wednesday. What was scheduled as a hearing on the Cryptocurrency Libra also included issues like antitrust and privacy. Is it a currency . Are you a bank . What is this association . It is a very complex project. And as you say, it is risky. Do you consider libra to be money . I consider libra to be a Payment System. So its like me having my money in wells fargo bank. You could think about it that way. Although, the we are not a bank, we are not applying for a bank charter. But that is the problem. That is the problem. Thats what were facing here. We are not going to launch the libra Payment System here or anywhere else around the world until we get approval from relevant regulators. The american competitiveness angle and he competition with china is a National Security issue. Especially, they immediately kicked off this private partnership with companies to race to try and build a system like this quickly. Will it be possible to conduct anonymous transactions using libra . Will libra allow anonymous transactions . It is an open question. Its pretty hard to stop anonymous trading. Have i missed something there . Congressman, i think this is more of a policy issue in question. As your code currently exist, ts, can you transact anonymously with libra . Congressman, it certainly would be possible to build a system that would allow that. I want to ask you a very simple question. Mr. Zuckerberg, are you a capitalist or are you a socialist . Congressman, i would definitely consider myself a capitalist. Frankly, im not sure we have learned anything new here. Taylor bloombergs kurt wagner was at wednesdays hearing and had this to say about it. Kurt people still do not trust facebook. I think that was the overarching theme from a lot of the questions weve heard and feedback from members of congress was basically pointing out things that facebook has done wrong in the past and asking given your track record, why should we trust you with a money, withpeoples a new cryptocurrency . At the end, it was representative mchenry, after almost six hours of questions and testimony, said im not sure we learned anything new here. It was a little bit of an unfair blanket statement but at the same time, i think despite the fact that we had all this time to hear from Mark Zuckerberg, we did not really walk away with a bunch of Big Questions answered. Taylor when pressed on why we should trust facebook, what was his response . Kurt facebook is just one of 21 Different Companies that are now overseeing the libra cryptocurrency. Facebook is putting out there that, hey, we are not the only people making a decision here. We want to work with regulators. We want you to tell us how this is going to work. And it is not going to be only our call. That is obviously a very important element of all this because for those people who think facebook has too much power or it cannot be trusted, the idea that they are bringing others into the fold or that they are following rules that someone else creates, that will give them a lot more flexibility to actually get this thing off the ground. Taylor and kurt, we heard him also bring in china and say if we dont do this, china will, so we have to do is to get ahead. We have a sound byte from what zuckerberg was saying about china. Take a listen. As soon as we put out this white paper on libra, what we saw in china especially, they immediately kicked off this Publicprivate Partnership with some their Biggest Companies in order to race to try to build a system like this. Quickly, a digital renminbi that they could use as part of their belt and road initiative, their foreign and Economic Policy to grow influence throughout asia and africa and other areas. Taylor kurt, is zuckerberg right in bringing in china here or is he just playing to all of our fears about china taking over . Kurt i think there is probably some validity to this concern. Right . This idea that there are companies and the government in china that really wants to accomplish a similar problem. And they have the technical ability probably to do Something Like this. I do think this is a very convenient argument to make, especially right now and especially in front of this congress, given all the issues we are dealing with with china. With the trade war and all of that. It does seem like now is the time to play up this fear that maybe china is the real threat here. And we heard him say this last week too when he gave a speech at georgetown about free expression, he also talked about the internet rules they have in china and if Tech Companies like facebook dont support free speech, you might look up and see that is gone from the internet because Chinese Companies are controlling it. So he has played on this fear before. Taylor that was Bloomberg Technologys kurt wagner. For more analysis on the hearings and the issues facing libra in general, i got insight and sara miller, Deputy Director of the open markets institute. Karen i think nothing was answered other than the commitment that libra will get regulatory clearances before launching. But from whom, how, for what, and whether the product exists after that i think is very much still to be determined. It was a promise, but not one with any specifics, any timing, or in my opinion, any clarity. Taylor and sara, are the problems here not about libra, but the fact it is libra and facebook and that facebooks name is attached to this project . Sara i think that certainly does not help. From the hearing today, there are two takeaways in my view. One is that libra is toast. Number two is that Mark Zuckerberg got roasted. Like, you know, he did not do himself any favors here. But the idea that regulators in the u. S. Or around the world are going to allow Mark Zuckerberg to potentially undermine the entire u. S. Financial system is highly unlikely at this point. So i dont think he did himself any favors at all, and it just opened him up to being a punching bag from both the right and the left on a whole host of issues that went far beyond libra. Taylor karen, you chuckled a little bit when sarah said that libra was toast. Do you agree that libra feels a little bit dead on arrival . Karen ive said before that i think this is the worst Product Launch ever, and that is counting the new coke. The reason for that is because they did not understand a very fundamental fact. The payments system, currency, financial transactions, its about other peoples money. Social media raises a lot of privacy and many other issues, but youre putting economic equality on the line when you start taking other peoples money, and i dont think to this day Mark Zuckerberg or facebook get that. This is different. Congress told him that again today from both sides of the aisle, as sarah said. And im not really sure they get it now. Taylor that was part of my conversation with karen, managing partner and cofounder of federal Financial Analytics , and sarah miller, Deputy Director of the open markets institute. And coming up, an earnings bonanza this week. We begin with the path to profitability. Tesla roars with surprise profits in the Third Quarter, impressing invenstors. We hear from an analyst. Plus, wall street expected growth from amazon this earnings season. Did they deliver . And if you like bloomberg news, check us out on the radio, the bloomberg app, and in the u. S. On sirius xm. This is bloomberg. Taylor tesla shares spiked in after hours trading after the wednesday Company Reported a surprise Third Quarter profit. Tesla ceo elon musk took to twitter, less then one hour later, saying he was super proud of teslas team for great execution and the support of tesla customers is greatly appreciated. With more on the earningspershare picture, margins, and what the company says about china, i spoke with dan ives, an analyst from wedbush securities. Dan if you look at the margins of profitability, that to me is the feather in the cap, and i think that is the surprise. This is something where they need to deliver here, and this is something where if they can maintain this, this could be a potential game changer for them Going Forward. Taylor the problem is you cant cut your way to growth. So if you are seeing a topline decline for the First Time Since 2012, is it sustainable to cut your way to growth . Dan well in our opinion, that is going to be the challenge for them, to navigate profitability while they are trying to get to growth, given what is happening in china. That is going to be the key in the conference call, a major shortcoming you are going to see, but that is really the key for musk Going Forward. Taylor dan, part of the profit picture and revenue picture has been the competition we have talked about between the s, x, and y, and the model 3, which is that lower margin. How do you feel about the composition . Dan its gonna be look, with model 3, given where margins are that is going to be difficult to get there from a margin perspective. Y is going to be key going into 2020. That will be a big focus on the conference call, as well as china and the gigathree buildout. Taylor that was dan ives. Amazon reported thirdquarter earnings thursday. And one of the big indicators of growth was expected to be the companys free oneday delivery. For more, i turned to our guests. Guest going into the quarter there was a lot of angst around cost. We knew oneday shipping would bring some variability in costs with it, albeit for a couple of quarters, and the variability played out. They are also spending a lot on content, aws, advertising division. So there is a spending cycle going on which makes the next couple of quarters, the anxiety would continue from a cost perspective. But where it is paying off, you are clearly seeing a sales impact because of one day shipping. It will pay off longerterm in terms of market share and Revenue Growth, but as far as cost of variability is concerned, we think that will continue for a few quarters. Taylor are you concerned about the rate of spending . That impactnd side, on the bottom line, or is this one quarter and we should brush it off . Deren i dont think it is one quarter but it does not concern me. What you have seen is amazon prove to the market they could drive profitability. They pulled unprofitable products, they emphasized aws. When you have seen in 2019 is that increased spending on the things that will drive more customers to you is amazon all over the place. Oneday shipping, getting products back on the shelf. So i think what you are going to see over time is their strategy is world domination. Anywhere you can buy a product, want to online, they offer that to you and they will figure out how to monetize it in other ways, advertising, aws. Taylor and is market share dominance the right strategy . Even though it is not translate into the bottom line . Guest i mean, they have proven it works. If they want it to work, it will work. At the same time, with aws specifically, there are concerns about growth slowing. It is a number of 36 billion. They are market share leaders in infrastructure services. So that adjustment needs to be happening in terms of what the expectations are for that revenue size. That does not concern us. If you actually look at the advertising division, you saw growth acceleration this quarter. And what we feel happening is now advertising will slowly take center stage as aws takes a more mature role. Taylor we have a chart showing Revenue Growth for Amazon Web Services. How concerned are we that this is slowing . It is slowing multiple quarters in a row. Deren there is concern, but i think there is a big market out there for them to go after. And i believe that microsoft is doing a good job and google is investing heavily in web services but amazon has a big leg up because of its deep customer relationships. Taylor i was speaking with a jefferies analyst who brought op microsoft yesterday. He said microsoft and their azure products will benefit from the shift to the cloud more than amazon. Are we beginning to see Amazon Web Services and some of their cloud products start to lose some of the market share . Guest im not sure about that in terms of amazon losing. Microsoft winning, yes. And that is the hybrid Cloud Strategy they have been successfully executing against and it should continue to benefit them. And like you said, the end market here keeps growing at a healthy pace. There is enough room for three players. But google has also stepped its game up quite a bit in the last couple of quarters, really. And we are going to see those results. But at the same time, i think amazon can hold growth in the 30 plus range, but advertising, disclosure of advertising is going to become more and more critical. This business can be significantly bigger than what it is right now. They have the opportunity, they have better targeting in many ways because they are almost just before the decision. So they have a very good roi potential. And as this business gets bigger, they might pull the disclosure card. Remember how aws was disclosed and suddenly the the profitability perspective was changed . So now, weight will shift more and more on advertising as aws plays a defensive role. Taylor if that were true, why are we looking at a lower than forecast fourthquarter Topline Revenue if they have that advertising power muscle . Deren i think they are probably looking at Consumer Spending and making sure they are conservative for what is a big Holiday Season for them. But i do agree that when it comes to the areas of market share they are growing and the investments they are making, then their ability to juice more revenue out of that same transaction through advertising, i think they have a lot more opportunity. Meantime, snap posted strong user growth in its latest report card. They said there were 210 million daily active users of its photo messaging app snapchat in the Third Quarter. Shares of snap have more than doubled in value so far this year. Michael of Pivotal Research joined us right after the analyst call. Behael i think there may was a little bit of disappointment from shorter term investors with regards to being a bit of deceleration relative to q3. I feel like the company addressed it pretty well. The u. S. Growth, which i think this is still viewed as being a more u. S. Centric story, was extremely strong, and they are adding more users in the rest of the world. Theres a little bit of a lag, but it feels like they are getting the right pieces in place in regards to monetization. Taylor and are you happy with the updated guidance you are getting from management on the call so far . Michael yeah, i think they are fabulous results. There has been a wall of worry with regards to user growth. The user numbers were fabulous for the quarter. Outlook was very strong as well. And, i think when you talk to the company at this point, i would say ownership has probably been a bit more hedge fundcentric in nature. They have been spending a lot time with the long only community. The feedback i have heard is it is great. We love to own stocks when they jump 20 . We dont like owning them when they basically go down 20 . So i think they are doing an effective job tightening up the range of expectations. And i look back objectively and im like, 50 Revenue Growth, that is fabulous. Those are terrific numbers. Taylor michael, im showing a chart to our audience of the growth really in those daily active users. Now hitting 210 million. What else do you need to see from this company to take on bigger Companies Like the likes of twitter or instagram, for example . Michael what i have been seeing in terms of the proprietary research that we do, i would like to see just a continued adoption of advertisers. Where if you look at twitter, pinterest, snapchat, they are still slightly more niche by way of comparison versus lets say google and facebook. Where virtually everybody is. Seeing that continue to move in the right direction, continuing to see new ad Product Innovation i think is key. But one of the things where i feel like i have gotten a lot of questions from investors is they want to understand what is the opportunity in terms of advertising . Like, chat probably is a slightly harder format to monetize in verses discover lenses snap select. And i think the message you heard pretty loud and clear from both of them on the call was this is a function of growing demand. There is more than ample supply and i think there is really a lot of headroom for the story. Taylor that was Michael Levine of Pivotal Research. Coming up, things get soggier for wework. News of worker layoffs and a softbank rescue plan. Details, next. And speaking of going public, the New York Stock Exchange president joins me to talk ipos and the rising inquiries around direct listings. This is bloomberg. Taylor it is the end of one of the more dramatic business debacles