Called it chinas best detective. We will hear from her after tictoc has said it is made changes. A Software Company beats thirdquarter earnings estimates across the board but after hours, shares are falling. We will break down the numbers. First to our stop top story. The shakeup at all for that. Alphabet. To executives have stepped down from the parent company. Shares are up about 2 . Manager isrtfolio here to discuss this. Our reporter who covers the company. Remind us if this is the right time for him to be taking over both companies. Wall street think so. Sinceeen running google 2015. Ill is for all intents and purposes google. Alphabet is google. Wall street had been uncomfortable with the expenses founders have made and bigger bets that have not panned out. This might be a sign that there is professional management at the helm. From employees, i have heard mixed results. Some say the founders set the culture for the company. Now with this departure it might be gone for good. Lets talk about a chart i am looking at. Basically, since 2015 when ,lphabet and google split out the shares have doubled. This seems to be a big vote of confidence in their leader. What changed for you as an investor today . What it holds onto is going forward, there will be more focus on costs and revenues. New cfo aey hired a few years ago. It has done a good job of driving that. As market would say, going forward, the idea is you look at these different businesses and you say is this going to work out . If its not, maybe we need to kiss it goodbye even though it is exciting and it sounds good. Drones, driverless vehicles, another health thing. It seems like all of their businesses that have really started to take ground, you think about youtube and google Cloud Platform and their Artificial Intelligence all being folded under the parent. You get an idea that wall street likes profit growth. They dont like cost expenses. Its an idea that going forward, google is going to be more efficient and is going to focus on driving the bottom line. Thats what washington wants to see. How he do we know about views some of those offshoot companies that lose up to 2 billion per year . We dont have much insight. He deflected the cut questions about those companies. The cfo dealt with them. We can see why their Investment Strategy three or four years ago, they were investing heavily in fiber which was their highspeed internet offering. And cable program, that has been all but shut down. Instead, outside of google, they are investing in a few Health Care Companies and driverless cars. Although the investment is not necessarily matching with their competitors are doing. I doubt we are going to see them make dramatic immediate changes. This will be a question to come back to. What do you think about the side businesses . I think about nest which when it was other alphabet was not profitable and under google it became much more efficient. Is that what you would like to see with these offshoots and alphabet . Definitely. The other thing that would be dynamic and we have talked about this before would be if they would give us more clarity in terms of reporting. We look at other revenue which is gcb that was up 39 in the fourth quarter. Or quarter. We want to know what they are doing with youtube. These other businesses, the fact that they are not making money, they lost 727 million in the third quarter. Do with these Companies Going forward . The more clarity you can provide for us to give us an idea, lets face it the stock could trade based on tcp and youtube. Gcb and youtube. It will be interesting to see if they gave us more clarity on reporting and going forward, will they do at these businesses that are doing as well . I want to show you another chart that i am showing here inside my terminal. This is not google specific but bear with me. A lot think that google will now do more share buybacks. We are looking at companies that engage in share buybacks have been outperforming and white. It companies that in yellow, the s p 500. Is this a story that we will get more share buybacks moment a gum comes to alphabet and google . Apple, the amount of cash they generate is huge. Google has a core business which is advertising which is a tremendous cash cow business. Now if they use that money because they dont pay a that drives the eps number when your topline number is starting to decline. At advertising is being an overall larger share of the revenue, what do you do with that cash . You buy shares and drive the eps. Thats a trick that a lot of companies in the tech space have been using. It will be interesting to see if frees cash to be used for Share Repurchase is going forward. The founders were symbolic for this. They invested the money in these projects. Is google willing to make a bet on youtube . It has been a tremendous success. Same for android. Projects that now we can say google maps has a huge business because the founders were willing to put in a lot of money. Youtube is still questionably profitable, gdp is the third place in the market and they are putting money behind enterprise computing. I think if they start to become a company that gets a lot of buybacks, you might have some people in the company who are losing they see as the innovative spirit of google. Lets talk about the regulatory overhang. How wellequipped is the new leader to step into the role and appeared to be more like tim cook of apple. Regulatory friendly . , twost year the Senate People didnt show up. He clearly is leaning on deputies, the chief lawyer, remember google has one of the biggest lobbying spending. That is increasingly going to be an important part of his job. There will be people who will question whether or not he is the sort of wartime politician ceo that he needs to be. At the same time, google has done well deflecting regulation. On him are your thoughts being able to go to washington, d. C. And be a leader who can help take google into the next century . I have confidence in his ability. Dont have the same concerns about google that washington does. I have a pretty good understanding of how they run their model. They do have competitive advantages but i am hopeful and optimistic that he will be someone who can communicate the right message to washington and be able to get this aside. I have been in the business for over 30 years. I remember when microsoft went through a similar type of trajectory back in the late 90s. They were supposedly a huge monopoly on the desktop. They were able to work through it. I am hopeful and confident that google can perform the same way under their new leadership and work through this tough time in regard to the scrutiny. Thank you to our guests. Is not the only company with a staffing shakeup. And the cfoxpedia have resigned effective immediately. They clashed with the board over the direction of the travel company. Andchairman barry diller device chairman will take over while directors look for longterm leadership. Discuss, our representative from bloomberg intelligence. When your a good thing resign and the shares jumped 6 . What happened here is, expedia has a history of companies that have executed so well and acquisitions. If you look at the companies thatacquired back in 2015, helped the company. Homeaway,acquired people thought that was there a into accommodations. What happened is this Management Team has not been able to deliver on the acquisition integrating it with the rest of the portfolio. That has really hurt the companys Operational Performance he had they took down the growth target right seven or eight basis points in the quarter. That is where the operational focus came into play. This probably happened too soon. You talk a lot about two years of operational underperformance. What would you like to see now that the new interim leadership and longterm leadership, what would you like to see them due to turn that around . Ask there are two things we think are critical for expedia to turn around. Reduce itsis to reliance on google. Google is building its travel product. That has hurt tripadvisor. Relies a lot when it comes to driving traffic through its spending on google. That is where booking. Com, expedias arrival has done well getting the direct traffic. The first thing i would expect the new ceo to do is fix the problem of reducing the reliance on google for traffic. The other is the shift to mobility. That is impacting every company that grew in the desktop era. Google is behind when it comes to shifting to mobile. We do know that the future is mobile. Now we are looking at shares of slack slipping. Quarterly results were mostly in line with estimates. Now, it is rising about 2 . The company boosted their fullyear revenue. At they are looking coming up, lots more stories on Bloomberg Technology including amazons uphill legal fight. Later, we will hear from a senator on tictoc. She has been a chief critic of the app. This is bloomberg. Amazon is challenging the u. S. Government of microsoft for the contract. Is with the pentagon and is worth more than 10 billion. Joining us to discuss what is at stake is our guest of bloomberg intelligence. How big of an uphill battles is for amazon . Its an uphill battle for any federal contractor who is trying to challenge the governments decision. The reason is, it turns on the law that the courts start with a strong presumption in favor of the government. The courts are not in the business of making government contract decisions. They leave that to the federal government. They are looking for errors. Cases, the courts and of rejecting these bid protests filed by bidders. 90 seems like an uphill battle. Yet amazon is filing it anyway. What other key points . One of the difficulties of following cases is a lot of them are under seal. What we do know is that it has made statements suggesting it is going to target potential bias. That likely is going to turn on comments made by President Trump about amazon and about this contract as recently as july of this year. It seems like a likely claim is is that the Contracting Officers were biased by the administrations animus against amazon. What is the burden of proof when you take a look at weighing trumps influence . Its not easy. We talked earlier about how generally these cuts cases are tough to bring. When you talk about the government acting in bad they bad faith, its more difficult. The assumption that they acted in good faith but we dont want to get into an assumption of whether they thinking. Its not enough for amazon to come in and say there was likely biased. Likelihood is not enough. You have to clear the high Legal Standard called clear and convincing evidence. Courts are in the business of routinely rejecting looking into that sort of issue. But this is ultimately going to turn on is the fact of what happened how willing is the core going to be to look at those facts . It is very tough for amazon to get the court to get into that sort of business. When you look at the facts you highlight some key interviews. What can we expect from those . One of the big thing space in this judge and she will have to is willearly as january she have to depose the government officers who made their decisions in this case . Decisions andse of the court cases are fought on the written record and we dont need to get into these depositions. The courts only look beyond the record in exceptional cases. Amazon will say this is an exceptional case. When you do interview these officers and look deeper about why this decision was made. We will have to see how the judge reacts to that in january. As soon as the new alphabets self driving cars, internet balloons and google lifesciences. We spoke to a former executive about how the c suite shakeup will affect alphabets investment in health tech. Investment will continue. Again, we see startups daily in the space. We are already outpacing the investment in Digital Health and datadriven Health Care Companies and 2019. We are outpacing 2018 numbers. Ask what should investors watch out for . Likes the good thing about there are a lot of companies out there. A lot of them have Companies Names like ai and Machine Learning. Its important to understand, are these Real Solutions or solutions in search of a problem . What is meet a need . Ifther thing is just to see this does utilize Machine Learning capabilities, we do see a lot of companies that dont have the full potential to get there. We see companies that dont have the data in order to bring some of the solutions they say they can bring. I would say doing their Due Diligence is important in understanding what those companies can offer it is key right now. Cofounder and ceo of luca biologics. Oft, we hear from the ceo uber. Thats next, this is bloomberg. Whats good for jayzs business might not be good for all of his businesses. He is returned his music to the Worlds Largest audio streaming service. That raises questions about the health of spotify has 113 million customers. Down executive has stepped from linkedin after breaking compliance rules. This is according to people familiar with the matter. Shes oversaw hiring and benefit programs. The ceo of uber says the Company Plans to be a onestop shop for intercity travel and may include flying taxis rate he spoke at the Economic Club of new york. Ultimately, where youre going to be with uber is we are going to be an asset where if you need to get to point a from point a to point b we will be the smartest way to tell you that. Data to huge amounts of figure this out. If you are in new york city, if you happen to be south of 42nd street and you are going to jfk and you want to hire an uber, we may take you to tell tell you to take an uber copter. That technology is being built right now. All you need to do is imagine a world where copter is replaced. Meanwhile, the mayor of london is not impressed by them revoking the operating lessons. They were quite aggressive. When they go to the court or the appeal will be heard, if they will change their tongue, i hope they do. When you speak to londoners who use private hire vehicles they quite like it. He says he will not compromise on Public Safety and uber should communicate better with london transport authority. Canng up, before qualcomm make its claim to being everywhere when it comes to 5g, it has to pay a hefty fine. We will have a look at the numbers next. This is bloomberg. Taylor this is Bloomberg Technology global link where we bloomberg daybreak australia to bring you the latest global top tech stories of the day. In chinadehailing use has dropped for a fifth straight order according to a new report. Daily active usage declined by 6 from the previous years period. Chinas ridehailing leader, which accounts for 93 of the daily market, saw app usage and 23 5 among riders among drivers. Deutsche telekom has stopped ordering new equipment for its 5g networks because of Political Uncertainty over chinese supplier quality. No other major European Telecom has announced a blanket moratorium on 5g, but in january, vodafone suspended purchases of huawei gear forwards networks. Indias government is set to debate on its longawaited privacy law. The prime ministers cabinet approved the bill wednesday two landmarker Indias Supreme Court ruling to privacy as a fundamental right. Those are the top global tech stories we are watching. Taylor we are taking a look at qualcomm. They lost a bid to overturn a record antitrust line and south korea. The countrys high court in favor of the antitrust regulator. The court agreed the u. S. Company abused its market dominance in modern chipsets. Qualcomm plans to appeal the ruling and south koreas supreme court. Joining us to discuss it is ian king, who covers all things chips. Can you put this into perspective for us. There seems to be a lot of battles with qualcomm. Where does this fit . Ian this was kind of mixed results for qualcomm. While the fines upheld some of the terms saying that their licensing was unfair and were actually thrown out, so it was a kind of partial victory for them and partial loss. Nobody wants to part with 800 million. In any way this meaningfully impact their Business Practices . Ian thats the key question. You obviously nailed it. That is what investors care about very much. They would say it does not. That they have basically been acting underneath the terms of this ruling for the last several years on the licenses they struck, for example, with apple, with samsung, were actually terms out underneath the with no real difference to what they will have to be doing in terms of licenses. Taylor you said this was sort of a win and loss at the same time. One of the things that struck me was qualcomm does not have to renegotiate those licenses, which i think is a very good thing, right . Pn ian thats a big thing, and thats the main thing in the u. S. If they have to go back and renegotiate licenses, thats an absolute horror story. Shery its been a nightmare period for qualcomm being embroiled in so many regulatory and legal tussles. They are still embroiled in a dispute with u. S. Regulators. What is ahead . Is this all coming to an end soon . Ian we thought it was, and then we had the ruling and the ftc case against them. Going tol and that is be heard starting relatively soon. You will note that parts of the u. S. Government have come out on qualcomms side, so there is i hope at least among investors who want to see an end to this, that they are entering the final stages and that things will go in qualcomms favor. Taylor you mentioned qualcomm had a settlement with samsung. Other things still outstanding. What are the odds you could see other settlements come like the one they just had with samsung . En ian the really big ones are resolved. The big outstanding one that is left is huawei basically is not paying them anymore. Safety say amongst trade disputes and amongst qualcomm continuing to face legal difficulties in the u. S. , huawei does not have a massive incentive to settle right now. Basically because huawei is essentially a tool in the trade dispute, they are probably goin