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 top story. The shakeup at alphabet. The cofounders step down from the parent company. Investors responded by sending shares up on the company about 2 . To discuss, dan morgan, senior portfolio manager. Also with us mark bergen who covers the company. We spoke care about 24 hours ago. Remind us again if this is the right time to be taking over both companies. Wall street thinks so. Hes been running google since 2015. Alphabet, for all intents and purposes, is google. 99 of the revenue comes from 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 sure your aunt. Since 2015 when alphabet and off, the shares have doubled. Frankly, this seems to be a big vote of confidence. What changed for you from an investor today . What it holds onto is going forward, there will be more focus on costs and revenues. We know they hired a new cfo 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. What do we know about how he views some of those offshoot companies that lose up to 2 billion per year . We dont have much insight. He deflected the 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. 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. What do you 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 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, the s p 500. Is this a story that we will get more share buybacks when it 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 dividend, that drives the eps number when your topline number is starting to decline. If you look 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 this frees cash to be used for Share Repurchase is going forward. The founders were symbolic for this. They invested the money in these projects. It is google willing to make a bet on youtube . It has been a tremendous success. Same for android. It these crazy 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 . Last year the senate, two people didnt show up. He clearly is leaning on deputies, the chief lawyer, remember google has one of the biggest lobbying spending. And arguably the best apparatus. 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. What are your thoughts on him being able to go to washington, d. C. And be a leader who can help take google into the next century . When it comes to all of the regulatory overhang facing all of big tech. I have confidence in his ability. We know he has been running that part of the business. I 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 for joining us. Google is not the only company with a staffing shakeup. The ceo of expedia and the cfo have resigned effective immediately. They clashed with the board over the direction of the travel company. The chairman barry diller and vice chairman will take over while directors look for longterm leadership. It is never a good day when you resign and the shares jump 6 . Relieved atstors this . What happened here is, expedia has a history of companies that have executed so well and acquisitions. So well on acquisitions. If you look at some of the companies they acquired back in 2015, travelocity, that really help the company. When they acquired homeaway, people thought that was there a that was their foray into alternative 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 . There are two things we think are critical for expedia to turn around. Especially on the top line. One is to reduce its rely goal one is to reduce its reliance on google. Google is building its travel product. That has hurt tripadvisor. Expedia still 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. Expedia is behind when it comes to shifting to mobile. You want to see better execution when it comes to mobile. We do know that the future is mobile. Thank you for joining us. Were looking at shares of slack after reporting Quarterly Results that were mostly in line with estimates. Now, it is rising about 2 . The company boosted their fullyear revenue. Coming up, lots more stories on Bloomberg Technology including amazons uphill legal fight. Against microsoft. Later, we will hear from senator Marsha Blackburn 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. It is not an easy battle. The company is facing legal hurdles in its lawsuit over microsofts win of the 10 billion pentagon contract. Joining us to discuss what is at stake for the ecommerce giant is our next guest. Matthew, how big of an uphill battle is this 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. In over 90 of 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 going to be 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. It starts with the assumption the courts start the courts start with the presumption that the government acted in good faith. Its not enough for amazon to come in and say there was likely bias. 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 court going to be to look at those sorts of facts . It is very tough for amazon to get the court to get into that sort of business. At theou take a look facts, and urinalysis, you highlight some key interviews. One of the Big Questions facing this judge and she will likely have to rule on it as early as january, is she going to allow amazon to depose the government officers that made the decisions in this case . Typically, these decisions and the court cases are fought on the written record and we dont need to get into these sorts of depositions. The courts only look beyond the record in exceptional cases. Amazon will say this is an exceptional case. We need to interview these officers and look little deeper about why this decision was made. We will have to see how the judge reacts to that in january. We will wait and see. Thank you for joining us. As soon as the new alphabets ceo steps in, it seems him he will take charge of the moonshot programs. 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 company starting up daily in this space. Already019, we outpacing the investment in Digital Health and datadriven Health Care Companies in 2019. We are outpacing 2018 numbers. Is there something investors should be watching out for . Absolutely. There are a lot of companies out there. Companies have names like ai and machine learning. Its important to understand, are these Real Solutions or solutions in search of a problem . Is this going to meet a mathematical need . Machinedoes utilize learning hip ability, we do see companies that make 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. Importantdiligence is in understanding what those companies can offer is key right now. That was a cofounder and ceo of luca biologics. Next, we hear from the ceo of uber. He wants to make his app a onestop shop for getting around town but the london mayor is unhappy. Thats next, this is bloomberg. Whats good for jayzs business might not be good for all of his businesses. He has returned his music to the Worlds Largest audio streaming service. That raises questions about the health of spotify has 113 million customers. Linked in top Human Resources executive has stepped down. She left the company after breaking compliance roles. 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. 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 from point a to point b we will be the smartest way to tell you that. We are doing it in little ways. It takes huge amount of data to 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 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 bybite ubers response revoking the operating license. The appeal will be heard. Use you speak to those who private higher vehicles. He says he will not compromise on Public Safety and new were should communicate better with london transport authority. Coming up, before qualcomm can take its place of being everywhere when it comes to 5g, it has to pay one hefty fine. We will have a look at the numbers next. This is bloomberg. Whether youre out here on lte. Or here on a wifi hotspot. Xfinity mobile has more coverage to keep you connected to what matters most. Thats because its the only Wireless Network that automatically connects you to millions of secure wifi hotspots and the best lte everywhere else. And now get 250 off when you buy a new Samsung Phone during Xfinity Mobile beyond black friday. Plus, you can save up to 400 a year. Click, call or visit a store today. Taylor this is Bloomberg Technology global link, where we join bloomberg daybreak australia to bring you the latest in global tech news. Lets take a look at those global top tech stories of the day. Shery ridehailing use in china has dropped for a fifth straight corner, according to a new report. In the Third Quarter of this year, daily active declined by 6 from the previous years period. Chinas ridehailing leader, which accounts for 93 of the daily market, saw rider and driver app usage slide by 5 among riders and 23 among drivers. Deutsche telekom has stopped ordering new equipment for its five g networks. The move comes over uncertainty over chinese supplier huawei. No other major European Telecom has announced a blanket moratorium on 5g, but in january, vodafone suspended purchases of huawei gear for its networks. Indias government is set to debate on its longawaited data privacy law. The prime ministers cabinet approved the bill wednesday two years after indias Landmark Supreme Court ruling to privacy as a fundamental right. The bill follows europes gdpr on regulations, including of fines of up to 4 of the companys global revenue for lawbreakers. 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 fine in south korea. The countrys high court in favor of the antitrust regulator to the tune of 864 million. The court agreed the u. S. Company abused its market dominance in modern chipsets. Qualcomm plans to appeal the ruling in 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 if we consider this one, it was 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 a partial loss. Nobody wants to part with 800 million. Shery does this in any way 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 no, it doesnt. They would say they have basically been act