We have details. And the week that was, elon musk has a reason to dance, and apple hits more milestones, that plus highlights with team monster. But first, our top story, the Trump Administration is imposing new sanctions on iran, retaliation for tehrans attack on u. S. Military bases. Now, the sanctions target the steel industry, as well as eight senior officials. Now while adversaries didnt get into traditional military war, their continued cyber warfare remains. Cybersecurity film dragos published a report highlighting hostile hacking activity by an iranian linked group against u. S. Power suppliers. So for more, we have the president of gullah tech adventures. Prior to that, he was a hacker for the nsa. With me in the studio is the proof point executive vice president. Ryan, let me start with you. What increases have you seen coming from iran targeting the u. S. . Ryan well, weve seen the continuation of campaigns at that they were already running. Perhaps the most interesting thing that we saw was that we saw some of them move from diplomatic targets, Public Policy targets and government targets, the classic intelligence gathering activities, to targets of civilian organizations, particularly lifesciences. Taylor ron, given your background here, what do you see as the path of least resistance for iran to do the most damage on the u. S. . Ron iran can talk or target soft targets, people like you and me, Small Businesses and corporations. Anybody out there who is the gate about protecting themselves, they need to think about their connections to the cloud and what they can do to increase their cyber hygiene. Taylor ryan, you mentioned a lot about civilian targets. A little bit of a shift in strategy. What do you mean when you say civilian targets . Ryan what i mean is private corporations, instead of ngos or policy organizations, or Something Like government entities. When you put yourself in the shoes of the iranians, they are about the deal with much tighter sanctions. They have to provide things like essential medicines. So to me, it would make perfect sense to target life science groups. Taylor when you look at sort of the access to u. S. Utilities, is that sort of a very classic way in which they could do harm, create chaos via a blackout for example . Ryan the russians have used that playbook against ukraine. The iranians, weve seen targeting utilities over a fairly extended period of time, and theyve done destructive attacks. That hasnt translated necessarily into actually taking power grids offline. That would be a different level of expertise. But all those things are on the table when it comes to planning for defending. Taylor ron, you seem to take a different point of view that perhaps we wouldnt see a mass blackout type of scenario. Why do you think that . Ron so, iran has many options when it comes to taking action in cyberspace. If they did Something Like attack the city of baltimore, attack the city of atlanta and claim credit for it, they will invite a strong response from the u. S. And i dont think they will do that. Having said that, their goals are going to be gathering information and intelligence about u. S. Policy. So anybody whos a vendor for the u. S. Or working with the u. S. Government, theyre potentially a target and they should be getting a second look at their cyber defenses. Taylor that brings us back to ryan. As they look at going back to their cyber defenses, what do you recommend the corporations, even people perhaps, what can they do . Ryan i think you have to look at what the iranians are good at. Theyre good at social engineering, excellent at running phishing campaigns. Theyre very compelling, the sort of things people will click on, were they not aware of the threat that the attachments to emails may pose. Theyve also hammered on cloud services. And really, the iranian playbook is similar to the cyber criminal playbook, in general. Ron is spot on, everybody should be concerned, but the things you would do to defend against iranian attacks work in general. The other thing ill point out is the part of Homeland Security has fantastic advice on how to keep yourself safe, one thing was offline backups. Now, the same things weve heard about in the ransomware crisis, that has affected cities and organizations around the country, thats a fantastic way to prepare yourself for a potentially destructive malware attack. Taylor ron, what do you think of, should the u. S. Start hacking back . How do governments and corporations here whats the best preventative ways for them to brace for a potential iranian cyber warfare . Ron i dont think we really know what cyber warfare looks like. If we compare their abilities with the u. S. , President Trump, after the drone was shot down, we took offensive action as reported. Thats different from the capabilities of iran. They target businesses and corporations. Thats where us as u. S. Citizens can have an impact, by controlling what is on her own network. Taylor ron and ryan, thank you both for joining me. And coming up, the first phase is about to be done, we break down what to expect in next weeks trade deal and what is left for phase two. And if you like bloomberg news, check us out on the radio, you can listen on the bluebird app, bloomberg app, bloomberg. Com and on sirius xm. This is bloomberg. Taylor President Trump says the u. S. And china are set to sign an historic phase one trade deal and the president s Economic Advisor laid out what this means for the Tech Industry when speaking to bloomberg on friday. Weve got tremendous amount of progress on intellectual property and the avoidance of theft and counterfeiting, a tremendous amount. And with respect to the transfer of technology, some progress has been made there, too, more will spill over into phase two. Taylor to take a look into phase one and whats to come, in new york, we have a senior fellow from the asia society, isaac stone fish. And Sarah Mcgregor. Sarah, let me start with you. Were still waiting on phase one. What are the odds we could see a potential for phase two . Sarah so, the expectation is on wednesday of next week, on january 15, a chinese delegation, led by the top trade negotiator, will be in d. C. And assigned the phase one deal. Weve heard from the Trump Administration that finally we should receive an actual text of whats in the deal. We have comments from people, likely just played at larry kudlow, saying there are things on ip theft and detect transfers and other things, but we have nt seen the nuts and bolts. So, i think thats the first thing that we need to check off the list. After that, we see potentially the phase two part of the deal starting. That being said, trump said himself this week it may not come until after the election. So, i think there is skepticism about if he is reelected, will that ever come . Will the political motivation be there for him . Taylor isaac, your thoughts on what we have in phase one, and if it leads us closer to face two. Isaac i think it has to lead us closer because its a step in the direction. But i think weve got very little in phase one. Its sort of an agreement to have an agreement to have an agreement. And it seems pretty short on details. I also, with trump saying, maybe we have to wait until after the election, it really does seem to be a trust me, im working hard for you. Heres a little bit of a deal, vote for me and youll get more of a deal. Taylor sarah, we heard about larry kudlow talking about getting big concessions from china with relationship to technology, like the ip theft, like the forced Technology Transfers. What specific details, as we know the devil is in the details when it comes to trade deals, what are you really looking for as it relates to those topics in phase one . Sarah so, a big issue in may was china had come back to the u. S. With a draft text and really scaled back on some of its commitments to codify into law changes that would help protect intellectual property of foreign companies, like those u. S. Companies that are working in china, and other commitments. It sort of shrunk back from those. And theres a complex system there on how they codify the laws with many different layers. The u. S. Was not happy with what they were offering. So i think a key question, when people look at the text and know the details of chinese law, it will be whether they actually made a hard and fast commitment. And if they dont live up to those commitments on ip theft or tech, what will be the repercussions . What is the enforcement mechanism in place so the u. S. Can say youre rolling back on these commitments you made . Taylor why has it been so difficult to get all of us on the same page when it comes to ip theft and the forced tech transfers . Isaac you have two countries with different interests on this. I think like it was with the u. S. And the u. K. 150 years ago, a lot of the best technologies are in the hands of American Companies and the Chinese Companies want to get their hands on that technology. And some of them use illegal means to do so. And i think, on the one hand, there are many people inside the communist party who want the country to be ruled more by laws as opposed to the party, but there are many at the top of the party that feels like what the party says is what should matter. So if a certain company, if they re forcing a Technology Transfer or actual ip theft, if its in the interest of the party they think they should do it regardless of laws. Taylor when we came out of the phase one news, it was clear apple was the clear winner of tariffs on the iphone, for example. So, what other companies do you see really benefiting on the signing of phase one . Isaac i see tesla really benefiting from this because theyre doubling down on their plant in shanghai. There are a lot of companies that have a lot at stake in this relationship and its less about the numbers, but more is on whether or not the party and also chinese consumers a feel goodwill towards the company. We saw this with apple and the chinese tech giant huawei, when the canadians arrested the cfo, there were people who wanted to boycott apple. And so theres a lot of issues about the goodwill that the chinese feel toward American Companies, and at the party feels toward American Companies, that could play out in interesting ways. Taylor sarah, as you Cover Economic policy, does any of the u. S. Goodwill from American Companies help . We talked about tim cook having a good relationship. You talk about elon musk over at tesla going to shanghai and trying to build a factory. Does any of that make a difference . Sarah i think it makes a difference on the Trump Administration we know that steve jobs, for instance, spent time at the white house and has met with donald trump. And for that reason, apple has been able to escape the tariffs, get exclusions for instance, and thats an indication of the leverage some of these companies have. They, of course, want to keep access opening to the chinese market. This trade war started on the premise of the Trump Administration saying it was going to bat for businesses, trying to level the Playing Field to make it easier for them, when really i think what were hearing from the companies now is theres been harm caused to them and they want the dust to settle more than it has been for the past couple years. So the push for a deal is part of the corporate lobby that the Trump Administration has of companies that want to keep their foot in china and expand it. Taylor Sarah Mcgregor and isaac stonefish, thank you for joining. Coming up, more employees is stepping down from google. Well find out what happened next. Bloomberg technology is on twitter. Check us out technology, follow our breaking news network on twitter quicktake. This is bloomberg. Taylor another shakeup at google. David drummond is retiring at the end of january. He steps down following questions about his conduct at the tech giant. This comes after a recent departure of their founder, larry page, and sergei brain. He was the first lawyer for google before shifting to alphabet in 2015. For more im joined by mark bergen. What do we know about the departure . Mark this was sort of a long time coming. David drummond had been there for a long time. He was formidable in its early rise. Hes been associated with the old school google, but more recently with their problems around men, in particular, and allegations of sexual harassment. So, he was the top lawyer when the andy rubin dispute, the former head of android, who spurred the google walkout. Hes had issues with allegations with extramarital affairs, with former google employee. Employees. There are many women at google who are asking, why is he still around . What sign is it showing . Now, a month later, david is stepping down. Taylor on that point, what does this tell us about google shifting strategy, perhaps taking a closer look at relationships conducted in the workplace . Is this a shift on a broader level . Mark i think theres a shift external and internal pressure from their own employees and from the general public after the metoo movement, a general consensus that this sort of baggage that the executives had was much more of a hindrance. David, like the founders, has taken a step back, he has retreated from daytoday operations. He was running, he was managing Google Ventures and capital g, their investment arms, as well as jigsaw, but it wasnt clear, he certainly wasnt involved as much as he was a decade ago when he led their development and legal strategy. Taylor i think it brings up the bigger change given the shakeup and top management that weve seen. We sat here last year when sergey and larry step down, no offense, we said nobody cared because it was so clear of his strategy following in the steps of google. Is there that same sort of confidence in the next generation of the legal team we had when the founders step down and we had so much confidence in the new ceo . Mark yeah, he was a deputy under David Drummond for a long time. Before that, i think google has had the largest legal team of any company. The question that this poses is more around or the other parts of alphabet. So, david german was everything not google. Its not named a replacement, its not clear if there will be one. It will be interesting to see if they appoint somebody to run what he was effectively doing, which was the legal and Corporative Development for everything from waymo to other divisions, if they think they need that executive level seat. Taylor mark will stay with us, because i want to talk about another google story. In the wake of amazons stumble, google quietly expands in new york city. The tech giant has added thousands of jobs in the chelsea neighborhood in 2006, without provoking much ire. Joining us to talk about this story is Bloomberg Natalie Wong in new york to really talk about how google has navigated the landscape so far in the city. Natalie, what did they learn from amazon in deciding to take a different approach . Natalie i guess the lesson that you can see in contrasting their approach to building an empire versus amazon is it takes time, you have to be incremental and you must work with the local community. Google set up shop in the chelsea neighborhood in 2006, while it was gentrifying, but they leased the space first then started to buy up the real estate, expanding further, while working with the community in chelsea. Whereas amazon came in in a public way and did not really engage with the local community on the grounds of long island city, and that clearly was a hindrance to them when they had that critique against them when they announced they would set up shop there. Taylor and mark, were showing visual pictures here of googles presence in new york, and there was a strategy that struck out to me. Theyre not building these big tall glass modern buildings. Theyre also taking a different monetary approach, not asking for subsidies. What do you make of those two strategies . Mark the first one is different from their headquarters in mountain view. They had these big ambitious plans a couple years ago and they hired an architect. They were going to do modular offices. It was sort of like a google moonshot. This one is much more muted and looking at the reaction to amazon, a lot of the critical backlash, google clearly wants to be as far away from that as possible. The other interesting thing about their strategy, when they initially got that large building in 2010 in new york, that was above these fiberoptic cables beneath the surface. And a lot of what google does is they think about how are we going to actually work this with their data center, piping in internet as fast as possible. So, their strategy depends on their datacenter use and the speed of their services. Taylor natalie, its notable that theyre not asking for subsidies, because thats where amazon was criticized. Has that also been part of their take . We wont ask about subsidies either. Well go in, develop the neighborhood, and work with local regulators . Natalie thats played a role in their success in manhattan. With amazon, subsidies did not work out well. And they Just Announced a big lese in hudson yards, around the same neighborhood as chelsea, where google is located and they signed a lease that will house 1500 workers without subsidies. Taylor natalie, whats your take on relationships with the politicians . We remember aoc, very strong critic who was outwardly bashing amazon. Has google done a better job with working with some of those regulators on the ground and getting them on your side . Natalie its really important to cultivate local relationships, and we found out that google has worked closely with the community activists, the politicians and local organizers to make sure they get ahead of any issues or complaints before they come out to the public and there is a big outcry, as we saw with amazon. So, for the most part, theyve avoided that public outcry with what theyve done in chelsea, which in a way there has been gentrification since google came in. Its not perfect. Muslim local residents do complain that the local businesses are pushed out and employees. Theyre just in a big bubble, they come and go to work, they eat in the building and they dont spend money on the local businesses. So there are these critiques that the local residents mate, but for the most part it seems they are trying to work with the local community, the activists and politicians to make sure they stay ahead of these issues before they get out of control. Taylor market, new york is a clear number two to Silicon Valley in terms of tech hubs tech cups . Mark you have seen a big presence in seattle, austin, google cloud is trying to cut deals with oil and gas companies. And i think that a lot of companies in Silicon Valley are aware of the price of real estate and housing prices here in the south bay, so i dont know where the second hub will be. Taylor natalie and mark, thank you for joining us. Coming up, well break down the weekend to see what is coming up with eugene munster, apple sales surging in china. Grubhubs future as an individual company. All that next. This is bloomberg. Taylor this is bloomberg technology. Im taylor riggs in san francisco. All week, some of the biggest names in tech gathered in las vegas for the annual ces conference. The main theme centered on connecting and interconnecting devices to the internet and to each other, as we edge closer to wireless in a more automated world. 5g playing a big role in the conversation. To discuss this and the other big tech stories of the week, we re joined by gene munster and john butler. John, as you take a look at the highlights, what stood out to you this year relative to previous years . John so, you mentioned it at the top, taylor. To me, the big overriding theme was about interconnecting devices and getting devices connected to the internet. What i mean by that is the connection of everything, not just your smartphone or pc, but also your refrigerator, your car, your television. And that was sort of the talk of the town, if you will, as i went from discussion to discussion. Everyone brought that up. And of course, underlying all of that needs to be a foundation of 5g. Taylor gene, as you take a look at ces, big notable changes in your opinion . Gene i think it was more subtle. I do think that there was a page turn from this connected device, like john talked about. I absolutely agree with that. I think there was this progression in previous years, but more this year about the intelligence layer. A. I. , machine learning, but i think there were some pointed examples of how not just a connected device, but a smart device like an oralb toothbrush that senses if youre pushing too hard, and based on your age, could impact the health of your gums and your enamel on your teeth, things like that. So its this next step forward. I think that was one piece. Also caught my attention, i think were getting closer to foldable tech, foldable computers, foldable phones. Lastly, wearables. Even though thats been around a long time, i feel like thats continuing to move from a small percentage of people to eventually its going to be on everyones wrist. Taylor john, im reading through your note. Amazon big and google talks integration. It made me think were talking about being seamless and interconnected and being omnichannel. Going to my house to car and also going from alexa to my google device . Are we truly going to be able to go everywhere despite any hardware or software . John i think id answer it this way, taylor. Were going to get seven to 10 years down the road and be astounded at how far weve come. I think between now and then, the Network Needs to get built to support this, the 5g network. My best guess is were really here in the u. S. , three to five years away from really having , i would say major coverage across the top 100 markets in the u. S. And then you really need to seed the market with devices. So, again, i think were in for a real good surprise seven to 10 years down the road. But in the meantime, were really in what i call that build phase leading up to it. Taylor gene, would you agree were still a few years away from 5g despite all of the hype and all of the talk . This may not be a 2020 story, as john mentioned. Gene definitely not, agree with john. I have a slightly different timeframe but agree with the takeaway, which is 5g is further away. Weve been influenced by the four major carriers, using phrases like nationwide by the end of 2020. But that does not really speak to the true coverage, where you can get consistent coverage through the day. And thats what johns talking about, five to seven years. Were at a point of 75 of the u. S. Coverage sometime early in 2022. So i think were probably two years away, well behind some of the expectations. It is important to i think take away from this even though 5g is going to take longer than we think, i think its impact on how we use devices and what we can do is going to be more profound than what we can imagine. Taylor john, how behind our we, are we, relative to some of the other asian nations, which frankly already have nationwide 5g . John well, i dont think the early part of the race is all that important, but we are behind countries like south korea, for example. Believe it or not, some of the nordic nations are ahead of us. But, you know, as gene said, i think within three years, well probably reach that nationwide coverage, at least in the top markets. This is the kind of market where its where you finish, not where you start what really matters. I think the u. S. Will get it needs to be pretty comfortably within a fiveyear timeframe. Taylor gene, final question here on 5g. Is it all the hype, is it all the rage, especially as we talk about a. I. And some of the major things that can be done on 5g speed, whether live up to its hype . Gene i think it will. Its important to note that 5g is not about faster downloads for video starting faster on your phone. The ability to take a cloud scale computing, which is currently done in a cloud, to be able to do that on a mobile device, is essentially what 5g enables. Right now, the speeds are not fast enough to do that, so the processing is done on a connected device, a mobile phone or other internet connected device. So that option, that opportunity of adding cloud scale computing to a mobile device, i think, is a big deal. What it empowers is augmented reality moves forward, you look at autonomous vehicles, vehicle to vehicle communication, and just intelligence at cloud scale in any connected device. It is quite remarkable what 5g ultimately can do for us. Taylor john, you mentioned not only is it the 5g network but the devices, as well, that are compatible with 5g. There has been a lot of hype about apple and the upgrade within the iphone cycle, even without a 5g phone until next september. How do you view apple in the midst of this upgrade cycle . John so, i think the big upgrade cycle will begin when the services get out there. In other words, i think the tail wags the dog, if thats the right way to put it. That you need the Network First before the phone sales will follow. I think by the time apple comes out with a 5g iphone in september, which is the rumored date, at that point, well have nationwide coverage by at t and tmobile. And by nationwide coverage, its going tone said be the ultrahigh data rate version of 5g well see probably three years from now. But in the meantime, people that want to tap the 5g network with an iphone are going to get the chance to do it come september. Taylor gene, youve been pretty bullish on apple, in part because of their exposure to china. Iphone sales in china up about 20 in december yearoveryear even though the Broader Market showed signs of slowing. Does that positive news in china reiterate your thesis or is it perhaps more positive than you expected and now youre reevaluating an even higher fair value for apple . Gene more on the latter camp. Reevaluate a different higher value. To put into perspective, yes, china has taken a step forward in the december quarter. If you think about apple story more broadly, this is an opportunity i havent seen this for a decade. Really, the next two to four years should be incredible for the company. In this 5g, theres going to be some disappointment, initially, with the initial 5g phones and the initial demand for iphone 5g, but make no mistake, this is going to be a massive upgrade cycle. Thats one piece to get excited about. I think the wearables, the services, all of that. When you put it together, what matters most is earnings. Weve seen it drift back towards that. Ultimately, the fact apple has as much income as faang combined should yield it a multiple to companies to google and microsoft. Thatd be a 31 multiple when you add that to apples earnings next year. That would imply a 465 stock price. Thats 50 higher than where were at. A long ways away, but thats in my view fair valuation. Taylor gene, another big story of the week had to be grubhub. Up 13 on wednesday on news they could be bought or they buy someone else. Grubhub comes out and says, no, were not for sale. Do you think grubhub should be bought or buy someone else or stand alone . Gene i think it should be part of a bigger company. Its very similar to what target has done for that last mile delivery. Ultimately, these businesses really hum when they have the scale of a lot of orders behind them. And so this is a crowded space right now. So im in the camp that somebody like walmart ultimately should acquire grubhub and see that as the best path forward. I think, being the switzerland, as a lot of these companies are today to multiple providers does , providers, just doesnt drive the types of economies to scale that they needed. The last piece is some of the retailers really need to solve that last mile, that last single hour delivery window opportunity. I think grubhub would be a great addition for those companies. Taylor well, john butler of bloomberg intelligence, thank you for joining us. And gene munster of Loup Ventures, you are going to be sticking around with us. Because coming up, tesla with elon musk dancing. We break down the companys asia ambitions with gene munster, thats all next. This is bloomberg. Taylor earlier this week, Tesla Ceo Elon musk had something to celebrate. Tesla has kicked off production in china and the company handed over the first china made model 3 to the public. And now teslas Growth Potential in the country is exciting wall street. Rounding up the week, analysts boosted their price target by more than 30 . Still with us is gene munster of Loup Ventures. So, gene, i have to ask, again, as you sort of saw that big jump in china and the big success in china, is that why you had predicted, or were they more successful than perhaps you thought they would be . Gene it moved faster than what i thought. They had set that expectation of the gigafactory in china to be producing cars by the end of 2019. Just given teslas history of missing its targets, i expected that to be sometime in the first quarter. Even at that, they did it in a year, which is remarkable. Give them credit for doing that. I think when you take a step back and think about what does that mean for the company more broadly this year, the analysts overall are kind of thinking somewhere between 30,000 and 100,000 vehicles from shanghai. But at the current rate, the current capacity and this is surprising its already producing 3000 vehicles per week. So, it can produce 150,000. And then the question is will they sell all the cars they produce . I think when you put all of this together, what investors are going to be looking at keenly this year is will they hit that 463,000 delivery number for full 2020 . Adding another, call it 100,000 from china, i think gets you quickly to that goal. Taylor gene, i think the numbers that you said there were 3000 a week. We remember elon musk talking about that quote production hell that he was facing in the first round of the model 3s in california. How did that avoid that over in china . Gene theyre basically building these factories, almost printing them out. Theyve already done that at blueprint. I think this is clearly evidence that theyre Getting Better at making cars. If you fastforward two years now, as they move into germany with the berlin gigafactory, that should ramp up quickly there. Thats essentially how they do it. They worked out the problems in fremont and now theyve exported that to china. Taylor gene, this is a question thats not quite a fundamental analysis question, but im curious to get your thoughts. When we talk about china and trade, a lot of the risks micron for example, you go over there, very successful, but then china steal technology and kick you out. Is that a risk when you look at tesla going over there, getting very good reception . Is their Technology Patents Strong Enough to resist any potential theft from china . Gene i think the Company Tesla has a different view about patents. The company is more of the nature that they will get the technology out there. Theyll put it out there. Theyve done that with some of their autonomous technology, put it out there for other people to use because they figure someone else will copy it or steal it. Ultimately, you need to move in a different direction to have a competitive advantage. I dont think thats a particular risk here for china. I think that awareness that you really cant rely on a patent to be successful, i think that insight from tesla is something that is somewhat unique and a competitive advantage for them. And to kind of add another piece to that, theyre embracing even further theyre going to do a studio Design Studio in china that will produce vehicles just for china, that will be lessexpensive versions of model 3s, maybe model 2, whatever youd call it. Thats an example of them fully embracing the good and the bad, and ultimately, seeing a large opportunity in china, largest e. V. Market in the world. Half sold globally are in china. Taylor i want to take a look at a chart im showing. It was another big milestone this week for the company. Their market cap eclipsed 88 billion this week. Its fallen down now to 86 billion, but notably, it eclipsed that of both ford and gm combined. Who are teslas competitors . Can anyone even, at this point, keep up . Gene well, ill start with the end here over time, the stock will go higher. I think it will be an upanddown road for the stock, but i do think it goes higher. I think there is competition out there. I dont think the competition has a Material Impact on their business in this year. In the u. S. , they have 70 share of the e. V. Market. Thats difficult to sustain. But if you even take that down to over time 20 , for example, that would outpace gms market share in the u. S. So, the answer is its difficult to compete with them and i think they will continue to make fast tracks towards that 463,000 vehicles this year. Taylor and finally, one last question to you, gene. What did you make of elons comments when he said the model y what eclipsed demand of all the other vehicles combined . Dashwood eclipse demand of all the other vehicles combined . Gene appreciate the enthusiasm around it. I think it probably wont be the case. I mean, they still have some great cyber truck, as opinionated as people are about that model y is going to be a big success, thats his point. I would agree with that. Its a needle mover for the company. Taylor i appreciate the enthusiasm gene munster of Loup Ventures brings. Thank you as always for joining us. Gene thank you. Taylor still ahead, facebook finally makes a change in its political ads, but is it enough to quiet critics . That is our conversation next. This is bloomberg. Taylor after months of resisting criticism about its political ads policy, Facebook Says it will now give users the opportunity to see fewer political and social issue ads in their feeds. But the social Network Still maintains its stance against factchecking politicians. Facebook announced the new User Settings on thursday. To discuss, we have kurt wagner here. Why now and why the change . Kurt well, perhaps youve heard over the last three months that everyone is very upset with facebooks ads policies. So theyve been kind of saying routinely that theyre looking at different options around ad targeting. They were not really committing to revisiting their Fact Checking ads. Theres been a lot of discussion. They came out with this blog post and they didnt really actually change any of the policies people are upset about. They said heres a new setting for users. If you want to see fewer political ads, you can check this new box in your settings and well show you fewer ads. Thats on you, the user. Our policies are not changing. Taylor frankly, from the user perspective, i wonder if there has been positive reception. If i go on to wish my cousin a happy birthday, and not going toim not going to go on have political dialogue. Does that help with the users perspective, that they can ignore political ads . Kurt i think thats what facebook would argue and theres a very valid argument to be made. Not Everyone Wants a political experience when they log on, especially instagram. This is a network where its often your friends, its food, vacations. Its not politics usually, for most people. So, this applies to instagram as well. This is how they frame this. This is something people have been asking for. We are now giving them that option. People who are critical of the policies might not be appeased. Taylor how upset are the advertisers, knowing i can unsubscribe, if you will . Kurt i think they would be more upset if they took away the targeting. The targeting is really the secret sauce of social media. Not so secret anymore after the amount of money that facebook makes. But that would have been a big deal for advertisers. That would have limited their ability to upload an email list of potential voters and really reach them. I think theyll be ok with them because most people are not going to use it. I think most people keep the settings the way that they are when they log in. They dont go and make the effort to go through and personalize them themselves. Because this is one of those optin features, i imagine those people will probably not even going to use it. Taylor you brought up that ad targeting policy. We know thats where the real money is. How does facebook compare in that ad targeting policy relative to google and perhaps twitter . Kurt yeah, both google and twitter made changes to political ads, specifically. Twitter got rid of most political ads. They said if you want to do an issue ad, you have to limit your targeting. State level, for example. You couldnt target by zip code. What these companies are doing, theyre saying political messages cant be super tailored to a specific group of people, a specific neighborhood or county. Instead, you need to be speaking to a broader group. And facebook does not have that right now. So, in theory, again if youre political candidate, you can get targeting with your messaging and some people think thats not a good way to communicate information. Taylor making a pit a little bit to a different story you were covering about facebook. Facebook. Zuckerberg saying he is ending his annual personal challenge to focus on facebook. Do we care . Kurt i guess we care, we wrote it up. These are the things that people and technology have looked forward to, at least come to expect, maybe not look forward to. Hes been really criticized the last couple of years. A few years ago, his goal was to go to all 50 states. People thought he would run for president. Last year, he said he was going to talk to a group of people about the future of technology. He talked to mostly white men. It wasnt a very expansive group. Answer these have given people a good reason to criticize Mark Zuckerberg in recent years. And so at this point, he should probably just focus on facebook. Taylor focus on facecook thats what kurt wagner does. Thank you for joining. And that does it for this edition of bloomberg technology. 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