Speaker 1: From the heart of where innovation, money and power collive
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay I'm Emily changing San Francisco, and this is
Speaker 1: Bloomberg Technology coming up in the next hour. Whoever said
Speaker 1: streaming is slowing down didn't tell Disney, the company reporting
Speaker 1: a major increase in subscribers for Disney. Plus this after
Speaker 1: concerns following Netflix's shocking drop. We're gonna break down the
Speaker 1: numbers and where the streaming business goes from here. Plus
Speaker 1: how low can crypto go? The massive sell off that
Speaker 1: started with tech is spilling over to cryptocurrencies at Bitcoin
Speaker 1: and Ether have both fallen more than fifty since record
Speaker 1: highs last year. And Google gives us a sneak peak
Speaker 1: a our glasses. What can they do and when can
Speaker 1: you get your hands on them? And how do they
Speaker 1: not repeat the failures of Google Glass A top Google
Speaker 1: exact call join us. We'll get to all of that
Speaker 1: in a moment, but first let's get a look at
Speaker 1: the market. Stocks sliding on signs inflation isn't going away
Speaker 1: anytime soon. And then as dat closing down. Three bloombergs
Speaker 1: Emily Grafhao here with the latest Emily walk us through
Speaker 1: the day. Hi, Emily, what was another volatile day for
Speaker 1: the US equity market. The SMP five hundred ended down
Speaker 1: over one point six percent, but the pain was really
Speaker 1: concentrated in those tech stocks. We saw the Nasdaq one
Speaker 1: fall over three percent. Big tech giants like Tesla and
Speaker 1: Apple were really falling along with the index. And this
Speaker 1: of course came after we had some CPI data that
Speaker 1: showed investors inflation is higher than expected and probably going
Speaker 1: to prompt the Federal Reserve to continue on that aggressive
Speaker 1: monetary tightening path that doesn't really bode well for high
Speaker 1: growth stocks. Field on, the u S tenure was lower
Speaker 1: for the third day, but didn't seem to provide any
Speaker 1: support for u S stocks. Also, the dollar finishing the
Speaker 1: day in New York largely flat but still approaching its
Speaker 1: largest a highest level since May. We talked about a
Speaker 1: little bit of pain in tech stocks, but the pain
Speaker 1: is even worse when you look at the crypto markets.
Speaker 1: Bitcoin falling below that key thirty thou dollar level, and
Speaker 1: this of course was near an eleven month low, and
Speaker 1: we're also seeing ethereum down about forty percent year to date.
Speaker 1: The risk goff mood and market has kind of been
Speaker 1: weighing on cryptos pretty much all year, but the pain
Speaker 1: right now is really being felt because of the plunge
Speaker 1: in Terra. It's an algorithmic stable coin, but it lost
Speaker 1: its dollar peg earlier this week. It plunged about eight
Speaker 1: percent today, paired back some of those losses just a
Speaker 1: little bit, but really worrying those crypto investors. We also
Speaker 1: saw Luna, which is a crypto token that's linked UM
Speaker 1: and helps maintain the Terra peg, also fall. There was
Speaker 1: an exchange traded product from twenty one shares that tracks Terra.
Speaker 1: It fell over nine today. I heard from Bloomberg Intelligences
Speaker 1: of Eric Baltuna is that is one of the worst
Speaker 1: single day exchange traded product declines in ETP history ever,
Speaker 1: so a lot of losses there. Let's get to Disney though.
Speaker 1: They reported earnings, missed on revenue, also missed on EPs,
Speaker 1: but they did beat on Disney Plus subscribers and reporting
Speaker 1: more Disney Plus subscribers than expected. Quite a change from UM,
Speaker 1: its streaming competitor, Netflix, which of course the stock plunged
Speaker 1: after they reported earnings. Disney actually down a little bit
Speaker 1: in the postmarket zoom out here to date, Disney is
Speaker 1: down over thirty so we'll see how analysts are taking
Speaker 1: this earning support that was largely positive. Alright, Bloomer's Emily
Speaker 1: Grafe O, thank you. I want to stick with Disney. Now.
Speaker 1: Talk more about those results with Ross Gerber, president CEO
Speaker 1: of Gerbert Kawasaki, a long time Disney shareholders. So look,
Speaker 1: Ross hul in ESPN plus subscribers a little light, but
Speaker 1: you have to look at that massive subscriber increase and
Speaker 1: feel some sense of relief, even surprise. I don't know,
Speaker 1: is this what you were expecting. Well, we didn't really
Speaker 1: have much expectation as far as subscriber because it's so
Speaker 1: hard to predict what, you know, consumers do based off
Speaker 1: what contents being released on each streamer. But what we
Speaker 1: now see it, you know, at the end of this
Speaker 1: earnings period, is that Netflix did lose a certain amount
Speaker 1: of subscribers to the competitors, one being Disney Plus and
Speaker 1: and the other being you know, Peacock or and Paramount Plus.
Speaker 1: So um. You know, certainly we don't know if that's
Speaker 1: a permanent change in behavior, because we think streamers go
Speaker 1: back and forth between what you know shows are you know,
Speaker 1: popular at the time. So Disney had very good results
Speaker 1: for their um, their streaming businesses, and and much better
Speaker 1: than we expected because obviously we thought they had a
Speaker 1: tough comparison to the COVID era. And you know, quite frankly,
Speaker 1: all of their businesses are starting to improve now and
Speaker 1: we're starting to see revenue dramatically increase in parks and resorts,
Speaker 1: and and actually a wonderful weekend at the theaters this weekend.
Speaker 1: So you know, with the valuations so cheap now in
Speaker 1: the stock market, stocks like Disney are quite compelling for
Speaker 1: long term investors. I thought what CEO Bob J. Peck
Speaker 1: had to say about Disney Plus subscribers who are grown
Speaker 1: ups but don't have children was really interesting. Take a
Speaker 1: quick listen to what he had to say. It's certainly
Speaker 1: popular with families, but as a reminder, almost half of
Speaker 1: Disney Plus subscribers are adults without kids, and he said
Speaker 1: he's going to try to cater more to that audience.
Speaker 1: What do you make of that strategy, Well, I think
Speaker 1: his point is really trying to broaden the market because
Speaker 1: obviously Disney Plus is just a no brainer if you
Speaker 1: have kids, So you know, what would be your impetus
Speaker 1: to getting what is perceived as a kid's channel. But see,
Speaker 1: when you're talking about adults, you're talking about gen xers
Speaker 1: like us who have grown up with Star Wars, and
Speaker 1: so what he's really saying is that there's an enormous
Speaker 1: audience base of people who don't have kids, who are
Speaker 1: really into the I P like, you know, Star Wars
Speaker 1: and Marvel movies and you know, you think, oh, these
Speaker 1: are kids movies, but they're actually not. You know, they're
Speaker 1: adult movies and it's adult content. And I think that's
Speaker 1: why they've been successful, is that there is stuff for
Speaker 1: different age groups on Disney Plus. How do you think
Speaker 1: Disney Plus holds up if Netflix releases a lower priced
Speaker 1: ad supported tier. I don't really see it as an issue. Like,
Speaker 1: so look at it this way. So you have basically
Speaker 1: three main streamers now with with Hulu, Disney Plus, Netflix,
Speaker 1: and what will be HBO Discover or whatever that is.
Speaker 1: Those will be the three main players. And then you
Speaker 1: have Amazon and Apple are the players that don't charge
Speaker 1: for streaming services and they try to sell other products.
Speaker 1: And so when you look at the you know, environment
Speaker 1: that's out there today, I think Disney's extremely well positioned
Speaker 1: in the multiple content offerings. So with ESPN plus their
Speaker 1: agreement with UFC and and really their numbers would have
Speaker 1: been completely blowout numbers if it weren't for the billion
Speaker 1: dollars they had to pay producers and other people to
Speaker 1: to put stuff on the streamers instead of in the
Speaker 1: theaters over the last year or two. So Disney took
Speaker 1: a big hit, you know, investing in the streamers, but
Speaker 1: that's gonna pay off big time for them long term. Meantime,
Speaker 1: he's talking about rolling out into fifty three new markets. Obviously,
Speaker 1: we've talked a lot about Netflix's global appeal, a lot
Speaker 1: of you know, new content coming in from for example,
Speaker 1: South Korea and the success of Squid Game. Do you
Speaker 1: think Disney can repeat that? No, and I don't think
Speaker 1: it would benefit them to. You know, Disney has a
Speaker 1: different approach to content. So if I make a Pixar
Speaker 1: movie that will play in all countries in the world,
Speaker 1: you just change the language. But the content works globally,
Speaker 1: where Netflix doesn't make kids content really and so it
Speaker 1: doesn't work globally. So I've recently watched a lot of
Speaker 1: the Asian based shows that they've been making Korean dramas,
Speaker 1: Japanese crime movies. You know, I watched some of these
Speaker 1: stuff on Netflix and Netflix has a far deeper approach
Speaker 1: to the local cultures and artistic sensibilities than I think
Speaker 1: the approach Disney has. So I think that Netflix ultimately
Speaker 1: is going to be much more successful internationally. And I
Speaker 1: think what Disney is really focused on is you have
Speaker 1: hot start in India where they they're a main player
Speaker 1: in India, and it's a massive market, and I think
Speaker 1: they're very focused on that market. And it makes a
Speaker 1: lot of sense for them to focus on bigger markets
Speaker 1: where they can put money into content and not have
Speaker 1: to spread it between so many regions. Um, So, parks,
Speaker 1: let's go want to talk about parks because you know
Speaker 1: trade Peck saying domestic parks are firing on all cylinders,
Speaker 1: but they might have to take a big hit to
Speaker 1: operating income three a fifty million dollars potentially because of
Speaker 1: the closures of its parks in Hong Kong and Shanghai
Speaker 1: do the pandemic and as we know, Shanghai is on
Speaker 1: a very restrictive lockdown to this day. How concerned are
Speaker 1: you about that? I mean, for me, this is probably
Speaker 1: the biggest concern I have as an investor right now.
Speaker 1: You know, I'm I'm not that worried about the FED
Speaker 1: actually because I you know, it's easy for them to
Speaker 1: stop causing pain. But like China has, we have a
Speaker 1: lot of business that we do in China, whether it's Apple,
Speaker 1: Tesla or Disney and many others, And and this approach
Speaker 1: in Shanghai has been hugely detrimental to the economy in China,
Speaker 1: to the people in China, and it may or may
Speaker 1: not work. I'm less believing that it's gonna work. So
Speaker 1: so this is a big issue for for Disney on
Speaker 1: the short term and and and maybe even on the
Speaker 1: medium and long term in in a country like China.
Speaker 1: So I don't expect it to be easy for Disney
Speaker 1: to do business us in China for the foreseeable future
Speaker 1: because of their goal of having no COVID and and
Speaker 1: the fact that theme parks are sort of the exact
Speaker 1: opposite of what you know, the Chinese government wants people
Speaker 1: doing right now. But I do think that that's more
Speaker 1: a short term issue than a long term one, but
Speaker 1: one that one weigh on Disney well. I wonder if
Speaker 1: you think doing business in Florida being more difficult is
Speaker 1: a short or long term issue you have. You've been
Speaker 1: pretty clear that you're not a huge fan of Bob Speck.
Speaker 1: You don't think he handled this situation in Florida very well.
Speaker 1: Disney is now losing these special privileges that they've enjoyed
Speaker 1: in Florida for decades as a result of this, you know,
Speaker 1: very controversial don't say gay bill. And you know it's
Speaker 1: clear that lawmakers in Florida are you know, taking this
Speaker 1: out on Disney. What's your take on shape back now
Speaker 1: now that you see these numbers, are you having a
Speaker 1: change of heart at all? Or are you still not
Speaker 1: a fan? Well? I mean he just fired the PR guy,
Speaker 1: right uh uh for for what's going on in Florida. Um,
Speaker 1: you know, there's a lot of things I don't think
Speaker 1: he's handling the way I wish. The Florida situation is
Speaker 1: really tough one. But I think that Disney wins in
Speaker 1: the end because in the end, whether you're on the
Speaker 1: right wing or the left wing, your kids want to
Speaker 1: Disneyland and and there's a lot of people type stuff
Speaker 1: onto Twitter or Facebook, but then they go to Disneyland,
Speaker 1: So you know, I don't think that that's such an issue.
Speaker 1: And and really the politicians in Florida are sounding and
Speaker 1: the people of Florida with higher costs, higher debts and
Speaker 1: taxes because Disney's actually relationship benefits Florida. So what I
Speaker 1: think is this will smooth out over time. And I
Speaker 1: think these political wars over the right and the left
Speaker 1: are more played out in the media than in people's
Speaker 1: actual behavior. All Right, we're continuing to get headlines from
Speaker 1: the Call Disney saying they still expect Disney Plus to
Speaker 1: grow even more in the second half of the year,
Speaker 1: though maybe not as much as we've seen it grow
Speaker 1: in the first half of the year. So that of
Speaker 1: course the number to watch, that big subscriber number. Ross Gerber,
Speaker 1: co founder of Gerbert Kawasaki, always love having you on
Speaker 1: the show. Ross, Thank you for stopping by. There are
Speaker 1: a lot of things that are going on, um, a
Speaker 1: lot of different disturbances around the world, but you know,
Speaker 1: for us, it's really about focusing on our long term strategy.
Speaker 1: So as mortgage rates have gone up and and they're
Speaker 1: gonna they still have further to go. Clearly, homebuyers are
Speaker 1: gonna have to trade down to slightly lower price points.
Speaker 1: But most of the data that I've seen around housing
Speaker 1: still predicts strong housing appreciation. I think people are overreacting to, uh,
Speaker 1: some of the inflation worries some of the other travel players.
Speaker 1: We've been studying inflation pretty carefully now for the past
Speaker 1: four or six quarters, because I think it happened, actually,
Speaker 1: or the growth of inflation I should say, you know,
Speaker 1: occurred maybe a bit more sharply than some had anticipated,
Speaker 1: and it certainly it continues to be a real concern
Speaker 1: some top tech execs. There. We've had right here on
Speaker 1: Bloomberg Technology reacting to concerns about rising inflation. Wednesday's report
Speaker 1: painting a troubling bigger picture for tech, especially as the
Speaker 1: FED tries to combat rising prices, all of this adding
Speaker 1: to the decline we've seen in tech docs in particular.
Speaker 1: For more on this, I'm joined by Steve Sarah's no
Speaker 1: founder and partner at Active in Capital. Steve, thank you
Speaker 1: so much for joining us. So what do you think
Speaker 1: the impact more broadly of inflation has been so far
Speaker 1: on tech. Well, when we went and looked back at
Speaker 1: the seventies during the stack placing period, the best performance
Speaker 1: sector was actually consumer products and the worst performing with
Speaker 1: information technology, you know, And I think that's a testament
Speaker 1: to how mission critical a lot of the you know,
Speaker 1: software computers were back then for businesses. It's much more
Speaker 1: mission critical today, and so we expect actually tech to
Speaker 1: perform a lot better where it's gonna where it's gonna
Speaker 1: show up in the form of pain or equity prices declining,
Speaker 1: or those um software programs that businesses use on an
Speaker 1: ancillary basis for things that are just not court of
Speaker 1: the business. So we do affect and we do expect
Speaker 1: inflation to affect technology pretty dramatically. And in gross stocks
Speaker 1: we've already seen it as they're down six pretty much
Speaker 1: across the board, and we're seeing in the private markets
Speaker 1: as well. So by dramatically, what do you expect the
Speaker 1: impacts of that will be, you know, massive down rounds,
Speaker 1: inability to fundraise, more layoffs. Yeah, okay, so you hit
Speaker 1: on all the key factors. We saw this before the
Speaker 1: dot com bust. There's a very strong anchoring bias in
Speaker 1: the private markets for the last twelve years, and even
Speaker 1: through the Great Financial Crisis, gross stocks really um never
Speaker 1: went down, and so it's gonna take time for prices
Speaker 1: to adjust. We're seeing the early cracks, um, some of
Speaker 1: which come in the form of last competition. We're also
Speaker 1: seeing converts, and what converts do is maintain an equity
Speaker 1: price but allow a company to extend its runway. What
Speaker 1: follows converts is always down rounds UM the other thing
Speaker 1: that's coming, and we saw this today with carbon or
Speaker 1: lay offs. You know, we think in technology the layoffs
Speaker 1: are actually gonna be shocking. They're going to be shocking, Emily,
Speaker 1: and we've seen Meta and Facebook freeze hiring, the same
Speaker 1: with Uber and it's this will be in the millions
Speaker 1: of people in the next twelve of the twenty four months.
Speaker 1: This is just the beginning. So you're comparing it to
Speaker 1: the dot com bust, I mean, just how close the
Speaker 1: comparison is there? I mean, do you think this could
Speaker 1: take twelve years to play out? So unclear how long
Speaker 1: it will take. Our current view is that over the
Speaker 1: next twelve months it's going to be very rocky. Back
Speaker 1: half the next year, things should firm up in the
Speaker 1: tech sector. The dot com bus, you know, like that
Speaker 1: was unique to that time period. Our time period UM
Speaker 1: more liquidity company business models are a little bit stronger.
Speaker 1: There's a better understanding of, you know, how to get
Speaker 1: to couch on profitability UM at the management team level,
Speaker 1: at the board level, and those discussions are happening right now.
Speaker 1: So I suspect that the downturn will be a little
Speaker 1: bit more violent, but the recovery recovery will be faster
Speaker 1: and the next kind of twelve to twenty four months,
Speaker 1: you're gonna see some really interesting opportunities. But we've got
Speaker 1: to flush through these down rounds, and companies with six
Speaker 1: or twelve months of capital left are really going to
Speaker 1: struggle or raise raise money in this environment. So who
Speaker 1: makes it out of the gauntlet who doesn't? So those
Speaker 1: with fortified balance sheets, those companies that got ahead of
Speaker 1: fortifying the balance sheet by trimming staff when necessary. It's
Speaker 1: always unfortunate to do lay offs, but it's it's part
Speaker 1: of what needs to happen during a downturn UM, and
Speaker 1: we're going to see the most pain is on the
Speaker 1: larger businesses unicorns. The smaller companies that can adapt UM
Speaker 1: and extend runway three or more years should be okay.
Speaker 1: Those that have less than two years are are going
Speaker 1: to struggle. UM. You know, more broadly, what's gonna work commerce,
Speaker 1: commerce infrastructure, anything to do with e commerce, fintech. Although
Speaker 1: we're seeing competition increase, it's been a blood back both
Speaker 1: in the private and the public markets, and then transportation,
Speaker 1: lotistics and security. Wow, they're giving it to us straight.
Speaker 1: Steve Sarasino, Activate Capital Founder, We'll be watching well. It
Speaker 1: was built as the biggest change to Airbnb in a decade.
Speaker 1: We have the biggest updates to our product in ten years.
Speaker 1: We've been thinking about this for a very long period
Speaker 1: of time. I can't say a lot, but I'll just
Speaker 1: give a couple of clues. Number one, there will be
Speaker 1: a whole new way to search on Airbnb, and this
Speaker 1: new way to search is going to be a new
Speaker 1: way to find really interesting homes. And then the second
Speaker 1: thing is we're gonna have a big step change to
Speaker 1: our service level and the kind of customer service we offer.
Speaker 1: Airbb has now revealed its big update, which includes a
Speaker 1: new way to search for homes, split your trips between
Speaker 1: a couple of homes, and perhaps the biggest upgrade, more
Speaker 1: protections while traveling. They are calling it air Cover, which
Speaker 1: includes a number of guarantees on your booking check in
Speaker 1: and what they're calling a get what You book to promise.
Speaker 1: We will talk about all that and more with Airbnb
Speaker 1: c O and co founder Brian Chesky tomorrow on the show,
Speaker 1: and coming up, we need a Name. We We Live,
Speaker 1: We Dream, We Work? What didn't work at We Work?
Speaker 1: And what lessons can tech companies learn from it As
Speaker 1: we navigate market turmoil and employers try to get workers
Speaker 1: back to the office. We're going to talk about all
Speaker 1: that and more with a former We Work exec Next,
Speaker 1: this is Bloomberg from Wall Street to Silicon Valley. Companies
Speaker 1: are competing fiercely for talent and to avoid losing more
Speaker 1: employees are tweaking in person requirements, even going fully remote.
Speaker 1: I want to talk about all this and more with
Speaker 1: Melissa Diameler, chief learning officer at the online teaching platform
Speaker 1: You to Me and former We Work executive, as she
Speaker 1: is out with a new book called Reculturing. Design your
Speaker 1: company culture to connect with strategy and purpose for lasting success. Melissa,
Speaker 1: the pandemic has totally reshaped the workplace, for better or
Speaker 1: for worse. How should companies re culture in this environment? Yeah? So,
Speaker 1: I The biggest question I always get right now is
Speaker 1: how do we bring our culture back? And that is
Speaker 1: the wrong question because it assumes that culture is the office.
Speaker 1: And while I think a lot of us enjoyed the
Speaker 1: ping pong tables and enjoyed the donuts and the free food,
Speaker 1: that is not what culture is. Culture is how work
Speaker 1: happens between people. And so I think the focus needs
Speaker 1: to be more on the values and the behaviors and
Speaker 1: and how we're showing up with each other through different
Speaker 1: ways of communicating, versus how we can get back people
Speaker 1: into an office. So let's talk about what companies are
Speaker 1: doing wrong. I mean you've companies, you know, changing their
Speaker 1: work from home policies, trying to you know, create these
Speaker 1: new perks for when people are in the office. Yeah,
Speaker 1: I mean I think that you know, it comes down to, uh,
Speaker 1: going a little deeper than just defining your values. I
Speaker 1: think companies stop when they have a list of values
Speaker 1: on the wall or they threw them up on a website.
Speaker 1: I think the companies that are thinking through this and
Speaker 1: we're doing this at you to me, are really trying
Speaker 1: to codify what culture is. What would it what would
Speaker 1: a value for instance of teamwork, how would that show up?
Speaker 1: You know? Is that collaborating with each other effectively. Is
Speaker 1: that constructive debate? And how do we do that in
Speaker 1: a way that is in this hybrid environment? What are
Speaker 1: what are opportunities for us to come back together in
Speaker 1: an office If it's more of a brainstorm and opportunity
Speaker 1: versus you know, when can we do it remotely? So
Speaker 1: I think it's less about how we can get people
Speaker 1: back into the office or you know, how do we
Speaker 1: how do we make sure that that we're continuing to
Speaker 1: UM figure out ways to provide food. It's more about
Speaker 1: how to connect so quickly. What are some parallels you
Speaker 1: can draw from your experience that we work and what
Speaker 1: we're seeing right now in tech market term oil companies
Speaker 1: getting punished, you know, whether you're growing or not. Mm hmm.
Speaker 1: I you know, I think of organizations again as as
Speaker 1: a total system, and I think it we work and
Speaker 1: a lot of companies get this wrong. I think we
Speaker 1: think of culture as this is separate hr initiative versus
Speaker 1: continuing to look at how to reconnect it to your purpose,
Speaker 1: to your strategy and closing those gaps. So if you're
Speaker 1: if your mission is to um, you know, to to
Speaker 1: make a life not a living and then you invest
Speaker 1: in wave pools. There's a gap there, No, Yeah, all right,
Speaker 1: Well you can check out your new book out now.
Speaker 1: Melissa Diamelar, chief Learning Officer at You to Me, thanks
Speaker 1: so much for joining us. Welcome back to Bloomer Technology
Speaker 1: Imamily check in San Francisco. We've got some breaking news
Speaker 1: now headlines involving Twitter, Dal Jones reporting that federal regulators
Speaker 1: are investigating Elon Musk's disclosure of his sizeable steak in Twitter.
Speaker 1: The report saying that the SEC is probing his late
Speaker 1: submission of a public form that investors must file when
Speaker 1: they buy more than five percent of a company shares.
Speaker 1: As we know, he started amassing Twitter shares back in January,
Speaker 1: but didn't reveal his steak until April. We're gonna have
Speaker 1: more on that story as we get more details. Meantime,
Speaker 1: Google just unveils a series of upgrades to its search
Speaker 1: and map services, revealing more about the company's augmented reality ambitions,
Speaker 1: and a slew of new products, like the six A
Speaker 1: phone and a Google Pixel watch to rival Apple Watch,
Speaker 1: and even a pair of new A R glasses. Rick
Speaker 1: aster Loo, alphabet Senior Vice president of Devices and Services,
Speaker 1: joins us. Now for more on all this Rick loss
Speaker 1: to get through here, let's talk about the phone first,
Speaker 1: the six and six A talk to us about the
Speaker 1: strategy here and the need for high and lower end devices.
Speaker 1: You bet well, thanks so much for having the Emily uh.
Speaker 1: First off, I just mentioned you know, our vision for
Speaker 1: computing is a vision that we call ambient computing, where
Speaker 1: computer should be able to help you with whatever you
Speaker 1: need seamlessly and kind of be all around you. The
Speaker 1: center of that universe is really phones today, and that's
Speaker 1: why we are investing so much in this area. Google
Speaker 1: Tensor is our technology substrate for these phones. Um it's
Speaker 1: a system on a chip the powers all of them.
Speaker 1: And today we introduced Pixel six A, which is a
Speaker 1: four dollar version of the Pixel phone that includes our
Speaker 1: premium tensor s ocuh and could do all sorts of
Speaker 1: great things for users around speech recognition and photography. So
Speaker 1: so that's pretty key. You know, later in the year
Speaker 1: we'll on the Phone Arena will be also launching our
Speaker 1: pre our next version of our premium lineup of phones,
Speaker 1: called Pixel seven. So we talked a little bit about
Speaker 1: about that too. So let's talk about the Google Pitch
Speaker 1: Pixel Watch. How do you think it stacks up to
Speaker 1: Apple Watch? And how many of these do you think
Speaker 1: you can sell? Well? I mean, first of all, we
Speaker 1: think it's going to be a terrific offering. I've got
Speaker 1: it right here. It's a beautiful device, round uh circular
Speaker 1: design with stainless steel and beautiful features. Um some of
Speaker 1: the key things you know. For anyone that uses a
Speaker 1: Pixel phone or Pixel family of devices, this is going
Speaker 1: to be the watch for them. It deeply integrates with
Speaker 1: Google's ecosystem products. You can get turned by turn directions
Speaker 1: without having your phone. You could use Google Wallet to
Speaker 1: pay for anything. Google Home app will beyond there you
Speaker 1: can do your smart home controls. And of course the
Speaker 1: best part is it deeply integrates with Fitbit. I've been
Speaker 1: a Fitbit user for ten years, so everything I do
Speaker 1: on here seamlessly sinks of my Fitbit account. I can
Speaker 1: get heart rate tracking, sleep tracking, all the latest features
Speaker 1: for health and wellness. So it's it's really exciting. I
Speaker 1: think people are gonna love this product. Any chance you've
Speaker 1: got a pair of those new A R glasses in
Speaker 1: your pocket too, I don't have them with me. There.
Speaker 1: It's a prototype where of course been involved in the
Speaker 1: a R space for a very long time, um, and
Speaker 1: we're really excited about the advances we've made. We see
Speaker 1: this area of being just a key part of the
Speaker 1: AMMY and computing vision. You can see how wonderful it
Speaker 1: would be to have something on your face that enables
Speaker 1: you to do real time communication, to do translation, to
Speaker 1: be able to live caption the world around you, all
Speaker 1: of this powered by powerful technology with our A our
Speaker 1: systems and with Tensor and so, you know, we were
Speaker 1: excited to show a little bit about the future here.
Speaker 1: Obviously it's a bit of a ways off. This is
Speaker 1: a prototype, but we are very much continuing to invest
Speaker 1: in the air space and we see it as a
Speaker 1: key part of where we're headed with ambient computing in
Speaker 1: the future. So tell us more about how the glasses work.
Speaker 1: Is this like Google Translate on a pair of glasses
Speaker 1: or is it something more? Well, you know it's gonna
Speaker 1: end up being a lot more, but it's very early days.
Speaker 1: I mean, what we showed was a prototype and we
Speaker 1: don't have like a ton of product details to share today.
Speaker 1: We were just showing a little bit about you know,
Speaker 1: how one facet of how it might work with powerful
Speaker 1: speech recognition and translation. We do have a lot of
Speaker 1: air capabilities on smartphones today. You can see that throughout
Speaker 1: everything we do with lens and Google Maps and things
Speaker 1: like that. So you'll see a lot of continued investment
Speaker 1: in the a R space. We believe strongly in offering
Speaker 1: users help in the real world and that's what we're
Speaker 1: very focused on with our A our efforts. So we're
Speaker 1: are you on the glasses in the research stage right now?
Speaker 1: Do you have a limited number of users testing it?
Speaker 1: I mean, how far along are you with this prototype? Oh?
Speaker 1: I mean, you know, we have we have a number
Speaker 1: of engineers and developers continuing to build product in this
Speaker 1: space for internal use and uh, you know, we're still
Speaker 1: in the research phase, so it will be quite a
Speaker 1: ways off, but we're very excited about where it is headed.
Speaker 1: And is it based on AI image processing. I mean
Speaker 1: there must be a lot going on on the back
Speaker 1: end there to make all this work. Um, well, yeah,
Speaker 1: I mean a R is one of the more sophisticated
Speaker 1: computing capabilities that's that's required to offer useful information of people. Um.
Speaker 1: We have in of course, a gray prowess in our
Speaker 1: computing capabilities in the data center what's been new is
Speaker 1: that we're adding a lot of intelligence to end points,
Speaker 1: and you can see an indication of that with Google Tensor.
Speaker 1: Um we're able to leverage both of these capabilities together
Speaker 1: to be able to really offer this sort of powerful
Speaker 1: experience in the future. So the big question is when
Speaker 1: when will these be available for consumers or how many
Speaker 1: years out? Are we talking more to come, But it's not,
Speaker 1: it's not imminent. We're definitely in the prototyping stage. So
Speaker 1: we'll we'll make sure to tell you Emily when they're
Speaker 1: about to be out. And okay, last question on the glasses,
Speaker 1: but look, Google Glass wasn't necessarily the consumer success you
Speaker 1: hoped it would be, you know, became the butt of
Speaker 1: a few jokes. How do you avoid that same fate
Speaker 1: with another set of glasses? I mean, we learned so
Speaker 1: much from the introduction of Google Glass. Um. We we
Speaker 1: clearly learned how hard it is to develop this kind
Speaker 1: of technology and learned a lot about what users care
Speaker 1: about and what's important um So, so I think that
Speaker 1: that informs us, uh and gives us just a great
Speaker 1: background to understand what we need to do in this space.
Speaker 1: So we're very glad that we had that initial effort. Um,
Speaker 1: it's really helped us think through where we need to
Speaker 1: be for the future. So we're very we're excited about it.
Speaker 1: We're using all the learning from our prior entry into
Speaker 1: this space and uh and I think you'll see a
Speaker 1: lot of the benefit of that in the future. So
Speaker 1: you said you also planned to release a tablet next
Speaker 1: year as a companion to Pixel and you know, I
Speaker 1: believe back in twe you said no more tablets. So
Speaker 1: so why the change of heart? Well, you know, I think, um,
Speaker 1: we the Andrew team has really invested a lot in
Speaker 1: larger screen devices, larger form factors, and I think in
Speaker 1: the last couple of years in the pandemic, it became
Speaker 1: really clear how important having these large screen devices is
Speaker 1: for the home for various use cases. And so between
Speaker 1: all of those, um collective things, at once, we decided
Speaker 1: that it was really important for us to develop one.
Speaker 1: And it really does provide a new, facet new experience
Speaker 1: for Pixel users. So we thought it was important to
Speaker 1: have it as part of the Pixel portfolio. So just
Speaker 1: how many facets will there be? Is this a foldable
Speaker 1: tablet we're talking about? Oh? Um, you know, we just talked.
Speaker 1: We just showed a little bit of a prototype of
Speaker 1: what we're building right now today, which is a standard tablet,
Speaker 1: and there'll be a lot more details shared next year
Speaker 1: when it comes to market. Okay, so bigger picture, how
Speaker 1: do you measure the success of Google's hardware division? I mean, comparatively,
Speaker 1: when you look at other companies and you compare the numbers,
Speaker 1: Google is not quite there, but obviously it's still growing
Speaker 1: and it's still a place that you're investing. What's the
Speaker 1: bar for you? Well, I mean, you know, clearly we
Speaker 1: want this to be a very large business for the company,
Speaker 1: and it has been growing quite significantly. For for instance,
Speaker 1: um we talked about it our earnings that Pixel six
Speaker 1: has sold more in its first six months than Pixel
Speaker 1: four and Pixel five combined. UM. So, so without a doubt,
Speaker 1: you know, we're investing a lot in this area, and
Speaker 1: we also are growing a lot, and our intention is
Speaker 1: to continue to grow the business. We're no doubt a
Speaker 1: challenger in this space, where a new entrant relative to
Speaker 1: other people who've been in it. So we're starting from
Speaker 1: a very small base, but we do expect to continue
Speaker 1: to grow and we're investing in the future for that,
Speaker 1: and that's why you see, you know, us make investments
Speaker 1: like the pixel uh sponsorship for the NBA Playoffs which
Speaker 1: have been just terrific to see, and trivia games to wash.
Speaker 1: So yeah, this is gonna be a space we definitely
Speaker 1: invest in and grow in the future. So in the future,
Speaker 1: how big a piece of the pie do you think
Speaker 1: or do you see hardware being in the overall Google hole, Well,
Speaker 1: we'll see, you know, hopefully it will become a meaningful part. Obviously,
Speaker 1: we're quite a quite a large and successful business as
Speaker 1: it stands, and we hope to be a contributing part
Speaker 1: of that. All right, Rick Ostelo Alphabet, Senior vice president
Speaker 1: of Devices and Services, Thanks for giving us a little
Speaker 1: peek into the future. Appreciate you stepping by. Thanks. Coin
Speaker 1: based shares coming up falling to new loads in this
Speaker 1: ongoing bear market. We're gonna talk about all that and
Speaker 1: more with Fourager Digital, another crypto exchange next. This is
Speaker 1: Bloomberg time now for our crypto report, and I want
Speaker 1: to get another look at coin base shares falling to
Speaker 1: new lows. Even the word bankruptcy the big B word
Speaker 1: being floated. Our crypto contributor Snelli BOSSI here with more Shanelle.
Speaker 1: Thank you so much, Emily. When we talk about what
Speaker 1: happened with coin based today, you do have shares and
Speaker 1: bonds of coin Based plunging to new lows after results
Speaker 1: disappointed Wall Street, really Goldman Sacks coming in and saying
Speaker 1: here that coin bas is unlikely to return to recent
Speaker 1: levels of profitability in the near term. In a quarterly report,
Speaker 1: they added a disclosure that if the company filed for bankruptcy,
Speaker 1: the court might treat the customer assets as a line
Speaker 1: for repayment, meaning the customer assets are what are going
Speaker 1: to be at play here. But you also, I want
Speaker 1: to be very clear about this, having Brian Armstrong really
Speaker 1: the CEO, saying that this is about a disclosure about
Speaker 1: how they hold the crypto assets and not really a
Speaker 1: statement about the chance of bankruptcy at coin base. While
Speaker 1: that's not a risk in the near term, here he
Speaker 1: is saying that your funds here are safe at coin Base. Still,
Speaker 1: you do have a huge drop off in the shares
Speaker 1: and a lot of questions about the exchange business moving forward.
Speaker 1: To answer some of those questions, Emily, I want to
Speaker 1: bring in Steve Erlick. Now he's the CEO of Chris
Speaker 1: Strip crypto asset trading platform Voyage or digital see if
Speaker 1: you're a long time member of the trading community, both
Speaker 1: from stocks and now to cryptocurrencies. When you look at
Speaker 1: the exchange model moving forward, a lot of concerns here
Speaker 1: about profitability. How do you make this work in a
Speaker 1: down market? Well, look, I think that you know, the
Speaker 1: exchange model is something that has been become very profitable
Speaker 1: across traditional exchanges. So we're in the early stages of
Speaker 1: adoption of crypto, especially in the US. We are working
Speaker 1: through you know, thoughtful regulation. So my belief is the
Speaker 1: exchange model will become you know, extremely profitable over time.
Speaker 1: But we're gonna have bumps in the road until we
Speaker 1: get there, and today it's one of those bumps in
Speaker 1: the road. But you know, I'm really you know, bullish
Speaker 1: on the exchange model and the industry in general. You know,
Speaker 1: I want to talk more about coin base for a
Speaker 1: second here, because the idea that there's a claim on
Speaker 1: assets here at the end of the day if there
Speaker 1: were to be bankruptcy. A lot of firms have not
Speaker 1: gone public yet, so they don't have similar discos disclosures.
Speaker 1: What kind of a risk does that really entail and
Speaker 1: what does that make the customer really aware of at
Speaker 1: the end of the day if they go to zero.
Speaker 1: It's really interesting because the SEC came down and said,
Speaker 1: I think in the prior quarters they didn't disclose the
Speaker 1: level of customer assets that they were holding. But the
Speaker 1: SEC changed disclosures and said, hey, if you're holding customer assets,
Speaker 1: you now have to put it on your asset and
Speaker 1: liabilit anty side of your balance sheet. So now that
Speaker 1: disclosure is there and we see how much assets they
Speaker 1: really do have. But to your point, a public company
Speaker 1: like coin based, like Voyager, we've been disclosing that since
Speaker 1: day one, and we've been public three years now. I
Speaker 1: think that's actually a good thing for consumers because now
Speaker 1: they see that our assets do cover all the liabilities
Speaker 1: where nowhere near any any bankruptcy situation in either case,
Speaker 1: and you now have more clarity than if you were,
Speaker 1: you know, investing in a private company and holding your
Speaker 1: assets with a private company with no required disclosures. So
Speaker 1: what about the model itself in terms of making money.
Speaker 1: There's a lot of questions around there around whether fees
Speaker 1: really start to go to zero, kind of like you
Speaker 1: saw in the stock market as spreads started to come in. Look,
Speaker 1: I think that you know, there's there's a place in
Speaker 1: this business for commissions. Consumers are getting a great price,
Speaker 1: great you know, action on all their trades. But I
Speaker 1: do think that you know, there's no national best bid
Speaker 1: and offer. This is where the market actually changes and
Speaker 1: is different for crypto versus the traditional markets. The traditional
Speaker 1: markets have reaganam Mass a national best better offer, so
Speaker 1: you have price protection on every trade. In the crypto market,
Speaker 1: you don't, And that's why I think we're looking for
Speaker 1: thoughtful regulation. But as long as there's exchanges around the
Speaker 1: globe holding and trading all these cryptos, there's opportunities for
Speaker 1: commissions and for spreads for every everybody in the industry. Now,
Speaker 1: I want to talk more about price protection. As you say,
Speaker 1: let's talk about it as it pertains to us T
Speaker 1: now trading out about seventy cents on the dollar. You
Speaker 1: made a decision not to list u s T, but
Speaker 1: you did list LUNA. Why is that. Yeah, So when
Speaker 1: we looked at the underlying of us T, we saw
Speaker 1: it truly wasn't a stable coin in the same instance
Speaker 1: as USDC. Now USDC, the US dollars stable coined by
Speaker 1: Circle and coin base is backed by US dollars and
Speaker 1: US treasuries, so and it has an attestation from a
Speaker 1: prominent accounting firm in Grant Thornton. We felt very the
Speaker 1: mo and we still do that there always will be
Speaker 1: a dollar for dollar there. When we looked at UST,
Speaker 1: we didn't see the same assets behind it, and so
Speaker 1: we're uncomfortable in bringing that to our customers. But we
Speaker 1: did list Luna only from an aspect of price action
Speaker 1: that consumers can actually participate in and trade Luna, but
Speaker 1: not take it off the platform. Because one of the
Speaker 1: main reasons to take it off the platform was to
Speaker 1: stake it for US T and earn those rewards. We
Speaker 1: didn't feel comfortable always thinking about the customer first and
Speaker 1: how they were going to look at the trade and
Speaker 1: the asset. We chose not to list UST and to
Speaker 1: list Luna. How do you think more exchanges are going
Speaker 1: to be more discerning moving forward about the types of
Speaker 1: assets that they do list, especially when it comes to defy.
Speaker 1: I definitely think that, you know, exchanges, everybody's going to
Speaker 1: take a different look about how they list their coins.
Speaker 1: We go through a really detailed process, and I think
Speaker 1: everybody's starting and going to expand their processes for that,
Speaker 1: processes for that as well. I do think we sort
Speaker 1: of we sort of flight out of defy. Today. We
Speaker 1: saw a lot of consumers bringing their assets back to
Speaker 1: a centralized place like US so they can actually be
Speaker 1: comfortable in holding the assets because in the defied world,
Speaker 1: you're putting your assets into some contract and going to
Speaker 1: get some reward on it. But now we see that
Speaker 1: those rewards may not be as good as they look,
Speaker 1: and to trust another party to do a lot of
Speaker 1: the work in diligence for you. We serve massive inflows
Speaker 1: today and massive trading volume today. So what then is
Speaker 1: the ultimate ramification for defy into this year? Given that
Speaker 1: it's not just us T that is falling, you see
Speaker 1: Bitcoin falling as well, below that thirty thousand mark that
Speaker 1: everyone was watching. Look, I think that this is an
Speaker 1: opportunity for a reset opportunity. I think, you know, UST
Speaker 1: did have an impact on the entire market today because
Speaker 1: us T was backed by bitcoin and there was a
Speaker 1: lot of selling of bitcoin related to the u s T.
Speaker 1: So I think you're seeing a reset time. I think
Speaker 1: we're close to the bottom here if we're not there already,
Speaker 1: and we'll see that rebound. But it's truly an opportunity
Speaker 1: for people to learn more. And that's the key thing here, individuals, consumers,
Speaker 1: brokers like us. We need to educate people more, educate
Speaker 1: consumers why these cryptocurrencies matter, and therefore then they could
Speaker 1: make an educated decision on which wants to own. Steve,
Speaker 1: thank you so much. That is Stephen Rlex, CEO of
Speaker 1: Voyager Digital, Emily back to you, Shanali, thank you well.
Speaker 1: Nike is escalating its legal battle with the sneaker marketplace
Speaker 1: stock x, saying it purchased four pairs of counterfeit shoes
Speaker 1: on the platform despite them advertising authentic footwear. This after
Speaker 1: Nike sued stock x back in February, accusing it of
Speaker 1: free riding on Nike's trademarks with a service called vault
Speaker 1: n f t S. Stock X argues it's n f
Speaker 1: t s aren't digital sneakers, but simply listings for physical
Speaker 1: sneakers that are stored in its fault and can be
Speaker 1: traded by users. We believe that we and you know,
Speaker 1: sort of move up and cascade up our net price
Speaker 1: over time. Given the tremendous value that we started with
Speaker 1: and the increased price value relationship all of all the
Speaker 1: new content. But we're pretty bullish above that. Disney to
Speaker 1: go about check there on the company's earnings call, speaking
Speaker 1: about pricing power and future pricing power for Disney Plus,
Speaker 1: Disney saw big growth in subscribers, beating estimates the service
Speaker 1: finishing the quarter with a hundred thirty seven point seven
Speaker 1: million subscribers globally, up thirty three from a year ago.
Speaker 1: Disney not the only one reporting results today. Ev makeer
Speaker 1: Rivian also out with its earnings and our Ed Ludlow
Speaker 1: has been listening in on the call, so shares up modestly.
Speaker 1: At what are the headline takeaways. It's still really hot
Speaker 1: out there for Rivian, but it was as good as
Speaker 1: it could be. There's still planning to build twenty five
Speaker 1: evs this year. Split across the consumer product in the
Speaker 1: van for Amazon, semi conductors are still hard. Cell supply
Speaker 1: is still hard. But I think you good use for
Speaker 1: investors is they got a lot of trucks built, sitting
Speaker 1: in a parking lot somewhere waiting to be delivered, and
Speaker 1: they're finding out the hard way. It's not easy being
Speaker 1: a real company. What about the supply chain crisis and
Speaker 1: especially what's going on with China. Are they feeling the
Speaker 1: brunt of that. I think they're disappointed. They've built five
Speaker 1: thousand vehicles since production started around the quarter, but at
Speaker 1: times they had to pause the line. Literally, you've seen
Speaker 1: the video, right, I've been inside the factory. All these
Speaker 1: great robotic arms just stopped because they don't have enough parts.
Speaker 1: Semi conductors is a big issue still, but they say
Speaker 1: that they're speaking to their suppliers. We've seen the worst
Speaker 1: of it. We've hit the bottom, and we're going to
Speaker 1: get better from here. He also disputed some reports from
Speaker 1: the Wall Street Journal about battery cell supplies and actually,
Speaker 1: if you look over a five year horizon, battery seal
Speaker 1: supplier is fine. It's longer term when we all start
Speaker 1: building e vs. The whole world's clamoring for an electric car.
Speaker 1: That's where it becomes a content. Did they have anything
Speaker 1: to say about Amazon, Yeah, a lot to say about Amazon.
Speaker 1: Progress on Amazon. You know, the two figure for this
Speaker 1: year includes ten thousand bands for and what's interesting is
Speaker 1: they're building in two sizes for one of a better
Speaker 1: description big and small. The big is really underway, the
Speaker 1: smallest in development, and they're on track and they're starting
Speaker 1: to roll out more and more pilots of amazon Is
Speaker 1: cities around the country. Adam Jonas from Morgan Stanley really
Speaker 1: willed them. What did he get anywhere? He kind of
Speaker 1: got somewhere. His point was that you look at the
Speaker 1: equity story. Rivian has fallen from a hundred and seventy
Speaker 1: two dollars a share following its I PO to around
Speaker 1: twenty dollars a share. Investors have lost patients for a
Speaker 1: company that burnt companies that just burned through cash. You
Speaker 1: wanted to know, how are you going to do better?
Speaker 1: How are you going to limit your costs? How are
Speaker 1: you going to spread out spending smartly? They give very
Speaker 1: detailed but very safe answers, and you can see the
Speaker 1: stock reactions kind of modest and after us, but it's
Speaker 1: up and given the tough time, that's positive. Exactly well,
Speaker 1: certainly it matters with inflation and rates going up and
Speaker 1: labor and supply chain stiles and just about everything. Okay,
Speaker 1: I thank you for that update, appreciate it. And that
Speaker 1: does it for the sedition Bloomberg Technology. We're back tomorrow.
Speaker 1: We've got a pack show. Airbnb CEO Brian Chesky will
Speaker 1: be back. We'll talk about the companies at new redesign,
Speaker 1: changes to shirt search. We've also got Arms CEO Renee
Speaker 1: Has and the CEO of son Nos, Patrick Spence. Big
Speaker 1: show tomorrow. Don't forget to check out our podcast Daily.
Speaker 1: You can find it anywhere you get your podcasts. I'm
Speaker 1: Emily checking in San Francisco. This is Bloomberg