|Bid||214.16 x 1400|
|Ask||214.10 x 1000|
|Day's range||212.96 - 218.76|
|52-week range||159.28 - 224.20|
|Beta (5Y monthly)||1.08|
|PE ratio (TTM)||33.25|
|Earnings date||21 Apr 2020 - 26 Apr 2020|
|Forward dividend & yield||N/A (N/A)|
|1y target est||248.09|
The Zacks Analyst Blog Highlights: Facebook, Netflix, NextEra Energy, GlaxoSmithKline and T-Mobile US
(Bloomberg) -- Using Facebook Inc.’s “like” or “share” button to distribute right-wing or anti-semitic material could be a crime if the information ends up being circulated to a third party, Switzerland’s top court ruled.The Swiss Federal Court upheld a fine imposed on a man for “repeated defamation” by a Zurich court, ruling that “activating both ‘like’ and ‘share’ buttons in Facebook can improve visibility and thereby contribute to the dissemination within the social network of marked content.”In the case under review, the liked and shared content reached people who weren’t part of the subscriber circle of the original author, meaning he was responsible for wider distribution of the right-wing and anti-semitic content, the court said.While the Swiss court stressed that each case must be examined to determine the impact of the sharing action, the decision is a potential blow to one of Facebook’s most iconic features. The social-media giant Mark Zuckerberg founded in his college dorm room 15 years ago has become the target of privacy regulators on both sides of the Atlantic and faces accusations it allows misinformation to flourish on its platform.A spokesperson for Facebook declined to immediately comment.The Zurich court must go back and render a fresh decision on whether the man’s underlying comments were indeed hateful and defamatory “because it had so far wrongly refused the accused the opportunity to prove the reality of the disputed accusations,” the federal court said.To contact the reporter on this story: Hugo Miller in Geneva at email@example.comTo contact the editors responsible for this story: Anthony Aarons at firstname.lastname@example.org, Christopher ElserFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Facebook's content moderation plan, its IRS lawsuit, Amazon's defense in JEDI, Google Cloud deploying AMD Epyc and other stories are covered here.
(Bloomberg) -- Attorney General William Barr is taking aim at a legal shield enjoyed by companies such as Alphabet Inc.’s Google and Facebook Inc. as the provision comes under increasing fire from both liberals and conservatives.Barr has accused social media companies of hiding behind a clause that gives them immunity from lawsuits while their platforms carry material that promotes illicit and immoral conduct and suppresses conservative opinions.The attorney general convened a workshop Wednesday, featuring many of the tech companies’ critics, to explore potential changes to Section 230 of the Communications Decency Act, which was passed in 1996 and has been credited with allowing the then-fledgling internet to flourish.“The Justice Department is concerned about the expansive reach of Section 230, but we’re not here to advocate for a position,” Barr said in his opening remarks. “Rather, we are here to convene a discussion to help us examine 230 and its impact in greater detail.”Barr said 230 liability is relevant to the Justice Department’s ability to “combat lawless spaces online.” He could instruct his Justice Department to explore ways to limit the provision, which protects internet companies from liability for user-generated content.The technology platforms warn that any changes in their legal shield could fundamentally alter their business models and force them to review every post, making it impossible for all but the biggest companies to operate.Barr and lawmakers from both political parties have blamed Section 230’s sweeping legal protections for allowing what they see as irresponsible behavior by the big technology companies.“We are concerned that internet services, under the guise of Section 230, can not only block access to law enforcement -- even when officials have secured a court-authorized warrant -- but also prevent victims from civil recovery,” Barr said. “Giving broad immunity to platforms that purposefully blind themselves -- and law enforcers -- to illegal conduct on their services does not create incentives to make the online world safer for children.”FBI Director Christopher Wray also addressed the workshop, along with a range of lawyers, academics, child advocates, tech critics, and trade groups. Some of the speakers, such as a representative from the National Center for Missing and Exploited Children, have expressed concerns about how the law is currently written, or called for changes.Others argue that the law should be left alone, including the Computer & Communications Industry Association, a tech trade group that counts Google and Facebook as members. The Justice Department also plans to host private listening sessions.Representatives from Google and Facebook didn’t respond to questions about whether they’d received invitations. A spokeswoman for Twitter Inc. declined to comment.Liberal groups say internet platforms don’t do enough to stop the spread of hate speech or police political disinformation from foreign and domestic operatives. Conservatives say the tech companies censor right-wing viewpoints.Both groups seek changes to the shield that would increase companies’ liability as a solution. Lawmakers and tech policy experts from both sides of the aisle worry about children’s safety online as well as drug sales, harassment and stalking, among other issues.“A lot of people are angry for different reasons at the large platforms,” said Jeff Kosseff, a professor at the U.S. Naval Academy who has written a history of the law and is also scheduled to address the workshop. “Section 230 is a pretty attractive proxy for that anger.”While the Justice Department can make recommendations, only Congress can change the law. Some legal experts say they are perplexed by the department’s role in the Section 230 debate, which doesn’t tie the government’s hands in prosecuting violations of criminal law.“DOJ is in a weird position to be convening a roundtable on a topic that isn’t in their wheelhouse,” said Eric Goldman, a professor at Santa Clara University School of Law and longtime defender of Section 230, who is also set to speak.Lawmakers are exploring an array of possible changes to the law, looking to use it to make companies police content in a politically “neutral” manner, rein in use of the shield by short-term home-rental companies or protect voters from misinformation. Democratic presidential hopefuls including former Vice President Joe Biden have weighed in with calls to repeal or change the law.When it comes to cases where online material exploits children, a draft bill from Republican Senator Lindsey Graham of South Carolina, a top Trump ally, would only allow the companies to keep the liability shield if they follow a set of best practices. For example, they would be required to report and delete the material, but also preserve it for law enforcement. Critics worry that the measure would also undermine encrypted communications because encoded platforms can’t see what material the law would prompt them to report.In 2018, in the first successful effort to chip away at the shield, Congress eliminated the liability protection for companies that knowingly facilitate online sex trafficking.The critics propose a range of changes -- from raising the bar on which companies can have the shield, to carving out other laws, to repealing Section 230 entirely. Uniting them, however, is the belief that the provision enables an online environment rife with political misinformation, drug dealing, child abuse and other ills.Technology companies counter that Section 230 allows social media startups to flourish because they don’t have to monitor postings and protects free speech. It also fosters their efforts to remove offensive content because the law allows them to take down material without facing penalties.“Section 230 encourages services to fight misconduct and protect users from online harms by removing disincentives to moderate abusive behavior,” Matt Schruers, the president of the Computer & Communications Industry Association, said in an excerpt from his prepared remarks.David Chavern, president of the News Media Alliance, a trade group representing publishers, doesn’t favor repealing the law but proposes “limiting the exemption for just the very largest companies, who both derive the most benefits from Section 230 and have the greatest capacities to take legal responsibility,” according to a copy of his remarks obtained by Bloomberg.Chavern’s group blames the advertising practices of Google and Facebook for the decline of journalism and advocates for policies to rebalance the relationship.(Updates with comments from Barr from eighth paragraph)\--With assistance from Naomi Nix.To contact the reporter on this story: Ben Brody in Washington, D.C. at email@example.comTo contact the editors responsible for this story: Sara Forden at firstname.lastname@example.org, Paula Dwyer, John HarneyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- U.S. and Chinese firms hoping to deploy artificial intelligence and other technology in Europe will have to submit to a slew of new rules and tests, under a set of plans unveiled by the European Union to boost the bloc’s digital economy.The legislative plans, outlined on Wednesday by the European Commission, the bloc’s executive body, are designed to help Europe compete with the U.S. and China’s technological power while still championing EU rights. The move is the latest attempt by the bloc to leverage the power of its vast, developed market to set global standards that companies around the world are forced to follow.Big U.S. companies, like Facebook Inc. and Alphabet Inc.’s Google, won’t get any reprieve from the Commission, which in its Digital Services Act plans to overhaul rules around legal liability for tech firms, and is also exploring legislation for ‘gate-keeping’ platforms that control their ecosystems.“It’s not us that need to adapt to today’s platforms. It’s the platforms that need to adapt to Europe,” European Industry Commissioner Thierry Breton said at a press conference in Brussels. If they can’t find a way adapt to the bloc’s standards, “then we will have to regulate and we are ready to do this in the Digital Services Act at the end of this year.”On artificial intelligence, users and developers of AI systems used in high-risk fields, such as health, policing or transportation, would face legal requirements, including tests by authorities, which could also certify the data used by algorithms, the Commission said. High-risk AI could also face sanctions, while lower-risk applications should abide by a voluntary labeling program, the body said.Facial RecognitionFacial recognition, which falls under the high-risk category, generally can’t be used for remotely identifying people under current EU rules – with some exceptions. The bloc is planning to start a debate on the topic to determine where European citizens would accept those exceptions.The EU also said it would propose plans to encourage data sharing among businesses and with governments, with the aim of pooling large sets of high-quality industrial data. The AI plans will be open for public consultation until late May and will aim to propose legislation based on the feedback as soon as the end of year.U.S. Chief Technology Officer Michael Kratsios encouraged the EU to “pursue an innovation friendly” approach that doesn’t overly burden companies, in a statement reacting to the EU’s announcement. “The best way to counter authoritarian uses of AI is to ensure the U.S. and its allies remain leaders in innovation,” he said.Tech PlatformsAs part of its Digital Services Act, the EU said it was considering rules for large powerful platforms that act as gate-keepers to ensure their markets remain fair and contestable. The possible legislation is seen as a way to complement antitrust law, which some have criticized for being to slow to restore balance in markets harmed by dominant firms’ behavior.“Some platforms have acquired significant scale,” the commission said in its document. “We must ensure that the systemic role of certain online platforms and the market power they acquire will not put in danger the fairness and openness of our markets.”In a statement, Edima, the platform association that represents platforms like Facebook and Google, said it “is committed to working with the European Commission to clarify roles and responsibilities within the online ecosystem.”Read more: Barr Takes Aim at Legal Shield Enjoyed by Google, FacebookThe EU’s package will also take aim at platforms’ liability as a global debate continues to simmer around who’s legally responsible for content on social media sites, amid the spread of disinformation, hate speech, and violent content.Under current EU rules, tech companies aren’t responsible for what users post on their sites unless illegal content has been flagged to them. The rules were drafted almost 20 years ago in an effort to encourage tech firms to grow and innovate, and companies worry that axing the provision could potentially force them to censor posts.Content Liability“We ask the commission to tread carefully as they look at how to tackle issues that will ultimately determine the future of tech,” said Raegan MacDonald, head of EU public policy at Mozilla Corp. “Instead of seeing tech as all the same - which it is not - the EU needs to be clear which companies and what practices and processes should be the focus of intervention.”Facebook Chief Executive Officer Mark Zuckerberg met with EU officials in Brussels on Monday as he called on governments to devise a different liability system for platforms -- somewhere between newspaper publishers, who can be sued for what journalists write in their pages, and telecommunications companies, who aren’t liable for customer conversations.Commissioner Breton dismissed Zuckerberg’s framing, saying his comparison to telecom companies was “not relevant.” The comment suggests the EU could lean toward much more onerous requirements on liability for platforms.(Updates with throughout with details of the plan, starting in third paragraph)\--With assistance from Aoife White.To contact the reporter on this story: Natalia Drozdiak in Brussels at email@example.comTo contact the editors responsible for this story: Giles Turner at firstname.lastname@example.org, Amy Thomson, Nikos ChrysolorasFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Facebook Inc. said it was “deeply concerned” about how a Singapore government order to disable access to a blog page on its social media website could set a precedent for stifling free speech.The government had ordered Facebook this week to block The States Times Review’s page in Singapore, saying the blog had repeatedly conveyed falsehoods and not complied with any of the directions that it had been served with under the Protection from Online Falsehoods and Manipulation Act.Facebook said it is legally compelled to comply with the order to restrict access to the page in Singapore after a ‘careful review’. However, “we believe orders like this are disproportionate and contradict the government’s claim that POFMA would not be used as a censorship tool,” a Facebook spokesperson said in an emailed statement Wednesday.Singapore’s so-called fake news law has been used several times since it was enacted in October. Some opposition politicians are worried the law will be used to suppress dissent ahead of elections that must be held by April 2021, though ministers have said the legislation is needed to deal with the spread of misinformation that could undermine free speech.“We’ve repeatedly highlighted this law’s potential for overreach and we’re deeply concerned about the precedent this sets for the stifling of freedom of expression in Singapore,” the Facebook spokesperson said.Read more: Facebook Adds Disclaimer to Post That Singapore Deems FalseAct SwiftlySingapore’s Minister for Communications and Information S Iswaran, said Tuesday at an event The States Times Review did not comply after its Facebook page was required with effect from Feb. 16 to carry a notice that warned the page has a history of communicating falsehoods.“What they did was they changed the vanity URL, which is not the requirement under the law,” he said. “Therefore we had issued a further direction under Section 34 of the Act to Facebook to disable access -- for Singaporeans to not be able to access this site.”Iswaran said circumstances like the ongoing coronavirus outbreak showed the need to be able to act quickly against falsehoods. “The reason why we need to act swiftly is because if we don’t, then these falsehoods can cause anxiety, fear, and even panic,” he said.To contact the reporters on this story: Yoolim Lee in Singapore at email@example.com;Philip J. Heijmans in Singapore at firstname.lastname@example.orgTo contact the editors responsible for this story: Edwin Chan at email@example.com, Joyce KohFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Facebook Inc said it was "deeply concerned" about a Singapore government order to block access to a blog page on its social media website under a controversial fake news law. The government had ordered Facebook this week to block the States Times Review's page in Singapore, saying the blog had repeatedly conveyed falsehoods and had not complied with any of the directions that it had been served with under the Protection from Online Falsehoods and Manipulation Act (POFMA). Facebook said in an e-mailed statement it was legally compelled to restrict access to the page.
(Bloomberg) -- Twitter Inc. is acquiring Chroma Labs, a seven-person startup that was founded by former Facebook and Instagram employees for building photo and video-editing features.Chroma Labs was launched last fall with an app that lets people edit photos and videos before sharing them on the Stories features inside other apps, like Instagram or Snap Inc.’s Snapchat. The company is joining Twitter to “give people more creative ways to express themselves in conversations,” said Twitter’s head of product, Kayvon Beykpour, in a tweet. A Twitter spokesman declined to comment on deal terms.John Barnett, Alex Li and Joshua Harris, Chroma Labs co-founders, worked on products at Facebook Inc. before setting out on their own to build a company around creative editing tools. While at Facebook, the group’s members were involved in projects such as Instagram Stories, augmented-reality camera effects and Oculus virtual-reality headsets. Early investors in the San Mateo, California-based startup include Index Ventures, Sweet Capital and Combine VC.Twitter has said that improving conversations on the social-media service is a top priority. In recent weeks, the San Francisco-based company has changed the way some user interactions appear in the app and has added the ability to respond to direct messages with emojis. Twitter hasn’t unveiled a Stories-like product for disappearing posts, though it introduced some camera features like tags and labels last year.“[We] built Chroma Labs and many successful products together to inspire creativity and help people tell their visual stories,” Barnett said in a statement. “We look forward to continuing this mission at a larger scale with one of the most important services in the world.”To contact the reporter on this story: Kurt Wagner in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Jillian Ward at email@example.com, Andrew PollackFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Facebook Inc is slated to begin a tax trial in a San Francisco court on Tuesday, as the Internal Revenue Service tries to convince a judge the world's largest social media company owes more than $9 billion linked to its decision to shift profits to Ireland. The trial, which Facebook expects will take three to four weeks, could see top executives including hardware chief Andrew Bosworth and Chief Technology Officer Mike Schroepfer called to testify, according to a document the company filed in January. The witness list also includes Naomi Gleit and Javier Olivan, veterans of Facebook's aggressive growth team, and Chief Revenue Officer David Fischer.
Facebook may make it easier to escape its ranking algorithm and explore the News Feed in different formats. Facebook has internally prototyped a tabbed version of the News Feed for mobile that includes the standard Most Relevant feed, the existing Most Recent feed of reverse chronological posts that was previously buried as a sidebar bookmark and an Already Seen feed of posts you've previously viewed that historically was only available on desktop via the largely unknown URL facebook.com/seen. The tabbed feed is currently unlaunched, but if Facebook officially rolls it out, it could make the social network feel more dynamic and alive as it'd be easier to access Most Recent to view what's happening in real time.
A Tel Aviv court ordered Facebook Inc to unblock the private account of a worker at Israeli surveillance company NSO Group, and similar rulings are expected for other employees in the coming days, an NSO spokeswoman said on Tuesday. A group of NSO employees filed a suit against Facebook in November, saying the social media group had unfairly blocked their private accounts when it sued NSO in October. Facebook-owned messaging service WhatsApp accused the Israeli firm of helping government spies break into the phones of about 1,400 users in a hacking spree targeting diplomats, political dissidents, journalists and senior government officials across the world.
(Bloomberg) -- For the second time in as many years, Apple Inc. has had to temper its sales outlook because of unexpected shifts in China, the country that’s served as the engine of its growth and success. First a trade war with the U.S. and now the outbreak of a novel coronavirus have called into question China’s role as a reliable market and supply chain partner for the world’s most valuable maker of consumer electronics.The coronavirus that’s stifled China’s meticulously orchestrated production and logistics has hit both Apple’s supply and demand -- factories are resuming work slower than expected, the company announced, and most of its 42 stores in the country lie dormant -- illustrating how heavily exposed its business is to disruptions in the world’s most populous country. A fall in sales within China is likely to be the most immediate impact this quarter, while widespread production bottlenecks there risk hurting global iPhone revenue in subsequent months.Amid its coronavirus troubles, Apple has been preparing to launch a new low-cost iPhone at around $400, Bloomberg News has reported. The model is still on track to launch in March, though the plans are still fluid, according to people familiar with the matter. Apple has also been preparing updated iPad Pro models with a new camera system for the first half of 2020 and the virus may yet impose delays or constraints on those plans.Apple Won’t Meet Quarterly Revenue Target Due to CoronavirusUpon joining the company in the late 1990s, Chief Executive Officer Tim Cook transformed Apple’s supply chain into the efficient juggernaut that’s been the longtime envy of the industry. Products are manufactured in China with the help of low-cost, but skilled, labor and shipped around the world in a matter of days. Relying on Taiwan’s Foxconn Technology Group to run on-the-ground operations and China’s abundant investment in transport to ensure logistics, Apple has become a trillion-dollar company largely by selling made-in-China iPhones, iPads, Macs and accessories.Responsible for millions of jobs in the country, Cook’s Apple has also garnered enough goodwill with the Chinese government to gain access to its market that is unmatched among U.S. tech heavyweights. Facebook Inc. and Alphabet Inc.’s Google are looking in from the outside, whereas Apple can sell all of its gadgets there. The Cupertino, California firm brings in more than $40 billion per year from Greater China, shy only of its takings from the U.S. and Europe. This strength is also the source of Apple’s vulnerability.On Monday, Apple cut its earnings guidance for the quarter ending Mar. 31, which was already wider than usual because of the unpredictability of the coronavirus fallout. U.S. stock index futures and shares in Apple suppliers from Japan to Hong Kong fell after the outlook warning kindled concerns about the damage the epidemic is causing global corporations and the Apple ecosystem. Last year, the company adjusted earnings because of a shortfall in iPhone demand in China, which it blamed in part on the ongoing trade war between Washington and Beijing.Production snarls at Apple’s main iPhone-making base of Zhengzhou may extend well into the June quarter and possibly beyond. Foxconn’s Hon Hai Precision Industry Co. only started seasonal recruitment on Monday, weeks behind schedule, and it’s been severely hindered by new policies intended to curb the spread of Covid-19 on campus. One recruiter, speaking on condition of anonymity, told Bloomberg News that the company was only hiring new workers from the local Zhengzhou area, tightening restrictions and eliminating the vast majority of available labor pool.Implementing a rolling quarantine of up to 14 days for returning workers from more distant provinces, Foxconn faces additional challenges in managing the movement of untold numbers of staff. In Shenzhen, as many as 10 workers are packed in each dorm room as they endure their assigned sequester period. The available beds are running short as a growing number of workers travel back, according to one person who helped arrange the program.‘Nightmare’ for Global Tech: Virus Fallout Is Just BeginningVirus contagion has shuttered plants across China for weeks longer than anticipated after the Lunar New Year break, and the nightmare scenario feared by Foxconn and its ilk is the infection spreading across factory floors, which could potentially freeze parts of the supply chain and trigger cascading shortages. Apple’s facilities have all reopened, said the U.S. firm, but evidence on the ground suggests they’re still far from fully operational.Existing iPhone inventories at retailers will soften the immediate blow of slower manufacturing, but analysts anticipate worldwide shortages will follow, extending the impact of the present disruption.“I expect we’re going to start seeing iPhone shortages outside of China, which plays into the guidance,” said Apple analyst Shannon Cross from Cross Research. “In theory, it shouldn’t be demand destructive. It should just mean there should be a larger backlog of demand when these issues are resolved.”The immediate reaction to Apple’s forecast cut has been a drag on Asian tech shares, especially those of suppliers to the company. But some impact on Apple was already widely anticipated.Tech Investors Jolted by Apple Pin Hopes on a Fast Turnaround“We’ve been getting nothing but headlines about the virus for weeks. Starbucks is closing its stores, Caterpillar is shutting its facilities. Company after company has been saying this,” Jim Paulsen, chief investment strategist at Leuthold Group, said by phone, expressing investor optimism for a fast turnaround. “We have been expecting bad sales headlines, this isn’t good, but it’s not surprising.” (Caterpillar closed its plants in China at the beginning of February at the direction of the Chinese government. It is re-opening them as the government allows; currently most are open.)Moving entirely out of China would be practically impossible for Apple in the short term, given the scale of its established network and the country’s incomparable ability to mobilize a workforce of millions. Similarly strong disruption threats to its supply chain arose in 2018 and 2019, largely spurred by trade war conflagrations, but Cook’s team has held steadfast in its commitment to the region and hasn’t shown any significant momentum toward a major move out.“Apple’s supply chain in China is so tight and large, it would be difficult to replicate outside the region,” Cross said. “I think you’ll continue to see small expansions into India, but the vast majority of production will remain in China.”Apple has indicated that its overall business is still strong, saying that it remained on track revenue-wise in regions outside of China for both products and services. The company is engaged in a long-term diversification shift that’s seen it pour billions of dollars into creating its own streaming content for Apple TV+ and building out subscription services like Apple Music and Apple Arcade. Its strongest step to reduce its China dependence to date has been this move to be less reliant on pure hardware sales for the bulk of its revenue.Addressing the wider smartphone industry in China, Strategy Analytics this month projected a significant hit to shipments in the first half of 2020, to be followed by a recovery and a slight increase in shipments in the closing months of the year. If Apple follows a similar trajectory, it could see iPhone demand shift into later quarters rather than vanishing entirely.“I think Apple remains in a very good position long-term,” Cross said. “I would assume there would be some pressure on the stock, but assuming this is a short term bump in the road, investors will look through it.”(Updates with comment from Caterpillar in 13th paragraph.)\--With assistance from Joe Deaux.To contact the reporters on this story: Mark Gurman in Los Angeles at firstname.lastname@example.org;Debby Wu in Taipei at email@example.com;Gao Yuan in Beijing at firstname.lastname@example.orgTo contact the editors responsible for this story: Tom Giles at email@example.com, Vlad Savov, Edwin ChanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Bill Gates paid Tesla Inc. a compliment for coaxing the car industry to go electric. If he was expecting kind words in return from Elon Musk, he apparently shouldn’t have spoken about challenges that still lie ahead -- or about his new Porsche.Gates, the billionaire co-founder of Microsoft Corp., spoke with a YouTube influencer last week about the challenges of reducing emissions to slow climate change. He called the passenger-car industry “one of the most hopeful” sectors taking action in this regard.“And certainly Tesla, if you had to name one company that’s helped drive that, it’s them,” Gates told YouTuber Marques Brownlee.Then Gates discussed recently buying a Porsche Taycan. While he called the electric sports car “very, very cool,” he acknowledged its premium price -- the initial Turbo S models start at $185,000 -- and said consumers still have to overcome anxieties about EVs offering limited range and taking longer to recharge. Gasoline-powered cars travel longer between quick refuels at stations that outnumber charging points.WANT MORE? Upgrade the luxury in your life with the Pursuits Weekly newsletter. The best in high-end autos, food, real estate, fashion, culture, and lifestyle delivered every Wednesday. When a Tesla enthusiast posted about being disappointed in Gates’s decision to buy a Taycan instead of a Tesla and his comments about range anxiety, Musk replied: “My conversations with Gates have been underwhelming tbh.”Musk, 48, is of course no stranger to tweeting dismissively about fellow billionaires. The Tesla chief executive officer questioned Facebook Inc. CEO Mark Zuckerberg’s understanding of artificial intelligence risks in 2017. Last year, he called Jeff Bezos a copycat after the Amazon.com Inc. CEO embarked on an internet-satellite project that could rival one that Musk’s closely held company SpaceX is pursuing.The Tesla CEO’s commentary on Porsche’s Taycan has been mixed. After chiding the sports car brand for using internal combustion engine nomenclature for the high-end version of its debut electric vehicle, he tweeted in September that it “does seem like a good car.”(Updates with Musk’s tweets on Taycan in last paragraph)To contact the reporter on this story: Craig Trudell in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Craig Trudell at email@example.com, Will DaviesFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- It’s not very surprising that Mark Zuckerberg’s state-visit-style trip to Brussels got a pretty chilly reception from European Union officials. The Facebook Inc. co-founder is pleading for more regulation to solve what he and his top lobbyist Nick Clegg consider to be a failure of public policy: If only governments could agree on how to regulate the internet without curbing free expression, the social network would be only too happy to comply.This analysis is not new, and entirely misdiagnoses the problem in the Europeans’ view: It is Facebook’s business model, which hoovers up billions of users’ intimate thoughts and behavior patterns to better target ads, which is the issue. And it’s one that the social network would prefer just to tinker with at the margins, given the costs involved.Judging by Facebook’s new 22-page paper on regulating online content, and Zuckerberg’s published speeches, the company views its own misadventures as simply symptoms of a bigger online disease. If regulators could just define harmful or illegal content, set the limits on free speech, quantify targets for the quality control that tech platforms should perform on their networks’ content — and do so at a global level — the results would be clear.There’s a clear self-interest on display here. Aside from being short on detail and big on “stakeholder” dialog, Facebook’s vision would conveniently raise the barriers to entry for smaller rivals in a market that is already dominated by a handful of players, while itself continuing to benefit from the scale effects of keeping Whatsapp and Instagram under one roof. Together, Facebook and Google controlled over half of digital ad revenue in 2018.One-size-fits-all regulation would be ideal for a globe-straddling company that boasts billions of users, an array of interlocking and addictive apps, and plans to launch its own digital currency to further lock people into its walled garden. There would be less to fear from the idea of data “portability” — even if users had the freedom to leave with all of their data and contacts, where else would they go? Facebook might also be only too happy to push quantifiable regulatory targets onto its 30,000 frazzled and overloaded content moderators. No wonder European Commissioner Thierry Breton dismissed Zuckerberg’s ideas as “too slow” and “too low” in terms of accountability.The real blind spot for Zuckerberg is the Facebook business model, which is precisely what the EU wants the firm to address. Mark Zuckerberg says he cannot be responsible for 100 billion pieces of content — but that’s not really true. It’s more that it would be very painful — possibly existential — for the economics of Facebook to hire the necessary moderators and engineers to make it happen. Zuckerberg’s idea that Facebook is somewhere between a newspaper and a telecom operator is exactly the kind of vision that European regulators reject: They are more inclined to view Facebook as a financial-services firm, where valuable consumer deposits — or personal data — rub up against speculative and risky activity, such as targeted advertising and monopoly power. Systemic risk merits systemic scrutiny.Therein lies the challenge for Brussels. So far, the sum total of regulatory action against Facebook is akin to “being nibbled to death by ducks,” a view recently expressed by Roger McNamee, one of Facebook’s earliest investors. Facebook’s stock price slumped last month after its results showed slowing growth and higher expenses, but it has since rebounded. This is still a $610 billion company with an adjusted net income margin of 35% that makes over $20 billion in revenue per quarter. Shareholder challenges to company management have hit the brick wall of Zuckerberg’s absolute control of voting rights. And despite some U.S. politicians’ calls to break up Facebook, there’s increasing convergence between Zuckerberg’s interests and Donald Trump’s geopolitical ambitions. European attempts to better tax tech companies have resulted in swift U.S. counter-blows on trade; Trump also sees Facebook’s financial-services push as an extension of the U.S. dollar’s power.If the aim is to change the way Facebook works, there will have to be a lot more biting going forward, from enforcement of privacy law and upgrading of antitrust law to more scrutiny of how the company’s algorithms and content moderation are working. Otherwise Zuckerberg’s next visit to Brussels risks being depressingly familiar.To contact the author of this story: Lionel Laurent at firstname.lastname@example.orgTo contact the editor responsible for this story: Melissa Pozsgay at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Apple Inc.’s earnings warning is an unfortunate reminder that, for all of its work to change investor perceptions over the past few years, it remains “the iPhone company.”For much of its six-year reign as the world’s biggest company by market capitalization through to the end of 2018, Apple was actually less valuable than Google parent Alphabet Inc. and Facebook Inc. on one crucial measure. The smartphone maker’s shares traded at a discount to those of the advertising technology giants based on its projected earnings — meaning investors were willing to pay more for a share of its rivals’ future profit. Even in its pomp three years ago, Apple’s stock traded at just 14 times forward earnings. Alphabet and Facebook traded at 20 times and 24 times earnings respectively.This showed that investors were more confident in Google and Facebook maintaining, or increasing, their profits than they were in Apple doing the same. That was largely because Apple is fundamentally a hardware company: At the time it was getting almost two-thirds of its revenue from the iPhone. It has lower gross profit margins since it has to pay for all the components used to make the handsets, as well as the labor and shipping costs. And, in order to meet its earnings targets, Apple has to convince consumers to spend another $800 on a smartphone every two years. If it ever came up with a dud iPhone, then earnings would suffer.As software companies, Google and Facebook have much higher gross profit. And given their stranglehold on internet advertising, they can count on regularly recurring revenue from that business. Back in 2017, Facebook knew it could generate an average of $21 per quarter for each user from fees that brands would pay to get their ads in front of users’ eyeballs. It wasn’t dependent on any one consumer product to keep that income flowing.Apple, unhappy about its relative discount, has spent much of the past four years working to lose it by moving beyond hardware. In 2019, iPhone sales represented 55% of its total revenue, down from a 2015 peak of 66%. In part, that’s because sales of the smartphone have declined, but Chief Executive Officer Tim Cook has also invested aggressively in new services (think Apple Music, TV+, News+, Arcade and so on), as well as wearable devices such as the Apple Watch and AirPods.This has made Apple less dependent on the iPhone. And it’s made the company’s customers more dependent on the device. Since the Apple Watch must be paired with an iPhone, for instance, it reduces the chance of customers trading in their Apple handset for a phone that runs on Android. The handcuffs are tightened every time somebody installs a new game from Arcade or adds songs from Apple Music to their library – they’d lose them all by abandoning the company’s operating system.Apple’s valuation has reacted commensurately. The stock is trading at 23 times forward earnings, more than Facebook’s 21 times and just shy of Alphabet’s 24 times. That’s partly down to the adtech giants’ own regulatory troubles — brought on by their troubling use of personal data and disquiet about their online ads duopoly. But Apple has succeeded too in convincing investors that it has dependable recurring revenue.That faith will have been shaken a little on Tuesday morning, after the company said revenue in the first three months of the year won’t hit the low end of its expected $63 billion to $67 billion range. The stock was trading some 4% lower in out-of-hours trading. The new coronavirus has stifled demand from Chinese shoppers less able to leave the house, and made it harder to recruit the workers needed to make its new low-cost handset.That stifled demand will no doubt recover once the virus abates. Nonetheless, this is a clear reminder that, for all its efforts, the iPhone is still Apple’s chief source of income. And that it will always be vulnerable to the capricious nature of consumer demand.To contact the author of this story: Alex Webb at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Facebook has suggested “new rules for the internet” as it continues to insist it must be regulated.The company and other social networks have faced criticism for the kinds of content they allow to be published on their platform.
Colombia on Monday issued an ultimatum to Facebook, telling the Silicon Valley-based tech giant it must strengthen its security measures to better protect users' personal data in the Andean country. Facebook has until June 14 to implement useful and effective new security measures to prevent unauthorized or fraudulent use of personal data, the Superintendency of Industry and Commerce said in a statement. Security improvements will help protect the 31 million Colombians who have Facebook accounts, the SIC said.