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tv   Bloomberg Technology  Bloomberg  April 10, 2019 11:00pm-12:00am EDT

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emily: i am emily chang in san francisco, and this is "bloomberg technology." counting down to uber filing its ipo. looking to raise $10 billion in what could become one of the 10 biggest listings of all time. shares of lyft have hit a new all-time low. plus snap is expected to lose , users in the united states for the first time this year. a marketer says instagram will pick them up. it's being called a triumph of
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modern astronomy. we will discuss how more than 200 researchers have contributed to the first-ever image of a black hole. but first, the top story. huber is gearing up for what could be the largest ipo this year, seeking to raise about $10 billion for its public offering, making it one of the biggest public offerings ever in the united states, but the company's road to the public market has not been without speed bumps. let's take a look back at uber's journey thus far. 10 years ago, they launched uber cab, an elite black-car service in san francisco. 10 years later, uber has a shortened name and has completed one billion rides. two years later, it was 5 billion across 600 cities in 70 countries, and by 2014, annual
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sales reached $495 million, making it one of the fastest growing startups ever. came with that growth many challenges. regulators and taxi drivers seriously protested expansion. reports of physical and sexual assault raised alarm bells about writer and driver -- rider and driver safety. uber's toxic corporate culture was exposed. reports of sexual harassment led to the firing of over 20 top employees. that same year, they were accused of stealing. pricewere also transparency violations and bribery. leadership under ceo travis kalanick reached a breaking point and investors pushed out the once untouchable ceo. former expedia ceo was brought in to fix it. he hired a new management, worked to rebuild trust. and reputation. but it hasn't been an entirely
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smooth ride. in uber's self-driving car pilot march, 2018, was involved in a fatal accident in arizona. today, drivers want better pay and benefits. still, khosrowshahi continues to push the bounds. uber eats generated a whopping $2.1 billion, 17% of uber's gross bookings in the third quarter of 2018. it bought an electric bike and scooter start up, and it is promising to launch flying taxis by 2020. but as uber spends more to fuel global expansion, profitability remains a big concern. entering the public markets could give uber a rush of new capital, but will the company's lofty ambitions attract investors or cause them to hit the brakes? now i want to stick with uber , and bring in gabe klein,
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a cofounder of a company and former commissioner for chicago and washington, d.c., their departments of transportation. he is with urban change management. gabe also an investor in uber's rival, lyft. you are somewhat a biased narrator, but i want to start on lyft, shares closing at $60 today. do you think the pessimism we are seeing days after the ipo is warranted? gabe: no. i don't. i mean, this is the same company that was around 10 days ago and six years ago, and they have got an excellent track record. you know we are seeing triple , digit year-over-year growth. we are continuing to see a focus on urban consumer transportation. we are seeing an expansion into micro mobility with scooters and
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the purchase of motivate bike share. i am very bullish. i think you really can't watch sort of day-to-day what is happening in the markets. emily: what about uber targeting a $120 billion valuation? certainly, much bigger than lyft. they are in more markets and are bigger. they are also losing a lot of money just like lyft. , is that fair? gabe: last year, it was $76 billion valuation. then $120 billion, now looking at $100 billion. i don't see what has changed materially from last year to this year aside from the shuttering of their autonomous vehicle, which i guess has been sort of brought back but which was really hemorrhaging cash, and of course the purchase of would say, as, i bright spot for them. i honestly don't quite understand the change in the valuation except perhaps for looking at uber eats, but i
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think you have to take into account post mates and the host of other businesses that are in that space versus the duopoly of uber and lyft. emily: right, but is uber eats a 40, $50 billion business? that is the kind of valuation we are talking about here. gabe: i don't think so. i think that is a commodities business. i think when you look at ride-hailer, it is very complex in terms of the technology to create the marketplace the , balance supply and demand. we do have a duopoly because it is so complex. it takes time to build that two-sided marketplace, but, no i , don't see that with uber eats. emily: lyft has been pushing, we creating a greener future, we are reducing congestion on the road but there was a study , done by the university of chicago that found that lyft and uber could be responsible with putting more cars on the road in the biggest urban centers and undermining public transportation.
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do you see any evidence of that? gabe: i do. particularly in places like manhattan, you have a tremendous amount of vehicles, up to 80,000 vehicles, and if they are roving or dead-heading, as we say in the transportation space, that could be a real negative externality for cities, so i think the focus on getting multiple people into vehicles is very important. nuc like in boston, i think it was announced at logan airport there's a push to charge more , for individual trips and discount the taxation at the airport for multiple person trips. i think you will see that as you move to congestion pricing in cities, as well, that there will be a real push towards non-single occupancy vehicle trips. emily: do consumers really want that? they have shared rides now and it is unclear how big a portion
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of their business that is, but it certainly doesn't seem like it is the biggest portion of their business. gabe: i don't think it is. i think that's going to change. i think that's where government regulation helps. i think pricing is hugely important. and so, if you charge a modestly smaller amount for a multiperson trip people are not going to do , it. and that was one of my complaints with lyft and uber launched multiperson lines. it is getting significantly cheaper. with the changes in taxation at airports and downtowns throughout the world, i think it will be much more tempting to share a ride. emily: what do you think is the biggest threat to their business given that getting from point a to point b, however you do it, is a commodity? gabe: yes. you are absolutely right. i think that is an issue. some people say, the problem for uber and lyft is that autonomous vehicles are further out, and
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that is a real problem for their business model because they have to get rid of their driver. i actually think it is quite the opposite. i think you will see both uber and lyft raise prices to approach profitability and i think the real existential threat for them, ironically, was autonomous vehicles. neither of them are the leaders in those industries. once waymo, cruze turn on those services, you are talking about a true commodity, so i actually think they are in a big -- better competition, five to eight years out. with robo taxis eight years out. emily: you have people betting of self driving cars thinking it will bring , costs down. gabe: i am not one of those people. i believe you have to invest in them and think about whether people will continue to see these apps as sticky when they raise their prices by 20% to 30%.
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emily: gabe klein, cofounder of good to have you here. thanks for stopping by. gabe: thank you, emily. emily apple got a rare negative : recommendation as hsbc lowered its rating on the stock to "reduce" from "hold." the firm said it could take some time for the digital services to get returns, and it did command the company for putting its money where its mouth is and raised its price target to $180 from $160. coming up, it is no secret that foreign companies want more access to the chinese government. well the chinese government , maybe opening a door into cloud computing. we will discuss, next. if you like bloomberg news, check us out on the radio, the bloomberg app,, and in the u.s. on sirius xm. , this is bloomberg. ♪
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emily: it is winner take all for the last two companies chasing a $10 billion department of defense cloud deal. amazon and microsoft are the last competitors standing. this, after the pentagon determined that the acquisition process for the contract wasn't tainted by alleged conflict of interest. the announcement for the winning bid is set for the middle of july. and speaking of the cloud, in china, it is a tricky road for foreign cloud operators. they are forced to license their company to local partners store , data on chinese soil. but u.s. and chinese regulators are looking at a compromise that could possibly do away with some of those requirements and give american companies access to that market.
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this comes as treasury secretary steven mnuchin told cnbc that both sides have essentially agreed on how to possibly enforce a trade deal. i want to bring in our bloomberg trade reporter. so, first of all let's talk , about what steven mnuchin said today. he told cnbc that the talks have been productive but that there are still issues. what are the issues? >> i think the issues are the same as those that we've been hearing about for some time, and that is how and when does the u.s. remove tariffs in exchange for chinese concessions on structural reforms, big purchases of soybeans, natural gas, and so on, aimed at closing the trade deficit, and secondly the enforcement piece. mnuchin said today that the enforcement piece was largely done, but we have got to get a little bit careful here. steve mnuchin has been out there beforehand saying that certain elements of the deal were completed and it has proved to
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be not quite there yet, and we have already heard some skepticism on capitol hill on exactly that. chuck grassley, making exactly that point, that he wanted to hear this from bob lighthizer, the u.s. trade representative not stephen mnuchin. ,emily: now, on that enforcement he said the u.s. and china would , open an enforcement office. is that something we expected? trying tohave been figure that out, and bob lighthizer has been looking at some structures. this is a key element of a trade deal for the trump administration. they have to make sure that china lives up to their commitments or else face consequences for the tariffs, so there have been some different mechanisms that have been talked wouldin terms of how that work. the chinese worry would be that they were giving up some sovereignty. they do not want the u.s. to be
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judge, jury, and executioner here. they want to have some say in it. this structure sounds a lot like an embassy to me, is one thing that is being talked about. they have also talked about joint panels. bob lighthizer has talked about a series of different meeting schedules where, every month, officials meet every quarter, sort of more senior officials meet, and twice a year ministers , meet to review progress. but we are still waiting for all of these details. sometimes when we hear raises more questions, like today, then -- then what it actually answers. emily: meantime, chinese officials called a meeting with executives from amazon, apple, to talk about potentially opening up the chinese cloud market to american companies. how significant is this? shawn: this is hugely significant, and it gets not just to the crux of previous administration complaints about china, that it has closed off
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china and this potentially lucrative market in the digital sphere to outside competition, and that that has created these kind of behemoths like alibaba that have not faced competition from the u.s.'s own behemoths like amazon. and for that really important e-commerce market. the cloud business is really kind of the plumbing for the 21st century economy, if you will. and if u.s. companies like amazon, there amazon web services their cloud unit, , microsoft, ibm can get in there and compete for that market, that would be huge. that would be a huge opportunity for u.s. companies. some big questions again about the details here. we are going to have to wait until we see these licenses get issued if they ever get issued, to understand the significance of anything that is negotiated. it is also pretty clear, and i don't think any companies expect
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this to keep this thing in place , called the great firewall of china. that is, of course, the firewall that isolates the chinese from the rest of the world that the , chinese are going to keep that in place and keep some data location requirements. so there is a lot there still to hear, but the fact that the chinese are calling in the companies to talk about this is a sign that they are thinking seriously about that and that is important because it points to this deal, this negotiation, being much more about substance than sometimes we've been led to believe. emily: right, and it is interesting how it fits into the broader context of the trade talks, in general. thanks so much for that update. coming up, disney is prepping for its big push into video streaming, pouring roughly $2 billion a year into its new service. but will it pay off? bloomberg tech's livestreaming on twitter. you can check us out @technology.
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follow our global news network @tictoc on twitter. this is bloomberg. ♪
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emily: after years of rumors, disney is expected to finally reveal the details of its new video streaming, disney plus, to investors on thursday. but, it is not the entertainment giant's attempt at a streaming first service. shareholders need to look no further than the disney channel, which the company first introduced as a premium cable network similar to hbo. joining us from l.a., chris palmeri. so, chris the disney channel , worked out well for them, correct? chris: yes, it did for decades. ,it was very similar in a way. originally, you had to subscribe
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to the disney channel. it was like hbo. disney was selling services so they had to give up some ad revenue when it put stuff on its own service. it took a while to catch on and the lesson really was that it offered a broad array of content, not just for the youngest kids, but content for older kids, teenagers. that's when things really took off, with those original shows. i think you will see a wide righty of programming right from the start with this new streaming service and big spending. emily: i know you and your team have been working hard to get any details on what this team -- event tomorrow, anything what disney will unveil. what are you expecting disney will show us tomorrow? chris: it is amazing that they disclose the biggest fox, but whenth everyone wants to focus on is this service that hasn't even launched. people want to know, when this
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disney plus is launching how , much it will cost per month, and they want to know whether there are targets for how many subscribers disney is anticipating. given their history, i doubt they would stick their neck out and offer that. they will want a sense of how much the company is spending and how long those losses will continue. i have seen estimates that this will not even break even unto 2024, so there will be a lot of questions from analysts about the cost of all this. emily: all right, bloomberg's chris palmeri, thank you so much for stopping by. we will keep waiting for your new reporting on what's coming tomorrow. someone says 7 million electric cars will be on the road by 2025, adding that electrified transportation has reached an inflection point. she spoke with bloomberg's alix steel at the summit in new york. >> we tried to do the old wayne gretzky thing, which is don't skate to where the puck is, skate to where the puck is going to be. so what we do with charging is
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we try to skate right ahead of the puck. we work closely with these car companies and say how many are , you going to be deploying in the united states, where will you be deploying them, and then we go and try to deploy there so people will buy them. >> how do you deal with that in a business model kind of way? >> as i said, we work really closely with the carmakers, and nissan is a partner of ours, where they tell us where they are going to sell cars and we , have an incentive program with their drivers so when they buy an ev, they get a bucket of kilowatt hours for free charging, and that is an incentive to get them to market. >> who will be responsible for driving that? will it be the car companies? will it be the current oil companies who already have fuel stations where they will be charging? is it utilities? what is the driver? cathy: the driver overall is that it is a good technology. we are talking about innovation. i've never met a person who has driven an electric car that
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doesn't love it. so it is the pace of innovation. that is sort of the number one. number two, we have environmental imperatives that have been around for a while, reducing all kinds of air pollution and including carbon pollution. i think the car companies see the nexus of those two things and they are pushing forward. i mean the car companies have , announced $300 billion they are putting toward electrification of their platforms. and that is significant. that is a significant amount of money. then what you see is the oil companies, i think the progressive oil companies, are saying, we need to diversify not just be the supplier of internal combustion engines. companies like total, shell, bp are diversifying and investing in electrification infrastructure. emily: all right cathy zoi there , of evgo. with our own alix steel. coming up marketers say snap out , of it. new research predicts that snapchat could lose new users in
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the united states for the first time. snap says that model is flawed. we will discuss, next, and later in the show, remember spacex's first falcon heavy launch that sent a tesla into space? well, another one, it's massive rocket is ready to launch. ,we have got the payload, next. this is bloomberg. ♪
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emily: this is bloomberg technology. i am emily chang in san francisco. we have talked a lot about smack, the push into gaming, and analysts upgrading the company. one analyst said snapchat's efforts to broaden its audience with new features will not revive growth in the short term. marketers saying snapchat will lose users in the u.s. for the first time this year, bringing their monthly users to 77.5 million in the u.s.. joining us to discuss, an analyst.
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tech'sth us, bloomberg reporter, who covers the company. >> they have a methodology that is different from snapchat's, and their comparison is different as well. e marketer is looking at monthly users. when he marketer -- what they are saying is based on their projections, user growth will over the nextine several years until 2023. snapchat disputes this and point to their own data which shows daily active users are not supposed to decline, but they do not get projections as far out as he marketer does. regardless, it shows that some of the more recent changes, as , finallyoned before having this android redesign, may not expand the overall audience. emily: what is your reaction to this prediction from e-marketer? growth were expecting 6%
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this year and now, they are going to -3%. we have been looking at the full social media space and it is hard to see how any social media company is going to experience user growth at this time. they are fully penetrated. it is about how to monetize those users. emily: you don't necessarily believe that the users could swing that much but you don't think users are going to grow? jay: i think it is going to be hard to see user growth. facebook and twitter have flatline with user growth for the last couple of years. they had appalled that because they were cleaning out their system of fake accounts. if you look at snap, they have fully penetrated the jens the -- z generation and they are struggling to capture millennials, gen xers, and baby
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boomers. i don't see user growth but i do see how they monetize the users. they are low in the ranking as for how much revenue they are getting per user. emily: snap released a statement saying the methodology of e-marketer's forecast is flawed. we do not anticipate a sequential decline. who do we believe? selina: broadly speaking the , trends do align. we are seeing snapchat's own a data showing the user growth is barely growing. they did not the client. emily: e-marketer is saying that instagram is going to pick up. selina: we have seen that well-documented. instagram has directly copied snapchat's most popular feature, stories. we songwriter a right after they announced that, there was a pretty big drop in usage for snapchat.
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when i am speaking to analysts, there seems to be a little bit too much excitement to soon when -- too soon when it comes to snapchat. the things they were talking about have yet to show proof that they have been successful. for example, the in-game app features. snapchat isn't out of the woods yet. we are seeing that they are really focusing on drilling down on this core gen z demographic , trying to get those users monetize better, but they seem to have given up on the older demographic. emily: does your pessimism about this, does that extend to instagram? jay: i think it does. you really have to look at every u.s.-based social media and say this is a fully penetrated market. it's different if you look at asia, where there is not much penetration. in the u.s., you have full internet penetration, smartphone penetration, and growth is going
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to be at the speed of population growth at this we remain bullish point. areas like snapchat getting into gaming, using an ad network, and they are doing really interesting things about how to monetize those users that they do have. i just do not see them being able to move kind of up the chain into millennials and gen xers anytime soon. emily: interestingly, over the last week, we have seen analysts upgrade their views on snap, including marc mahaney of rbc capital two days ago. he said he believes snap is at a flexion point. >> now if they truly have fixed their android problem, they are going to open up a broader range of users. you will see revenue growth accelerate. you will see gross margins accelerate. losses will come down. stock will go higher. emily: we're focused here on the u.s. because that is what e-marketer is focused on.
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many international users are android users. what does snap's picture look like in the international market , and from your perspective have , they fixed their android problem? selina: we have yet to see. they have only recently announced that there is going to be a new revamped version. if they do get it correctly, they do have a huge global market opportunity. some regions and some places, it may be a little bit too late. they have already lost those users to competing platforms. there are developed markets they can still patch rate. in terms of all of this analyst sentiment, i think it is fair to say that 2018 was rock bottom for snapchat. everything that could have gone wrong did go wrong. and now, analysts are starting to track this maturity, this growing desire to make money. to actually be a profitable growing company. top executives from other firms and have a little bit less executive turnover. those are all they are hanging onto. emily: do you think that snap will remain relevant in the conversation? you hear about these users who
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have fallen off. twitter's growth has also plateaued, but president trump tweets on twitter every day and it is a huge part of the news cycle. it keeps twitter feeling relevant. do you think the same thing is happening with snap but with a younger democratic it -- younger demographic? jay: that is a good point about twitter because i think the trump effect on twitter is it brought twitter into a lot of people's lives who are not using it. snapchat hasn't had that moment outside of the gen z generation. there's going to be something that happens and it only happens on snap and you will have to be on snap to see it. that is a great upside case of it happens, but we do not know if or when it will happen. emily: thank you both. meantime, amazon will start accepting cash at its convenience stores. they don't have cashiers. there has been criticism that going cashless discriminates
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against lower-income customers. without credit or debit cards. amazon has only 10 go stores in three cities in the united states, but there could eventually be as many as 3000. coming up, no longer just a something to be imagined in a galaxy far, far away. we will tell you just how scientists captured an image of something so strong that nothing can escape it. we are talking about black holes, next. this is bloomberg. ♪
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emily: spacex is readying another launch of its falcon heavy rocket on wednesday. unlike its original launch this , one will be for the first paying customer of the rocket. just who is it? a satellite's -- services provider. let's get to dallas where our reporter is standing by. this is a big milestone. it really is for spacex. this is the first time they are flying the falcon heavy with a paying customer and it is not just for the testing and pr. this is actually bringing in money. it is an important addition to their product lineup because spacex can now say we have something for customers that have a really large payload. like this satellite. more importantly down the road, , it opens them up for more government business. emily: what happens next?
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you know, if they can pull this off how many more customers , could we see? justin: it is sort of a limited universe of players with satellites this large. i mean that is not a very large , and growing business. it is a steady business and it is very profitable, but at the same time, you would really be counting on the department of defense which does a lot of , classified spy satellites and other military technology, and i think, you know one of the , interesting things about space force that the president is trying to get integrated and get that through congress is that you can see a lot more launches in theory if that takes off. because that would potentially mean a lot more hardware that goes into space. and potentially more business for spacex. emily: spacex is working toward launching its first human into space. what is the timeline on that? justin: that is going to be later this year. i mean there are still some , fairly significant reviews that need to happen before nasa
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puts their astronauts on that. and that would be with the commercial crew program. the falcon heavy that is launching today is actually not rated for humans. we will not see any nasa work on that. and you know elon musk has said , that if in the future, a larger starship project is not meeting the deadline said he has -- deadlines that he has said we , -- he has set we could , potentially see them get falcon heavy rated for human passengers but that is still something pretty far off. emily: we know elon musk likes to make ambitious deadlines for himself. so what are the other milestones you are going to be watching for? justin: the big one for spacex is when they fly people. i mean, that is sort of the top of everything to the company right now because this is a critically important contract with nasa, with the u.s. government. it also is the first chance for, spacex toelon and
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show we can fly people. he started the company because he wants to go to mars. the whole point of all the work they do now is for deep space exploration in the future. i think that is what everybody at spacex is working toward now to fly people safely and show that it is just the next thing on the list that they are going to cross off. emily: ra. -- all right. just, thank you so much for stopping by. speaking of deep space, it is being called a breakthrough for humanity and something that pushes the boundaries of science. i am talking about the first ever glimpse of a black hole in space. you are looking at a black hole at the center of a massive a massive galaxy some 55 million light-years away from us here on earth. up until this point, a blackhole was something we only saw in simulation or christopher nolan
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sci-fi movies. it took eight telescopes scattered around the world from hawaii to antarctica and beyond to make this possible. to tell us more about this exciting new frontier we have a caltech professor and experimental physicist who joins us on the phone. you are hereed because i have been getting so many questions from my children about this blackhole. tell us why in particular this image is so exciting. think children have the best questions, so the reason that they are excited is the same reason i am excited. just aok at it and it is thing you would never see on earth. the laws of physics that are going on and making the kind of image are the kinds that you only hear about in harry potter novels or comic books. emily: here are some questions from my six-year-old son. where did it come from? where do black holes come from? rana: see this is what i am saying. these are the best questions. this is exactly what we talk
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about in astronomy conference. where do black holes come from ? and everyone has their own opinions. this is one of the observations that we think will help us figure this out. the only way to get a big blackhole is to put together a bunch of little things. and this thing is billions of times heavier than the earth or heavier thanimes the sun which is thousands of , times heavier than the earth. it is a lot of things have smashed together. one of the things we really don't know is do blackholes make galaxies or do galaxies make blackholes? for the heaviest ones, one of the opinions is that when these things are flying around in the center of the galaxy, it is really crowded. and their gravitational pull drags on each other and eventually slows things down, and they all fall down and land on the blackhole. part of the reason you see all of this glowing orange material around the picture of the supermassive blackhole is it is the friction of these gases rubbing together as they fly at the speed of light and just
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rubbing together, just like rubbing your hands makes them hot. if you have a bunch of gas together at the speed of light, it generates x-rays and gamma rays and radiation. that is why we can see it from so far. emily: here is another question from my son. you said why was it so hard to take a picture? why can't they just to send a drone in there? drone inwill send a there someday, i hope. this is a picture taking radio waves, which is unusual and not something we are used to. it is something like when you see in the movies, people use sonar or radar to figure out what is going on. in the ocean or on the ground. so it is a different kind of radiation from light. but it is just as good, and in this case, the people who observed it use this because they are able to put telescopes on different sides of the earth. it is a little bit like how something would look if it ball was the size
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of the earth. why is it so hard? a blackhole is about as small of a thing is you can make as far -- as you can make as far as we know from physics. if you took 5 billion suns and smashed them together until they completely collapsed, this is about the smallest thing you can make from that much mass. and it is so far away. it is millions and millions of light-years away. so you know we think it is , something small like when you see an airplane in the sky, that is small. or when you see the moon, that is small. this thing is millions and millions of times further away than the moon. or billions of times further away than the moon. and the moon that we look at, it is something like half a degree across in terms of angle. but it is hundreds of times farther with me earth than it takes to get from l.a. to new york. if you did that trip 100 times, that is about how far away the moon is.
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if you did that trip, you would have to get hundreds of billions of times as far away as this blackhole is. emily: that's basically what i told him, for sure. rana: sorry. go ahead. emily: my last question is, what is next? what do you learn from this? what's the next big discovery that scientists are looking towards when it comes to blackholes? rana: i was already wondering about this last night when i was guessing with the image will look like. it is one of those things. stephen hawking brought up this problem -- which is really what he is famous -- in 1974. he said we don't know what the border of a blackhole is going to look like. there's a lot of hawking type of predictions about radiation from the border of the blackhole. when we thinkven about blackholes on a chalkboard, the laws of physics don't make sense. there is a clash between quantum physics, which tells us about
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particles and uncertainty, and einstein physics, which tells us about gravity and space. we do not know how to put those two things together. we think finally when we do it, we will find out that there is something new and exciting going on at the border of a blackhole. so the next efforts will be adding more telescopes to make this image better. experiments which will look for gravitational waves. just starting from a few days ago. and then hopefully in several years, we will have another space antenna to look for another kind of gravitational signal, but from supermassive black holes. emily: so fascinating. iqued thep curiosity of children and adults everywhere. thank you so much for joining us. still ahead, google is looking for a new moneymaker. we will talk about where the company expects to find a fresh source of cash. in one of its most popular but so far free features. this is bloomberg. ♪
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emily: for more than 14 years, google maps has been relatively free of charge and dad. -- and ads. now, it could be a moneymaker. google has been slowly experimenting with ads. as google's search ad business slows, consumers might start to see more ads on maps. joining us from new york to discuss, garrett. how would this work? i'm sure a lot of people have started to see a few ads here and there. there are obvious ones such as
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if you search for coffee shops, a list comes up. a company could pay to be at the top of that list. the other way is for the pin that shows a coffee shop to be a different color. maybe a brighter color. in this case, purple and green pins are going to be ads in the map searches. there is a whole host of other ways that you can imagine them doing this if they want to pull more money out of maps. emily: will consumers except -- accept this after it being ad free? garrit: i came to this story because as a consumer, i started ads in my maps and i love using maps all the time. i always felt that it was sort of a great piece of infrastructure, a utility that i could use to get around. google spends billions of dollars building maps. you know mapping the entire , world to a level of detail that is pretty incredible if you think about it. it is a definite transition from
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something we were just using for driving directions to something we really used to sort of find our way through a city. when i go traveling, i save a lot of pins about restaurants of r things i want to see. at this point, they are at the point where we're going to use this regardless of whether there's a few ads or not. because they are under pressure to grow revenue, they are really going to start turning on the screws here. emily: how much money could google make from this? garrit: that is a great question. google is already making billions of billions of dollars per quarter on search ads. when you think about mobile search, for example, a lot of the first screen, it is hard to adsnormal searches without crowding that out. there is a lot of room to grow. as you said earlier, they have been going slowly on this. they don't want to spook people off. i don't want to push back against consumers and what they like. but there is a lot of room to grow here. emily: so when do you think we
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will see ads the greater volume? garrit: i think they will continue to kind of go slowly. it's not like this company is under tremendous pressure for investors to quickly wrap up money on maps. definitely expect this to continue. five years from now, we will look back and maps will look pretty different. emily: interesting. all right. thank you for bringing us that story. and that does it for this edition of bloomberg technology. be sure to follow our global breaking news network tictoc on , twitter. this is bloomberg. ♪
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