This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes Tim Stinovic from Bloomberg Radio Facebook. As you know, we just broke down there earning stock still up about four point seven percent in the after I was for some inside as only he can do, is Bloomberg Radio host Paul Sweeney, who hosts like, I don't know what twenty shows here at Bloomberg the Ken I know, and you do it. Well, Um, this feels like a blockbuster quarter.
We knew though the comparisons were going to be somewhat easy, right, yeah, we we did it. This is that. This really is, you know, as the analysts like to say, a blowout quarter and me, you think about a company that's got twenty six billion dollars of quarterly revenues of growth. It's just extraordinary. And they did it the old fashioned way. They raised prices by about and they sold at twelve percent more D units and so that'll add up to
a really good top line. And then the profit margins were so much better than the street had been forecasting, which led to a big epspat as well. Did you feel like after you saw Google's numbers yesterday you knew that Facebook was probable we're gonna have a pretty good quarter as well. I did, I really did, because these are the two players, and maybe along with the Amazon
now that really dominates. Did your advertising to look at some of the smaller companies like Pinterest, who reported and disappointing numbers yesterday, and you know Snapchat and Twitter, they you know, they kind of play with the crumbs that are loved by the Googles and the Facebook and the Amazon's here. So you saw some really strong numbers, really strong metrics out of Google and Facebook saw you know,
experienced a similar type of marketplace. So walk us through some of the other metrics, because I think one of the concerns is, well, I don't know where should we go, Like first quarter daily active users, there's so many headlines
that come across the Bloomberg. Tell me what else you think are our audience needs to know about, Paul, I'll tell you what that what advertisers look at, they look at the size of the audience and and for uh, you know Facebook, that's monthly active users, average users that grew and that was better than a forecast. And then the second question is how engaged are is that audience with your products, because the more engaged they are, the
more they are likely to be influenced by advertisement. And for Facebook that's daily active users UM and the daily active users also came in a very strong relative to expectations. So Fama ad salesman for Facebook, it's a pretty easy sell for me. That's it. Like, so I do think about kind of in this world, right, people are constantly
trying to get our attention and sell us stuff. And I said earlier when it comes to something like Facebook, you know, Instagram, what'sapp, I mean, they are very much aggressively looking to use those channels right to sell stuff. I know my eighteen year old it's often how she shops. She's following influencers and she's on Instagram and she sees something and then she finds out where you know, it's sold. Everything you know has a tag on it. I mean
that they're looking to boost right in terms of their business. Yeah, that's the one one area that they'd really like to develop, and that's kind of the shopping aspect, shopping shopping mechanism on Facebook. It's got such a big audience, it's such an engaged audience, and and there's and you write the influence influencers are such a big part of the retail landscape these days. You don't want to lose those people to as they you know, close your wrap and open
up the Amazon app. So you want to try to build that e commerce business. And so they did launch a business called shop about a year ago, but it really hasn't done that much. So I think that's gonna be one of the areas on the conference call um that investors are gonna want to get some more clarity. Okay, so are there is there anything in this quarter that
bothers you at all? Well, I mean the comparisons are gonna get tougher, which they kind of called out for the third and fourth quarter of this year, so you're not got And so they said, kind of the revenue outlook in terms of growth rates is similar in the second quarter then when they saw in the first course. So that's good. Then the comparisons get tougher, and I said, sequentially the growth rates will slow. So that's that's an issue. The other issue, which well in that's will they be
hip to that? Do you think at that point? Because you know, yeah, we'll see that. That's that's why they're calling it out so early here you know. Um, if you didn't already know it, now you do, um and UM. So the other thing is Apple computers changing the way their apps target users. Right out, you have you opt out. You have to physicality to say opt out. I don't want you to track me Facebook when I go to other apps. Now Apple saying we're going to change that.
Now you have to opt in to say yes, Facebook, Yes, and all these other apps, I want you to follow me, uh as I traverse all around the Internet. Now, the question is that could be a real issue for digital advertising dollars um if people start, you know, failing to opt in. Um. So we'll have to see how that
plays out. We have to see how Facebook reacts. But typically when those things kind of happen, and we saw something similar in Europe, what it does is actually benefits of the incumbent players because advertises feel like I'm just gonna go where I know the audience is, you know. So we'll have to see how that plays out. Listen to our Kurt Wagner tech reporter here a Bloomberg News his boy Facebook is he is great is big these days? Head count as at the end of March with sixty
four employees up over a year ago. That's a lot of new employees to add during a pandemic. But it says something. I guess they're busy and they're growing. Yeah, and I've got two sons graduating from college in a matter of a week or so. So I'm like, call up Google, they're hiring, go to Silico, to Stilson Valley because those books that they're hiring, Well, it's funny that
you say that. Kurt's wig Ken swig if Swig Equities was on with us and he's a real estate investor in entrepreneur and he said, you know, look at who is tapping into real estate, Like in New York. It's the Amazon's, it's the Googles, it's the Facebook. You know, they're not running to shut down offices or have everybody work from home. They're tapping into office space big time. They are. And that's it's good to see. And uh, you know, it's good for the city of New York.
And because it's prime real estate and it's a lot of it, and we see it from all these companies, whether it's an Amazon or Facebook or Google. They are still so much in the investment mode. You look at their R and D, you look at their investments and property plan equipment in terms of you know, new real estate all around the country. Uh, they are still very much in the growth mode, still very much in the investment mode. So um and when they make this much
cash it, I guess it's easy to see why. Yeah, it's interesting. I was just passing something about UM. You mentioned earlier about Apple and having to opt in, and it looks like Facebook had made some comments about that. Here it is, Facebook listed ad targeting as a head wind again primarily because of changes to Apple iOS fourteen, but that was listed as a headway in last quarter as well. So you know, as an investor, the regulatory environment.
You know, Paul, we talked about this a lot. It does feel like these big tech companies are increasingly under the gun when it comes to lawmakers and policymakers. A lot of times it's just talk. I don't know, it feels a little different what's on your radar when it comes to possible, uh, things that might be a drag on a company like Facebook going forward. When I talked to tech investment bankers that that I know, they say that Google and Facebook are really on the sidelines right now.
It feels that way in terms of M and A because UH and sizeable leminary because they know that they're being targeted by the regulators. UM So I think the risk is very low that they would ever be broken up, for example, but they know that the regulatory bar for making any kind of acquisitions uh is really high, and so they're just kind of staying on the sidelines, keeping their heads down, trying to stay out of, you know, the cross hairs. And then we'll see what happens going forward.
But um it is an issue, and we've talked about it a lot that you know, the US regulators and even the folks in Congress, they've taken a very light hand really over the last fifty or sixty years towards US technology and allowed the Silicon Valley to grow and make all these great innovations. But that feels like it might be changing a little bit because you've got these mega mega companies like Amazon, like Google, like Apple, like Facebook that are just so pervasive across all of our lives.
It's just not some industrial company or railroad company out in the Midwest. These are the companies that that we touch every single day, and it goes to data privacy, data integrity. UM. So there's a lot of issues and a lot of layers, and uh, it's definitely a risk out there, I think for a lot of investors in Silicon Valley. Hey, listen, since I have you, because you know, we've been following, you know, some of these big tech
names and we're waiting Apple. Uh, they should cross and about I don't know about eight minutes from now here, and just you know, it's a little bit of a mixed bag Microsoft versus Google. You know what we're getting with Facebook, We'll see what we get with Apple. How do you do you see any consistent themes or anything as we go from report to report. Well, it's interesting. I think the you know, for the software side of
the technology space, UM, it's really all about the cloud. Um. And there's lots of applications for the cloud, and there's lots of different layers of it that the you know, the on arack Ranas and the man deep things of
the world, Bloomberg Intelligence they know really well. But but what we do know is that cloud computing and all its applications is probably one of the it's probably the biggest growth in tech spending, and that theme is still very strong, and it's a very competitive race between Amazon and Amazon Web Service, Microsoft with it as your Play. Google's in there as well, IBM has a place, So there's a lot of big competitors there, but it is
growing very quickly and the pandemic just accelerated that. Again as more and more companies we're looking to put more and more of their data distributed on the clouds, so all of us working for home could have better use of it and we could use our applications on it.
So big, big growth area there. And then the second area that we're seeing from these consumer technology companies who like the um you know, the facebooks of the world, is that advertising dollars continue to flow to these digital platforms. And again the pandemic probably played a role as an accelerant there. As we're all spending more and more time on our devices here, right, and I would assume that
we're going to continue. I mean, sure, we're gonna go back out and we're gonna travel and we're gonna live, but we have gotten so much increasingly used to doing everything on our phone right and online, that that that stuff doesn't go away. No, it doesn't. And you know, another big area because we're spending so much more time on our digital appliances is security. And we hear that a lot from the technology investors is that that is a great growth area with the technology spend, which is
sixth security. The more time we spend, the more data we put up on the cloud or put store on our devices, um, the security has got to be a lot better because we know there are a lot of bad people out there with you know, you know, really looking to hack into a lot of these systems. So that's gonna another growth story as well. I hear a lot of people who are saying, I keep getting messages change my password. They're not, it's not complicated enough, or
you've got to you know, you've got security concerns. Paul Sweeney, love you, Love you. That was so great. Paul Sweeney, co host of Bloomberg Surveillance and Bloomberg Markets. Catch him on Bloomberg Radio with Tom Keane from nine to ten and of course Matt Miller from ten to noon. Shares a Facebook by the way up four point eight percent. We are awaiting Apple earnings. They're going to cross in any minute. This is Bloomberg Radio. So definitely our top
story right at this moment is Apple. Charlie breaking down the numbers the quarter. The stock is up about three percent in the after hours. Big headlines Apple authorizing an increase of nine d billion dollars to its existing buyback program. Second quarter revenue big beat, huge beatty eight billion versu an estimate of seventy seven point three bill billion. If you go through all of their product lines and business sectors,
big beats in those as well. Let's get to it though, and what you need to know about the quarter from Bob O'Donnell. He's president chief analyst at Technolysis Research. He's based in Foster City, California, and that's where we find him on this Wednesday. Bob, nice to have you here. We've said a lot I feel like today, but it
looks like a blowout, blockbuster quarter. Yeah. Absolutely, And you know what's fascinating when you look through is there was a lot of focus on what services we're gonna do. It looks like services did okay, but really the big stuff was good old iPhones and Max and that you know, those are the things that are really crushing it for him,
and you know from a regional perspective. Again, obviously we're just going through this live here, but the China numbers are also looking really good, almost double from a year ago. So that's that's a clear sign of the fact that the iPhone twelve having five G that's what was critical for China because five G networks are very widely available in China and without a five G phone, Apple was
at a real disadvantage. So the iPhone twelve selling through China and clearly in big numbers, that's got to be a big person of the reason there. And then Max the M one, that's Apple's custom chip that they created based on ARM architectures. Um, they've done this for the iPhone, but they introduced that last fall for the Mac and clearly, uh, they had a lot of success with that. And of course just last week we saw them introduce M one based Imax and even brought the M one to the iPad.
So you know, we've got this custom silicon story that Apple's telling. Um, we've got the five G story that Apple's telling. And look, the service businesses, all these other things are also doing well. Not that they're doing they're not doing as well, um, but those that's kind of those traditional Apple businesses that the one seemed to seem to be the shouts. Hey, hang on for a second. Just got um. It's been talking about an overflow of newsday,
but it's all good stuff. Amazon just crossing the Bloomberg terminal to boost pay by at least fifty cents to three dollars an hour to over five hundred thousand of its staff members, rolling out pay boosts from mid May through early June. Uh to invest over a billion dollars in incremental pay for certain staff. We probably will hear a little bit more about that tomorrow when the company
reports its latest quarterly results. Amazon shares let me just take a quick check here in the after hours up about eight tens of a percent, and just quickly want to mention Verizon exploring a sale of its media assets, including A O, L and Yahoo. This is coming from Dow Jones. Uh. Yeah, could value Verizon meeting media assets at four to five billion dollars, so a lot going on.
Quick check though of the stock here in the after hours shares a Verizon just down a hair down about one tenth of one percent um and it thoughts on Amazon and Verizon there Bob, Well, you know the interesting Amazon they've been. They've caught a lot of grief lately in terms of you know, their worn't place standards and and everything else. But another interesting data point just came out today is that Amazon was ranked as the number
one place to work by linked In. Linked into a huge study of the top fifty companies to work at in America, and Amazon came out number one. Interesting, was also in the top ten. Um A, T and T was in the top ten, IBM an alphabet. Verizon was also I believe in the top twenty. But anyway, you know that, I think it's interesting segment. And we'll see
what happens with Amazon's earnings tomorrow. Yeah, exactly. And I know we've been here at Bloomberg Business Week doing a lot of reporting about and Bloomberg News just Jeff Bezos thinking about his legacy, you know, uh, and what's to come, and so thinking a little bit more broadly about that. Bob, thank you so much, really appreciate you breaking down Apple with us. Bob o'donnald, President, chief Analyst. I took analysis research on the phone from Foster City, California,