From Marhard.
We're Innovation, Money and Power Collie in Silicon Vallet NBN.
This is Bloomberg Technology with Caroline hide.
And ed Love Love.
I met Ludlow in San Francisco. Caroline hides off. This is Bloomberg Technology coming up in video slides. For a third consecutive day, almost four hundred billion dollars wiped off its market cap. Full coverage ahead, plus Apple facing billions of euros in fines over its app store rules under the EU's Digital Markets Act.
Details succumb and car seller's.
Worn of a possible material hit from the CDK cyber attack. We have all the latest from one of our big tech editors. This is what financial markets look like to start this week. Happy Monday to all of you watching around the world.
World.
The SMB five hundred actually modestly higher. We're going to get into this very shortly, but in video, which is the most expensive stock on the s and P five hundred is a real drag then as that one hundred down three ten percent yields pushing a little higher four point two six percent on the US tenure. And Bitcoin's been a real story. Going to dive deep into bitcoin. Halfway through the show with our own in house and
list of Bloomberg Intelligence. But we're coming off one of the worst seven day stretches of the year so far for many digital assets, but mostly bitcoin. Let's take a look at Nvidia. Actually, in the last twenty minutes or so, the declines that we open with in Monday session have really accelerated. We're down more than five percent in the session over three days. The three straight days of declines,
which hasn't happened since early May. We've wiped up more than three hundred and eighty billion dollars in market cap. As a consequence, Nvidia has gone from being the world's most valuable company briefly dropping below both Apple and Microsoft. But there's a lot of conversation around valuation. One of the tricks we're looking at is it's priced to sales ratio. It's trading at more than twenty times that the expected sales are the next twelve months. I want to get
out to London and Bloomberg Opinions columnist Pame Olsen. In her column last week, Parmei argued that in Vidia is a classic case of the bigger they are, the harder they fall, and that other tech company leaders should be looking at what's happening with Nvidia and wincing over how rapidly it's taken the AI world. Pame good timing to have you on the program. Explain your thesis to me, Well.
I think a lot of people look at videos as kind of bellweather for AI's success, but it's also a reflection a.
Lot of the hype in AI.
You know, it's kind of profiting from the short term success of businesses who are buying its chips for their servers, cloud companies like Microsoft and Amazon. But if you look further downstream at the the actual businesses who are buying the generative AI tools from the likes of open Ai
or Microsoft Azure, we're seeing signs of discontent. There are businesses who are saying, and I've seen multiple surveys coming out just in the last few months, saying that they are not really getting the productivity they were hoping for. They're not quite sure how to use it. There's been a decline in plans to spend on AI.
I think there's been.
A decline from ninety three percent last year to sixty three percent this year. In spite of the fact that these tools are getting better.
So I think a big reason.
For this is that these generative AI tools from the likes of Microsoft, Open Ai, and Google have been marketed as general purpose tools, like a Swiss army knife.
Of technology that's going to make.
Your workforce more productive. But of course these tools aren't necessarily general purposes. They're certainly capable in some areas, but they make mistake, they make hallucinations, there are issues with data security. Strangely, our whole perception of computers in AI, in how it was kind of marketed to us by science fiction as being these kind of.
Robotic, fact based machines, isn't really how it is. In reality.
They're actually very good at artistic endeavors and generating images and poetry and stories. Actually really not so good at generating facts that you can rely on. And this is something that businesses are realizing, sometimes to their detriment. And so I think this has been with kind of raining and of spending, and I think we're starting to see that reflective potentially in the decline and shares and in video.
A lot of investors, even if they can't do the math on valuation or correctly forecasting or predicting sales they'll say, oh, when videos supply constrained, right demand right now, for AI accelerators greatly exceeds their ability to supply. It's one other piece of your column that I found so interesting. We both covered technology for quite a long time, and you make the point that historically, in phases of technological progress, all companies have a very clear north star something to
work towards. But you also make the point that with AI, it's kind of become such a grand vision led by specific individuals that it's lost or meaning what do you mean by that?
Well, this whole race, this arms race for AI, was sparked by two men, Sam Altman of Open Ai and Demis Hasabus, the founder of DeepMind Google DeepMind now, and both guys we're trying to create artificial general intelligence, which is this hugely ambitious goal to create a machine that can essentially do everything.
It is more knowledgeable than humans.
It can surpass our own cognitive abilities, and it has general knowledge, meaning it can do creative things, but it can also do mathematical calculations very well and better than humans. And their objectives were nothing less than curing cancer and solving climate change. There was a sense that if you had this machine, this almost godlike machine that could solve everything in a general capacity, that it could fix all problems.
And I think when you have a vision like that, that's just so grand, and then it trickles.
Down into the marketing and sales channels of your tech company, and then they're going out and trying to sell this to businesses. Then your end customers have this kind of sense that they're getting this tool that has this general purpose ability. They're almost left with a sense of paralysis. I mean, what do you do with technology that can
do everything? Where do you even start? So I think the mistake that some tech companies have made in marketing AI has been not necessarily in saying that the capabilities are too high, because the they're very capable, but it's been in marketing them as being general purpose because they can't do everything everywhere all at once. They can only do a few things very well. And that's why I think businesses need time when they buy these tools to experiment with them.
You know, it's a little bit like with the mobile revolution.
People individuals who worked for companies brought in their smartphones and they told the IT people, can you just set up my corporate.
Email to my BlackBerry, to my iPhone, and they were sort of forced.
Companies were forced to do that because people were doing their own personal experiments with them and using them as productivity tools for themselves. And I think right now, this kind of top down approach to let's force the entire staff to use these tools, it's just a recipe for failure, because when technology is so new and cutting edge, it really needs time to percolate and for individuals to just sort of find the way and how these tools were work for everybody else.
Patmy Elsen, one of our Bloomberg Opinion columnists, just really fantastic to have you on the show, and I really strongly advised the audience read Palme's column from last week. Let's keep the conversation going with the Aka Yoshioka, portfolio manager at Wealth Enhancement Group.
This is wonderful.
There is the fundamental analysis that you can make whether you're on the cell side or by side. There is the technologist or techno optimist view, and then there's the sort of romantic view of what AI can do for mankind. Very difficult for you, aoco, everything that we've just discussed, Where do you start with the fundamentals or what your heart tells you.
Absolutely, we always go back to the fundamentals. I think when we're looking at a security and I think we look back at history too. I think there's a part
of us. There are some of us that have witnessed some of this back in the nineties, in early two thousand when the tech bubble bursts, and so we're well aware of some of the risks that surround names that get hyped up from both the sentiment standpoint, even though the fundamentals may be there in order to support some of the overall enthusiasm around the start.
The point that the Bloomberg story at the weekend made was that it's really hard to forecast or predict top line growth from video right now. If you go back to the August quarter of twenty twenty three, which is when this kind of parabolic growth took off, revenue each quarter has come in on average thirteen percent above what
management guided. Now, as you know better than anyone, management teams can be a little conservative even at the midpoint of the ranges when they guide, but it's still the math that you have to do. They point in this piece to the price to sales ratio being above twenty three something like that. In any normal circumstance, I think people would be much more cautious.
Than they are within video.
Why are they not being so cautious at least until this morning session.
Absolutely, I think it's really difficult to really ask for what the you know, total addressable market really is for artificial intelligence. You could say that it continues to be, you know, to be growing, and so really trying to ascertain what that number is going to be in the long term is what is so difficult about, you know, valuing in video right now. It used to be sort of a rule of thumb when I was growing up in this business that you know, anything over ten times
price to sales was just too expensive. And at twenty three times, it's well above that, and so it does become very difficult and so and it becomes more of a short term guessing game in terms of supply and demand. Right now, demand outstrips supply. But you know, as Parmi mentioned, if demand starts to weigane a little bit and that equilibriate equilibrium comes to fruition, I think, you know, it could be problematic for Nvidia.
To investors get distracted for other potential opportunities because of all this sort of myopic focus on one name.
I think, you know, part of the reason why some of the utility companies have done so well recently is just all of the electricity demand that's being forecast for the data centers to really utilize the power that AI brings to all these servers and data centers. And you know, you've seen sort of that secondary and tertiary derivative plays of artificial intelligence and Nvidia kind of come to the market.
So we'll have to see where the true sort of opportunities are going forward now that so many sort of secondary and tertiary effects have really.
Been played out a little bit.
And you know, we look back at history again with Nvidia and there have been plenty of times in which the stock has come down over fifty percent. It's part of the volatility for the stock over the long term.
Ka Yoshioka, portfolio manager a Welk Enhancement Group.
Great to catch up.
Great to have you here on Bloomberg Technology.
Thank you.
We have some breaking news crossing the Bloomberg terminal, and we have a red headline crossing the Bloomberg terminal. Black suit cybercrime gang is blamed in major CDK ransomware attack. This is a hacking group called black Suit, and according to Alan Lisker, who is a threat analyst at the cybersecurity firm Recorded Future, they are behind the cyber attack
on CDK Global. That is the hack that has basically crippled a number of auto and car retailers because those names on your screen, some of which are really moving through upside but recovering from many days of declines, rely on cdk's platform for a POS front office, back office inventory management. So that's the breaking news that we're getting.
We have a name that it is a group called Black Suit, and that the cybercrime group has demanded an extor aortion fee which is believed to be in the tens of millions of dollars from CDK, and Bloomberg News reported if you remember Friday, that CDK would be prepared to make a random payment.
Later in the.
Program, we're going to go out to Dana Wolman, who's one of our tech editors who's been leading coverage of this, and we will get a much bigger picture and detailed picture of what's going on.
After we've got that break news.
Okay, coming up on the show, Apple is risking new fines over its.
App store rules in the European Union.
We're going to go out to Bloomberg's Mark Guman. There is a lot of Apple news to discuss.
Stay with us, This is Bloomberg Technology.
There's a lot of Apple news to break down today. First, the company risks billions of euros of new fines in the EU after antitrust regulators escalated a conflict over the company's app store rules. And Apple has added China's two biggest online retailers, Ali Barber and JD to a growing list of apps that will support its mixed reality Vision pro headset when it goes on sale in that jurisdiction. Friday, Who else do we go to? Bloomberg's chief correspondent, Mark German.
Let's start with the EU. You know, it's an ongoing and developing issue for Apple operating in the EU market in the context of the Digital Markets Act. What is the latest and how does it change things?
Yeah, the U situation had a lot of news over the past few days. Let me take you back to Friday. So a couple of weeks ago WWDC Apple introduced Apple Intelligence that's its new AI system for the iPhone, iPad Mac that also introduced a couple sort of heart new features for the iPhone and iPad. One is called iPhone Mirring that allows you to use your iPhone via your Mac via the new Sequoya update coming in the fall.
The other one is called SharePlay screen sharing, where you can essentially screenshare from one iPad to another and control the other iPad. Let's say you want to help your
parents with technical support. Those three features, according to Apple, won't be coming to customers in the twenty seven countries that make up the EU later this year because of the Digital Markets Act and the interoperability requirements, which means that Apple may have to lower the privacy of those features in order to make them interoperable for third party
developers and meet some of the EU guidelines. This morning, the European Union announced charges against Apple related to its compliance or according to them, lack of compliance with the Digital Markets Act relating to steering users to be able to complete app payments outside of the Apple payment system. Long story short, the EU wants Apple to lower the
commission significantly, which it did. It broke up the commissions between a technology fee and a revenue share fee, and then at the same time, Apple is still trying to collect that revenue from apps that are sideloaded and not bought through the app store, and so the your Opean union doesn't love that.
Let's quickly get to the Vision pro use in China, so Ali, Barber and JD you know, big name compatible apps. But it's an important launch market as well. What's the latest.
It's an important launch. The Vision Pro goes on sale in China, Hong Kong, Singapore at the end of this week. I don't really think it matters if Ali Baba or other applications locally are on there and not certainly it helps, but the real story with the Vision Pro is that sales are not going to take off until the company is able to make a version that's about half the price.
I reported over the weekend that Apple is still planning to release a cheaper model as early as the end of next year, but they're struggling on how to cost reduce it given how expensive the components are in the Vision Pro, and if they really start reducing functionality, you're down to something that's on par with a competitor that's still a third of the price in Meta. So Apple is a long way to go on the vision pro to make it a success.
Check out Mark's latest power on from over the weekend, Bluebos, Mark Gumman, thank you. There is more with Apple which will be withholding a raft in new technologies from hundreds of millions of consumers in the EU, citing concerns posed by the blocks.
Regulatory tepts to rain in big tech.
At the same time, reports over the weekend that Apple is open minded about its partners here.
In the US on AI.
Bloomberg Intelligence senior analyst and Irana joins me on set in San Francisco.
It's great to have you in town.
I want to get to this AI reports from the Wall Street Journal. And in short, it's that Apple would look at metas underlying technology and Google's underlying technology.
We already know about open AI. What do you make of that?
Now?
I really like it because one of the things is they have been criticized for choosing a particular vendor and not you know, you could say, give users a choice, and that's getting them in some regulatory trouble.
Now, you know, if you were to give me a choice for Becauzar in search there's.
A high likelihood I'm going to go with Google, and you know you're going to have the same If you give users the choice whether it's Open Ai, Meta or Google, the users will define, you know, where they want to go. And I think that that kind of protects Apple in my view, from a regulatory point of view, and not only that, in the case of Google, for example, it's been criticized for a lot of money that's coming from Google do to Apple. I think, you know, there's ways you can redo that deal.
The regulatory compliance observation is really interesting. You know, they probably don't want to make any more trouble for themselves, but we've just outlined some of the difficulty they're having, particularly in Europe. You know, whether it's app store related or it's policy related. And I ask you this probably every three months, and I have done for a few
years now. I still don't know whether that anxiety regulatory risk is reflected in the stock or whether investors really have concerns about that.
See, we have a concern about it because frankly, from a free cast flow point of view, that's a big payment that goes from Google to Apple and has a very high margin to but you know, Apple's always been a closed ecosystem ever since we have known the operating system, which is why they argue that it's a better operating system, it has less attacks, et cetera. Now, if they're going to open it up, the question is whether you're going to get the same level of safety or not. And
that's the argument they're making. But the regulators are saying you're making too much money on the app store fee. I think there is truth of both sides. The question is how how low the feest can get. In one of the conference calls, the CFO said that EU accounts for only seven percent of the app store sales. That
was the first time we got that information. So frankly speaking, financially, it's not going to ding them, but only if that kind of ruling comes to the US and China, it's going to be a.
Bigger Rasuo BLOEMBG intelligence and listener. Right, Rona, thank you so much time for talking tech. And first off, a blockbuster hit for ten cents, It's Dungeon and Fight, a mobile game brought in two hundred and seventy million in just thirty days, taking the top spot in downloads and revenue.
In China.
The performance of the game exceeded analyst expectations and mark the biggest debut of the year for ten Cent to date. Plus, Amazon and f One will debut a new AI feature to keep viewers watching, set to be rolled out during the Spanish Grand Prix. The new feature, dubbed the stat Bot, aims to provide context and trivia during broadcasts by passing
through race archives and real time racing data. The new tech will be rolled out live during this Sunday's race in Barcelona, and Mitsubishi Heavy Industry says they're nearly done designing a next gen nuclear reactor as Japan ready to shift to develop more atomic power. Bloomberg spoke with Mitsubishi's president Friday. Here's what he had to say about a nuclear future.
I believe that gas turbines will grow going forward, and it will be combined with carbon capture, hydrogen combustion and so on. Nuclear power is also valuable power source in the context of carbon neutrality, so I think it'll be necessary to a certain extent as well.
Welcome back to Bloomberg Technology, Ed Lovelow in San Francisco. I want to check in on the markets, but I'm kind of micro focused on what's happening with bitcoin. Actually, remember that this is an asset that trades twenty four to seven and over the last seven days or so, we've basically had one of the worst weeks of the year so far. It's interesting Bitcoin just above sixty one thousand US dollars per token.
It's hovering at a more than one month low.
But the other data set that we look at is the outflows six consecutive days of outflows on dedicated bitcoin spot ets here in the United States. By association, we also go to the equity market. If we change up the boards, you see some of the sort of hypo related stocks also under pressure. Coinbase chief among them, down four percent. Actually, Riot Marathon Digital holdings have kind of paired some of the losses that we saw.
There's a number of things happening in the market, some of its psychological.
I was listening to Bloomberg television earlier, and we're back to that debate of which you think about the bigger picture, Well, if bitcoin is digital gold, why is it not behaving like gold.
There's a lot to discuss.
Unfortunately for us, we can break it all down with Bloomberg intelligence and this James Seffert, James, good morning to you. I don't know where do you want to start. For me, the outflows data is kind of key because for at least for me, that's the very little that I've got to go on.
Yeah, I mean, it's the one area where we can know exactly where money is moving, right, that's one of the benefits of utfs. We know exactly how much money is going in or going out. And like you said, over the last ten or so trading days, it's been a significant outflows and net outflows, but it's been about a billion dollars in olflows. And that's what ETFs are built to do. They're built to take in money and see money go in and out, and they're basically overall
they're going to track the underlying asset. That said, these things, since they launched in January have still taken in about fifteen billion dollars. So, yes, a billion dollars out over the last ten or so trading days is a big deal, but it's not enough to cause the kind of correction that we're seeing in the market right now, with bitcoin trading under sixty two thousand.
As you know, James, I just got back from a vacation, and while I was away, I was kind of braced to the idea that there might be some more traction or news around eth spot, ETF, ether, Ethereum, spot ETF and I came back and nothing had really happened, and we continue the status quo that we're expecting some movement in the coming weeks.
What kind of a consideration is that right now?
Yeah, I mean, obviously, based on what we're seeing in the markets with pricing, I don't think anyone's really paying attention to the fact that we're going to get Ethereum, spot, ETFs are over under date. If you to try and figure out when these things are going to launch right now with July second, we think the SEC is going to get those filings off their plate before the July fourth weekend. That's just our guest. There's no guarantee, no
matter what, they will launch some point this summer. So that is again only a matter of time that people are not really kind of focused on the fact that that's happening. Because Ethereum is also down, as you kind of hinted at, it's any stocks related to bitcoin or crypto. Ethereum is down but they are going to launch at some point in the in the next couple of weeks, and we think it'll happen before jewel or July fourth,
but there's no guarantee on that front. That said, if I would add that, all these issuers they just had to file a whole bunch of amendments to these ETFs, so they had to submit a bunch of new documentation in the SEC, and all of those came in on Friday, right around market closed. So the SEC has some new stuff to get through and it will could take a week, maybe two weeks, and then we'll know for sure when these things are going to launch.
If we try and marry those two points of discussion together, the outflow data we have from bitcoin the well, I think you said not paying attention, but let's say lack of activity.
In gearing up for ef ETF.
Is it case of like, well, if I'm an investor and I'm open minded to putting money to work in different places, I'm holding out to wait for eh. Is there a close relationship between bitcoins ETF flows and I guess the anticipation of a new product to come.
It'll be very interesting to see what people do Obviously, there's a lot of people that have put money to work in those bitcoin ETFs that the most successful launches in ETF history across the world. So are there are people going to say, I'd rather have a sort of index ex sourcis of cryptocurrency. Do I believe in bitcoin more than ethereum or ethereum more than bitcoin? And we'll see those numbers come out once these things launched, We'll
see what the flows do. We were pretty we had strong convictions that these were going these bitcoin ets were going to be successful, and even still, the numbers that we saw come out in the month since they launched kind of blew our expectations out of the water. Like I said, we're about fifteen billion now. We thought fifteen billion was going to be the first year of flows with these bitcoin ETFs, and that was pretty strong indications
of what we thought was going to happen. And it looks like we're I mean, we don't know what's going to happen between now and the rest of the year, but it'll be interesting to see what people do with these ethereum ETFs when they ultimately do launch. I'm more inclined to think that I don't know. We view these things as kind of satellite positions in portfolios. People in our minds, we are assuming are not putting significant capital
to work fifty percent of their portfolios. So if they're doing something like three to five percent, like we're hearing from these issuers are getting from their clients, maybe they just add a couple of percentage points onto ethereum. Maybe they sell a little bitcoin and buy ethereum. But we won't know until these things launch, and even then we won't exactly know what people are doing. We can just kind of read the tea leaves and get kind of an inkling of what's going on.
You're pretty good at reading the tds. Okay, So on the beach, I wasn't talking about ethereum ets. We were talking about interest rates whenever wherever. When I look at digital assets or cryptos as a market broadly, you know, there seems to be in the pullback of recent weeks, a concern about rates, but just generally, this sense that we look at the crypto market is a reflection of risk appetite going forward and whatever the FED will, it won't do.
What's your math on that?
Yeah, I mean the way I look at it is one this thing, these assets. There's a lot of underlying belief that people have in these assets, right, but also they are pure momentum. There's a lot of momentum at play behind this. So when we see moves like this, it's pretty standard to see big moves. I was looking at some of the numbers for the twenty seventeen bull market for bitcoin and crypto and the twenty twenty bull
market for crypto. It's very, very very common to see many, many pullbacks of ten percent or more some in most cases. In both cases we saw pullbacks of twenty five to thirty percent or more before we hit those ultimate old time highs. So this is a very volatile market. I think the one thing hitting right now is mount Gox, which was a crypto exchange that went bankrupt in twenty fourteen.
We just got announcements that they're going to start releasing those coins, and I think people are worried about the potential of nine billion worth of bitcoin hitting the markets
and getting sold. I don't think there's a lot of caveats here and there about how much money is actually going to get dumped on the on the market, but I think that's really kind of like we've already in this kind of sideways to downtrend for bitcoin, and now we're getting this news of Mount Cox releasing coins next month potentially, and I think that's just kind of spooking markets here a little bit.
Bloomerg Intelligence analyst James Siefer, it's great to have you on the program, and you've been very busy of late.
We appreciate it.
Okay, coming up on Bloomberg Technology, we're going to be joined by Alexander Yazdi, co founder and CEO of Voodoo, to discuss the company's recent acquisition of the social media platform be Real for five hundred million euros.
A lot of you on be Real, I'm not. We'll just talk about it. This has been big technology.
Leading mobile apps and games publisher Voodoo recently acquired the social media platform be Real in a five hundred million euro deal. With this acquisition, Voodoo hopes to further its diversification into consumer apps, but it also offers be Real a platform for growth. Delighted to say that, Voodoo CEO Alexandriasdi joins me now to discuss and you know, I look at this, I'm so familiar with some of the mobile gaming side of Voodoo. I'm not a B real user.
I know my producer, John Hyland was was a B real user at times. I think Jackie Lopez, who leads our team, also as a user. What was the impetus here? What made you wake up Alexander and think this is the one for us?
Sure? Thanks Ed? Thanks Ed?
Sorry? So yeah?
So be really is amazing. It's the most successful social up created in the best AHOs and they really created the unique behavior that just to share antique content with true friends and also where every single user is posting content and not just a passive consumer, and so unlike other social networks, the users really share their real lives without the fear of being charged and without all the
time consuming effort to craft the perfect facade. And their success really shows the users create for this type of content because they grew until like to forty million users and the majority of them are extremely engaged. So why we acquire with we do is because we think we can push their vision and mission to create authentic connections
to more people everywhere in the world. And Voodoo's mission also and why we exist is to help products and great ideas to have the best possible life and scale by leveraging all the growth technologies and the optimization skills we develop in the past ten years, first as you said, with games, but also then with non gaming ups especifically social ups in the past four years.
It's an interesting expansion to portfolio really quickly. Five hundred million euros in cash. How is the deal structured?
Yeah, so the deally is like structuring cash and shell So there is a portion in cush and a portion in Voodoo shells. And there is a part of the five hundred million which is an upfront consideration, and another part which is based on performance. So it's not like the full five hundred is not just a five hundred up fronts.
The reason I ask is I kind of do the math on Voodoo plus be Real. So you guys have one hundred and fifty million active users monthly across basically the entire portfolio, but with be Real you're like instantly added forty million more. You know, it's an interesting use of capital. But you know you've been talking about how you think you can help be Real scale find growth. They also help you find growth pretty quickly as well.
Yeah, so we don't we don't aim at using be Real or games to do massive cross promotion. You know, we we like to have our apps stand alone, driven by leaders that have full ownership on their products, so we will more leverage or know how our technology and our skills to grow be Real into what it should be, which is like an iconic global social network because the need they answer is really global and it's a daily
universal need to share content with friends. So we will just take this gem and invest all our infrastructure to grow be Really. But it's not like using our games to take their users into be Real or vice versa.
I think we should talk about the social media landscape and the opportunity before you, you know, you'll be aware of what's happening with TikTok in this country, in the United States, particularly when it comes to image or video based content. Right the competition between TikTok, Instagram reels. In Europe,
Snapchat still has a strong presence. But my question for you is whether you feel that there is there is a demand right now for something different, new, and that be Real is kind of reflective of that.
Definitely.
I really think like social media is great, and there is a lot of social media that promotes a part of your life which is the one you want to share, the one which.
Is like crafted, modified, improved.
But also at the same time the users need also to have a social network that makes them able to share like their authentic lives. Right, So it's two different purposes and BE really unseld the second one, which is to share their autentic life without any filter, to there
a small circle of true friends. So until now, no social media actually answered that need and be really really grew so much without any marketing strategies to this forty million months active users because there is a need and there is also a hole in this specific need.
Ala when you think about your strategy to grow be real it's user base and its engagement, where do you think that comes from? I mean, do you specifically say, okay, this is analogous with Snapchat or snap we go after those users, or we think this is analogous with current Facebook users.
What are your target audiences?
So you know, our target adjance is like everyone having a smartphone because as I said before, really like everyone in the on the planet really needs to to have authentic connection with their friends. So that's our target audience today, it's more for the generation Z which are using the product, and that's great because usually the social networks can grow
with with this generation. And I think if we do a good job then I mean, if we do a good job on the product side, meaning adding the right features to conquy again the users who churn and also conkey on new users on Burial, then we can grow to more users in more countries and also targeting maybe people at later ages like forty plus, et cetera, because Burial didn't move that past in adding new features to create newness and life in the product.
So that's our job.
We want to grow be Real by giving the users more opportunities to share authentic content. And if we think that if we do the right job, then people would come back and we would get more users.
Voodoo is Alexander Yazdi. It's great to have you in the program. I know a lot of be Real users watch this show. So if you're a b Real user and you.
Have a thought on Voodoo buying the platform, please reach out to us and Alexander come back on the show soon. A hacking group called Black Suit is believed to be behind the cyber attack on CDK Global. That's paralyzed car sales across the US. That's according to a threat analyst at the security firm recorded Future from All. Let's bring in our technology editor, Bloomberg's Dana Wolman, tell me about black Suit and what we know.
Black Suit is a known group comprised of hackers based in both Russia and other parts of Eastern Europe. And interestingly, they have not named CDK a victim on their website, and that could mean a couple things. It could mean that CDK paid a ransom, which we don't know if they did or not. Or it could mean that there are still an active negotiations with CDK. So worth noting, and you said Bloomberg's source on this was not a black Suit itself, but a security researcher.
I think that Bloomberg reported on Friday that in terms of an extortion fee, CDK was planning to make a payment. That's kind of like the tech side of it, right, it was cdk's platform that was compromised and them that was compromised. One of the things you've been writing about even this morning, right it's been five days or so now, is that this is actually materially really impacting some of the auto and car retailers.
What have you learned?
Yeah, so far, by my account, at least five publicly traded auto dealerships have filed with the SEC warning investors of a possible financial impact, and the wording has varied from one company need to another. Some of them have said, well it's a little essentially said well, it's a little too early to gauge the exact impact. One of them
said it's reasonably likely that the impact was material. The company that so far seems the least affected of the ones that posted filings was Penske, only because it's auto dealership division does not use CDK software.
It does use CDK, but.
In a more specialized business facing division, and of those companies, Penske is the only one whose stock seems to be up since this hack broke on Wednesday.
So never before have many of our audience stopped to think about the software management platform that any given car retailer uses. But we learn quite a lot about CDK. Just explain its place in that industry. Because if you went to try and buy a car this past weekend, which is end of the quarter, you might have struggled.
You and me both ed I had not heard of before this story broke, and I certainly didn't know that one company had a really strong grip on the entire market for dealership software. I don't think anyone has really thought much about the kind of software that dealerships use, but in fact, many tens of thousands. By our account, around fifteen thousand dealerships in the US and Canada use CDK software and they use it for almost everything that
they do. That includes scheduling appointments, tracking repairs on cars, and closing transactions.
Without this software, with the software.
Being down as it has been since this series of attacks, dealerships either aren't serving customers or they're resorting to good old fashioned pen and paper when possible, and it's not even always possible to do things using pen and paper.
Dana, really quick, we have thirty seconds.
But what's the next thing that the tech and auto's teams are watching for in this story?
So aside from looking to see if black Suit takes exact responsibility, we are looking for a couple of things. We would really love to know the exact amount of the ransom. We've reported so far that it's in the tens of millions. Obviously, we're looking for a more specific number than that, and we're waiting for CDK software to go back online, which of course the fifteen thousand dealers are as well. Every day that the software is down, these companies are of course losing money.
Bloomberg's day in a warm and it's been so busy for you and the Auto's team trying to get to the bottom of this story, which will continue to cover.
Thank you so much.
That does it for this edition of Bloomberg Technology Fast starts the week, and there's a lot to recap on the podcast.
You know where to find the pod.
It's on Apple, so on Spotify, it's on iHeart, and it's on all of the Bloomberg platforms. From San Francisco, Happy Monday. This is Bloomberg Technology.