Troy Wolverton

SAN FRANCISCO — <a id="e52d7b8f-c8c6-33e4-a1e7-3eb055819cad" href="https://www.businessinsider.com/category/facebook?utm_source=intl&amp;utm_medium=ingest"> Facebook's </a> head of communications on Wednesday defended the company's decision to go after liberal financier George Soros, saying it was "completely legitimate."

The company's move to publicize Soros' ties to groups critical of Facebook represented an effort at transparency and honesty that's needed in public debate, said Elliot Schrage, the social-networking giant's outgoing vice president of communications and public policy, during a panel discussion at the Atlantic's Free Speech (Un)Limited conference here. Schrage didn't discuss the anti-Semitic overtones of the effort, which echoed longstanding far-right conspiracy theories that Soros is secretly funding a wide range of efforts to undermine American society.

Asked about the company's efforts regarding Soros and what it says about Facebook's commitment to free speech, Schrage answered:

"I think the principle that somebody who is a critic of yours, an investor who criticizes you in a public debate — if they're going to enter the public fray, I don't think it's at all illegitimate ... to transparently communicate about that," he said.

He continued: "I think that's a completely legitimate thing to do."

Schrage noted that he wasn't defending "all of the things that every consultant has done for Facebook," and referered to his previous blog post <a id="d7bf78f7-2c24-3fd1-a48d-cac160bc65db" href="https://newsroom.fb.com/news/2018/11/elliot-schrage-on-definers/"> acknowledging his own "failure" </a> for the scope of Facebook's work with Definers, a Republican-affiliated opposition research firm that oversaw the anti-Soros effort.

Notably, Schrage did not refute the hypotehtical notion, which was also part of the question, that Facebook could go after journalists that are critical of the company.

Already under fire for a series of scandals and fiascos dating back to the 2016 election, Facebook has faced particularly harsh criticism since last month when <a id="13520a36-facf-36f1-a4fe-6cf8df9b569b" href="https://www.nytimes.com/2018/11/14/technology/facebook-data-russia-election-racism.html"> The New York Times reported on its anti-Soros effort </a> . The company has since acknowledged the substance of the report, that it hired a public relations firm named Definers Public Affairs and had it investigate Soros after he harshly criticized the company at the Davos conference earlier this year. Definers later encouraged reporters to write about his connections to anti-Facebook groups.

Read this: <a id="d7b8f111-e467-3d9a-a730-989cf003eb2f" href="https://www.businessinsider.com/facebook-george-soros-critics-nyt-2018-11?utm_source=intl&amp;utm_medium=ingest"> Facebook reportedly had its Republican-linked PR firm try to blame George Soros for the anti-Facebook movement </a>

<h1> Facebook has sent mixed messages on its Soros effort </h1>

Soros' foundation has funded some of the groups involved in the Freedom From Facebook effort. ButSoros, his foundation, and the anti-Facebook groups have denied that he directly funded their efforts against the social networking company.

After the news broke about the effort, company CEO Mark Zuckerberg and Chief Operating Officer Sheryl Sandberg first denied knowing about it, but defended the effort to investigate Soros. Schrage previously apologized for not apparently being aware of the anti-Soros effort, saying he was sorry for letting down his team but not being on top of it.Sandberg, meanwhile, has said the company didn't intend "to play into an anti-Semitic narrative against Mr. Soros."

Despite her initial denial of knowledge about Definers and its efforts, Sandberg <a id="6f09416a-d1ba-355b-abe7-df36bc7e4c5a" href="https://newsroom.fb.com/news/2018/11/elliot-schrage-on-definers/"> has since acknowledged that she was alerted via emails about the company's work with Definers </a> . Meanwhile, in a separate article, The Times reported that <a id="bcc18443-2ad9-31e2-a3bf-4985d3ca943c" href="https://www.nytimes.com/2018/11/29/technology/george-soros-facebook-sheryl-sandberg.html"> she herself ordered Facebook's communications department to investigate Soros' potential financial motivations </a> to attack the company after his Davos speech.

In the wake of the report, many commentators have called on Sandberg and even Zuckerberg to resign or be fired. In response to a question at the conference, Schrage defended Zuckerberg, saying the latter has been "an extraordinary leader." He also reiterated that he, not Zuckerberg or Sandberg, was responsible for the hiring of Definers and the anti-Soros effort.

"My teams were responsible for what happened," he said. "I accept responsibility for what happened."

Facebook quickly cut ties with Definers following the first Times report. Sandberg has tried to reach out to Soros since the Times report, but he hasn't taken her or returned her calls, <a id="7ad11a9a-c0f2-38e9-a72d-71379b66c9da" href="https://www.buzzfeednews.com/article/charliewarzel/facebooks-tensions-zuckerberg-sandberg"> BuzzFeed News reported </a> Wednesday.

Schrage's appearance at the conference followed <a id="1c974255-e681-30d0-a1d1-9c8cf01693e9" href="https://www.businessinsider.com/facebook-documents-six4three-case-published-british-parliament-2018-12?utm_source=intl&amp;utm_medium=ingest"> the release by the British Parliament earlier on Wednesday of documents Facebook attempted to keep secret </a> about how it managed developers' access to its users' data. He wasn't asked and didn't discuss those documents or what they revealed.

<ul><li> Read about Facebook's attack on Soros: </li><li> <a href="https://www.businessinsider.com/scott-galloway-facebook-should-fire-zuckerberg-sandberg-2018-12?utm_source=intl&amp;utm_medium=ingest">Facebook's board needs to get a spine and fire Mark Zuckerberg, marketing guru Scott Galloway said</a> </li><li> <a href="https://www.businessinsider.com/facebook-problems-go-beyond-sheryl-sandberg-2018-11?utm_source=intl&amp;utm_medium=ingest">Sheryl Sandberg is on the hot seat at Facebook — but ousting her alone wouldn't solve its problems</a> </li><li> <a href="https://www.businessinsider.com/congress-should-ban-facebooks-dual-class-stock-structure-2018-11?utm_source=intl&amp;utm_medium=ingest">Facebook's Mark Zuckerberg isn't accountable to anyone, so it's time Congress took away the source of his power</a> </li><li> <a href="https://www.businessinsider.com/facebook-problems-go-beyond-sheryl-sandberg-2018-11?utm_source=intl&amp;utm_medium=ingest"> </a> <a href="https://www.businessinsider.com/facebooks-zuckerberg-should-step-down-after-smearing-soros-2018-11?utm_source=intl&amp;utm_medium=ingest">Heads ought to roll at Facebook over the Soros smear — starting with Zuck's</a> </li></ul>

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SEE ALSO: Mark Zuckerberg once suggested that a Facebook user's data was worth ten cents a year

Facebook's PR head defended its anti-Soros effort, saying it was 'completely legitimate' (FB)

To Mark Zuckerberg, your data may only be worth 10 cents a year.

In 2012, Facebook's CEO suggested that the company charge developers 10 cents a year to access the friend lists and other personal data of its users, according an email message released by the British Parliament on Wednesday as part of a <a id="643700b3-84a4-30d6-acc6-ab54228fe7d6" href="https://www.businessinsider.com/facebook-documents-six4three-case-published-british-parliament-2018-12?utm_source=intl&amp;utm_medium=ingest"> larger cache of internal Facebook documents </a> .

Zuckerberg was discussing ways the company could make money from its so-called platform business, which allowed programmers to use data from the social network and build Facebook features into their apps.

"I've been thinking about [the] platform business model a lot this weekend ... if we make it so [developers] can generate revenue for us in different ways, then it makes it more acceptable for us to charge them quite a bit more for using [the] platform," he said in the email dated October 7, 2012.

Read more : <a id="75a0ca7f-63be-34ff-a2fc-257209db3930" href="https://www.businessinsider.com/mark-zuckerberg-facebook-considered-selling-access-to-data-because-apple-app-restrictions-2018-12?utm_source=intl&amp;utm_medium=ingest"> Facebook considered charging companies for access to user data, according to explosive internal documents — now Mark Zuckerberg says it was because of Apple's restrictions on iPhone apps </a>

A possible model for charging developers, he continued, might be structured so that "login with Facebook is always free. Pushing content to Facebook is always free. Reading anything, including friends, costs a lot of money. Perhaps on the order of $0.10/user each year."

Developers could pay those costs directly to Facebook, he said in the email. Alternatively, they couldcould cover those costs by buying ads on its social network, running ads from Facebook in their apps, using its payment system, or selling items in its store.

"The basic idea is that any other revenue you generate for us earns you a credit towards whatever fees you own us for using plaform," he said in the email. "For most developers this would probably cover cost completely."

The email was part of a trove of documents Parliament seized from app maker Six4Three last month. Parliament member Damian Collins order their seizure and approved their release after Zuckerberg refused on multiple occassions to testify about issues related to the leak of data on millions of Facebook users to Cambridge Analytica and because he thought they were in the public interest.

In a <a id="69bd607f-65c5-30b2-a60e-182dba8f163d" href="https://www.facebook.com/4/posts/10105559172610321/"> statement </a> , issued on Facebook on Wednesday after the publication of the documents, Zuckerberg acknowledged that the company considered charging developers for access to its platform as a way to defray the costs involved in running that service. But he argued that was different than charging them for access to users' data, saying instead that it would have been akin to how developers are charged for using cloud services such as Amazon Web Services. He also <a id="7519aa45-4d5e-303f-aaec-718d9a99518e" href="https://www.businessinsider.com/mark-zuckerberg-facebook-considered-selling-access-to-data-because-apple-app-restrictions-2018-12?utm_source=intl&amp;utm_medium=ingest"> placed part of the blame on Apple for its restrictions on the iOS platform </a> .

"We've never sold anyone's data," he said.

Facebook has been under fire for much of the last two years, and particularly in the last six months since news broke of the Cambridge Analytica data leak.

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Mark Zuckerberg once suggested that a Facebook user's data was worth 10 cents a year (FB)

The internet has reached a major milestone — half of the world's population is now online.

The digital transformation of economies and society continues apace and promises a range of benefits, from better health to reduced inequality to greater access to information, the World Economic Forum said in a new report issued Sunday night. But as the digital era takes hold, policymakers, businesses and citizens are facing some profound anc difficult-to-solve problems, the forum noted in the report.

Internet adoption is slowing, which threatens to leave billions on the wrong side of the digital divide, possibly even permanently, the report warned. With <a id="63ac137e-8f6f-3441-a35b-508c13246122" href="https://www.businessinsider.com/category/cybersecurity?utm_source=intl&amp;utm_medium=ingest"> cyberattacks </a> up and trust in tech companies down, more than half of people around the globe think technology's downsides outweigh its benefits. And both the public and private sectors are struggling to keep up with the pace of digital change and set rules that benefit everyone.

"While recognizing that digital developments fuel many opportunities in political, commercial, and social spheres, a key point of this paper is the need to focus on inclusion and addressing digital divides," said Lynn St. Amour, who helped put together the report as the co-chairperson of the forum's Shaping the Future of Digital Economy and Society committee.

The committee brought together people from governments, corporations, and non-profit organizations around the world who worked together for 18 months to produce the report, entitled "Our Shared Digital Future Building an Inclusive, Trustworthy and Sustainable Digital Society." Among the participants in the working group were World Wide Web creator Tim Berners-Lee, former Vice President Al Gore, and Booking.com CEO Gillian Tans.

Read this: <a id="0f6e61ca-e606-30b4-ad39-93ca0a660880" href="https://www.businessinsider.com/tim-berners-lee-the-web-has-failed-instead-of-served-humanity-2018-7?utm_source=intl&amp;utm_medium=ingest"> 'The web had failed instead of served humanity': Tim Berners-Lee was crushed by Russia using Facebook to meddle in the US election </a>

<h1> Internet adoption has slowed markedly </h1>

Perhaps the biggest problem facing policymakers amid the digital transformation is the slowdown in internet adoption, the report said. Being able to go online is essential to being able to take part in the digital economy and world.

While the number of internet users worldwide grew by 17% in 2007, it's only expected to increase by 5.5% this year, the forum reported, citing data from the International Telecommunications Union. And the 50% adoption rate worldwide masks wide differences in adoption rates around the globe. Only 44% of people in the Asia-Pacific region are online and just 22% in Africa, according to ITU data.

"Digital connectivity is foundational to meaningful social and economic participation of individuals and countries in the 21st century," the forum's working group said in the report. "Unequal access to the internet increasingly means unequal access to opportunities, jobs or ability to deal with unexpected events."

The forum recommended that governments and multilateral organizations invest in widening access to the internet and in removing barriers to adoption.

<h1> Trust is waning in the digital economy </h1>

Another thing holding back the digital transformation are cyberattacks. Some 74% of businesses will be hacked this year and hacking attacks cost the world economy some $400 billion each year, according to the report.

And the problem is worsening. In just the first half of this year, cyberattacks compromised 4.5 billion records, which was up from 2.7 billion in all of last year.

"Digital connectivity plays a pivotal role in unlocking innovation and prosperity around the world," the working group said in the report. But, it continued: "the increasing number of cyber-risks presents a major obstacle to our continued and collective path to progress."

The forum called on governments and businesses to prioritize cybersecurity and to work together to reduce risks.

Amid all the cyberattacks and other problems, confidence in the digital economy is ebbing, according to the report. Just 45% of people around the world think that the benefits of the digital economy outweigh the drawbacks, the forum group said, citing data from marketing firm Dentsu Aegis.

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Half of the world is now officially online, but several thorny new problems now threaten the digital economy

Hi Tim, I've got a simple solution for the problem you seem to be having selling iPhones.

It would also be the right thing to do for your customers and longtime fans. Better yet, it would be smart business.

I know you know this, but things haven't been looking good on the iPhone front lately. Just Tuesday, Bloomberg reported that you have revved up your marketing efforts to try to boost the sales of your latest phones and have started offering more generous-than-usual trade-in terms for older phones.

Those efforts are starting to look more and more desperate. For the first time in recent memory, <a id="a3bd059b-1fd3-340d-aacc-81a93b666ce2" href="https://appleinsider.com/articles/18/12/07/apple-store-app-sends-rare-push-notification-to-promote-new-iphone-models"> Apple reportedly sent a push alert Thursday </a> from your Apple Store app to iPhone customers to advertise the new phones. I got an ad for them Friday in my Twitter feed — one of the first I recall ever seeing.

The latest round of price hikes have felt a lot like you were taking advantage of your brand loyalty to gouge your customers

You've even stooped to advertising the new iPhone XR <a id="c1dd0fe8-1ef2-3d70-a353-a409f004ac84" href="https://www.zdnet.com/article/iphone-xr-from-449-apple-ramps-up-iphone-sales-push/"> at a too-good-to-be true price of $449 </a> — $300 below what you actually charge for it. People have to notice the asterisk beside the number and bother to read the fine print to realize that they have to trade in a recent phone that's in good condition to get that low, low price

But those are only the latest signs that you're struggling to find buyers for your new phones. The Wall Street Journal reported earlier this month <a id="4aa87005-c9c9-3039-a4f3-807f5caa6388" href="https://www.wsj.com/articles/apple-suppliers-suffer-as-it-struggles-to-forecast-iphone-demand-1542618587"> that you've twice cut back on orders for your iPhone XR </a> and also slashed orders on your XS models. Foxconn, your biggest manufacturing partner, <a id="e9a9c2ec-2536-3adf-a161-c2a20a9f8ffd" href="https://www.businessinsider.com/foxconn-cutting-costs-latest-warning-sign-for-apple-2018-11?utm_source=intl&amp;utm_medium=ingest"> is cutting costs and warning of a tough year ahead </a> . And you yourself stoked investor fears when you offered a weaker-than-expected sales forecast for the holiday quarter and <a id="b3ffe4b0-bcbc-3853-a7ae-66f2ef1182e5" href="https://www.businessinsider.com/apple-will-no-longer-report-iphone-sales-unit-numbers-2018-11?utm_source=intl&amp;utm_medium=ingest"> announced that you'd stop your long-standing practice of reporting how many iPhones and other devices you sell </a> .

Read this: <a id="761ad0d8-0ecb-355d-ab71-05cb866a4b1c" href="https://www.businessinsider.com/apple-reassures-investors-about-iphone-sales-after-stopping-disclosure-2018-11?utm_source=intl&amp;utm_medium=ingest"> Apple told investors not to worry about iPhone sales — but now it seems worried about them </a>

<h1> Apples phones are really pricey </h1>

From where I'm sitting, well outside the walls of your gleaming spaceship campus, it's pretty easy to understand why you're having such trouble — <a id="39bc02b9-70ef-3bcb-abc7-ee848e7ed72f" href="https://www.businessinsider.com/apple-iphone-xs-and-xr-mainstream-consumers-2018-9?utm_source=intl&amp;utm_medium=ingest"> your phones are too darn expensive. </a>

The least expensive of your most recent phones — the XR — costs nearly $150 more than that inflation-adjusted figure. And your flagship model, the iPhone XS Max, has a starting price that's almost double it.

Sure, today's phones are leaps-and-bounds better than those first models. They have bigger, higher resolution screens and much faster processors. They have much-improved cameras and built-in facial recognition systems. And they can do things those first phones couldn't, such as shooting movies, making video calls, displaying augmented reality, and running multiple apps at the same time.

But you know what? Lots of other phones offer similar capabilities these days, and <a id="9a9acfbf-a7ee-3b95-a12c-bd5a9b93c757" href="https://www.businessinsider.com/diehard-iphone-ios-user-switches-to-android-oneplus-6t-2018-11?utm_source=intl&amp;utm_medium=ingest"> some really good ones cost hundreds of dollars less than your phones </a> .

<h1> Hiking prices paid off in the short term </h1>

I know. You've made it a personal point of pride to turn Apple into a premium brand. You've been hiking prices on many of your products, not just your iPhones, and putting an emphasis on things that appeal to higher-end consumers like leather cases and watch straps and tie-ins with luxury brands such as Hermes.

And I know <a id="f042cb47-1487-3ad0-a861-8fe3b34d86ac" href="https://www.businessinsider.com/wedbush-daniel-ives-bullish-on-apple-services-business-2018-11?utm_source=intl&amp;utm_medium=ingest"> you're focusing more on your services business these days </a> . In the future, you see selling subscriptions to Apple Music and iCloud and your upcoming video business being as or even more important than selling iPhones and iPads.

And, sure, at least in the short term, your premium price strategy has paid off. Even though you've sold about as many iPhones in the last year as you did the year before, your revenue from them went up 18%. Your profits have soared too — they were up 23% in your last year.

Those healthy profits might take a hit if you step back from your premium strategy. It might also be embarrassing, even galling to some there in Cupertino.

But it would be the right thing to do.

<h1> Higher prices are depressing sales </h1>

Even though you got a big boost from raising prices last year, that's starting to look like a one-trick pony. On average, Wall Street analysts are forecasting that the number of iPhones you sell in your current fiscal year is going to fall 2% and your smartphone revenue is only going to grow 1%, despite your higher prices, according to UBS.

And some analysts think the situation is going to be worse than that. UBS's Apple analyst Timothy Arcuri <a id="2244c58a-7d49-30f9-addf-573b0270ae83" href="https://www.businessinsider.com/apple-iphone-xr-weak-sales-revenue-2018-12?utm_source=intl&amp;utm_medium=ingest"> is predicting your unit sales are going to fall 7% this fiscal year and your iPhone revenue will drop 2% </a> .

It's not a surprise that your prices are becoming a problem, especially as your phones have edged up to $1,000 and beyond. The number of people who can afford to plunk down $1,000 for a phone is fairly small. The number who can afford to do that every 18 months or so is even smaller, especially if you compare it to the number of people who can afford one that costs $750 or $500. All else being equal, it's likely you'd sell a whole lot more phones at those lower prices.

Your prices are a particular problem in developing countries such as India, which is one of the few places around the world where smartphone growth is still strong. By all accounts, <a id="adf5c573-4632-3a3b-a73c-fa61254ba4ea" href="https://www.cultofmac.com/580556/apple-faces-new-challenges-in-india/"> you're having a tough time gaining traction in India </a> , simply because your phones cost too much — an iPhone XS can cost more than half the average Indian's annual income. If you want to compete there, you're going to have to cut your prices or offer lower-cost models.

Maybe you don't care all that much about selling phones in India, what with your new focus on services. But to a large degree, your services <a id="56982f5e-0db9-3f01-a75c-4deb380b60d3" href="https://www.businessinsider.com/nomuras-jeffrey-kvaal-is-skeptical-of-apples-services-business-2018-11?utm_source=intl&amp;utm_medium=ingest"> is linked to the number of iPhones you sell </a> . The fewer phones consumers buy, the fewer warranties you're likely to sell and the less opportunities you'll get to convince people to sign up for your music service or cloud storage.

And, look, you can easily afford to cut prices. Yes, it costs a lot to make your latest phones. But the premium prices you charge for them means, despite that, you're making fat profits off of them.

IHS Markit estimates that all told, the parts needed to make the top-of-the-line iPhone XS Max, for which you charge consumers $1,100, <a id="bc0de38e-fe37-32ff-ab68-bcda8c589a05" href="https://technology.ihs.com/606680/iphone-xs-max-costs-apple-20-more-in-materials-than-last-years-smaller-iphone-x-ihs-markit-teardown-reveals"> cost you just $390 </a> . That of course doesn't include labor or shipping, or the marketing costs required to sell iPhones, but it gives an idea of just how profitable each phone is for you — and how you could still profit from it even if you cut your prices.

Finally, it would be the right thing to do by your customers. You've got some of the most loyal customers in the world. For years, they've already been willing to pay a substantial premium for your products, because they've felt your well-designed and easy-to-use devices were worth the extra cost.

But the latest round of price hikes have felt a lot like you were taking advantage of that loyalty to gouge your customers. I think you're already starting to see the backlash in terms of your disappointing iPhone sales. UBS caught some of it too in its survey; a lower portion of your customers think your products are a good value or high quality. Perhaps more ominously, a lower percentage say they're committed to your brand.

You can fix this. The answer is easy. Just cut your prices. It's really not that hard.

<ul><li> Read more about Apple's recent struggles and strategy: </li><li> <a href="https://www.businessinsider.com/apple-iphone-xr-weak-sales-revenue-2018-12?utm_source=intl&amp;utm_medium=ingest">Apple's iPhone revenue is set to fall this year for just the second time ever</a> </li><li> <a href="https://www.businessinsider.com/microsoft-nadella-is-product-visionary-apple-tim-cook-isnt-2018-11?utm_source=intl&amp;utm_medium=ingest">Microsoft's surprising comeback over Apple is the outcome of two new CEOs with radically different game plans</a> </li><li> <a href="https://www.businessinsider.com/nomuras-jeffrey-kvaal-is-skeptical-of-apples-services-business-2018-11?utm_source=intl&amp;utm_medium=ingest">Apple fans are betting the booming 'services' business will take the sting out of an iPhone slowdown — here's why they might get a painful surprise</a> </li><li> <a href="https://www.businessinsider.com/wedbush-daniel-ives-bullish-on-apple-services-business-2018-11?utm_source=intl&amp;utm_medium=ingest">Investors focused on Apple's disappointing iPhone sales are missing the company's hidden goldmine</a> </li></ul>

<ul><li> <a href="https://www.businessinsider.com/android-phones-apple-iphone-x-design-notch-2018-10?utm_source=intl&amp;utm_medium=ingest">Android phones everywhere are adopting the iPhone's 'notch' design — and it's causing them to miss a golden opportunity</a> </li><li> <a href="https://www.businessinsider.com/apple-iphone-xs-does-not-come-with-fast-charger-included-2018-9?utm_source=intl&amp;utm_medium=ingest">It feels like Apple is being cheap by not including an important accessory with the $1,000 iPhone XS</a> </li><li> <a href="https://www.businessinsider.com/mark-zuckerberg-facebook-considered-selling-access-to-data-because-apple-app-restrictions-2018-12?utm_source=intl&amp;utm_medium=ingest">Facebook considered charging companies for access to user data — now Mark Zuckerberg says it was because of Apple's restrictions on iPhone apps</a> </li></ul>

SEE ALSO: Apple's $1,000 iPhones are turning it into a luxury brand — and it could lose a whole generation of customers

Hey Tim Cook, there's a simple solution to your iPhone sales problem (AAPL)

You could just about buy McDonald's with the amount of value the most widely watched tech stocks shed on Tuesday.

If you include Microsoft's market losses, you could snap up Burger King's owner as well — or a heck of a lot of Big Macs and Whoppers.

On a down day for the markets, the big tech stocks got crushed. Collectively, Facebook, Apple, Amazon, Netflix, and Google parent company Alphabet, lost $141 billion in market value, as their stocks declined 4.5% on average.

Microsoft, which has been vying with Apple for the title of most valuable public company in the world, saw its shares fall 3%, as the company's market capitalization dropped $27 billion.

Read this: <a id="c10fb52d-b855-37f0-a7ab-97af74d8dd0a" href="https://www.businessinsider.com/microsoft-nadella-is-product-visionary-apple-tim-cook-isnt-2018-11?utm_source=intl&amp;utm_medium=ingest"> Microsoft's surprising comeback over Apple is the outcome of two new CEOs with radically different game plans </a>

By comparison, McDonald's has a market value of $143 billion and Restaurant Brands International, the parent company of Burger King, has a market value of $26 billion.

Among the big tech shares, Amazon was the biggest loser. With its stock falling nearly 6% to $1,668.40, the e-commerce giant's market capitalization plunged by $51 billion. That's about the same amount that General Motors is worth in total.

Apple was the next biggest loser, at least in terms of the market value it lost. The iPhone maker saw its capitalization drop by $39 billion thanks to its stock falling 4% to $176.69.

In terms of percentage declines, Netflix was the second to Amazon. Its stock fell 5% to $275.33, resulting in a drop in its valuation of $6.5 billion.

The selloff in shares of the big tech companies has been <a id="abb34d0f-7c1b-3069-af3b-d3c18754056e" href="https://www.businessinsider.com/shares-of-apple-facebook-google-netflix-and-amazon-lost-172-billion-market-value-2018-10?utm_source=intl&amp;utm_medium=ingest"> going on for months now </a> , amid broader concerns about slowing growth and stricter regulations. Although Facebook only saw its shares and market valuation drop by 2% Tuesday, its stock has declined the most from its peak this year of any of its peers. Since hitting their apex in July, Facebook's shares are down nearly 37%.

Netflix is a close second in that category. Its shares are down 35% since they peaked in June.

Tuesday's decline in tech shares extended far beyond the giants, with the tech-heavy Nasdaq Composite index falling 3.8% to 7,158.43.

Intel's shares fell by 5%. Western Digital, Micron, and Nvidia all saw their shares drop by more than 7%. ETrade declined by 8%. And AMD shares fell by a whopping 11%.

<ul><li> Read more about the FAANGs: </li><li> <a href="https://www.businessinsider.com/nomuras-jeffrey-kvaal-is-skeptical-of-apples-services-business-2018-11?utm_source=intl&amp;utm_medium=ingest">Apple fans are betting the booming 'services' business will take the sting out of an iPhone slowdown — here's why they might get a painful surprise</a> </li><li> <a href="https://www.businessinsider.com/baird-colin-sebastian-reports-merkle-ad-data-q4-2018-11?utm_source=intl&amp;utm_medium=ingest">Amazon's ad sales are up 150% in just the last month — and it looks like it will be a happy holiday season for Google and Facebook, too</a> </li><li> <a href="https://www.businessinsider.com/apple-reassures-investors-about-iphone-sales-after-stopping-disclosure-2018-11?utm_source=intl&amp;utm_medium=ingest">Apple told investors not to worry about iPhone sales — but now it seems worried about them</a> </li><li> <a href="https://www.businessinsider.com/wedbush-daniel-ives-bullish-on-apple-services-business-2018-11?utm_source=intl&amp;utm_medium=ingest">Investors focused on Apple's disappointing iPhone sales are missing the company's hidden goldmine</a> </li></ul>

<ul><li> <a href="https://www.businessinsider.com/smartphone-blind-test-apple-iphone-google-pixel-2018-12?utm_source=intl&amp;utm_medium=ingest">A top YouTuber did a ‘blind’ test to find the very best smartphone camera, and the iPhone lost in the first round</a> </li><li> <a href="https://www.businessinsider.com/mary-lou-jepsen-says-openwater-will-disrupt-mris-2018-12?utm_source=intl&amp;utm_medium=ingest">Former Facebook exec Mary Lou Jepsen said her new company will make telepathy possible. But first, it’s going to upend the medical-imaging industry</a> </li><li> <a href="https://www.businessinsider.com/scott-galloway-amazon-will-spin-off-amazon-web-services-ignition-2018-12?utm_source=intl&amp;utm_medium=ingest">The business school prof who predicted Amazon would buy Whole Foods now says an AWS spinoff is inevitable — and the standalone company could be worth $600B</a> </li></ul>

SEE ALSO: One of Wall Street's most accurate tech analysts says these are the 6 companies to bet on while the market gets trashed

The big tech stocks just lost $141 billion in market value. That's enough to buy McDonald's (AAPL, FB, AMZN, NFLX, GOOGL, INTC, MSFT, NVDA, AMD)

Amazon will spin off its cloud business in the near future, unlocking tens of millions — perhaps even hundreds of millions — of dollars in value, marketing guru Scott Galloway said Monday at Business Insider's IGNITION conference.

The move will also help the company placate regulators who are starting to scrutinize its anticompetitive practices, said Galloway, a professor at New York University's Stern School of Business.

After the e-commerce giant spins it off, Amazon Web Services (AWS) "will be one of 10 most valuable companies in the world," he said.

"The question then becomes, what happens to the old [retail-side of] Amazon," Galloway added.

Amazon will decide to split off AWS, because it makes a lot of sense and market forces will dictate it, Galloway said. Cloud computing is one of the most important trends taking place in the technology industry, but there's no simple way for investors to profit off it, he said. The three biggest cloud services — AWS, Microsoft Azure, and Google Cloud — are all part of much bigger companies whose results only partially reflect their cloud businesses.

"There's no pure way to play" the cloud trend, Galloway said.

As the biggest of the bunch, AWS would be a natural to become its own standalone business, he said. And it could be a huge windfall for Amazon shareholders. Depending on how it would be valued and the multiple to earnings that the market would assign to it, AWS by itself could be see a valuation of anywhere from $70 billion to $600 billion, he said.

Read more: <a id="111af5de-1329-30f7-ac68-625e3bfa9e83" href="https://www.businessinsider.com/goldman-sachs-cloud-computing-market-forecast-aws-microsoft-azure-google-cloud-2018-11?utm_source=intl&amp;utm_medium=ingest"> The cloud-computing market is set to double to $116 billion by 2021 — these 3 charts show why that's probably good news only for Amazon, Google, Microsoft, and Alibaba </a>

Better yet for shareholders, the combined value of a retail-focused Amazon and a newly separate AWS would likely exceed Amazon's value, he said.

<h1> Spinoffs are good for shareholders </h1>

That's been the lesson from other spinoffs in the past, he said. Amazon's market capitalization is about $864 billion.

Right now, AWS' value is being held down in part by the fact that the profits it generates subsidize other parts of Amazon's business, he said. The company's international business chronically posts losses on its operations, and its North American business generally posts only narrow operating profits.

But Amazon has another incentive to spin off AWS — regulatory scrutiny. Policymakers around the world have been increasingly focusing on the power and anticompetitive practices of the big tech companies. There are growing calls to weaken those companies and introduce more competition by breaking them up.

Spinning off AWS could allow Amazon to get ahead of the regulators and split the company on its own terms, Galloway suggested. But it likely wouldn't address fully the anticompetitive concerns regarding Amazon. Sen. Elizabeth Warren, D-Massachusetts, and others have taken particular aim at the company's practice of both selling products directly to customers and providing a platform for other retailers to sell products online. Amazon uses data generated from those third-party sales to give its products a leg up on those companies, critics say.

Regulators "are worried about an invasive species called Amazon," Galloway said.

Galloway has a <a id="9d60c407-401c-38b8-ae5b-21b19812b554" href="https://www.businessinsider.com/scott-galloway-amazon-will-be-the-fastest-growing-healthcare-company-2018-12?utm_source=intl&amp;utm_medium=ingest"> track record of successful forecasts concerning Amazon </a> . He <a id="940e1249-dea7-35ea-a4d2-a215fd5bf426" href="https://www.businessinsider.com/amazon-hq2-will-be-new-york-or-dc-scott-galloway-predicts-2018-2?utm_source=intl&amp;utm_medium=ingest"> predicted which cities it would choose for its second headquarters </a> and also that it would buy Whole Foods.

During his talk, Galloway also focused on <a id="a4d55643-053a-394b-a13b-4418c73a7fd9" href="https://www.businessinsider.com/category/facebook?utm_source=intl&amp;utm_medium=ingest"> Facebook </a> , arguing that the company should similarly spin off Instagram, saying it could be worth $100 billion to $470 billion as a standalone company. He also called on the company's board <a id="8ed18a36-4a64-3f07-a303-e4fc339a4190" href="https://www.businessinsider.com/scott-galloway-facebook-should-fire-zuckerberg-sandberg-2018-12?utm_source=intl&amp;utm_medium=ingest"> to fire CEO Mark Zuckerberg and Chief Operating Officer Sheryl Sandberg </a> .

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<ul><li> <a href="https://www.businessinsider.com/scott-galloway-facebook-should-fire-zuckerberg-sandberg-2018-12?utm_source=intl&amp;utm_medium=ingest">Facebook's board needs to get a spine and fire Mark Zuckerberg, marketing guru Scott Galloway said</a> </li><li> <a href="https://www.businessinsider.com/facebook-apple-backing-ap-computer-science-principles-improve-diversity-tech-2018-11?utm_source=intl&amp;utm_medium=ingest">Facebook and Apple are backing a new course that gives kids college credit for learning to code — and it's the fastest-growing AP course ever</a> </li><li> <a href="https://www.businessinsider.com/amazon-under-investigation-by-german-competition-watchdog-2018-11?utm_source=intl&amp;utm_medium=ingest">Europe is closing in on Amazon, as Germany investigates if the firm is abusing its market position</a> </li></ul>

SEE ALSO: Amazon's cloud CEO just pooh-poohed employee concerns about selling its facial-recognition software to ICE and law enforcement

The business school prof who predicted Amazon would buy Whole Foods now says an AWS spinoff is inevitable — and the standalone company could be worth $600B (AMZN)

Facebook <a id="3a437bc4-6eea-3388-a7d9-ba913ed93346" href="https://www.businessinsider.com/category/mark-zuckerberg?utm_source=intl&amp;utm_medium=ingest"> CEO Mark Zuckerberg </a> may have effective control of the company, but its board can and should fire him anyway, marketing expert Scott Galloway said Monday at Business Insider's IGNITION conference in New York.

And the company ought to fire Sheryl Sandberg, its chief operating officer, while it's at it, said Galloway, a professor at New York University's Stern School of Business.

Given all the failures that Zuckerberg and Sandberg have overseen and the threat Facebook poses to democracy and civil society, they ought to be replaced, he said. The only reason the board hasn't replaced Zuckerberg yet is because it's weak and has refused to stand up to him, he said.

"He can and should be fired," Galloway said.

Zuckerberg <a id="47f317be-f5de-3bf1-a5ee-f75f063eb1f9" href="https://www.businessinsider.com/facebooks-dual-class-stock-structure-protects-mark-zuckerberg-2018-3?utm_source=intl&amp;utm_medium=ingest"> holds more than half of the voting power at Facebook </a> , thanks to special shares that give him extra votes. That power means that he can appoint and fire the company's board of directors at will and by himself determine the outcome of any shareholder vote.

Outside observers have said that power makes Zuckerberg untouchable. In his talk, Galloway acknowledged that if Facebook's board fired Zuckerberg as its CEO, he could turn around and force all of the directors to resign.

Read this: <a id="eaddb9b4-febc-3200-afd9-c66ced5db420" href="https://www.businessinsider.com/facebooks-dual-class-stock-structure-protects-mark-zuckerberg-2018-3?utm_source=intl&amp;utm_medium=ingest"> Mark Zuckerberg is acting like a man who can’t be fired — and the unique way his stock is structured could be why </a>

<h1> Zuckerberg wont burn down the castle </h1>

"I don't think [Zuckerberg] would burn down the castle to save it," he said.

Facebook has been reeling from a series of scandals and fiascos over the last two years, including the hijacking of its systems to spread Russian propaganda during the 2016 election; the incitement of genocide against Myanmar's Rohingya minority; the leak of data on tens of millions of Facebook users to the Donald Trump-linked data firm, Cambridge Analytica; and the exposure of tens of millions of other users' personal information in a hacking attack. More recently, the company has come under fire for hiring a public relations firm to conduct opposition research on anti-Facebook groups and to attempt to link them to George Soros, in a move that mirrored longstanding anti-Semitic smears.

Similar to the situation with Zuckerberg, Galloway said there's been too much handwringing over what can and should be done about Sandberg, who has served as his top lieutenant and has overseen many of the functions at the center of the company's fiascos. Sandberg is one of the few high-ranking female executives in the tech industry and became something of a feminist icon with her book, "Lean In." There's concern that attacks on Sandberg are misogynist or, because she's Jewish, anti-Semitic, Galloway said.

But <a id="70a33649-c456-36f9-a33d-3de47f1743c7" href="https://www.businessinsider.com/facebook-problems-go-beyond-sheryl-sandberg-2018-11?utm_source=intl&amp;utm_medium=ingest"> holding Sandberg accountable </a> for the record of failures during her watch would be neither, he said. Instead, it's what's necessary and what should be normal, he said.

"What do we do about Sheryl Sandberg? Fire her," he said.

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SEE ALSO: Facebook's Mark Zuckerberg isn't accountable to anyone, so it's time Congress took away the source of his power

Facebook's board needs to get a spine and fire Mark Zuckerberg, marketing guru Scott Galloway said (FB)

Mary Lou Jepsen has some bold predictions about the impact the technology being developed by her new company, Openwater, will eventually have.

Openwater's new imaging system will upend the medical industry, allowing doctors to detect cancers sooner and monitor them more effectively, she says. It will give access to MRI-quality scans to millions of people around the world who can't afford them now. It will allow new types of medical procedures that will obviate the need for surgery to treat certain conditions.

It will also allow doctors to more effectively and precisely treat brain diseases such as schizophrenia and depression. And it might even allow people to essentially read each other's minds.

"The things we can do with it are pretty profound," Jepsen said at Business Insider's IGNITION conference on Monday.

Jepsen has a long history in the technology industry, mostly working on display and camera technologies. She was part of Facebook's Oculus team; worked on virtual-reality technology for Google; developed the low-powered, sunlight-readable screen in used in the low-cost computer created by One Laptop Per Child; and helped created a holographic video system while a professor at MIT.

Jepsen founded Openwater in 2016. The idea behind the company was to build on the advances the consumer electronics industry has made in recent decades in chips, cameras, and sensors <a id="fd80b5a8-8a3d-3c98-a960-0695f71f5f50" href="https://www.businessinsider.com/facebook-google-portable-mini-mri-see-inside-body-brain-animal-testing-openwater-2018-11?utm_source=intl&amp;utm_medium=ingest"> to create an imaging system comparable to MRI machines but in a more portable form and at a fraction of the cost </a> .

Read this: <a id="41820bd6-438d-3384-a043-807d6b00a96e" href="https://www.businessinsider.com/facebook-google-portable-mini-mri-see-inside-body-brain-animal-testing-openwater-2018-11?utm_source=intl&amp;utm_medium=ingest"> A superstar ex-Facebook and Google exec is trying to upend a $24 billion industry with devices that spot disease sooner — and she's already testing it on animals </a>

<h1> Openwaters system could be cheaper and smaller than MRI machines </h1>

The system the company has developed takes advantage of the ability for infrared light and ultrasonic pulses to penetrate human bodies. It is able to combine the two signals to create a hologram that can then be analyzed by its systems to detect various structures, Jepsen said.

The system already shows the potential of duplicating the resolutions capable by MRI machines and even bettering them, she said. That kind of imaging ability could allow the system to be used to detect blood flow in the brain and tumors and even, potentially, individual neurons. Being able to zero in that close could allow doctors to precisely tell whether the drugs they are administering are effectively treating patients with brain diseases, she said.

But it also could allow a kind of telepathy, Jepsen said. She cited research that's been using a kind of MRI machine that scanned study participants' brains as they were looking at particular kinds of images. Based on that data, computers then attempted to guess what images the participants were looking from just their MRI scans, and were able to do so relatively accurately. Because it has a higher resolution than MRI, Openwater's technology could potentially read users' minds even more accurately, allowing them to transmit their thoughts and feelings electronically, without saying a word, she suggested.

"The bet is ... we're going to get to a lot better resolution soon," she said.

Because the system relies on the kinds of camera, laser, ultrasonic, and logic chips that are mass produced by processor makers, it has the potential to be much cheaper and smaller than existing imaging systems, she said. MRI machines, for example, can cost millions of dollars and rely on huge and heavy magnets. Openwater's system could potentially be worn by patients on a regular basis or used in developing countries that can't afford MRIs or other high-tech imaging systems, she said.

"We can make healthcare better and cheaper," she said. "That's what we're trying to do."

Openwater is one of several companies trying to disrupt the medical imaging industry with lower-cost technology. Another is <a id="6e4534ae-c5ad-31b2-aaec-e8e222843472" href="https://www.businessinsider.com/vayarr-superman-vision-device-can-see-through-objects-2018-5?utm_source=intl&amp;utm_medium=ingest"> Vayyar </a> , which has an imaging system that relies on microwaves that is already being tested for use with detecting breast cancer.

Jepsen's company has yet to demonstrate its system for the public. It also hasn't yet sought approval from the Food and Drug Association for it to be used on humans, Jepsen noted.

But, she noted, it relies on infrared light and ultrasound, both of which have long been used safely with humans. And the company has already started animal trials.

"I think this is inevitable," she said. "It's going happen."

<ul><li> Read more from BI's IGNITION 2018 conference: </li><li> <a href="https://www.businessinsider.com/blavity-aaron-samuels-interview-business-insider-ignition-2018-2018-10?utm_source=intl&amp;utm_medium=ingest">How an LA upstart is redefining the media world by helping African-American millennials 'tell their own story'</a> </li><li> <a href="https://www.businessinsider.com/zipline-ceo-keller-rinaudo-business-insider-ignition-2018-12?utm_source=intl&amp;utm_medium=ingest">Meet the two-year-old Silicon Valley startup that beat Amazon to creating the world's largest fully autonomous drone delivery system</a> </li><li> <a href="https://www.businessinsider.com/match-group-ceo-talks-tinders-impact-on-dating-scene-ignition-2018-2018-12?utm_source=intl&amp;utm_medium=ingest">'People in their 20s really never used dating apps until Tinder:' Match Group CEO talks about the changing dating scene at IGNITION 2018</a> </li><li> <a href="https://www.businessinsider.com/scott-galloway-amazon-will-spin-off-amazon-web-services-ignition-2018-12?utm_source=intl&amp;utm_medium=ingest"> The business school prof who predicted Amazon would buy Whole Foods now says an AWS spinoff is inevitable — and the standalone company could be worth $600B</a> </li></ul>

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SEE ALSO: Facebook's board needs to get a spine and fire Mark Zuckerberg, marketing guru Scott Galloway said

Mary Lou Jepsen, CEO and founder of Openwater, explains her company's new medical imaging technology at Business Insider's IGNITION conference on Monday, December 3, 2018.

Former Facebook exec Mary Lou Jepsen said her new company will make telepathy possible. But first, it’s going to upend the medical-imaging industry (FB, GOOG, GOOGL)

Mark Cuban made a name for himself and made lots of money entertaining people, whether through his ownership of the Dallas Mavericks basketball team or as the host of the show "Shark Tank."

Now the billionaire businessman is hoping to use some of his wealth to help those far less fortunate than him.

Cuban <a href="https://www.businessinsider.com/see-mark-cuban-at-ignition-2018-2018-10?utm_source=intl&amp;utm_medium=ingest" id="35bc3260-37c4-32da-a62d-db6ed8802b32"> is backing a company called Paladin </a> that has designed a system designed to pair up lawyers wanting to fulfill their obligations to do pro-bono work with those who need but can't afford legal services. On Monday, he joined Paladin founders Felicity Conrad and Kristen Sonday at Business Insider's IGNITION conference to explain and tout the new service.

"I'm looking for companies that have an impact," Cuban said. He continued: "What Paladin is doing is important."

The American Bar Association, the professional association for lawyers, recommends that attorneys provide at least 50 hours of work for free each year to non-profit groups or to people unable to afford a lawyer. Many lawyers don't meet that goal. Meanwhile, Paladin estimates that some 86% of the people who need legal services don't get it because they can't afford a lawyer.

Paladin attempts to match up the two sides. It works with law firms, law schools, and corporate legal departments that are looking for pro-bono work for their attorneys and pairs them up with legal-aid organizations that help those in need.

Read this: <a href="https://www.businessinsider.com/see-mark-cuban-at-ignition-2018-2018-10?utm_source=intl&amp;utm_medium=ingest" id="4c7a49d9-36da-382c-a95a-2b9fc15fef27"> IGNITION 2018: Hear from billionaire investor Mark Cuban and 2 cofounders who scored a deal with him </a>

<h1> Paladin may be in the right place at the right time </h1>

The three think they are founded Paladin at just the right time. There have been a growing number of legal-access crises in recent years, most notably those faced by immigrants due to the policies of the Trump administration, they noted. So there's a growing need for legal aid among those who can least afford it, they say.

Mark Cuban speaking at Business Insider's IGNITION conference on December 3, 2018.

"It's going become part of the criteria for selecting a law firm," he said.

That Conrad and Sonday are the founders of Paladin is unusual not just for the tech industry in general, but for the legal technology sector in particular. Even today, women founders represent a small portion of all startup teams andget only a small fraction of the funding of their male counterparts.

But women and people of color are needed for companies in this sector, Sonday argued. Women and people of color are much more likely to be in the group that Paladin is seeking to help than white males. To be able to help them, it needs to have people who can empathize with their plight, she said.

"I think it's really important that the people building these solutions are the ones that are closest to the problem," she said.

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Kristen Sonday, cofounder and chief operating officer of Paladin, talking at Business Insider's IGNITION conference on Monday, December 3, 2018.

The founders of a Mark Cuban-backed startup think they can help lawyers do more good for the world

Floyd Mayweather Jr. and DJ Khaled were two of the most well-known celebrities to jump on the cryptocurrency bandwagon last year.

Now their promotion of particular initial coin offerings has gotten them in trouble.

Mayweather, a former boxing champion, and Khaled, a record producer, will each pay more than $100,000 in fines to settle charges that they illegally promoted an initial coin offering without disclosing that they were paid for it, <a id="bd2af339-8ae9-3fd7-a2b6-ab80929cbf4c" href="https://www.sec.gov/news/press-release/2018-268"> the Securities and Exchange Commission announced </a> Thursday. They also both agreed to forgo promoting any other ICOs or stocks for multiple years, the SEC said.

"These cases highlight the importance of full disclosure to investors," Stephanie Avakian, co-director of the SEC's enforcement division, said in a statement. "With no disclosure about the payments, Mayweather and Khaled's ICO promotions may have appeared to be unbiased, rather than paid endorsements."

Neither Mayweather nor Khaled admitted to or denied the charges.

<h1> They touted an ICO that officials say was a scam </h1>

Mayweather and Khaled were both paid by Centra Tech to to tout its controversial ICO last year, according to the SEC. Centra Tech paid Mayweather $100,000 and Khaled $50,000, the agency said. Both then <a id="1f78f72f-25da-3758-a382-3c2fdf453930" href="https://www.businessinsider.com/two-of-centras-founders-resigned-weeks-after-its-ico-2017-11?utm_source=intl&amp;utm_medium=ingest"> promoted the ICO on their social media accounts to their followers </a> , but neither disclosed that they were being paid to tout it, the SEC said.