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tv   Bloomberg Technology  Bloomberg  February 1, 2017 5:00pm-6:01pm EST

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democrats skipped a vote to advance oklahoma attorney general scott pruitt's nomination to lead the epa and they did vote the same with a vote for mick mulvaney to have the omb. a panel of the nominees through emergency action. the ok'd steven mnuchin and tom price. the senate has voted to proceed to consider that the devos -- betsy devos' nomination. two republican say they will not vote for her. donald trump's choice for the supreme court met with senators ahead of his confirmation vote. the president announced his nomination last night. george h.w. bush and first lady barbara will handle the coin toss at the super bowl. mr. and mrs. bush were released from the houston methodist hospital.
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global news powered by 2600 journalists and analysts in 120 countries. this is bloomberg. bloomberg technology is next. ♪ caroline: i am caroline hyde, this is bloomberg technology. facebook with another solid quarter in the books. we'll break down the numbers ahead. plus the inside track on ge digital pivot. and ao discusses big data bloomberg exclusive interview. read it's cofounder adds his voice to the courts of criticism and the legality of donald's
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travel ban and ahead. first to our lead. facebook shares surging in after hours. we are at all-time highs if we hold on to these gains up 4.6%. the company reported a jump in sales to $8.8 billion topping estimates. it reported just under 2 billion monthly active users and one point seven 5 billion users accessing the platform on their smart phones. this move solidifies facebook's position in the market for mobile advertising, just behind apple that -- alphabet google. kirkpatrick and thank you for joining us. clouds?re any
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some big silver linings here. >> clouds. i can't really think of any. i'm sure some people would be upset that the numbers aren't better than they are. somenalysts were expecting incredible results and pretty much everything beat it. we have 25% of the worlds population using the platform. i cannot see any clouds there. caroline: on a daily basis, three times the u.s. population. that is phenomenal. the growth drivers here. businesses are getting mobile. million. that is big growth. >> they are doing superbly on
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mobile. when i think of where it there real prospects are going all word it is the truly global nature of their business. if you look at the growth they are saying in asia and the rest of the world, africa and latin america, they are doing surprisingly well. this has always been where i thought their long-term potential was. they make 10 times more fo per user in the united states than asia, yet the opportunity to build those numbers more to parity, they are getting faster user growth and making somewhat more money per user. i was struck. asian revenue was up 59%. that is impressive. the rest of the world, that was up 52%. even though the numbers are small, this is where the opportunity is long-term. needs,e: the potential
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we are hearing the cfo telling me they are not backing away from the view they need to spend aggressively. it seemed to be the headcount, they are ramping up 34% in the fourth quarter and say they are going to accelerate that more in 2017. are they spending wisely? >> i think so. to achieve any kind of haveation, you have to resources to do it. if you have the cash that is where you could spend it. the idea of ad product innovation goes hand in hand with features. you have to give something to the users to keep them engaged. the expectations for a social platform are quite different. then the expectations in the u.s. and the u.k. and the rest of europe. you have to invest smartly and get the best engineers to do it.
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i do think that it is smart. caroline: what about the move to video? video is what mark zuckerberg and sheryl sandberg have been picking up, still mobile instill video. and the wall street journal piece saying they may be developing a tv app. >> that is where they can compensate for this problem that they have acknowledged that they have saturated our newsfeeds with as many ads as we are likely to handle. particularly on mobile. either have to charge more per ad, grow their user base or they have to find other kinds of ads that make more money. video ads can do that. suggesting they have a set top box was interesting. it was a little unclear how it might work. my guess is down the road they would like to have some kind of app that allows you to watch tv and all the ways we watch tv and
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still be on facebook in a fundamental way. they have tried this and it hasn't really worked. if they could make it work they to show usnew ways ads while we're watching tv and they could break in more doubt. caroline: mark zuckerberg saying that he will seek original content deals and he's putting video first. i'm going to find a cloud admits the silver lining. it looks as if facebook did lose out. stolenbuilt upon technology. $500 million. that is a quarter of the price tag. is there a particular concern? >> i don't know. i think it is a concern. it is a court ruling that is going to hit a pocket book. oculus being an engine for innovation, anything that
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questions its source code is going to be of concern. something that will continue to be litigated for a while. the growth we are seeing, i'm sure it is a concern. is it a deal breaker? i can't see it as being that. >> what about the fake news and how zuckerberg himself has been trying to respond to this? orchestrate the way in which he interacts with his own user base? >> it continues to be an issue of concern for the intelligentsia. it is not a concern to the average facebook user. mostly they just want to be entertained and then they are. facebook is taking the issue seriously. you're going to see them take moves to avoid seeming to compound the partisanship that
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is so big a problem and so many societies around the world. they are operating in so many different languages. this problem is global. that easygoing to be for facebook to get a grip on this right away. i think they will over time. is time to look like they overpaid for it. unlike instagram where they got a spectacular deal. he had some pretty embarrassing behavior around politics and his own public statement saying maybe they are regretting a little bit their association with him. they have now brought you go in to take over oculus and i think he will be a great leader for that part of the company. >> great insight. , you are both
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sticking with me. you are coming back later. we will bring you all of the headlines as they cross. stick with us. now another bloomberg scoop. new chip.esigning a that is according to people familiar with the matter. the chips are being used in the latest macbook pro. more on this story later in the hour. it has been called the front page of the internet. we will catch up with the reddit co-founder and why he thinks trump's travel ban is intentionally unconstitutional. next. ♪
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caroline: hewlett-packard is
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wrapping up its m&a with the purchase of a security startup to find security threats. helpeal will bo connect everything from computers to handheld smart devices. hpv is continuing to look to spin off other assets. leaders had a visceral reaction to president trump's travel ban which bans people from prominently muslim countries from entering the u.s.. the band hit a chord. for theand hit a chord reddit co-founder. he took to the social media platform to share his immigration journey calling it deeply un-american and potentially unconstitutional. joining us is the reddit co-founder. we thank you for your time. thank you. i was moved by reading your piece.
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welcoming immigrants has been our countries unfair advantage. >> one of the things i thought obligated to do, we built it to be a home for conversation. families came here and and and ifo of how much they appreciate that here, it is the fact it is a constant rejuvenation of people who really, really appreciate this country in a way that someone here can't fully
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understand because i don't quite know how good i have that. you don't have to look too far to seeing so many founders that are immigrants themselves or children of them. people born out of silicon valley, run by immigrant leaders. what about the response? the comments that you have sparked have been numerous. in terms of a voice on the internet. what about action in terms of activity? we are seeing legal steps and donations going to the aclu. is this tangible enough? >> it is a start. donated our front page and advertising to the aclu yesterday. we are finding more and more opportunities whether it is an civil protests, a very american rights,, donations to groups like the aclu working hard to make change and protect our rights and our constitutional
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rights, and good old-fashioned phone calls. ofe years ago i was part hundreds of thousands of americans who defeated too bad bills, those bills that were considered inevitable. and that was simply because people picked up their phones, called their representatives and said this is bad. this is bad for america and here is why. i think it is quite a take all of these things. platforms like reddit are powerful tools to connect people but at the end of the day it takes individuals to create change. some of that is old-fashioned phone calls. are you optimistic? >> i am very optimistic. i have to be. experiment isreat constantly in motion, constantly in flux. i believe constantly moving forward, we are always trending in the right direction, but i
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believe we are going to get there through more discussion and not less? caroline: how much would it have her read if you could not have immigrant talent? >> we are only 150 strong right now. we had a number of people within the office who themselves are immigrants to this country or who have families who were in so it was clear for everyone involved just how important an issue this was not just to behold a higher the best people in the world to come here and create more jobs but for the spirit of our platform. ourant -- we are proud of monthly active users but we have more growing to do and that's when to come from having the most global platform possible and to do that we need to have voices and opinions that are as global and brought as possible. it is important for our success as a company.
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caroline: we have seen a lot of leaders come out and stand opposed to what donald trump has done with the travel ban. some faster than others. in particular uber has suffered criticism. delete or was trending. it has been hit by rankings on apple app store's. you are a supporter of delete uber. >> i have a -- i have not publicly said anything about it. i don't fully understand the depth of it. it was a decision made during a new york strike to keep running while taxis were not. i really only read one headline about it. i don't have enough to have an intelligent comment. what we as citizens are really starting to appreciate is the effect social media can have on changing perceptions and
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changing actions. significant donation. that happens because citizens take platforms, they speak their voice and make change happen. valley?about silicon pleased theye you have a direct communication with donald trump? make an't know it will impact. it is too early to tell. it is important. thatf the things we saw is the more voices we can have understanding technology in washington the better. involved are not necessarily technologists themselves. have,of this stuff we once you cut through the
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technical jargon, can we be up to the challenge of having the grit to educate and not come from a place of silicon valley snobbery buddy place of wanting the best decisions possible. talking of education, on a day where we have facebook news and the veracity of that is something that reddit has had to tackle. is this something that you are -- your own network is tackling in the right way? is it anymore you would like to see be done? >> we were pretty insulated from the rash of the really explicit often thebecause perpetrators of it were creating this news would try to game or cheat reddit to bolster it on the front page.
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we have tools and place that work to thwart people in gaming the system and that is the nature of the platform. it is about trying to use up votes and down votes to make sure good content bubbles up. our community does a good job curbing the obvious scamming stuff. is where we area are still trying to figure out how to we best address news that is not explicitly fake? not just a random person has built a fake website. thatur news organizations are always presenting the full story. we don't have a good answer for that. on, wend that we are want to give our users the most information. the most ability through other crowdsourcing, the most information possible so they can make the best decision possible.
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this is definitely new territory. what we have seen is that alternate fax was the quote -- alternate facts was the quote. it is going to become more important than ever for the press to have a role in this world because every functioning democracy needs high functioning media. we shall see. caroline: i hope that this news organization can still lower you on to have these debates. thank you. store popped as investors reacted to earnings. could this push them into overboard territory? another check on facebook shares, still higher as the earnings continue to dominate company revenue. david wainer just said that facebook. ranking out mobile usage.
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caroline: tesla started testing self driving cars on california public roads last year according to reports made public wednesday by the state department of motor vehicles. the four vehicles traveled 550 november --ber of october and november of last year. tesla officially dropped the word motors from its name. tesla had shortened its name on the company website in july. acquire the name solar city. apple surged 6% in reaction to its earnings result after the bell tuesday. investors are cheering the record-breaking sales because on iphone.e
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the surge has caused it to cross a key technical level. here you will see the rsi. the relative strength index. if you go below or above the red this is overbought territory. we are the most overbought for march 2012. since check out the price. the highest since july 2015. now checking in on facebook earnings, david wainer telling us that ad revenue growth rate will come down. this is bloomberg. ♪
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[ alarm clock beeping ] weather. ♪ [ laughter ] cartoons. wait for it. [ cat screech ] [ laughter ] ♪ [ screaming ] [ laughter ] make everyday awesome with the power of xfinity x1...
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hi grandma! and the fastest internet. [ girl screaming ] [ laughter ] >> let's start with a check of your purse word news. president trump arrived at the air force base to meet the remains of the chief petty officer. he died sunday during a special
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forces raid in yemen. he was killed in the first counterterrorism operation of administration praised british lawmakers have backed a bill authorizing the start of the eu exit process. agreed to respect voters june 23 decision to leave the bloc. billk wants to have the approved so it can meet in march 31 deadline. candidatesidential francois fillon says he will remain in the race this -- despite for the revelations about his use of public funds. the emerging to factor front runner. it suggests he would be far right candidate marine le pen and a runoff. the u.s. national security advisor said the administration is putting iran on notice after it tested a ballistic missile. israeli prime minister benjamin netanyahu plans to bring new sanctions on iran when he meets this month with president trump. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries.
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this is bloomberg. after 5:30 p.m. wednesday in new york and thursday morning in singapore. david, good morning. david: good morning from singapore. we are looking at a mixed start. singapore. david, good morning. futures in japan, australia. a few points up, would not put too much into it at the moment. back in the saddle this thursday. here is one market and watching closely, head and shoulders above everyone else after the government decided not to take breaks on kinds tax equity investments. it was the best budget data for the markups in mumbai in over 10 years. do we see a day two, it's what we are asking. within the equity space we are
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asking asian carmakers in light of the retails reports in the reportedch double-digit decline by the likes of nissan, honda, hyundai, kia. shares of sony, the company reports earnings after the closing bell in tokyo. we will see what they plan to do with the movie business after taking that $1 billion right down and how they look to avoid that in the future. let's to talk about in asia. "ore from "bloomberg technology next. ♪ >> this is "bloomberg technology ." i'm caroline hyde. jumping inill
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after-hours trade straight get into my terminal, a more than two percentage points. investors bullish on the social network after a report say 51% jump in sales to a $.8 billion. the company user base -- $8.8 billion. continuesy user base to grow. facebook solidified its position as number 2 in the market for mobile advertising behind alphabet's google. how can it continue with momentum into 2017? with us is before us to and the ceo of tech economy and bloomberg contributor. let's start off with the share reaction we are seeing and the phenomenal growth overall we are seeing. one billion users added in one year. one of my colleagues, who rose for gadfly -- writes for gadfly -- >> it is incredibly phenomenal. i see these numbers and it just
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-- it kind of blows my mind. even though i've been following facebook as an analyst for years, i think back to 1999, was in social media before we called it that and we ended with 10 million users and we are really excited. it is like adding a whole twitter in a year. phenomenal. in terms of how you think mark zuckerberg will be reacting, david, i know you know him personally. notably, he's been adding about $3 billion to his wealth of the overall mark. we got a bit of a lean into what he's been saying. one of the key issues is fake news. this is what he said on the call. we just have a technical issue there. we will bring you that. he was basically saying, we are seeing -- they are still trying to tackle fake news. overall, is he going to be optimistic about the company?
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david: are you kidding. he has no choice but to be optimistic. he always has been a product optimist. we've heard so much about his other activities in the last few months, more than we ever really have, the speculation he might run for president, which i don't think it's accurate. his huge move into philanthropy, giving away his money or putting it into a different structure that will allow him to give it away over time. one thing that struck me listening to the results is that i imagine he feels a little more comfortable devoting his attention to those other activities, whatever they may be, now, because sheryl sandberg is such a miraculously good business leader, then the business itself is so solid that even though i'm sure he continues to have as strong opinions as he ever has about product direction and all kinds of ideas about how virtual reality will change everything, he doesn't have to worry about it day today at all.
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it is a juggernaut. having had a rough couple of years, is back in the saddle. clearly making all the great decisions she's always made great it is an astonishing machine. you were right to allow this to hundred $70 million figure. -- rough couple of years, is back in the saddle. clearly making all the great decisions she's always$270 mill. how could a company be adding $270 million --270 million users in one year? companies at the scale, we've never seen anything like it. it is phenomenal numbers, they are mind blowing. what i'd also like to bring is perhaps a copycat that's been going on, and whether this is the right way to go. they could not buy snapchat. they seem to be pulling a few leaves out of their book. we saw instagram rollout stories. to try and tackle
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snapchat as a direct competitor in such a way? >> it's a crazy question because pretty much any other company, i would absolutely say no, i'm not a fan of copycat strategy. it very rarely works. eventually you saturate the market and nobody wins from a user perspective. in this case when you have and you billion users, know a certain kind of feature capturing the hearts and minds of a certain demographic -- sure, right? why not. especially because it gives them some runway. some things will stick and some things won't. it's not going to hurt them. if they can build aespecially bm some runway. future just as good as what anybody else has and see how it works for them, why the heck not? caroline: why the heck not build a snapchat competitor, but will it be able to draw over the millennials?
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facebook may be did not quite have the call factor that snapchat does. it seems like facebook is somewhat diminishing in its appeal to millenials. certainly younger millenials, and the group coming up behind themthem. considering that they made that brilliant move to buy instagram, they have a hedge strategy that is really effective, and they are going to keep those people in their community one way or another. they certainly are worried about snapchat, vis-a-vis instagram, per se, whether it is facebook that is threatened or instagram, it's hard to argue. the good thing for them about snapchat, it is still pretty much a u.s. phenomenon. it does make sense for them to borrowing, and even -- they admitted at instagram that they are copying snapchat. until snapchat really does get traction outside the u.s., since they already have traction elsewhere, they can pull these things out before snapchat can. it is somewhat brutal but
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probably effective strategy. fascinating to talk about their global growth. david kirkpatrick, and melissa parish. wonderful to have such viewpoints. now, general electric has recently been focusing in on analytics straight what can we expect from the industrial company in the near future? the general electric chairman and ceo jeff and melt -- jeff immelt sat down for an exclusive interview in boston. >> wasn't an issue to be in the software business, per se. it was the recognition that our engines have a couple hundred sensors on them and they provide this continuous stream of data. we made the decision we want to model that data on behalf of our totomers and not relegated someone else. that led us back into the chain of adding software talent, building a software platform. our theory is every industrial
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company has to be additional. we want them to leave that kind of path and that's how we have invested. >> do you feel at home? >> i've had to relearn. one of the things when you are running ge, you always have to say why not us. it's kind of like, what's next. let's try. we brought in a lot of people from the industry to help us, but myself -- i've had to kind of learn new ideas. >> how do you deal with that? ge has a famously strong culture. we've had a change. you've got to recruit the talents. you are never going to hope to do that. and then you have to get people who are comfortable with the speed and culture that silicon valley, the way people get paid, the pace which you have to go.
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people have to learn to live in a horizontal and vertical world at the same time, which is hard. but then we also have to bring additional people. if you're in an airplane at 35,000 feet, do you want to the people who make the entrance quit their company every five years? no. you have to bring a bit of the industrial thinking into additional help at the same time. >> the people who make the entrance quit their company what will ge look like in 20 years' time? >> i think we are going to be kind of still having an industrial core. we are going to be a big software player in 20 years' time. i would say -- i don't know that we will be broader as a company, but we will be much deeper. we will go from information all the way through how things get made. i think you will see ge that is broader.aybe not by doing analytics. that to me is more valued content in the industries we
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serve. >> did you say 3-d printing? >> getting back to your global point, about analytics and manufacturing, it democratizes the supply chain. it says you can do in a factory with 400 people it used to take 2000 people to do. we are investing in both of these in a substantial way. >> the idea of a conglomerate. you sit there, you are now i'm much more focused company with perhaps the arguable exception -- that seems more separate than the rest of it. genesis of our medical business comes from the global research center. we basically invented the x-ray tube 100 years ago. all the life science stuff we do comes out of our research centers. we see health care as part of the package.
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i think management is key. you always have to be good at culture and leadership. nothing is general anymore. when i first became ceo we were we mayinsurance, media, jet engines. -- made jet engines. that's too hard today. you have to have this combination of depth and breadth. you have to have managers who are maybe more technical, know domains better. we've had to reshape leadership and culture. >> the old system at ge, going to work at nbc -- shifting around. >> it's much more constrained today. we still want people to be broad, but they also have to be deep. or you can't pick the right ideas. you can't drive the change that is required. caroline: that was the ge chairman and ceo jeff immelt. france has issued an ultimatum
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more or pay drivers risk new legislation that would set a minimum wage equivalent for drivers. the country once an agreement in place as early as next week between the ridesharing company and drivers union, staging protests for better pay. a mediator has been appointed to coordinate discussions. if talks fail, france will recommend legal enema pay for the drivers based on time and distance traveled. looking to apple, shares rose more than 6% in wednesday trading, the biggest gain since july, after posting record sales for the fiscal first quarter. that one day gain to the stocks is equal to $39 billion. to put that in perspective, that value is bigger than the entire market capitalization of companies, including ebay. just shy of yahoo!'s market cap of $42 billion. wow. turninging with apple,
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to a bloomberg school. the company designing a new chip for laptops, stepping into intel's turf. more details ahead. this is bloomberg. ♪
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the chip went into development last year and is said to be similar to the one .lready used in the latest pro- joining us with this school is mark gurman, another great piece of reporting by you, mark. there is a functionality behind this chip. what can it offer? >> thank you for having me.
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it was a great story between me and our chips story. chip does some security in the touch id and payments functionality with touch id. to expand thatng to this new power nap feature, a low-power mode which should save some more battery life on mac laptops. caroline: arm holdings is a technology supplier, designer of the chip. tell us about the inroads it's making on intel's turf. >> intel is a commonplace chip supplier to other laptop and desktop computer makers. they failed in mobile years ago with the transition to mobile chips, which owns samsung and qualcomm. first iphone with its own apple in house chip came out seven years ago with the iphone 4, and the first ipad. so now apple is looking to do a bit more and step on intel's turf some more with its own mac
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components. caroline: what does it allow apple to do? things here.few this is just one step in a long-term exploration of going completely in-house on apple chips. but apple is really known for its integration of hardware and software and making its own component, also, cost savings, but it puts the company on its phone roadmap. moreey want to have a efficient laptop, and now they are finding ways to create these co-processors to speed up security, improve performance of battery components like we put in our report today, and they were doing their own chips. they don't have to worry about intel on that front. caroline:co-processors great scm yourself and ian king. mark gurman, thank you for joining us. now, sequoia capital shaking things up.
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the venture from that back to apple, cisco, and google apple, cisco, and google announced that longtime partner jim ghosts will be stepping back. he is famous for leading the investment in whatsapp, whatsaph was acquired by facebook for $22 million in 2014. he will be passing the baton on to soeonmeone who co-led the venture business since 2007. up next, more takeaways. facebook's latest earnings report. still record highs. this is bloomberg. ♪
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caroline: facebook's earning call continues and the stock is still higher. what is encouraging investors? the 51% jump in sales.
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mobile advertising continuing to drive facebook's growth. the company gained on its number one mobile ad rival, google. for more, i want to bring in our bloomberg intelligence analyst. give us some highlights. maybe the future is really about instagram. 5 million businesses advertising on the service? >> 500,000. caroline: give us a sense of instagram's future potential. >> this is just the start for instagram and video. talking about one billion, roundabout that run rate. the potential here is massive. like the delta we saw between 500,000 versus 4 million. user growth was if the 1% in one year. 51% in that year. daily active users, 400 million? that is a rocksolid number. instagram and video could help them offset some of the -- that
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facebook has for this year, where revenue is expected to slow down. they are expecting 33% earnings growth next year from 51% this year. caroline: quite amazing if you are saying 4 million advertisers on facebook, and they've got 65 million business pages. when you put that, 5 million businesses one million advertising, the growth is clearly there. it's all been about video. when you put that, 5 million businesses on instagram. for only 1/2 of ad
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market in general, nobody has cracked the code on measurement. that's why video is still 10% of what the tv is. when they are able to do that, that's when the masswhen they a, that's when the mass market is going to shift. we don't think that's going to have been near term, but they 2015, fdaring demand was so more -- so much more that they had to spend to meet the demand. now we already saw amazon wants to increase the headcount, and investments continue to grow. the profitability side of the iffy.on is a little it is going to ebb and flow. on the cloud services side of the equation, it should be time. the growth is rock solid. look at microsoft.
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they are pretty much number one right now. they have a run rate of about $10 billion great if you look at the industry, by 2020 it is expected to top $70 billion. the runway is fairly long. cloud solutions should be fine. fine fromde should be a top line. the profitability aspect, that might have some flags to watch out for. great to have your analysis, thank you very much indeed. that's about it for this edition of "bloomberg technology." tune in tomorrow for amazon results. this is bloomberg. ♪
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>> from our studios in new york city, this is "charlie rose." charlie: eli brody is one of the world's most prominent philanthropists. "the new yorker" called him the -- of los angeles. september ofed in a downtown showcase for his contemporary art collection. it is the fourth contemporary art museum he has conceived and brought to fruition. will mark the 10th anniversary of the stem cell research roadrs funded by the foundation. he and his wife have invested nearly $600


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