Jd. Com. All that ahead. Ibm shares are lower after a 13th straight quarter of declining revenue. Sales came in below the estimate at 20. 8 billion. The company did beat on earningspershare. Joining me to break down the numbers, anurag, james, and tim. Anurag, i want to start with you. Its great to see you here in person. It seems like investors are split over ibms future. You have people who are very optimistic and say that if ibm can transition into a mobile cloud social company, things look a lot better. Which side are you on . Anurag they are both accurate in a way. The question is how long should you wait for it to happen. Cloud is a small portion of the revenue for them. Emily what numbers are standing out to you right now . Tim a couple of things. This is a Company Still in transition. If you look at the numbers today where they have a backlog of 122 billion orders, services are up 17 , you could see that they are moving forward, not backward. I have followed ibm from the beginning. It is a company that is struggling. I think that the fundamentals suggest they are making progress. Emily looking at the headline numbers, what is standing out to you . James its interesting. These guys missed on the top line, as you talked about, and they missed in a couple of key areas. They missed on software and in Global Technology services. Those are two areas we think are facing significant business transitions that software is a service. That cements our negative basis. From an earnings perspective, it looks like their tax rating was lower than expected. Emily ibm is making some hard choices as it becomes a new business. I want to talk about watson. This is something that Ginni Rometty is hugely optimistic about. She thinks this is the future of ibm. Is it, really . Anurag you can see all the Artificial Intelligence would be one of the major drivers for technology for years to come. They have a Massive Services business and a very big software business, but the Analytics Business is a very small piece of the pie. Emily what do you think about some of these Strategic Initiatives . James ibm has a lot of resources and very intelligent people. The issue is when will this move the needle. They have some very large legacy businesses. Ginni rometty has said she thinks watson will be a 1 billion business by 2018. Even with their stated goals its not going to be a needle mover. We think ibm can be successful in a lot of these businesses longterm, but we are concerned that the legacy business are whats going to drive the stock over the next couple of years. Emily 13 straight quarters of revenue decline. What are we going to be talking about with ibm a year from now . Anurag a lot of the same things. Emily when are we going to see a major change . Anurag youve got to be patient. Emily is it a fiveyear horizon, 10year horizon . Anurag it could be five years to 10 years before we see it. Emily anurag, james, tim, thank you all. We will continue to follow ibm aggressively. Today in drive, Autonomous Vehicles have a new test track. University of michigan created a course designed to resemble a city and suburbs. The project has stoplights buildings, even mechanized pedestrians. The facility will give the Auto Industry a hub that can be used by anyone researching autonomous cars. Ford, general motors, and toyota have all collaborated on the course. Until now, tests have been conducted on private roads or grounds. Still to come, my exclusive interview with paypal ceo dan schulman. We discussed his plans and whether or not he has heard from carl icahn. Plus, taylor Swift Partners with a chinese ecommerce giant. Emily time for unicorn watch. Jet. Coms valuation may rocket to 3 billion. The ceo is reportedly in talks with investors to raise hundreds of millions of capital by the end of the year on top of the 225 million they already raised in the last year. Now to paypal, the hottest new Single Company in town. The online payments giant started trading on nasdaq today, leaving its ebay days behind. Shares rose nearly 11 today already valued at much more than ebay. I spoke earlier with chief executive dan schulman about his plans for the newly independent company. Dan paypal is the Worlds Largest peertopeer platform. One of our Services Brands is venmo. Venmo is growing by leaps and bounds. Its really the way the millennial generation manages and moves money. Our platform enables people to transfer money seamlessly, easily, very inexpensively. We can partner with any one of a number of different platforms out there to help them. I think in our future, there will be a lot of partnerships with Technology Companies going forward. We have 17,000 people across the world. All we do is focus on Digital Payments. They have platform advantages. We have platform advantages. Potentially bringing those two platforms together in partnership could create a very powerful Value Proposition for consumers. Emily whats it like working with carl icahn . Dan we have shareholders across the world right now, as you can see from our early trading. There is a lot of interest in paypal. I think what we really want to focus on is just creating a Great Company going forward, focus on customers, focus on what customers need. And if we can do that, hopefully we will be a great investment for all shareholders. Emily what about carl specifically . Have you guys talked . Dan we have not talked yet. Ive been out on the roadshow, speaking to different investors, getting their feedback, learning what they expect from us, what Growth Opportunities they have for us. It has been tremendously valuable for both parties. Emily are you worried about potential agitation . Dan im not. Carl and other investors are the same. They want great value to be delivered for investors and for customers. As long as we stay focused on that, thats the right thing to do. Emily a lot of people talk about paypal as an acquisition target now that its separate from ebay. What do you think will happen . Dan we were split apart to create two great companies. Ebay will be a fantastic company. We were set up to really capitalize on the changing chessboard that is going on in Digital Payments right now. And we think we have tremendous opportunity. Our Addressable Market now could be as large as 25 trillion. And focusing in on that and delivering value to customers will deliver value as an independent company to shareholders, and we are very focused on that. Emily so, you see paypal staying as an independent company . Dan i do. Emily i want to bring in two former paypal executives. Now the president of a north America Technology company. And david, an early employee of paypal. Daivd, when carl icahn floated this idea that paypal and ebay should go their separate ways, you said ive been saying this all along. What can paypal do now that it couldnt do joined with ebay . David you are right that this is something ive been saying for years, that paypal should be its own company, free to pursue its own destiny, out of the shadow of ebay. I have been saying it for years. I think carl icahn got on the bandwagon and made it happen because, quite frankly, ebay management fought this tooth and nail. Emily its interesting, there isnt anybody who were early employees on the board. I asked john donahoe, now paypals chairman, no longer ebay ceo, why not. Take a listen to what he had to say. John i built relationships. I reached out to many of that founding generation. Theyve been great counselors max, reid, peter, and others. Ive listened and introduced dan to many of them as well. No one knows what the future will bring, but we have a proud heritage and tradition here. We always Welcome Ideas and feedback. Emily whats your take on that response . David i think its a giant missed opportunity. One of the reasons i was in favor of the spin out was to create a separate paypal board distinct from ebay, you could include this founding dna on the board. Look at the options here. Youve got the paypal mafia. You want to put them on the board not just for what they did at paypal, but what theyve done since. Elon musk, reid hoffman, chad hurley the list just goes on and on of extraordinarily accomplished people who are still very involved in silicon valley. I dont know how you dont ask those people to be on the board, or at least have one of those people on the board, because it is important to have people understand the paypal product. Look who they replaced them with. I was looking at the board members. There was a guy who was ceo of freddie mac during the housing bust. I guess the guy who was ceo of Lehman Brothers wasnt available. It doesnt make sense. Emily whats your take on this, as somebody who worked at paypal . What do you think . Cameron i think its a great move. Competition is heating up. Payments are super hot. Emerging markets are the area of focus for paypal. I think that this move makes them independent and they can move much more nimbly and quickly to counter what some of these other people are doing. Emily what kind of challenges is paypal going to run into in places like brazil and china . Kamran everyone looks at the opportunity in the tens and millions of users. Payments are hard in those countries. In brazil, 50 of people dont even have credit cards. If you look at one of our customers facebook, you print out an invoice and take it into a Convenience Store or bank branch, you pay cash, and thats how youre paying for advertising on facebook. I think it is great they can go after india and china, but its not going to be easy. Emily it was interesting he suggested partnering with facebook. The guy who was running paypal is running Facebook Messenger what do you make of the suggestion they could potentially partner with facebook rather than compete . Kamran payments are hard. Facebooks core business is advertising and or games. They are looking to partner with players. Things keep evolving and moving quickly. It is definitely an interesting space to watch. Emily david, you said paypal could be a 100 billion standalone company. What will it take to get there . Do you still own shares . David i do still own shares. I think the paypal product needs to be updated. There hasnt been a focus on innovation the last 10 to 15 years. The product needs to be updated for all the waves that have happened over that time social, mobile. Those are all areas they need to focus on. They focused on those areas through acquisition. The company has made some good acquisitions with braintree and venmo, but i think they need to innovate internally as well. Emily he talked about they have 6. 6 billion on the balance sheet. They are going to spend it, but he also wants to innovate organically and from within. We will have to see if they do. David sacks and kamran zaki thank you both. Jd. Com is creating a u. S. Mall. It will sell American Products ranging from converse to raybans to ocean spray. It will also be the first retailer to sell authorized taylor swift merchandise in china, including a line designed by swift herself. This as the Company Looks to close the gap the between itself and alibaba. The Parent Company of uniqlo determined that the companys strategy was not in line with their china strategy. Will apple reveal how its watch is selling . What to expect from apples thirdquarter earnings. And Stephen Hawking supporting a 100 million alien hunt. Bernie sanders is the latest political candidate to up his snapchat game. Sanders joins bush and clinton on the act. Emily it is time now for the daily byte, one number that tells a whole lot. Todays number is 100 million. Stephen hawking and yuri milner are backing a 100 million alien hunt, the first of its kind. It is being run through the u. K. s National Academy ofg science. Participants plan to investigate 10 times the amount of sky that has been previously researched through the use of highpowered telescopes. Hawking said, we believe that life arose spontaneously on earth, so in an infinite universe, there must be other occurrences of life. Another story an accounting scandal at toshiba. They must restake profit from the last six years, almost triple the companys earlier estimate. Toshiba overstated its bottom line under pressure from management. The president is scheduled to hold a news briefing tomorrow. The company has lost 3. 6 billion since may 8, when they canceled the yearend dividend. Apples stock is jumping as analysts prepare for the Third Quarter earnings. Shares were up as much as 3 today. Another big question is whether we will learn more about the apple watch. The company has said it will not break out watch sales. Tim cook said he is happy with how the product is selling. We have with us our Bloomberg News reporter tim higgins, who covers apple from san francisco. What do we know about how the watch has been selling . What new details are we going to get . Tim they have been pretty clear they are not going to release Sales Results for the watch. It will be in with other. It will be looked at closely to try to get an indication of how the watch has been doing. Emily frank, why so quiet about sales . It leads one to believe maybe they are not doing that well. Frank i think apple is a conservative company. They dont want to talk about something less than a full quarters worth of sales. They also want time to digest how people are adapting to it, so they can build a storyline. Emily there is a report out of kgi that apple iphone sales are going to fall this quarter. Whats your thought on that . Tim we have seen it suggested that iphone sales are going to rise. Emily this would be a painful sales drop. Whats your take on the sales report . Frank when we look at the big picture, we expect uplift from the iphone 6 to play out over two years. It would be pretty surprising to see a drop in this quarter after two strong quarters. There seems to be pentup demand for a larger screen iphone. It seems unlikely that will happen. Emily what about china . The Smartphone Market is saturating. Other smartphone makers are feeling the pinch, but apple has defied the odds. How is apple keping the momentum going in china . Tim the stock issues in the chinese market, there is concern that will bleed into the middle class buyer. Analysts we talked with think that the previous quarter was pretty strong in china. Continuing signs there has been greater interest. People that had bought cheaper phones in the past are being encouraged to buy these largerscreen iphones. Emily there has been a huge selloff in china. Any indication about how that has impacted apple . Frank you know, no. The reports coming back about the small percentage of the total population in china that is actually involved in the stock market suggest there is not going to be a broad impact unless it impacts the mood. If you are talking about people feeling the hurt from the stock market decline, that seems to be a smaller chunk of the population. Its only if it alters the fundamental mood of the company, and i dont think we are seeing signs of that. It is kind of opaque in china. Its hard to figure out whats happening. Emily frank, tim, we will be all over Apple Earnings tomorrow. That does it for this edition of bloomberg west. Big tech earnings day tomorrow. We will have it all. Mom has always been one of those people who needs to keep busy. 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Nine years ago, Warren Buffett pledged part of his fortune to the bill and Melinda Gates foundation. The Gates Foundation has since become a leader in fighting global issues such as hunger poverty infectious diseases, and education. In 2010, Warren Buffett, bill and Melinda Gates joined forces again. They created the giving pledge. It is a request for the very wealthy to pledge to give away at least 50 of their wealth to