Transcripts For BLOOMBERG Bloomberg Technology 20170726

10 times more on viagra than transgender care. When the blackid hawk helicopter was shot down, she did not care if the troops sent to rescue her were gay, straight, or transgender. This is bloomberg. Chnology the 2 billionst mark. Meg whitman is stepping down from hp. Could this be part of a bigger move . Plunging . S stock first to our lead. President is expected in a few moments to announce that the taiwanese manufacturing giant plans to open a factory in the United States in wisconsin. The facility will be located in the home state of House Speaker paul ryan. Is expected to employ 3000 people at first and expand. Our bloombergg in reporter who covers the white house. What exactly do we know . That thewhat you said, white house is trying to get as much press for this as they can. They have a big event. And is not something they will just have foxconn announce in a press release. Issues thatof those the president is strongest in, jobs, manufacturing. This is what the administration got here on, so it makes sense for them to talk about it. They started off the day distracting from all of this with these tweets about Transgender Military Service members. He threw in another tweet about his attorney general that distracted the conversation that could have been leading up all day to this foxconn jobs announcement. Emily foxconn is the maker of apple products. We do not know if this factory will assemble any apple products. What could this mean for u. S. China trade relations . Reporter we have been reporting screens. Could be lcd some could involve sharp. It was reported yesterday that there will be three apple manufacturing plants opening here. The could be something to come from apple. 3000 jobsere is that are a significant number. This goes to the president s agenda of what he said he would do, bring jobs back to america. This is a business decision for foxconn. The numbers have to make sense. For other companies, it is clear, and Business Consultants say that this pressure from the president to encourage companies to come to the u. S. Is one of the factors driving them. That political pressure is sometimes the nudge that they need. Emily we will come back to you in a moment when we hear from the president. Facebook turned out faster than expected Quarterly Sales growth, fueled by strengthen mobile video advertising. The social network has over 2 billion monthly active users and is driving revenue faster than other tech giants. Facebook has been investing in original content, with the first chose coming in august. I just got off the phone with their spokesman who explained the strategy. We are seeing a lot of content shift to mobile, and our goal is to be a platform for content providers to find their audience and monetize. Were doing a lot of investing to kickstart the ecosystem. We have a lot of video views on facebook, but not really that kind. We think that kind is important. Over the long run, our goal is to be a content platform. Emily shares are at an alltime high after secondquarter results. Author ofpatrick, the facebook effect. Your first reaction on the top line results . Hohum, just another quarter with 40 Revenue Growth, profits going through the roof, everything doing great on mobile. Execution is their middle name. Fortunately or unfortunately. They have got it down. Emily listen to what Sheryl Sandberg told me that drove this quarters results. We had a strong secondquarter, and that is case on increased engagement, and increased ability to work with marketers so that they can reach their audiences. We are up 17 yearoveryear. That is exciting on a large base. The and revenue is up 40 yearoveryear. We are announcing that we have over 15 million business profiles on instagram. That joins a 70 million business pages we have on facebook. Emily they did not break down it seems revenue, but to be contracting meaningfully to the bottom line. That will bring in 3. 2 billion dollars that is about we are hoping to receive some calls about how some of these other platforms are contributing. What do you make of the fact that facebook is experimenting, yet we do not know how they are contributing overall . Guest i dont think there is any question that instagram is proving to be a commercial success as well as a user success. It is an addictive platform. My 25 eurodollar cannot stop ughter 25 year old da cannot stop using it. Everyone else that i know at that age are incorporating instagram in a deft way. I use it and i am surprised the ads are not offensive. I thought i would not like them, but they almost seem like they belong there more than on facebook. Something about the visuals of instagram is perfect to the moment we are living in. Emily we are getting more headlines from the facebook earnings call. They are talking about artificial intelligence, and how it will be used to flag inappropriate content. Facebook has said they will hire thousands of workers to moderate this content. That technology will be able to do a greater part of this job. How great of an challenge will in termsn the future, of balancing humans and machines . Guest it is a huge challenge, though facebook is investing a lot and doing excellent work in artificial intelligence. We are not at a point where machines do what people do. They are taking the burden off people in key areas. Ai will make that accelerate. Everything in tech is an arms race. Ai will help facebook monitor and manage the content that viewers see. Challenges will grow because the nature of both content from bad actors, as well as weird content by ordinary users will continue to get more complex. The tools needed to combat it will be more complex. These will be an analyst they will chase after perfect success. Facebook has had issues with the content on it. There are interesting questions about how they make the decisions about what should and should not be allowed. It is helpful to have ai but it is not the end in anyway. Emily facebook stories have passed 200 million users a piece. We will continue to watch the headlines. My guest host for the hour, david, you are sticking with me. Meg whitman is officially off hp inks board. What does this signal for Hp Enterprise . This is bloomberg. Emily meg whitman is stepping down from the board of hp ink. The news comes on the heels of our report that whitman is on the short list of candidates to fill ubers vacant ceo spot. They are hoping to name a new ceo by september, and have noted and have shortened it to fewer than six contenders. That is according to a person familiar with the matter. Joining me now is eric, finally has real information. Reporter i could not stomach coming on without some sort of answer. What do we know about meg whitman . Reporter she has long been someone in my mind who was a possible candidate. What do we knowshe has been ad, she is close to ryan graves, their board member and former ceo. Emily she is also an early investor. Reporter right. She has been in the mix. She has the statesmanlike reputation. A lot of the pieces you would imagine. But shet a guarantee, is definitely in the mix, one of five or fewer candidates. The hope for them is to get it together before labor day. Emily david, what do you think of meg whitman . Guest i was just thinking, listening to eric, there is an interesting analogy between what meg whitman did well, which was run ebay, and uber. They are both marketplaces. They are both places where you bring buyers and sellers together. I think it is the kind of company she could run better than she has been able to run hp and hp inc. You might say she is ut shetionally too old, b valley that are in, an sheep veteran, and she brings a lot of the right characteristics to the job. I think she would be a strong candidate at a minimum. Emily valley that are in, an sheep one source is reporg that meg whitman is unlikely to take the job and may not be a top contender. Your reaction . Reporter she is definitely a top contender. Hps statement is that she will be here until the job is done, which is super vague. Rico and i disagree on this one. Cara said she is in the mix. There is a little bit of shade, but well see. Im not saying that she will definitely be the ceo, and these things get some technical, when you are friends with people in the mix. A lot of gains here. Emily us talk about Travis Kalanick getting the getting legal representation. Reporter two attorneys from attorneyformer u. S. Who dealt with what color crime. Obviously, he needs his own counsel now that he is not the ceo of the company. He has different interests, and needs his own advisors. Emily how serious could this impact travis personally . Reporter right now, it is a civil lawsuit. We have no signs that it escalates to it is about uber. Uber is named and he has a big stake in uber. We have to wait and see whether anything else comes of it. Emily the problems facing uber are many. Ceo,lawsuit, lack of a cultural issues. Do you think that ubers culture can be fixed . Guest i think any culture can be fixed. Certainly this one can. May be any culture could not, but if they copy with enormous momentum, with than tet if a company with enormous moment in ournterest enormous a compliment. Accomplishments. You need someone who can rally the troops. That would be hard for anybody. I would imagine that uber is a highly demoralized company. Because the business remains so good, people are willing to keep foraging forging ahead. They are looking for leadership, and a lot of things need to shift. Somebody needs to lead that company with real vision and real leadership capability. Emily what are your employees telling you about what you about what they want . Reporter the reason we have this sixweek timeline is because they are trying to give employees hope in their all hands meeting, that there would be an end point to this lost in the wilderness period. There is hope that they can have leadership. They are trying to be optimistic about this committeerun company, but it needs to have huge ambitions if it will meet its valuation. They had to do Stock Offering changes to keep employees happy. It is a workforce that needs to be reassured. It is a work in progress. Emily lyft, nipping at the heels. We will have another candidate tomorrow. David kirkpatrick, you are sticking with me. Better work ceo, chris duggan, is stepping down from the head of the startup he started. Hes under a lawsuit alleging sexually harassed a former employee. Director will serve in the newly created position of executive chair of the platform. Plans for a book he was said to coauthor with john doerr have been put on hold. We speak with tom leighton and dive into the second earnings report. This is bloomberg. Emily breaking news, lets head straight to the white house. We are waiting for an announcement from President Trump about a new foxconn factory in wisconsin. The growthincrease of big data with artificial intelligence, and a new ecosystem. It is the key for the future. A. K. Will enable new medical solutions. To limit loss in surgery. Anden pain in treatment, gradually reduce the cost of health care. Foxconn and sharp are committed to building in america this most ecosystem. K. Why do it here . Yetas invented in america, america does not have a single lcd fab to produce a complete a. K. System. We are going to change that. [applause] it starts today with this investment in wisconsin. [applause] mr. Walker, i would like to thank you and your leadership teams. You,ld also like to thank mr. Jared kushner, the White House Office of american innovation, for your hard work to make this investment a reality. Speaker ryan, thank you for all your advice and support on capitol hill. Pence. Esident we have a strangers. Facility in your home state. Your support is appreciated. Mr. President , we just met i nside. [laughter] 15 minutes to talking. I met you three times. Each time, you have emphasized the importance of manufacturing in america. In providing high skilled jobs for American Workers. I feel confident to say this is a winwinwin strategy. Mr. President , with you, the Vice President , the speaker, and congressman walker. Byongly supported americans, we are confident that ans will be a great success. [applause] i know that you are committed to grow manufacturing in the United States. Because of you, we are also committed to great jobs for the american people. Mr. President , the eagle flies. Thank you. [applause] first off, thank you to the president for hosting us. You will hear from him in a moment. Mr. Vice president , my good friend, and former colleague, to the speaker, my friend and longtime legislator. For all of you, to terry, and your team, louis and alan, we spent a lot of time with your great team. We are really appreciative. Personally, i want to say, terry give a great speech there, but he us, he and bod embodies a Success Story in terms of hard work, determination, and building the company with a few thousand dollars in 1994, starting out by building the knobs for the black and white tv. Some of you may render. Gallagher, i am thinking of you. Building the atari joystick. I can member that. Remember that. Now, being one of the leaders in the world. We are thrilled to have you here and to have your Success Story part of the american Success Story and coming to the state of wisconsin. Terry, thank you. [applause] walker it is a great day for america, a great day for wisconsin, and a great day for foxconn. [applause] today, we are announcing the single Largest Economic Development project in the history of the state of wisconsin and one of the largest in the history of this country. [applause] this will be the investment from a foreignbased company in u. S. History as measured by jobs. This is literally number one. Thank you, terry. Foxconn, the state of wisconsin will, tomorrow, enter into a memorandum of understanding where foxconn will invest 10 billion, excuse me. [laughter] im glad to see that speaker ryan is keeping track of millions and billions. [laughter] 10 billion. For a minute i thought i was on a tv show. 10 billion which will create 13,000 jobs in the state of wisconsin. [applause] turn, the state of wisconsin, to fulfill that commitment, our partnership with terry and the foxconn team, will invest 3 billion in economic incentives to make that go forward. These 13,000 jobs have an average annual salary of over 53,000 plus benefits. [applause] in addition to the 13,000 jobs directly created by the foxconn investment, the project is expected to create at least 22,000 indirect and induced jobs throughout the state of wisconsin. The foxconn manufacturing campus will be a combination of a variety of buildings totaling 20 million square feet. Think about that. That is three times the size of the u. S. Pentagon, or for packer 11s, that is big enough for lambeau fields inside of that space. [applause] jobs10,000 construction will be needed to build that campus. We will need people from all across the state of wisconsin to help. The firstll be facility in the United States that will build lcd panels for everything from the automotive business, to health care, to entertainment. This is some of the most Exciting Technology in the world. Going forward, i want all of you, but particularly the president , to know that these panels will be made proudly and america, particularly in the state of wisconsin. [applause] willnns new ecosystem transform wisconsin. Terry and i came up with a name. We call it wisconn valley. [applause] conn, with two ns, will the region we will call wisconn valley will be the new global home to cuttingedge technology and innovation. It will help us attract top talent from across the country and the world. Wisconn valley will help us with one more tool to keep our employedraduates. Ithin our borders terry fron to thanking want tonn, and sharp, i thank the president of the United States. As terry alluded to, the president in late april, met with terry emily Wisconsin Governor Scott Walker talking about a new facility that foxconn is opening in wisconsin. We heard from the foxconn chair, terry gao. They plan to invest 20 billion in the United States by 2020 to create 13,000 jobs. David, one thing that we do not know is whether any of these products produced at this plant will be apple products. We know that they will be lcd panels, which may be used in some apple products. Trump has been hard on apple and talked about convincing apple to move manufacturing efforts to the United States. What is your take . Guest i dont know if it has anything to do with apple but it is an impressive announcement. It is an advanced plant. The lcds they are talking about is like building gigantic chips. If the state is investing 3 billion in incentives, the state, local, and federal together, 13,000 jobs, that is 230,000 per job by my rudimentary math, for jobs that he said will pay an average of 53,000 per year. This is great, and it suits the agenda, paul ryans agenda, and governor walkers agenda, but its not cheap. It looks like foxconn is getting a good deal. Emily we are waiting for the president s remarks. We will come back. David, thank you for sticking with me. We will speak with tom leighton in an exclusive earnings report. He will talk to us about jobs. This is bloomberg. Emily the cloud Delivery Platform akamai reporting betterthanexpected secondquarter revenue. They boosted their top line with yearoveryear increase, but forecasts missed estimates. Ceo tom leighton joins us now. How do you explain the slowdown in traffic . Guest the important thing to realize we have lost some share to doityourself efforts, but outside of that, our traffic growth is bigger than the internet as a whole. The important thing to take away from the q2 results are that now, our performance and security business, the majority of our revenue, is very profitable. Growing at 16 yearoveryear. Our security business is almost 500 million. We expect it to be 1 million in the next five years. Emily you mentioned that Revenue Growth is strong while slowing down. Is that just the law of large numbers . Are you past the adapter stage . Guest crowing at the rate we growing at the rate we are is good. We are confident we can make it a 1 billion business. We are just now launching our first two Enterprise Security products. We think they have more runway than the existing web security business. Emily when you think we will see more products contributed to growth . Guest i think next year. They are on a track record that exceeds what we did in the first year with web security products. Emily you see a lot of what is happening with streaming Services Like sling tv, youtube tv, hulu live, etc, can you give us any color on how these services are being adopted . Guest that is a great question. We deliver for a lot of those companies. Video is the majority of traffic on our platform, growing at a good clip. That makes us optimistic about the future of our media business. The question is, how fast will the adoption be . Everybody in the industry thinks thet over a period of years, majority of video watching will be on the internet. Emily what is your take on the takeover of the fcc and the argument about fast lanes or no fast lanes, the big internet giants going up against the at ts and verizons of the world. Guest there has been a shift fr om the big content folks to the big carriers. A lot of rules are going away. In terms of akamai, we are neutral on that. We were not regular did before or now. This is find from our perspective. Emily what does it mean for innovation . Guest i think it will be fined for innovation. This books this puts us back to where we were before. There will be less legal engagement. I think that things will be fun. Emily just hearing out of washington, foxconn announcing they will open a manufacturing plant in wisconsin greeting 13,000 jobs. A big victory for President Trump, who i am hearing is coming up to speak. Lets listen in. [applause] pres. Trump thank you veyry much. I want to thank our great Vice President. Thank you to speaker ryan, we are working closely and getting a lot done. Governor walker has been so tremendous, from the first time that we announced that terry had a small amount of interest going into this country some place. When you give that to governor walker, it is pretty much a done deal. [laughter] ron johnson, senator. He has been so helpful to us on a thing you have not heard much about recently, healthcare. I think we are doing ok, ron. Im hearing good things. Secretary mnuchin, secretary ross. All of the congressman, the great congressman and senators that we have in the audience, thank you very much. Friend,specially to my one of the great businessman anywhere in the world, terry gao. [applause] i would see terry and say, you have to give us a couple of massive these are massive places that you do such great work with. He will be doing that in a state that is close to my heart, wisconsin. We are very happy. Big job producers, anywhere at anytime. It will be fantastic for the people. It a great day for American Workers and manufacturing, and for everyone who believes in the uncept and label made in the sa. [applause] today, i am pleased to announce that foxconn, a world leader in manufacturing for computers, communications, and consumer electronics, one of the Great Companies of the world, will build a stateoftheart manufacturing facility for the production of lcd Panel Products in wisconsin, investing many billions of dollars, right here in america, and creating thousands of jobs, american jobs. Thats what we want. [applause] another big investor in our country, steve wynn. He is raising so much money for our great republican party. Andrea, please stand up. Thank you. Thank you, steve. You have done a great job. Thank you. Foxconn will invest in southeast wisconsin, while a larger facility is constructed over the coming years. That facility is currently under negotiation. It will be about the biggest there is anywhere. The companys initial investment of more than 10 billion will minimum,00 jobs at a with the potential for up to 13,000 jobs in the very near future. Minimumthe construction of this facility represents the concern of lcd electronics, and electronic manufacturing to the United States, the country that we love. That is where we want our jobs. To make such an incredible investment, chairman gou put his faith and confidence in the future of the american economy. If i did not get elected, he would not be spending 10 billion. [laughter] [applause] his Great Company you see what i am seeing, has seen our administrations work to remove jobkilling regulations. He has been watching. To hire american. To pursue the steps necessary to revitalize american industry, including repealing and replacing obamacare, we had better get that done fellas, please. We need that so badly. Cutting taxes, fixing our trade deals, and rebuilding our infrastructure. We will be submitting an infrastructure bill in the not very distant future. We will be submitting a tax bill in the very near future. [applause] when this investment is complete, foxconn has the potential to create more manufacturing jobs than we have seen in many decades. Chairman gou, i thank you for your investment in the american worker. Down. Ever let us terry gou told me that he believes in america. He really believes in america. Entrepreneur,t one of the greatest in the world. He wont say it, but i will. One of the great entrepreneurs of the world. He has a real bond with the administration and americans. Foxconn joins a growing list of Industry Leaders who understand that americas capabilities are limitless, and that americas thatrs are unmatched, and americas most prosperous days are just ahead. We are going to have some very magnificent decades. Thank you forthank you for bein. Emily President Trump taking a victory lap at the white house, talking about the foxconn chair, theirgou, talking about commitment to invest 10 billion in the United States by 2020 to create a manufacturing facility in wisconsin. Initially it will create 3000 jobs, but President Trump making a point to mention this would not have happened had he not been elected. He also mentioned the Embattled Health care bill, thing that needs to be done so badly. I will bring back in tom leighton from akamai. What is your take . Guest anything that brings jobs to the u. S. Is all good. At akamai, we have created several thousand jobs in tech. The majority being in the United States. In tech, one of the issues we have is gender balance and diversity. That is an area where we are making special efforts. We have created something called the occam i technical academy. Akamaiesigned the technical academy. It is designed to provide training for women vets. The hope is they will come to akamai when they are done. So far we have been pleased with that. Emily great to have you back here on the show. We will continue to monitor any headlines from President Trumps remarks, right now at the white house. U. S. Regulators finally weighed in on initial coin offerings. We will talk to the ceo on the type of coin offerings. This is bloomberg. Emily u. S. Regulars now have jurisdiction over digital currency. The sale of Digital Assets must now adhere to federal security laws. I want to bring in Caroline Hyde from london. The pace of future coin offerings, and the growth of assets. Ours bring in the ceo, guest. Brad, you were not surprised. The sec have been eying this up. Guest i do think it is a surprise for anyone paying attention. For decades we have had securities laws developed for the protection of consumers, investors, and also companies. The name itself, an initial coin offering, and ico, sounds like an ipo. I have been fond of saying if it walks like a duck, and talks like a duck, it probably is. Now the sec will regulate it like it is a duck. It is good for the industry. Caroline what does it mean if you are in the u. S. , looking at doing an initial coin offering, what does it mean for the new information that you have to give your Investor Base . Yout what it means is, need to have the same kind of thoughtful process that goes through any securities offering. What was happening you had over 1 billion raised through initial coin offerings. I think youll see that slow because there will be discipline included in that process. Disclosures, transparency, and making sure the investors know what theyre buying, and what they should expect going forward. It is operating in a gray area for awhile. The sec is providing clarity around that. It will be good for the industry at large, and separating what would be at the edge of fraud, to better use cases. Ultimately, Digital Assets have a valuable role to play. The more utility you can derive, the more valuable it will be. In some of these token offerings, it was unclear. Caroline will it tried it off shore . The isle of man has been known as bitcoin island. Could you do offshore offering . Guest sure. People have talked about how you can just avoid u. S. Regulation, but i think governments around the world will recognize it. Governments around the world have protections for companies, consumers, and investors in terms of how securities are offered. They can go offshore and focus on nonbritish, noneuropean investors, but i think that is a shortsighted opportunity. We are focused on, how do we work with regulators, governments, and banks to take advantage of a new asset class, and the technology that can accelerate the engine of commerce globally. Caroline you are working with the bank of england. How are banks adopting this . Are they looking to build their own ecosystem . Their own block chains and areas of growth, or are they adopting ripple and your own xrp . Guest ripple is working with 90 banks around the world. For starters, we are working on a crossborder payment solution. You are in london, if i wanted to send you 10,000, the fastest way to get the money today is to drive to san franciscos International Airport and fly it to you. You can stream video from the space station, but you cannot move your own money. If i were to use the existing infrastructure, it would take me three to five days, and it would be expensive. We think we live in the world of internet, and you expect information on demand. Their is the reason why you should not think about value and money the same way. We talk about the internet of value and how we enable that. Bankers trying to start up their on things. Im sure this will keep growing. That is brad, the ceo of ripple. Emily Caroline Hyde in london. Paypal is rising in late u. S. Trading. The company boosting their adjusted earnings forecast for the whole year. Paypal topped earnings and revenue estimates for the second quarter. President trumps military transgender ban is meeting opposition from several tech leaders. Tim cook tweeted his response this afternoon saying, we are indebted to all who serve. Discrimination against anyone holds everyone back. Rve. Themse other ceos treated their tweeted their disappointment on trumps transgender ban. That does it for bloomberg technology. We are Live Streaming on twitter. Check us out weekdays. Find a clock p. M. In new york, 2 00 p. M. In san francisco. This is bloomberg. From our studios in new york city, this is charlie rose. Charlie we begin this evening with politics. President trump deals with speculations that he will fire jeff sessions. He said he was a disappointed in sessions. News, thepolitical senate voted this afternoon to move forward and begin debate on the Gop Health Care bill after bys president pence v