Working at full capacity since the 2005 devastation of hurricane katrina. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. I am emma chandra. This is bloomberg. Best of Bloomberg TechnologyBloomberg Technology is next. Emily i have emily chang and this is best of Bloomberg Technology. To runedia won the race it over. Amazons whole foods opens for business by throwing prices on the chopping block. We will discuss what the lower prices mean for the competition. There might be a wall between President Trump and silicon valley, that the administration is going all in on cybersecurity. We will break down the plan to up the ante against hackers and militants in the cyberspace a new c. E. O. Picked in a statement obtained by Bloomberg Technology, barry diller says if he does leave it will be to my great regret but also my blessing. Shares of expedia fell about 4 on the news. Criticaker and outspoken of trump beat out competition from meg whitman and jeff immelt who were both in the running for the final job. Kalanickds travis whose aggressive management style was met with heavy criticism in the last year, eventually getting ousted in june. Joining us for reaction, lane kasselman, former head of medications at uber. And Eric Newcomer who can give us the playbyplay. What happened . It is crazy. We have been talking about meg whitman and jeff immelt. And then it is this dark horse candidate sort of out of nowhere. How did it get there . I think we are trying to figure it out. It is clear the board supported meg whitman and travis camp resisted that and perhaps supported jeff immelt. A lot of the dynamics on the final day we dont understand. Whitman came in saturday . It has been a blur of the weekend. And talked to the board. It was serious. Jeff immelt pulled out after that. Ultimately, we know the board voted unanimously for the new c. E. O. , so some sort of agreement was reached. Hard to know whether this was the result of a long negotiation where no one got their favored candidate or there was more support than we realized for the dark horse. Emily having worked at uber and worked with travis, knowing he was in the room when this was happening, what do you make of the choice . It is an exciting choice for the people that work at cooper uber. It will be challenging for him. The board is loyal to the founders. He has a lot of work to do ahead of him. He has to convince 15,000 employees he has the best interest at heart. That will be tough. Emily you wrote a daunting list of to dos. Recruiting . There is a lot of rate talent at uber but a lot of junior talent. Chiefeed a serious Financial Officer as soon as possible. Probably a head of operations. There are three g. M. s divided around the world. They had reported to jeff jones. Now they report to no one. They probably need a c. O. O. Or head of operations. There is no chief marketing officer. Legal needs to be short up. They need general counsel. Independent board chair. That decision will have to come from the board and the new c. E. O. There are a lot of in seats that he to be filled soon. Emily i have interviewed him a couple times. This is someone we will get to know over the years. Im curious what you think it is an exciting choice. We know his record at expedia. We know he did some big deals including buying orbit. Iacnow he was the c. F. O. At for many years. What do you think he brings to the table . I talked to a lot of former and current employees to get their reactions. It seemed like everybody the company wanted somebody who can help deal with the issues of the past few months. It is pretty clear there was a strong desire for a female leader. But since that did not happen, i think they are happy there is an immigrant leader who can probably best represent the interests of multicultural drivers and employees all over the world and communities in different countries. I think there is a lot of excitement. Emily the problems uber started with, allegations about sexual harassment, disappointment from the community travis was on President Trumps business council. The fact he has been outspoken about President Trump brings a new perspective to the table. He has been super outspoken about trump, probably the most in silicon valley. His most recent tweet was about trump. Emily he talked about the remarks after charlottesville and said trump repeatedly failed the expectations of the office. Uber operates in cities with polarized liberal constituency in drivers and riders. C. E. O. Onoutspoken this issue has proven important. I think that will be useful to them. Emily how do you imagine he will work with travis and what travis involvement might be . It is too early to count him out. I suspect he will stay significantly involved. One of the first things i would do is build an alliance with travis, get rid of the petty bickering on the board level and start focusing on how we will Work Together to make sure the operations of the company are fluid and they understand what is next. Hopefully, a big ipo emily where do you think travis is on this right now . Not unhappy. Maybe happy. I think he would seem to be very worried about meg whitman from everything we have learned. Enemiess like not his candidate right now. I think the key fact is the board did not seem to solve its own problems picking this c. E. O. Benchmark is still suing travis. Can tell, there has not been a grand negotiation. It seemed whitman had these sorts of requests. With him we get a new c. E. O. But Everything Else remains unsolved in travis relationship is yet to be defined. Does he have a title or is he just a board member . Filed foray, travis it to be moved into arbitration. , weve gotten at least one endpoint. We will see what happens tomorrow. Lane kasselman, thank you for joining us. Hurricane harvey has been downgraded to a Tropical Storm. It has drifted back into the gulf of mexico and is poised to regain strength before crashing into the texaslouisiana border. Some tech firms are stepping up rescue and relief efforts. Amazon and whole foods announced they will match donations made crosse website to the red and said more will come. Coming up, whole foods may not be whole paycheck anymore. We were bring you the changes amazon is bringing to the grocery chain next. Bloomberg technology is Live Streaming on twitter. Check us out. This is bloomberg. Emily a story we are watching. Billionis investing 7 in memory chips. The investment will go to one plant. The memory chip business has become more profitable in apple in the most recent quarter. The announcement comes days after the Court Sentenced jay y. Lee to five years in prison for his role in a bribery scandal. Amazon is spinning its first day as the owner of whole foods cutting prices by as much as 43 . March found items can be seen with orange signs with the old and new prices listed. The amazon echo is also foranged though on sale 99. 99. Joining us from new york, jason mak and olivia zaleski, who went to whole foods this morning checking out prices. What did you see . Lots of price cuts. We saw them on bananas, lean beef, Peanut Butter was a big one. Emily avocados . They were down about 1. My favorite, organic rotisserie chicken, was down about 5. A huge price cut. Emily was a crowded . It was really crowded. I talked to people who said they held off to go monday to get big savings. Emily interesting you would see amazon echos in the stores. Do you think people will be buying these while they are Grocery Shopping . Buying the echos . Possibly. I think the echo was the First Successful entry into the living room. We are seeing a try to be copied by apple and google. Not as successful as the echo. When you think about the transaction for amazon, i think this is another point to underscore the deflationary impact from amazon across all of retail. As you increase touch points with the customer, especially as it relates to grocery, i think the opportunity is not just limited to grocery but think Bigger Picture into restaurants and all the way down the supply chain i think you will feel the effects. A big win for amazon to get this deal approved. Emily was in the grocery business, how do you see competitors responding . I dont think you can. The problem is the Business Models are so different. Amazon has the opportunity to operate at a target 0 margin. They are able to do that because of the fact the business is subsidized through the cash flow proceeds from aws. There is no grocer that has that luxury and no retailer that has that luxury. That is why you continue to see deflationary impact from amazon. Groceryook longerterm, is a massive step toward capturing an even greater part of the broader economy. Emily olivia, what is next . I think we can see next what james is pointing out, reader touch points greater touch points. Amazon wants to be the retailer for everything. I spoke to people in the store today who said the traditionally buy toilet paper at costco or target. They said now they would probably consider doing it all through amazon whole foods because it is easier to have it in one place. Especially if they are a prime member, they can get savings through the prime membership. Emily james, the other question with the price cuts, they are great, but how along long can they last . Indefinitely. Trades on the theoretical margin the company could get to should it back and exercise pricing power. That is not in the companys d. N. A. You asked about the next opportunities. I think it is not limited to grocery. You have to think about the other areas they are looking into. There is the pharmaceutical element they could explore. You have media. They are going to become the single largest investor in netflix,content after surpassing netflix in the near future, capturing advertising dollars. Theres every opportunity they are pursuing at half a chilly dollars or more. The fact the government approved this without blinking, i think you cannot stop this train. Emily do you think amazon will try to significantly expand the number of whole foods stores . I dont think you need to. You have about 500 locations around the most important markets around the country, the most affluent markets. You do expand on the Distribution Capabilities and leverage your logistical networks and use whole foods as a commissary to encroach on restaurants with prepared foods. As far as the blueprint of whole foods footprint of whole foods, i think theres a lot of existing opportunity they can leverage. Emily thanks so much. Im going to check it out for myself. Coming up, google and facebook continue to dominate global ad dollars. Has the space hit its peak . We will explore next. This is bloomberg. Emily we have breaking news coming from the japanese government saying a missile from north korea appears to have flown over japan. This coming from the japanese koreanent, that a north missile appears to have flown over japan. We have seen the war of words escalating between President Trump and the north korean regime. We are getting headlines in and will bring you more information as we have them. Now to another story we are watching. Facebook will block at pages from sites that repeatedly share fox news. They will not be allowed that share false news. They will not be allowed to advertise on the platform. To further dig into the global ad space, james is still with us. You make the assertion the global ad market may have. Peaked. What makes you think so . Globally, and it has always hovered around 1 to do t 2 of gdp. Toward seeing a trend the lower end in terms of contributions to the broader economy because at dollars are going further so you are smarter and spending less. Tohink the bigger phenomenon continue on the previous discussion on amazon is you are seeing the eradication of brands and brand affinity in the market. Saw consumer, you packaged Goods Companies with sales shortfalls leading to massive reductions in advertising spend. If you have a company like amazon pushing commodities down and making decisions about function and price over the brand, i think you could wipe out an entire portion of the brand Advertising Market that exists today. We may be in a situation where the growth of amazon and targeting capabilities may lead shrinking ad spend as we look forward. Emily facebook and google are the giants in the room. Do they only get stronger even if the pie shrinks . Yes. google it is facebook and everybody else. I think you will have diminishing relevancy of other media channels, all the traditional ones. Look at Television Time spent increased last year but advertising fell. You had advertising dollars fall across every channel. Television, print. The only space growing is mobile. The companies that command mobile are google and facebook. The mixture of the following traditional assets along with internet is not enough to be made up by the growth in mobile. Emily what does that mean for everybody else trying to take a bigger slice of the market whether it is snapchat were twitter or twitter . The interesting thing about snapchat is i thought they had ulse on what it meant to have successful mobile content. What they were hitting on with discover i thought was excellent. They were securing deals to capitalize on that with premium content providers. If they are able to execute on that, they can serve as a thirdparty alternative. They have not been showing us they are able to do that yet, which is why it is somewhat disappointing. I think the Facebook Google duopoly is hard to shake. But the market does want an alternative. Atm rooting for snapchat, least on a personal level, to succeed. Also a giant is potentially in this fight. What is amazon doing that could change the game when it comes to Online Advertising . It is interesting because they are one of the top 10 advertisers in the market. Their potentially shrinking the market but also a big contributor. The way i think about it is when you have all of these retailers suffering in the offline world, youre going to want to be able to go to where the attention is. The attention is increasingly shifting toward amazon. If the attention is there, i have to find a way to differentiate my product on amazon. That is where the advertising dollars open up. I think a lot of the dollars being spent everywhere else aside from facebook and google can be captured by amazon. I think what has been a twohorserace can quickly become a threehorse one. Emily if the pie is getting smaller, how much smaller does it get . Theoretically, i think it can fall by one third. That is assuming all brands are eradicated. I dont see that happening. You could see a 10 or 20 reduction conceivably in overall ad spend. I think marketing departments will face stricter parameters of operation because it is known to be about longterm campaigns. Increasingly, it will be about shortterm results. Shortterm thinking can reduce dollars. And of course, the fact that if you are no longer trying to pitch the energizer bunny versus amazon batteries that will have an effect as well. The consumer packaged goods industry is the largest spender in the market and has fallen. Emily we will be watching. Thank you for stopping by. We are continuing to monitor the breaking news out of asia. Prime minister shinzo abe reporting about the missile that has appeared to have been fired from north korea over japan. We are getting headlines from the japanese government and from the south korean government. We will bring you more news after this quick break. Mark i am Mark Crumpton in new york. You are watching waz Bloomberg Technology. North korea has reportedly fired an apparent missile in the direction of northern japan according to the japanese government and multiple local news agencies. It is unclear what kind of missile was launched by pyongyang. We will have more on this as it develops. During a joint press conference with the visiting finnish president , President Trump discussed Recovery Efforts in hurricaneravaged parts of texas and louisiana. Harvey is the first major Natural Disaster of mr. Trumps presidency. Mysident Trump Administration is coordinating closely with state and local authorities in texas and louisiana to save lives. We thank our First Responders and all of those involved in their efforts. President trump the first lady are scheduled to visit texas on tuesday. Reportsciated press more than 1000 people have died from a mudslide and fliood that hit the capital two weeks ago. They kicked up a third round of negotiations in brussels with the chief negotiator warning the may Administration Needs to be more forthcoming about where it stands on the terms of the separation. Almost five months of discussion have made little headway. The u. K. Released a batch of position papers last week to outline its position. I am Mark Crumpton. This is bloomberg. It is just after 5 30 in new york. In sydney. Y morning david, good morning. Good morning. Traders in asia already looking to digest breaking news out of the region and looking at the potential impacts from what we thehearing out of japan on news north korea appears to have fired a missile toward that country. Thingsuld exacerbate that traders are already looking too. Gold has had a big upward move overnight on the news out of the u. S. On Tropical Storm harvey. They are looking for gold to potentially breakthrough the 1350 barrier. We should see haven demand as a result of the news. N was something traders were looking for. Gety we are continuing to breaking News Headlines out of japan. These headlines coming from the japanese government and south korean government. We are seeing the japanese government saying multiple missiles appear to have be