And cnn reports President Trump wanted to know where special counsel russia investigation was headed and asked if Deputy AttorneyRod Rosenstein was, quote, on my team. The top doj official in the russia investigation has sought trumps support in fighting off document demands. And the moon puts on a rare cosmic show today, a red blue moon, super big and superbright. The first time in 15 years a blue moon has synced up with a supermoon and a total lunar eclipse. Global news, 24 hours a day, powered by more than 2700 journalists and analysts. This is bloomberg. Emily im emily chang. This is bloomberg technology. Coming up, facebook, hit and miss. Our look at fourthquarter earnings for the social media giant and the most concerning metric for wall street. Plus, microsoft earnings also on cap. On tap. How microsofts push into the blockchain and the cloud added to its bottom line this quarter. The court battle between uber and waymo. We will get coverage as Travis Kalanick and larry page get ready to testified. First, to our lead. Facebook reports its fourthquarter earnings results. Here are the highlights. Revenue coming in at nearly 13 billion, beating the highest estimates from analysts. Monthly active users totaling 2. 13 billion, while daily active users came in at 1. 4 billion, slightly below forecast. That is one of the most important metrics that wall street cares about. Facebook stock extended losses in afterhours trading, down 4 at the moment. For more reaction lets bring in , david kirkpatrick, ceo of techonomy, who knows all about facebook, having written the facebook effect, and jitendra waral. Analyst at Bloomberg Intelligence with me in the two studios. One of the most surprising numbers is that daily active users in the u. S. Actually declined for the First Time Ever. Jitendra yes. That raises the question about the changes they are making to the platform. It could be a temporary shift, if you may, to these metrics. But instagram and ad pricing still are big offsets for them this year. More commentary on the call will be focused on what those changes mean to the trajectory of the decline we are seeing here. Emily meantime, David Zuckerberg saying the changes , they are making on facebook are decreasing User Engagement. How, you know, do you look at these results . David i wouldnt put too much importance on the drop in daily active users globally. Or the decline the miss, i should say. What jitendra mentions about an actual decline in the u. S. Is interesting and could be a response to facebooks manipulation of the way the newsfeed works. I want to point to something in the release that really makes me wonder how the world ought to respond to this notion of them making these changes to try to make us all do better. It is a very manipulative attitude. Listen to what he says. He said weve made the decision to show fewer viral videos to make sure peoples time as well spent, and we reduced time spent on facebook by roughly 50 million hours every day. Thats global. Really doesnt that sound a , little bit like geppetto with the strings of pinocchio or something . Oh, we are going to show you fewer viral videos because we know whats good for you. I think they are on very thin ice with the way they are handling these problems, and its very hard to know what really should be done, but im not sure that just telling us to watch fewer viral videos is the answer. Emily facebook Earnings Call has started. The cfo speaking on that call. You can watch the live headlines as they happen on our blog on the terminal. Tliv. Jitendra, is this facebook is swinging in the opposite direction, trying to do better for its users. Jitendra on the platform come i believe so. Having said that, they do have instagram up their sleeve. That platform is headed towards one billion people. Right now, its just in the beginning phase of monetization, and it could be much more material in terms of revenue contribution longterm. I think ad pricing offsets and instagram will be core points. As far as changes are concerned, if they are able to show that this trajectory of daily active users is just temporary, but amount of time eventually improves i think the r. O. I. Will show up. Emily do you think they will have to make these hard choices on instagram as well . David its interesting that instagram hasnt been hit with the same kind of concerns as facebooks core platform, even as instagram is clearly getting more and more advertising revenue. You know i just want to point , out that, despite all the political and social challenges that facebook faces, though, the financials of this quarter are spectacular. You know they have the highest , operating margin they may have ever had. Their profits their revenue went up just about 50 , but their costs only went up 30 . Thats like on a 12 billion per quarter revenue runway. I mean this is a profit machine , that has a lot of money to experiment with these many problems that they need to solve. Emily i also want to point out another number. There is increased headcount, 47 yearoveryear. They now have 25,000 employees. We know they have been hiring people to combat things like fake news, to combat things like offensive and disturbing content. What do you make, jitendra, of the sheer scale at which the Employee Base is growing to respond to some of these concerns . Jitendra they have a lot of unmonetized properties as well. You have messenger, whatsapp. On top of that, i dont know if hiring people is directly correlated to the actual impact of that, in terms of reduced fake news and better Quality Content and things like that, but at least they are making the effort. I feel this year based on what Mark Zuckerberg has said, that number might be even bigger. Emily zuckerberg speaking on the call right now. You can see what he is saying. Reiterating the importance of personal connections and how actively consuming public content takes away from the time people spend connecting with each other. So, there you go again. David, to some extent, sort of moralizing the way we use facebook. Going strong there. David moralizing is an interesting word. Clearly, the world wants facebook to have less of a toxic effect on society. I would argue, on balance, facebook still has a phenomenally beneficial effect on society, but there are some very toxic components that we have been hearing about, whether it is addiction, political manipulation. Its interesting to ask yourself whether the world wants these people with very little transparency to be the ones kind of telling us whats good for us. I think it is a very slippery slope. I think they could get some pushback for that itself. It just underscores what a challenging position they are in as they try to make us stop thinking that they are doing us harm. Emily Mark Zuckerberg also saying that facebook will focus on videos that encourage meaningful social interaction. That decreased time spent on facebook by roughly 50 million hours per day. They dont normally share exactly how many hours are spent on facebook. Ok lots to digest here. , david kirkpatrick, ceo of the chonomy thank you , very much. Jitendra waral, we will continue to go through these numbers. We will bring you all the updates throughout the hour. Bloomberg subscribers, just go to tliv top live blog, being updated by the Bloomberg News team by the second. Staying on earnings, paypal is sinking afterhours, issuing a forecast that fell short of expectations, signaling struggles ahead. Paypal is looking to compete with banks and startups in the transaction market, but growth of its venmo service slowed. Coming up, we are staying on earnings. Continued growth in Cloud Services helped fuel microsoft results. We will break down the numbers, next. And bloomberg tech is livestreaming on twitter, technology, 5 00 p. M. In new york. 2 00 p. M. In san francisco. This is bloomberg. Emily lets continue our coverage of tech earnings. Microsoft topping analyst estimates for Second Quarter revenue. Tax charge caused the company to report a loss. Cory johnson joined us from new york with more. Microsoft getting a boost from azure, but there is this tax issue. What are your takeaways . Cory a little confusing. I think we will see this with a lot of companies as they figure out what the new taxes mean for them and repatriation issues. Which is tricky. The companies that are starting to hide stuff will use nongap numbers to sweep stuff under the rug. The good companies, including microsoft, they have always been exemplary in the way they report earnings, as far as i can remember, indeed very , conservative over their history. Their nongap numbers are spectacular. And the Revenue Growth we see from this company, really fantastic. The big takeaway here, to me, is accelerating growth in their Cloud Business. The Cloud Business is growing at about 96 , now growing at 97 , 98 . Its going to grow even faster. Thats what we saw from the results. Satya nadella has done a seemingly impossible job of turning the battleship, changing the culture. And not too long ago, we were talking about was microsoft what was microsoft going to be . Microsoft 10 years from now. Now we are seeing a company doing terrific under his leadership, doing things that Steve Ballmer couldnt get on. Emily the cloud was nadellas baby in earlier days. Do you think microsoft is on a path where they could seriously rival aws in the cloud, even as the cloud itself is expanding . Cory it is the number two player, nowhere near competing in terms of size. I think what we might see, and it will be curious we will get these questions on the call, what kind of customers are going to the microsoft cloud . Amazon has been strategic in the way they talk about who is using the cloud to say, hey, we are not just the startups in silicon valley, not just the hipmunks of the world. We not just these little startups in silicon valley. We are Big Companies like the cia, netflix. We are competitors like netflix. Even ibm, using the amazon cloud, in addition to having their own cloud. We will see what microsoft will tell us about their own customers. One might expect the fortune 500 customers who are already buying from microsoft and buying microsoft to distribute it on the cloud would be the azure customers. We will see what they say about that on the call. Emily qualcomm, disappointing revenue and profit forecast. How much of this has to do with slowing smartphone growth in general and a decline in the use of qualcomms chips in favor of other alternatives . Cory i think the big question for qualcomm isnt just the headline of slower smartphone growth. Are they getting paid by users of their technology . China was not going to pay. They struck a deal with samsung. Again, the devil is in the details here. We will find out if qualcomms customers are paying them for these chips. They have got a lock on a lot of the ways that the cell phones work, smartphones work, but slowing growth in that area will be a headwind for them. Getting customers to pay is the bigger problem. Emily this is perhaps the last chance they had to show shareholders that come should remain independent as broadcom tries to take this company over. How well are they making that case . Cory they are not making the case strongly, but it will be difficult for broadcom to pull this off and convince shareholders and regulators that we need fewer Chip Companies out there. Companies, when they go it alone, tend to do a better job when they are in a conglomerate. We will see what they can put up. These results are not the we are doing great all by ourselves, we dont need your help. Investors will want to see if these guys can do a better job. Emily cory johnson, thanks so much. You will be coming back later in the hour to break down these tech Earnings Calls. Sheryl sandberg, coo of facebook, just starting to speak on their call. Kroger is striking back at amazon. The largest pressure chain in the United States is expanding its socalled scanbaggo technology to 400 stores. This allows customers to use a handheld scanner to log items. Coming up, creating a workplace free from constant notifications and popups. Our next guest is trying to make that a reality. This is bloomberg. Emily square is getting in on the bitcoin bandwagon. The company is introducing Bitcoin Trading for almost all users of its cash payment app. The service will be available to most customers of square cash, which lets users transfer money to friends and family. Transactions happen within seconds. It wont add a percentage or a fixeddollar amount on to the sale of bitcoin. Notifications are everywhere today. Facebook likes, emails in your inbox, chat updates, and more, an almost neverending stream. Asana is trying to make sure employees dont have to face the barrage. The cofounder of facebook with youthe cofounder of facebook with zuckerberg and rosenstein, who helped create facebook famous like button. Justin rosenstein, welcome to the show. Is Company Security 75 million round of funding, which puts asanas valuation is at 900 million. Great to have you back on the show. Justin think is a much. Emily so, what is this money going towards . Justin one, being able to grow internationally. We have a huge footprint internationally. 192 countries have Customers Using asana. We want to enable more teams to Work Together. More Enterprise Growth and expansion across verticals. Emily what sets you apart from the other Workplace Collaboration apps, slack, facebook, microsoft, the giants trying to get into this space . Justin Companies Need three pieces of software to be able to collaborate effectively, messaging, things like slack, files, like google drive and dropbox. There is a huge gap left around who is doing what by when and having the clarity you need to have responsibility tracked well, for everyone to know what the plan is. We are tracking it. This huge market that asana is leading. Emily youre focused on calendaring and scheduling . Justin what are the steps now left between a call pushing your goal . Who is responsible for what are the steps that are left now between accomplishing your goal . Who is responsible for what . People spend an enormous amount of time on email and meetings and tasks and status updates. All this work about work, just to get everyone on the same page. Asana gives everyone that clean same page so everyone can see exactly what needs to happen. How much more do you think you are effective than you were before . Customers report an average of 45 improvement in what they are able to accomplish, which seems like a staggering improvement. Emily we often talk about whether certain businesses are a zerosum game. Not all businesses are. Obviously, facebook became a monopoly. Google became a monopoly. What makes you think there is room for all of these different Workplace Collaboration apps when we are already app overloaded . Justin within each vertical you will see a lot of consolidation. Here is going to be consolidation within messaging, within files, and within work management. Those tools work symbiotically. We partner well with slack. Within work management, you will see the emergence of a single leader. We are already very wellpositioned to become that category leader, that category king, as a result of that, among all those systems, we are the only piece of software that is both easy and powerful. It is easy to get started, but theres no way you can scale to a large organization. You will see clunky Enterprise Software that is so hard to use, people dont use it. Weve seen companies of so many different industries, whether from nasa to national geographic, from Navy Federal Credit union to general electric, or nonprofits like teach for america or even governments like providence, rhode island. They are able to adopt asana, because every organization has real needs around being able to Work Together more effectively. Emily are you trying to decrease notifications . Justin a lot of the notifications this constant continuous partial attention you get into where you cant get into flow or focus. Someone just sent you a message or someone just emailed you. Email becomes someone elses to do list. To be maximally focused, maximally inflow to get the most on, you want to have clarity on what are all the things i need to accomplish, what am i responsible for in priority order . Asana turns the paradigm on its head and shows you calmly all the things you need to do in the right order so you can mindfully proceed in your work. Emily the overwhelming nature of notifications is in part a symptom of this company you were integral to, facebook, which is now under fire for fake news, for being addictive. What is your perspective on that and facebooks responsibility . Justin im really glad that, as a culture, we are finally having this important conversation about what role do we want technology to play in our lives. People often over simplify to technology is all good or all evil. Technologists have a core responsibility to Design Software mindfully. How can we maximize the amount of good that it is doing and minimize the amount of harm . Thats something we have been focused on at asana from day one, helping people to align their attention with their intention. I hope that all Software Developers around the world are thinking about that more and more. Emily we were talking about facebooks earnings earlier. They are doing things that they feel are better for users, but decreased time spent on facebook are they getting onto thin ice, or is that something they should be doing . Justin if you are truly a missionoriented company, then money the new round of fund raising we just did, think of it as the point of building rockets is not to have a lot of rocket fuel, just as the poin