Announce tomorrow that he is running for the utah senate the held by a retiree warren hatch. That is according to the associated press. Three people with direct knowledge of the plan. Massachusetts governor moved to utah after losing the 2012 president ial election. A french court has acquitted a man charged with harboring islamic extremists after they carried out attacks in paris in november, 2015. He has denied knowing the identity of the two men to whom he was renting. One of the two was the suspected ringleader of the paris attacks. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Emily welcome to bloomberg technology. Im emily chang, live from the Goldman SachsTechnology Conference in the heart of san francisco, where Silicon Valley needs wall street every year. Weve been hearing from tech luminaries. Jack dorsey talked about how remaining independent will be a strength for twitter. Later today, we will hear from uber ceo dara khosrowshahi. I will speak with the Goldman Sachs president and cocoo, as well as benchmarks bill gurley. We have physical earnings out. Cory johnson is back at home base with more. Cory cant wait to see all that. Cisco, news crossing the tape, 12 billion of sales in the last quarter, sales up for the first time in the last 12 quarters. Cisco, disclosing a onetime charge related to the tax overhaul. The company revealing some big plans. It will increase the dividend 14 and it committed to another 25 billion to buy back stock. John butler joins us now. He covers cisco for bloomberg intelligence. We will pretend to have this conversation for the first time. I really interesting quarter from cisco. What worked . John sales up, very good. What was really good at cisco is the core business here really is sales. It is over 20 of revenue. They have a new product that is really starting to work. The trick with cisco, what people are looking for is they want to see that Company Start to get out of the woods in terms of growing again. I think we are getting there. This is the First Quarter that really looked good to me, like they are on a more Sustainable Growth trajectory. Cory lets talk about the product starting to work. John its the catalyst cory this tells us everything we need to know about whats going on in the world of hardware. Cisco makes boxes to stick in the back of businesses and data centers. This catalyst does what . 9000 john you can drive the network, if you will, from a software dashboard. It is all pointandclick in terms of provisioning new circuits and setting up your network. That is very attractive to companies and carriers as they want to minimize the i. T. Personnel in an organization. Also, as security gets more important. That softwaredriven element of hardware is on the rise. Cisco was a little bit slow in getting there. I think they are there now, and i think the momentum will continue to build for them. Cory to that point, it seems like other companies have been trying to get in there. They are facing competition from cisco on the software side. Their advantage may not be as strong anymore. John cisco was a little behind the curve as well, as you mentioned. The Big Companies have really had a hard time turning that battleship, if you will. Smaller, more nimble companies have come in and had success there. Cory as it relates to the buyback, and i just tweeted something about this yes, it will reduce the shares outstanding, or will it . The company has been issuing so much stock that you have seen the share count jump every single quarter i think for the last 16. At what point do we see a buyback as changing the nature of the income statement, as opposed to just fixing something . John honestly, cory, thats tough to say. Cisco really is an acquisition growth story. When you are as big as cisco, sometimes you need to buy bank to buy your way into new markets. It is tough to predict their behavior on that front and therefore it is tough to predict where the share count is going to go. This is a big buyback. This really is good news for current shareholders, i think. Cory last question as it relates to cisco. You said this is a growth story again. John they are getting there. The orders are something i really watch, because that gives you a forward view of the business. In this quarter, orders were up 5 , which is, against a revenue forecast of 3 to 5 for next quarter, it gives you a lot of comfort. What that tells me is they are starting to gain momentum. They are really starting to gain traction with those new products, and that really is the key to this story here. Cory john butler, thank you so much. Appreciate your time. Chuck robbins, doing a great job, as you just heard. We will get results tomorrow at 9 30, back east, out here at 6 30. Emily chang, youre in such a perfect place. The conference you are at i love that you are there. People are pumped to know what is going on in technology. Today was a remarkable day on the markets. Emily right. Cory, i wanted to ask you to walk us through what happened today and talk to us a little bit about how it fits into the broader volatility. We will have Goldman Sachs president and cocoo, coming up. He thinks this is a Good Environment for trading. What did you see today . Cory we knew that lets go back to last friday or two fridays ago. We saw this sort of amazing slight, very slight increase in the employment number and wages. We were waiting for wages to go up. Every economist under the sun has been telling us that wages were going to go up. We finally saw it, as wildly predicted, and the market went haywire. The vix went through the roof. The volatility index had been trading at 10 or even high nines for even months or years, with very few increases above 12 or 15. It suddenly shoots up to near 15, to near 19, to 30. It blows up the reversed traded exchange. It takes billions of dollars out of the market. For the first time ever, two weeks ago, we saw the future volatilities contract one month and two months both of 80 in the same day. It was incredible. Today, we get the cpi with a higher price than expected. The market waved it off, and the stocks rallied. Emily what about the fang stocks in particular . We have been closely tracking whats going on with facebook, apple, alphabet, amazon. What did you see there . Cory we saw a reversion back to the way the market has been trading the last few years, at least for one day, where we saw the rallies in spite of some of the news that was out that might be bad for the economy overall. We saw that, generally, acrosstheboard, stocks rise. We saw Companies Like fossil, watchmaker they got 40 of their sales were smart watches, a little tech boost. They call them wearables. I think every watch is a wearable, right . The wearable sector did enough to give the stock and 80 boost stock an 80 boost today, with the belief that technology is the future. I think it shows that the individual stock stories are doing very well. When the news is well, the stock feels great. Across the board, people wanted to buy stocks today. You saw that across the table. Emily all right, cory johnson, editoratlarge. Thanks for breaking it down. We will talk about it all with heather bellini, Goldman Sachs tech analyst. This is bloomberg, live from the Goldman SachsTechnology Conference in san francisco. Emily welcome back. The Goldman SachsTechnology Conference in san francisco. We have been hearing from twitter and square ceo jack dorsey. Uber ceo dara khosrowshahi, coming up. I will speak with david solomon, coming up. Heather bellini, i want to start with you on facebook. No Company Seems to be getting quite pummeled in Silicon Valley like facebook has been recently. Unilever now threatening to pull their ads because of the platform being what they call a swamp for extremism and hate. How concerning is this . Heather so, i think if you are a chief marketing officer, you want to make sure that you are protecting your brand. Brand safety is top of mind. It is not just for facebook. It is also for youtube with google. It has been experiencing the same type of feedback. I think maybe some of this might be a little bit overdone. I dont think that facebook and google are trying to create an environment where this type of backlash is occurring, but i do think they are making a lot of efforts and inroads, whether it is investing in people to try and make sure theyre getting rid of this content before it comes online or investing in ai, machine learning, to do that. These are platforms that have exploded over a very short period of time. It is an iterative process that i think they are truly focused on. Emily how much do you think it will impact revenue . Do you think it will have a Material Impact on revenue . Heather you have to think about the platform, whether it is facebook or google with youtube. These are multibillion user platforms. If you look at the daily active users for facebook, 1. 4 billion. There are probably 1. 5 billion plus active users on youtube, if you look at the measurement there. If you are an advertiser, are you going to walk away from that many eyeballs . Weve heard Sheryl Sandberg say, we could deliver the super bowl in terms of reach every day to u. S. Advertisers, just domesticallyfocused advertisers. I think this is a call to action. I think the cmos want to see more being done, but i also think facebook and google are responding in kind. I think it is an iterative process, but i dont think they can ignore these platforms. Emily what about the fact that, for the first time, users in the u. S. Didnt grow for facebook last quarter . Heather they declined 700,000, 800,000 users. The u. S. And canada are about 190 million users. You are at a point where, even when we model out, we dont model a lot of growth, if any, in daily active users for the company, just given the percentage of the population that they are already hitting. I dont think that should be a big surprise. If you look at where their growth in usage has been, it has been predominately outside the u. S. In a lot of emerging economies, so it wasnt all that surprising to me. What you have to continue to focus on is the value that advertisers are getting from this platform, despite what they might be saying. They are getting a lot of improved targeting, better targeting then they could get on than they could get on any other medium, and they are seeing return on investment on these ads continue to go up. Facebook continues to do things that improve the reach, improve the targeting, therefore you are seeing at pricing go up for the company. It is working the way it should, we feel, at this point. Emily you mentioned alphabet. Youtubes ceo recently said they spoke should get back to baby pictures. Facebook has been changing algorithms to show more posts from friends and family. Interesting to see the dichotomy there. Youtube struggling with its own issues. What do you think the big headwinds are for youtube . And heather they have the brand safety issue to be aware of as well. We talked a Brand Partners and ad agencies a lot. They are just as concerned about that on youtube as they are with facebook or some of the other social media platforms. I think again, in partnership , with the advertisers, from a measurement perspective, people want to see the standards continue to move in the right direction. I think, unfortunately, it has been a sign of the times for the last year or so how this message has evolved. These platforms maybe did kind of not that they went off the rail, but i would say the issue has been just from what users have been posting on all of these sites. Collectively, everyone is more focused on it. You have started to see that change with some of the algorithmic changes on facebook, but i think youtube is focused on it as well. Emily interesting number is out on lobbying. Google outspent every other tech company. Facebook hasnt spent very much. Theres a lot at stake for facebook right now. Do you see headwinds coming from their relationship with washington . Heather i think on the Third Quarter conference call, their earnings call, which was early november, Mark Zuckerberg tried to make a statement by saying he was going to hire all these extra people to start policing the site, something we were talking about before. He then announced the algorithmic changes in early january. I do feel they are trying to show their users and the political establishment that they are trying to police themselves. Does that mean they are not going to spend on lobbyists and start to get much bigger there like google . Probably, you would see it moving more toward maybe not spending as much as google does, but moving in that direction. I do think that at least they are trying to show everybody that this is front and center and really important to the companys strategy. Emily there has been talk that amazon could surpass facebook as the secondbiggest platform for digital ad dollars right now. Google is dominant, then facebook. Do you see a potential shakeup in the hierarchy . Heather well, heath covers amazon for us. By his estimates, i think in 2017, ad business was about a 2. 5 billion business, and about 3. 7 billion this year is his forecast. Its going to take a while for them to be able to surpass facebook and take that number two position. I certainly dont think anyone should discount the power of amazon and its prime users and just how many people go there to shop. I think it is something that Everyone Needs to be mindful of. We definitely hear a lot of interest from ad partners, telling us that people are kicking the tires and looking at that opportunity to find that third platform, which has been slightly more elusive. Emily what are the big issues you are watching for google and facebook over 2018 . Heather for facebook in particular, we are focused on Facebook Watch as another way to engage with your users. For us, we think about time spent. There are only so many minutes in a day that you are going to spend sifting through your current facebook feed or your instagram feed. How else can they improve engagement or increase engagement with people like you and i . That might be, if you are a patriots fan, starting to watch tom versus time, the docuseries, three 15minute series. That would mean youre spending more time interacting with the platform. I see Facebook Watch that is something we are spending a lot of time on right now, something we hope to see bald into a much bigger reason why we are going to want to go to the app. Emily heather bellini, Goldman Sachs tech analyst. Thanks so much for stopping by. We will talk more about amazons lobbying efforts in particular and how their strategy is changing. That is next. This is bloomberg. Emily welcome back to bloomberg technology. Im emily chang. Want to go straight to cory i will johnson, talking about amazon. Cory . Cory you just had a great interview talking about what other Tech Companies are doing in washington. Amazon, no slouch there. We take a look at all the things amazon is doing, lobbying and strategies. Naomi nix covers lobbying for big tech firms for bloomberg is. What is amazon doing . Bloomberg news. What is amazon doing . Naomi they have dramatically increased the investment they are making in lobbying in washington. In fact, the percentage of money they spent on this has grown by 400 . It is now more than 12 million. It used to be just under 3 million in 2012. Cory is that 400 yearoveryear . Thats huge. Naomi its huge. Not only are they spending more, they are reaching out to more government entities. They have grown the number of they are reaching out not only to the white house and congress, but to agencies that deal with the Postal Service and trucking regulation. They are also covering a lot more issues. They cover more issues than any other of the other Tech Companies we looked at. Cory are they covering more issues because they are doing more or because amazon is just huge right now . Naomi its really both. The growth in the companys Business Model has really spurred the growth in lobbying here in washington. So, the fact that they are, you know, looking at, say, expanding into Drone Deliveries made them want to lobby the faa and tackle the regulations regarding drones right now. So, as their Business Model grows, as they grow into new markets, whether its Drone Deliveries or health care, we should expect amazon to continue lobbying other agencies to get the kind of changes they need to seize those business opportunities. Cory great stuff, naomi nix. Everybody check that out on bloomberg. Com or on the bloomberg terminal, if you should be so lucky. We have a filing from Berkshire Hathaway, known for all the companies it owns, but also the companies that Warren Buffett and team invest in. One of them is ibm. Ibm has them poorly over the entire berkshires investment, so it is kind of giving up on ibm. Berkshire hathaway missed with ibm. Emily cory johnson, thanks so much. Coming up, the interview you have been waiting for. David solomon, president and cocoo of Goldman Sachs. That is next. This is bloomberg. Haidi you are watching bloomberg. I am haidi lun. Florida say 17 people were killed in a School Shooting in southern broward county. The suspected gunman has been arrested. He is said to be 19 years old and a former student of the school. Offeredt trump has federal assistance to the state and his condolences to the victims families. Jacob zuma has bowed to pressure and resigned, but he says he disagrees with the decision to force him out, calling the treatment unfair. The party is expected to name ramaphosa as acting president to stand until next years election.