Plus you will hear from the social Networks Global chief diversity officer. She tells us how facebook plans to double the number of female employees globally over the next five years, and why the company is setting such an ambitious target in the middle of a media firestorm. But first to our top story. Facebooks plans to create its own cryptocurrency, libra, is not getting love from lawmakers. And you can add fed chair Jerome Powell to the list. Take a listen to what he told the House Financial Services committee on wednesday. While the project sponsors Public Benefits including improved Financial Access for consumers, libra raises many serious concerns regarding privacy, money laundering, Consumer Protection and financial stability. These are concerns that should be thoroughly and publicly addressed before proceeding. Facebook has a couple billion plus users so you have for the first time the possibility of a very broad adoption. If there were problems there associated with money laundering, terrorist financing, any of the things that we are all focused on, including the company, they would rise to systemically important levels just because of the mere size of the facebook network. It cannot go forward without there being broad satisfaction with the way the company has addressed money laundering, all of those things. The number of concerns i listed at the beginning data protection, consumer privacy, all those things will need to be addressed very thoroughly and carefully and again in a deliberate process that will not be a sprint to implementation. Emily we discussed the future of the digital money with joe weisenthal, the bloomberg cohost of whatd you miss . And bloomberg businessweeks max chafkin. Max this skepticism gets to the general skepticism about crypto, which you heard jay powells two cents on that, plus the fact that facebook has so much power. That is something we have been reckoning with over the last basically couple of years, where they have this huge user base, they are able to push people into new projects, and you can imagine if we aggressively tried to push people to this new cryptocurrency, that could create a whole bunch of issues. Emily joe, powell is talking about libra posing a threat to the Global Financial system and at the scale of facebooks size, any problems would be magnified. Is he right to be concerned . Joe you know, listening to chairman powell, i was struck by this is something that is on his mind a lot. As you mentioned, a lot of the lawmakers asking him about it. I think in the past when it came to cryptocurrencies or blockchains or other endeavors like this, you got the impression that this was something, we are watching. This is more than that. There are a lot of efforts on the part of the fed to really understand what they are doing and seeing if it passes muster. I think it are reasons for them to be legitimately concerned beyond the systemic nature of this. It does raise questions of, if this is going to be a much more efficient way to transfer money from person a to person b anywhere around the world, how can you really do that, and also remain consistent with banking and payment regulations in all these countries . I think there is pretty legitimate reasons to want to take a go slow approach to make sure this isnt some sort of regulatory arbitrage to get around the existing rules of payment. Emily even though jay powell and the fed are taking their time in examining facebooks plans and cryptocurrency in general, it seems not all lawmakers understood exactly what they were asking about. Exactly what they were asking about. This was an exchange between congressman david scott and the fed chair. Take a listen. Rep. Scott this libra business is really disturbing. I think we all know, libra is the london interbank offered rate. Very critical. It is apparent that libra is going to leave us or be removed. The potential ramifications of the end of libra, as the libra schedule end nears. Jay i think you said it very well. I think there are 300 trillion plus referencing libor in different currencies. Emily [laughter] looks like congressman scott laughing at himself, getting libra and libor confused. Can we trust lawmakers understand what they are supposed to be regulating here . Max this kind of came up during Mark Zuckerbergs testimony. Where you had these super cuts, silly or adolescent out of left field questions. I think facebook is going to try to use that answer and say, well, dc doesnt know what they are doing. On the other hand, the fact that people are confused by this and it does affect potentially billions of people, suggests we should all be educating ourselves more closely. Emily i have to know what your reaction to that moment was. Joe it was a funny moment. The question about libor and the replacement is interesting. But you know, i have a lot of sympathy for the politicians. Especially on this think about it. How many people have you and i interviewed who are in tech or maybe even would describe themselves in blockchain, or in crypto, or in bitcoin that cannot articulate what makes the technology compelling . It should be worrisome. I do think it is a case for slowing down. Again these Tech Companies think theyre going to reinvent the Financial System while lawmakers are still struggling to wrap their heads around what it is, that these kinds of exchanges say like, you know, slow down. Emily speaking of regulating, who actually does have the authority to regulate cryptocurrency . To regulate what facebook is at least trying to do and launch this thing in the next year . Is it the the fed . It is obviously not only u. S. Regulators that will be concerned. Joe there is a real morass in terms of crypto regulation in the u. S. The fed is definitely going to have a role in this because libra will interface with the banking system. Unlike most cryptocurrencies, there is going to be fiat money and government yielding bonds held in regulated Financial Institutions that back libra so there is no doubt that the fed will have a role. To your point, if it is going to be global currency, at some level, they will have to deal with regulators in every country in which they want to operate, which is why i think part of the appeal may be regulatory arbitrage. If they were going to just set up banks in all of these countries, that would be a major headache. And you have to wonder if the crypto approach is sort of a shortcut around that, and if so, it is a pretty good reason for people to be concerned. Emily max chafkin and joe weisenthal. Coming up, the president holds what he calls the social media summit, only it was missing the social Media Companies. But tennessee senator Marsha Blackburn did attend. We are going to hear from her next. If you like bloomberg news, check us out on the radio, the bloomberg app, bloomberg. Com and in the u. S. On sirius xm. This is bloomberg. Emily a federal Appeals Court said tuesday that President Trump cannot block his critics on twitter. The decision upholds an earlier ruling he violated the First Amendment when he blocked users who were critical of his policies. Trump wasnt the only politician affected by the ruling. After the judge released his verdict, congresswoman Alexandria Ocasio Cortez was sued by two people she blocked on twitter. And sticking with social media platforms, the Trump Administration hosted a closed door social media summit at the white house thursday. Billed as a gathering to bring together leaders for a robust opportunity to work on the challenges in todays social environment, but heres the catch. Google, facebook, twitter were not invited. Instead it was a guest list of various conservative lawmakers, internet personalities, many of whom echo trumps complaints about social media sinuses silences conservative voices. We discussed the event with one of its attendees, senator Marsha Blackburn of tennessee, who joined us on thursday. Sen. Blackburn my biggest take away from the meeting is, you have a lot of people who utilize social media to get their message out and to communicate their stories. What they are tired of is seeing social media pick and choose what they want to promote, what they want to prioritize. I feel like this should be unusual platform, and they are looking forward to have congress do some more work on this. They are also looking forward to the white house turning more attention to the issue of big tech and fairness on these platforms. Emily now facebook, twitter, the social Media Companies were not invited. How can you have a productive meeting without the companies in the room . Sen. Blackburn actually, they are going to be included later. What the president did today was to hear from people who utilize social media. You know, emily, one of the things i think is so important right now is that individuals do not sit down every day and watch the news at 6 00 and 10 00. What they do is to build their own network of different sources and channels, and sometimes they are streaming it, sometimes they are watching cable, sometimes they are getting notifications and alerts on their mobile device, and they have built their own network. What they want is fairness. They dont want one of the Search Engines going in and prioritizing everything that is in that feed. They want to have access to fair news. They want they dont want opinion journalism. They want facts. So when you have individuals who are creating that content, it is important to hear from them. Now, i do understand, and as the president said today, he is going to invite these social Media Companies to come in and to have a meeting. And that is something that is taking place in the next few weeks. White house will have the date out soon, i am sure. And they will have the opportunity to talk about what they are doing. One of the things that has been of concern to us is how some of these companies manipulate their algorithms. And that pushes forward certain content, then diminishes other, and is the exercise of a form of bias. Emily so, do you think that the suppressing of conservative views, which is what you and other lawmakers in that room have been complaining about, do you think that is deliberate or do you think it is inadvertent . Do you think it is an accident . Sen. Blackburn when Mark Zuckerberg was before us, when i was in the house, this was just about a year ago, i asked him the question, do you subjectively manipulate your algorithms . His response to me was, contained the information well, people live in Northern California that work with us and they bring their worldview to work. And what, as we move toward a. I. And Machine Learning, the biasing of these algorithms is something that is of concern to us, not only when you are talking about opinion, but also when you are looking at how Machine Learning will be self replicating. Emily now some of the folks in that room have been accused of posting racist remarks, antisemitic remarks, spinning up conspiracy theories on social media. Is that the kind of thing you think should be left up on social media platforms . Sen. Blackburn of course not. There is no place in the Civil Society for that conduct. Just as, there is no place in a Civil Society for some of the postings that take place that are offensive or suggestive or harmful to children. And all of these components for social media is speaking specifically to the reason why we need to put some guardrails in place for social media. Emily speaking of that, you have been calling on snap to take action to prevent, as you wrote in a letter to them, more children from being exposed to sexual predators and explicit adult content while using snapchat. Saying the fact that messages on snapchat disappear actually it is a child predators dream, is the way you put it. What your main concerns about snapchat in particular . Sen. Blackburn main concern for snapchat, number one is their ratings, being there for 12yearolds, the auto delete feature on those videos. There are cases where predators child predators, pedophiles, have been arrested, convicted. They have used snap to coerce and ensnare children, threatening to put their video on social media unless they send more videos. This is something that parents need to have the tool to turn this off. There need to be explicit instructions for parents how to handle this. Emily that was tennessee senator Marsha Blackburn. Coming up, ibm closes its 34 billion deal with red hat. Our conversation with the ceos of both companies on the second largest tech deal ever. And later in the show, facebook is attempting to drastically increase minority representation in its workforce. How the social Media Company is tackling its diversity problem. This is bloomberg. Emily ibm has closed its 34 billion purchase of red hat, finalizing the worlds secondlargest tech deal ever. Ibm was once synonymous with mainframe computing, but it has been struggling to adapt in a cloud first world. The company is playing catch up to amazon and microsoft in Offering Software and services over the internet. Bloombergs david westin spoke with the ceos of both ibm and red hat on tuesday. It is important to our clients. It is the destination for the cloud. You know david, i think a lot of times people think everything will move to one public cloud. That is not what we see clients need, want, and are even targeted to. It is this idea that, i have got an existing estate like a house. I am going to modernize it, and i have five to 15 private clouds already and if i modernize an app, i will put it where i want and then i have to manage and secure all that. That is the destination. For the next generation, we now give them a platform between red hat and ibm that runs on any public cloud, that runs private, that runs traditional, and they can write an app once, run it anywhere, secure it and manage it. That is a distinct and unique capability. And that is what i mean by the hybrid cloud, and it makes us a leader in that. Others talk it, but they may have just a connection between public and private cloud. This now allows us to be multicloud everywhere. David as ginni says, jim, you have other competitors out there in the cloud that are pretty big, like amazon and google. How is this going to help you catch up to them . Or is that even the goal . Jim i will start for the red hat component. Look, our goal is to be an even better partner with clouds. They are great partners. Our Software Runs on those clouds, it runs on premise, it runs on ibms cloud. So they will continue to be great partners for us. As we are capable of moving many more workloads onto our software platform, that is more workloads that those clouds can actually go and address and run. My conversations with the major clouds have been very positive because of these the this is an opportunity to get more workloads out of datacenters running on their clouds. Ginni that is an important reason to do this. Our clients want us to be a want us to be able to take our platform and run it anywhere. We cooperate with our partners and we are in competition on the other side. David ginni, you have ramped up ibm percentage of revenue from the cloud dramatically, 4 to 25 in a reasonably short period of time. What is the ultimate goal . Where will this get you to . Ginni there is not an ultimate goal. As you think about the clients moving their work, 80 of work will move to the hybrid cloud. This will continue on, and when we look at our revenues, it transcends everything from our public cloud, now these platforms will be on other clouds included in the services revenue. The goal is to move with the same journey our clients need it to move with. David what about moving, ginni, what about moving with the overall size of the cloud expanding . How much of this will just be riding with the cloud up and how much of it be taking market share from other providers . Ginni look. For ibm itself, one way to think about this is 200 basis points of Revenue Growth over a fiveyear period. And so this is what jim just said a minute ago, the important part to think of it is of our own cloud, ibm public and private together, should be the very best for missioncritical work. We also want to have our platform running everywhere else. Growth anywhere is going to be good for ibm then. Jim to emphasize that, this is all about helping clients provide more value to customers. When a client builds a new application, a new website, a new mobile application, opportunities for us to participate, whether it is helping them building the application, helping them integrate that with data, having it run it on our platform, having it run on ibms cloud, any of these components are areas of incremental value we can participate in as our customers create more value for their customers. Emily that was ginni, the ceo of ibm, and Jim Whitehurst, ceo of red hat. We continued our discussion of the mega deal with bloombergs Olivia Carville on tuesday. Think about ibm. We have an 108yearold American Icon that has largely been known for its mainframe cycles. In the last couple years they have been trying to reinvent themselves. This acquisition of red hat is essentially ibm trying to reenter the cloud space as a totally different company. It is trying to transform what it has been providing so far. And change the game. We have heard the ibm ceo ginni earlier call this a game changer for ibm. It is important to think about why this is going to be so significant for not only ibm but also for the wider cloud space and also for the other cloud providers like amazon, microsoft and google, who will now be seen as partners to ibm rather than rivals. Emily interesting. What are some of the risks to this new strategy, and what can go wrong . Olivia i think that one of the biggest risks here is whether or not red