Dorsey, and alphabets sundar pichai, are set to testify virtually tomorrow. Section 230hange could have longterm ramifications on free speech on the internet. Banned news political ads. We will ask Cambridge Analytica whistleblower as part of our special electioneering series. First, lets get a read on stocks and microsoft results. Abigail doolittle with us from new york. Big beats out of the gate. Abigail in the after hours, they are trading higher. Although i think what we are about to look at could be all over the map at the moment. They are talking about the idea that further lockdowns could hurt demands. Their Cloud Business was weak. Microsoft Cloud Business very strong. That was a piece of the beat. Maybe part of the business that could have gone to microsoft. Again, after hours, this stock is trading higher on the year. Valuation is rich, but the theter is good enough that stock is doing just fine. The s p 500 index and the dow down once again. The nasdaq climbed sharply higher. Twitter, facebook, alphabet, and amazon, big days out of all of them. Tomorrow, jack dorsey of twitter, Mark Zuckerberg of ofebook, and cinder pichai alphabet testifying before congress. As you are talking about, these three ceos are expected to defend section 230, which gives these companies protections around free speech so they will be somewhat legally protected in the case of content. Amazon up 2. 5 . That one doing well again after a slide during the prime event. Thursday, all eyes will be watching. Getting mixed reasons in terms of what is ahead for tech. Sap, not so much. It seems that we will be moving into the baskets of the haves and havenots. We will know on thursday. Emily tech shares in a bubble, wondering which tech shares in particular. Buyingthe company xilinx. Amd thehis will give ability to abigail the whole day, investors responded well relative to xilinx. The response earlier was much more exuberant. The shares in the premarket, a. In the close, up 8. 5 , which is great. You mentioned, they are buying amd buying, xilinx, them in an all stock deal. That is a 23 premium from mondays close. That suggests there could be more chapters ahead. Maybe they think another competitor could come in, intel, and offer more. That is a pretty decent premium. Really important about this deal beyond the fact that it could help amd strengthen up against intel, it tells you that the ceo of amd feels that the environment is healthy enough to make this kind of a big deal. That is certainly a vote of confidence in terms of the environment. Definitely another big move by the ceo of amd. Abigail, thank you so much for those updates. For more on the markets, i want to start by taking a closer look at microsoft. Again, topping estimates on booming cloud demand. We are joined by dan newman. Dan, you heard abigails assessment. Are we seeing a further divergence of the tech have this and have the tech haves and have nots . Microsoft is showing a lot of strength. Result,a. P. s troubling although i thought it was overblown, the reaction, it was great to see microsoft come across with such a strong beat. I think everyone was keeping an eye on the Cloud Business and the surface business. E business grew 48 . The productivity business did really well. 11 overall. The crm business, which competes with sap, saw 38 in the cloud. I was great. Of course, the surface growth, that was really big beat for microsoft. Emily how do you read this in the context of s. A. P. s ceo warning about a slowdown into the first half of next year when so many thought tech was only going to go up and up. I think there are challenges and haveou have haves nots across different industries. Digital technology has been accelerated as a result of covid19. Customers need to be able to reach companies through technology. Crm, erp. That means expanded partnerships in operational tech, traditional tech. Microsoft made a big announcement with honeywell, to get into the industrial data play. Companies that have done well or been able to stabilize it realize that tech investments will be critical coming out of this pandemic more successful and ready to do business. Makingmeanwhile, amd this acquisition of xilinx, a company that makes programmable gate arrays. This will give the ceo more of the parts that she needs to further take intels market share. We listened to the call earlier. Takei listen to what she had to say. People look at our businesses as complementary. They are complementary from a product and market standpoint. But we have these important intersections around the data center focus and around the Technology Sort of strategy. Emily daniel, how big a deal is this, and what will the impact be . Combinedhis brings the over 200 billion. Intel is over 300 billion. But, a. M. He continues to be able to tout that they are taking market share in the compute and data center. This adds capabilities in data center, highperformance, and gives the Company Strength in communications, which is big around 5g and automotives. I thought it was really great to see that they were going to ,ncorporate the ceo of xilinx keeping him involved in the strategic plans moving forward. It does diversify the company. There are certainly some risks associated as well. Emily you also cover google. We will take a look at alphabet ceo cinder pichais testimony he is set to give on capitol hill tomorrow. We have this big antitrust suit hanging over google. They are reporting earnings later this week. How big a risk is regulation . I think everybodys eyes are on that doj anticompetitive suit. It will be hard for the company to argue that it does not have some type of anticompetitive practices antimonopoly over that search space. That will be the challenge for google. Has rallied the last couple of days. The stock was up. What i am really looking at is googles Cloud Business. That is the complementary or diversification strategy of the company. This is an area where the company does not have a monopoly. You saw azure grow 48 . You saw aws continue. The google cloud revenue, they are estimating about 3. 3 billion this quarter. It would really be important for the company to see growth on par with microsoft. Aslly, solidifying itself that third player. Emily ok. We will be all over googles results later this week, following Sundar Pichais testimony tomorrow. Meantime, airbnb is one step closer to its widely anticipated ipo. The company says it will list shares on the nasdaq. They say they will be to raise as much as we billion dollars in the ipo. In august, the company said it had filed for the offering confidentially. Coming up, a look at what the chiefs of facebook and twitter will be saying at a wednesday hearing before congress. All the details, next. And, reports tonight from the u. S. Elections project indicate that early voting has had more than 50 of all u. S. Ballots cast in 2016. We will talk about this unprecedented election with just seven days to go and social medias role in it with Cambridge Analytica whistleblower brittany kaiser. This is bloomberg. Twitter Ceo Jack Dorsey and facebook ceo Mark Zuckerberg are preparing to defend Legal Protections granted to tech companies, also known as section 230, tomorrow. They will appear with googles sundar pichai. Bloomberg has obtained the prepared remarks. Joining us to discuss, kurt wagner. We have seen testimony of all three ceos. Lets focus on zuckerberg and dorsey. All of them defending section 230 and warning that big changes could lead to big changes on free speech for the internet. You would expect, all three ceos, but certain zuckerberg and dorsey, are planning to make the pitch tomorrow. If they were peeled of section 230 were to go through if a repeal of section 230 were to go through, suddenly they would lose that legal protection, they would be liable for the things that people post. As a result, they would have to be more cautious about what people post. This whole argument depends on the idea that publicans are feeling that too much is coming down and now these companies will try to counter this argument and say, repealing this will do the exact opposite of what you want. Quotes fromng some their prepared remarks, dorsey saying that we should be mindful that repealing section 230 will result in far more removal of online speech and create severe limitations on our ability to remove harmful content online. Zuckerberg saying something similar and reiterating his calls for regulation. What do you make of that . Kurt i think it would be foolish for these ceos to show up and basically say, everything is working really great, certainly dont go out of your way to make some changes. That will immediately make it look like they are not taking this seriously. What they are trying to do i would imagine is trying to thread this needle. Here are all the reasons why we dont think this should be repealed. But, we get your point. We understand this is not a perfect system. As a result, we are willing to make tweaks so long as we dont lose the important protections to kind of help the internet work. I think what they are trying to do is basically offer a bit of an olive branch, say, i see where you are coming from, how can we work with you to basically make this better . From we are seven days election day and as of this newing, facebook stocks political ads. Has facebook taken any additional action on the ad front as we move to election day . Kurt not yet. But, you cannot put new ads up on facebook. You can continue to promote ads that were already in the system. What we saw yesterday was the Trump Campaign in particular starting to kind of add a bunch of different promotions into the system that it looks like they are planning to use in the runup to the election. There are some that say, election day is today. They uploaded that yesterday. Clearly, they are hoping that they can keep that in the system and repromote it next week. The question, is that allowed . Will the Company Actually step in and say, you cant do this. Clearly, a lot of people are asking about it. I would not be shocked if we heard something from them in the next when he four hours. 24 hours. Emily interesting. That could gog, live at any moment. We will continue to get updates from you i know throughout the week. Coming up, the Software Industry boom over thea last year. One company, what they are doing to take on salesforce and adobe, next. This is bloomberg. Out with earnings after the bell, beating revenue estimates and providing some hope for investors that the Expansion Strategy might pay off. The stock is up nearly 200 year to date. The Company Announced a 3. 2 billion acquisition with segment in an effort to better compete with salesforce and adobe. The cfo joining us now. Thank you for stopping by. S. A. P. Results because date being share yesterday, yet twilio reported revenue growing. This that mean they are seeing an sap problem or is there weakness across the broader industry . I cant really comment on s. A. P. , but we feel great about the last quarter. Broadbased strength across the board. We feel really good about our guide. We had investor day on october 1 in which we said, over the next four years, each of those years, we would turn in 30 plus Revenue Growth. We feel really good about the growth prospects. What about, lets say, postelection into january, knowing that the only thing we know for sure is that the pandemic will still be with us, no matter who is in office . I think we are seeing is that there been some secular tailwinds. In the health care industry, that has been one of those that has longsought to digitally transform. With the pandemic you would not have wanted it to happen this way but it gave the industry the impetus to really get going on that transformation. You look at some of the customers we have signed up. With philips, we are actually able to create a solution for our customer and consumers whereby if you are an individual who needs to make a hospital appointment, you can pull up to a hospital, interact via sms, you can wait in your car until you are called for an examination, then only have to come up to the hospital room one you are called upon. That was the kind of interaction that was impossible precovid. It is one of those industries that we think has longterm resiliency. There are others like that in ecommerce and financial services. Emily sequentially, when you look at your Revenue Growth rate, it has declined in four of the last five quarters. He pledged to grow revenue in the midterm 30 . Will acquisition be playing more of a role . When we provided the guidance around 30 plus for each of the next four years, that was on organic only basis. The segment which we are certainly excited about, that was not factored into the Financial Guidance at the time. We do think that can act as an accelerant in terms of some of the things we aim to do around customer engagement. But we feel great about the prospect and we think that will be additive once we close that transaction. Emily what is the argument to customers who do not already use segment about why they should go with twilio and what you offer versus salesforce or adobe . The reality is that you do have overlapping technology. I think there are two dynamics. If you consider twilio, we grew up as a Cloud Communications company and we have been moving rapidly towards customer engagement. We have a number of Communications Channels that customers can avail themselves of and be able to engage with consumers. The problem is one of the gaps in that strategy is having the data, being able to access the data through all the disparate systems. Are comes segment which has flaw has a phenomenal solution. They are able to break down all of the silos that exist inside of a company. We are now able to marry the insights from that information, couple it with the engagement experience that we bring, and now can reach our customers and help them reach their consumers in a tailored, targeted way that also drives high roi for our customers. Emily you have had two big acquisitions in the last couple of years. What are the white spaces . Where do you want to see twilio grow, and will there be more acquisitions in the future . We are not ruling it out. We have what we would characterize as a strong balance sheet. We are certainly going to be opportunistic. We maintain a really active gameboard. A few years back, as you alluded to, a bigger acquisition that helped us expand into an additional channel, give us some more breadth. I think segment is a little bit different. We are constantly on the lookout for different assets in artificial intelligence, machine learning, that we think can be additive to flex. We also think there are additional things we can do in marketing. It remains to be seen what we end up doing but we certainly have very active. Ofly all right, the cfo twilio. We will keep our eyes on the company. Coming up, as the u. S. Braces for one of the most critical elections just a week away, google turns to a familiar partner to ensure the public gets the most accurate Election Results. More on that next. This is bloomberg. Emily this is bloomberg technology. Im emily chang. Google said it is teaming up with the Associated Press to provide accurate Election Results on november 3. Similar to previous elections. Bloombergsor more, mark bergen who covers the company for us. Similar but different. Talk to us about how google is working with the ap. Mark yes, the difference will be on Google Search results. It will be a widget that displays on your phone. Similar through the electoral maps you would see at 530 that shows the live results. Google is doing that for different state and local races as well. So this is sort of this will appear above any news results as that is. He traditional a big change from the last election. Emily what about when it comes to youtube . You were a talk you reported that the Trump Campaign had bought the youtube masthead on election day. We have seen facebook make some pretty dramatic moves when it comes to political advertising. They are not accepting any new political ads for the next week. How is google at youtube planning to handle all of this . Mark so far, youtube and google why is turning off ads when the polls close, is the latest they have said. They will not be accepting or showing new ads. The report both before the report before, we are expecting the trump page to have the homepage on top of youtube. There will be searches like if you search for Election Results on youtube, and youtube is still the secondbiggest Search Engine behind google, they will display a similar link to the Election Panel i talked about earlier. The idea is, and really interesting, youtube said they will put up a message that says results may not be final, which is the very likely outcome. Because of mailin voting, we will not have a clear election result. Emily now, when it comes to election misinformation, while there are so many kinds, there is the New York Post story which was totally unsubstantiated that facebook and twitter took action on google took action on, google has stayed out of the spotlight. How has google been hamlet been handling election misinformation . Mark they have stayed out of the part out of the spotlight because google news, they have the list of approved publishers. They capped that. They posted a New York Post story with the google news results, they kept it on youtube as well. They rat the rationale for the company as it does not go as viral in the same way that can be shared on facebook or other. They put in a lot of new policy updates, especially with youtube, with raising authoritative news results that you will see more accounts, from everything from cnn, to fox news, to bloomberg tv that will appear at the top of any election related results. They have also, like facebook, they said they will pull down anything related to qanon. They said they will pull down anything that incites violence. They