And jon fortt making his way back from out west. You know why we cued the billy joel at the top, shares of twitter had their dose of honesty. Extending their losses, revenue up 61 in the quarter. Executives voiced concerns about user growth. Here is jack dorsey the interim ceo on last nights Conference Call. Chronic initiatives we mentioned in previous earnings calls like instant timelines and log dot experiences have not yet had meaningful impact on growing our audience or participation. This sun acceptable and were not happy about it. Joining us this morning from one market in san francisco, colin sebastian. Good morning. Good morning. People are noting the clash between last nights call and the media rounds they did in the prior quarter where they were enthusiastic about the game plan and about the product. Why the uturn . On one hand twitter is, theres a tale of to sides of twitter. On one hand, adam bains team, on the revenue site of the business is performing extremely well. Twitter beat expectations on the top and bottom line for the second quarter. But really the issue is and continues to be, the struggle to accelerate user growth. And the problem with that is, twitter is not yet at scale. So they cannot compete effectively against facebook or google for ad dollars and if they cant accelerate the user growth, ultimately the advertiser revenue dollars will hit a wall and we have the change in sentiment here this morning. From my perspective as i was looking at the transcript of this. I felt good about it. Because they were finally owning up to the problems that a lot of us have been talking about all along. It seemed to me like they were living in some alternate version of reality. Slowing user growth is really okay. They were kind of big enough. People shouldnt be paying attention to monthly active users, its as if they got on board with what everybody else has been looking at. We do want to be a mass market mainstream service, that is what we want. Were not getting there, were going to try a bunch of new stuff and were not sure when its going to start working. Isnt there in a way a Positive Side to them facing up to those facts . Yes, there is. I would agree with your characterization. Thats a key reason weve been cautious in the stock since last year. Hearing Management Team as you put it fess up to the reality of the user trends, is on the one hand encouraging. On the other hand, we dont see a lot of upside potential in the stock until some of the new initiatives, in the fall with the launch of project lightning to see whether it does have a positive effect on twitter. Keep in mind, twitter has more free advertising exposure than any other platforms or websites. With hash tags and twitter handles and that has not converted into the mass market usage. Wire still skeptical. The question is when whe will we see all of the changes start to add new users . The stock turned negative when nodo said theres going to be a considerable period of time before you see the impact if these changes. When do you expect to see the user base actually grow, is it going to be next year . I think what they can say at this point is that at 300 million users, we effectively have a largeenough sample size to gather the news. The question is can they build a giant news experience where people go to find out whats happening in the world. I think nodo took the stiff medicine in a big dose, it cant have much more down side at 20 billion. How is that different from the whole syndicated metric that costolo was trying to use . I think the syndication is an ad network play they could do. Think having a giant loggedout home page that everybody can go to to get the news. Its google. Com as posed to an adtype experience. Investors need to be wary. If the sentiment stays negative, people are going to get whipsawed. Colin, would that work, preserve the model for those people who are on it, like it, and whom they dont want to leave . Well certainly 300 Million People is a decent number. And if thats what twitter is thats fine. And we need to recalibrate our expectations. But one issue i had with the commentary from management last night, despite the fact that they did fess up to some of their head winds, is they still characterized the opportunity for twit nert same light as facebook. And so investors are still being led down the path of one day twitter can be as large as facebook. And we think that part of the story from last night still is a challenge for us at least. I love that if youre going to be a public company, if youre going to have the kind of exposure that twitter has, if you believe that this, i believe anyway that this is plumbing, that they can build some really interesting experiences wirks not swing for the fences . If theyre content to be a little niche play, were a mom and pop greasy spoon restaurant on the Lower East Side is that worth billions and billions of dollars . Is that like saying that tgi fridays can be as ubiquitous as starbucks, right . But the stepback and look at trend thats going on right now. You have apple news, apple going news. Twitter is better positioned than just about anyone to be the destination point toor all the news on the web. If they can execute, youre going to have a lot of value. But they havent yet and theyve always been positioned that way. Meantime all the other competitors are getting into that space which raises big questions. Colin, one last question for you, does your price target account for minimal user growth over the next year . Extending into 2016 as well. All right. Appreciate that, colin sebastien. Next up shares of yelp. Getting crushed this morning. Down more than 25 . Earnings missed estimates. Company gave a lowerthanexpected forecast for revenue in the current quarter. 2015 has not been kind. Shares down 55 so far this year. Jon theyve stopped giving monthly metrics. Lebchin leaving as chairman. People are looking you found a bright spot in twitter. No the sure you found a bright spot in yelp. Hard to find a bright spot in yelp. I feel like the product experience hasnt improved. Its been getting worse over the past couple of years. When i look at yelp reviews, ive got got to run my own mental filter, on do these people really care about the food or is there some other issue in here, service some side thing that theyre ranking this restaurant on, i have to look at the number of reviews, the recency of them, they could have fixed a lot of that stuff. Its interesting to me, one of the notes i saw, not sure if its mark mahaneys or others, that yelp is suffering from the unicorn effect. A lot of employees that they need, are getting offers from others. Yelp is having to pay more to keep talent. The one possible silver lining, its interesting that lebchin chose to leave yelp and stay with yahoo. Does that open up more possibilities for them to get some kind of a deal done with such an active investor stepping away . Lebchin does have his hand in so many different things. Im less concerned about the fact that lebchin is leaving his role on that board. I think yelp is a lead anywhere the local advertising space. But youre right, the product has to be a good service. And if you really want to review of a place to go, there are other places. Wheres the positive . With facebook. Yelp is exiting the brand advertising space, 8 million of their revenue. There was 107 million in local. Basically with the level of targeting you want with a big unit theres no competing with facebook. I think thats a very positive sign going into tonight for facebook. Facebook is a huge sucking machine taking targeted advertising out of the ecosystem. Not positive for yelp, positive for facebook. Were you asking for a positive. Everything is positive for facebook. Jon is mentioning facebook, strong expectationsor big growth in mobile ad revenue. The march 2, 100, 9562 at last print. You like the targeting, you like let me give you my in the trenches assessment of the past quarter. Facebook is no longer digital advertising, theyre this is what im doing on facebook. Now lets talk about what im thinking about in digital advertising. Mahaney said stain gram could be 2 billion in 2016. A survey of preferred media distributors, buyers, that makes him put up a 15 sequential ad Revenue Growth estimate against 13 . The sequential ad revenue consensus estimate. Think theres upside going into tonight. And i think the key area to watch is going to be video. This is going to be the First Quarter where were going to see real results from video and we could see guidance about how big video could be for facebook moving forward. The most valuable type of advertising, smeshl i had on mobile. One thing that has skeptical expenses. Because facebook got a nice little pop on the back of googles earnings programmatic strong for google. You would expect the same trend to be strong for facebook. Has facebook had a run up to this point. Google talked about expense discipline which surprised people. Facebook had already talked about how they were going to spend, theyve never been really out of control spenders. Do they even have the inclination to say that theyre going to cut back on costs . And if they say theyre going to continue to spend, might that disappoint investors . The only thing that makes me nervous for tonight is i look at this number daily active users over monthly active users. The number of people that are on monthly. Its been alltime high the past few quarters, in the u. S. And canada, its 77 , its been that for two quarters. A high bar to keep jumping over every quarter. Our investors are going to be a little upset if it drops to 75 . Probably not but im just raising. Twitter, not growing. Google, just basically shutting down google plus at this point saying it didnt work and facebook has continually hit new highs as far as user growth so with that backdrop theyre really strong. Water or cocacola. Every single day. Or email. Jon, good to see you. A quick check on the markets, session highs, dow sup 83. Shares of gilead rallying after profit and revenue topped estimates, the drug maker raised estimates. Panera, profit and revenue came in below expectations but the company said sales are accelerating. And were seeing an upside reversal once again the second day in a row, in energy, that might be a reason we are having this nice little rally here midday. When we come back, microsoft takes a step back to move forward, the headline of Walt Mossbergs review of windows 10. With enough rough quarter under its belt what can twitter do to turn things around . Nick billton will weigh in and alibaba laying out a 1 billion challenge to amazon. Why the cloud is get morgue crowded. When youre not confident your companys data is secure, the possibility of a breach can quickly become the only thing you think about. Thats where at t can help. At at t we monitor our Network Traffic so we can see things others cant. Mitigating risks across your business. Leaving you free to focus on what matters most. Nbut your stellar notebook full hangives youn ap calc. The gumption to reach for the sky. Thats that new gear feeling. All hp ink, buy one get one 50 off. Office depot officemax. Gear up for school. Gear up for great. Welcome back, windows 10 launching today and the reviews are in. Re codes Walt Mossberg calling it a solid evolutionary operating system. But warns users they should wait on the upgrade until more bugs are fixed. Joining us now is re code coexecutive editor Walt Mossberg. And walt, tell me big picture, where do you see this operating system . Because we tend to see a hit from microsoft, and then a miss. You know for every xp, youve got a vista. For every windows 7 youve got a windows 8. Is windows 10 going to be more in the camp of the wow, i really love this operating system . Or some other camp . I, well thats a good analysis, jon. But i would say its not going to be wow i really love it i think its going to be wow, this is, this is an improvement this is comfortable this is familiar. And yet it has some new things. So im going to upgrade to it. And therefore, i think its going to be, theres a very good chance of recovering for them. From the flop that was windows 8. Its one of those cycles. Well walt, i mean the pc Industry Needs more than, this feels kind of familiar. They need something thats going to cause people to say when they look in the best buy or whatever store they go into i actually need to upgrade to a new pc, instead of buying an ipad. Instead of just getting a phone. Is this going to be enough to do that given that youve got the edge browser which replaces internet explorer. The start menu is back, youve got cortina in there, you can draw on web pages. Is all of that stuff going to mat centre the newer pcs will let you log in without a password. Are people going to find that compelling, do you think . Well, the last thing i think may be compelling, i did not get a chance to test it. There are few pcs that are equipped to do that yet. Because you need special cameras and special sensors. The other stuff, you know, i really, i dont think the edge browse certificate almost entirely catchup, the writing on web pages is not going to have broad appeal. Some appeal, no the broad appeal. I think cortina could be the big deal. But i have to say, it was very buggy in my tests it didnt work about half the time. So you know, i, and theres one other really important thing here that i think has to be mentioned. In the past, for decades, microsoft has not cared very much about upgrading. Theyve wanted you to buy a new pc when a new version of windows came out. This time they really want hundreds of millions of people to upgrade and theres a hid reason. And the reason is, now theyve got it organized so if you write a new app, a new style app, that runs on a pc, it will also run on their phones. And their phones are as you know, a giant flop. So they need more apps on the phones and they hope to get them through the pc so they desperately want everybody to upgrade. But if everybody upgrades, that depresses sales of new pcs, at least in the short run. So what do you think this is going to do in terms of the phone business . Do you think this going to have a positive impact . I think it will have a positive impact. But im doubtful that it will rescue Windows Phone and make Windows Phone a major contender to android and iphone. Walt, i like what i see of windows 10 so far. Obviously i havent tested it to the degree that you have. Ive had a bit of a walkthrough of it. I really disliked in windows 8, the fact that had you to switch between a tiled touch mode and the old desk top mode. It felt like were you dealing with somebody with split personality when were you trying to get work done. This version feels a lot smoother, cleaner and theyll have pcs with intels new sky link chip down around 500. Thats almost an impulse buy Electronics Price point. Toor me back to school, holiday period, its intriguing, a possibility that some of those consumer who is used to upgrade pcs, every three to four years, now have waited five or six, might see this opportunity to pull the trigger. I think youre right except for the fact theyre making it so easy to upgrade. This will run on the same specs as windows 7 which came out in 2009. This is attractive and i intend to upgrade, i think you hit it on the head in terms of them solving the dual personality problem they had in windows 8. Here theyve really put it in your control. They have a thing called continuum. If you have one of those two in one machines, if you pull the screen off to act as a tablet. It will prompt to you switch into the windows 8 tablety mode, instead of forcing you to have both modes running at the same time. Theyve done a lost things right here. And im certainly going 0 upgrade my windows 8 machine. But im not going to even if given the opportunity and theyre rolling it out gradually. Even if given the opportunity im going to wait a little bit. I think theres a lot of bugs in this still. Walt, i read a lot about this, but i havent tried it out myself. I remember when apple launched siri, it was such a big deal. Cortina, how does it compare . Do you think its on the same level . I think its in some ways its not. I mean theres some things that siri can answer and do that cortina cannot. But there are some things cortina can do that siri cant. Cortina is meant to focus much more on your daily activities. Siri is a broader, movies and stuff like that. It also, theres a lot of overlap. As well as by the way, googles voice interface google now also overlaps. One big difference is that apple has not put siri on the mac. And now we have core tanna on pcs, i think cortana is a huge selling point. It will demo well in the stores. If you read my review, it doesnt work about half about time. And i even got a message popping up on a 1500 new dell laptop that microsoft sent me. They sent me two of them. And this happened on both of them. I got a message that popped up that said hey, cortina, this microphone wasnt designed for cortina, it may not be able to hear your voice commands. So theres some things that still need to be worked out. I think cortina is a big deal, the start menu is a big deal. The untangling of the two interface sass big deal. The question is, will people upgrade or go buy a new pc . I dont know the answer. I think most analysts are thinking there will be a shortterm hit to sales. Which are already down 10 or 12 year to year in the last quarter. Walt mossberg from re code, thanks so much for joining us. Up next, alibaba making a major investment this morning. Aimed at amazon. Details, when we come back. [ male announcer ] some come here to build something smarter. Some come here to build something stronger. Others come to build something faster. Something safer. Something greener. Something the whole world can share. People come to boeing to do many different things. But its always about the very thing we do best. Im here at the Td Ameritrade trader offices. Ahh. Steve, other than making me move stuff, what are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place that lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim . For all the confidence you need. Td ameritrade. You got this. Europe about to close, lets bring in simon hobbs to count down to the close in the uk and across europe. European stocks rising ahead of the Federal Reserve decision, 2 00 our time this afternoon. A height of earnings season. Two interesting things appearing in results. One is the effect of the lower euro which is boosting profitability. You see it at bayer, and i mean peugeuot is making a profit