Where thee at a Forum Library will be unveiled. They will donate 2 million to summer job efforts. Im Alisa Parenti, and this is bloomberg. Emily im emily chang and this is bloomberg technology. Coming up, face the 2 million monthly active users, but couldnt add slow down be looming . We hear from the coo Sheryl Sandberg on their earnings report. Plus, tesla bulls can breathe easy for another quarter as the company confirmed its anticipated model three massmarket is on track to begin production on time. And our extended interview with ,ilicon valley veteran chamath taking on everything from President Trump, to advise for travised goober ceo kalanick. First, facebook shares are down after a quarter that missed earnings. The Biggest Tech Companies keep getting bigger, though, and facebook is no exception. They are at 1. 9 4 billion users, and at this rate, they could hit head 2 billion total users by next quarter. Another contributor is mobile advertising. Thanks in part to instagram. The Company Warns revenue could slow down this year. Revenue growth could slow down because they are running out of space to put ads in the core app. I spoke to coo Sheryl Sandberg who had this to say. We carefully track the impact of ads on the User Experience and we have been doing that for the past several years. We have been able to include the improve quality and relevance of ads. We are focused in continuing to improve ad quality and relevance. Emily joining us from seattle, the marketer principle analyst Deborah Williams who specializes in social Media Marketing and demographics. Your first take on the numbers, especially whats going on with ads. Tells our incredible numbers. Every quarter, it seems like facebook has another great quarter, and its kind of hard to see where they might be problems. The revenue number looks great, the user number looks great. As a lot of momentum at facebook. By the same token, Sheryl Sandbergs comment about ad load, weve heard about this for some time. I think it is starting to show that facebook is looking for act two when it comes to revenue. The newsfeed has been the main source of revenue for five years and now it is looking for other things. Instagram, video. Emily the next act might be instagram, which some people call facebooks next facebook. 700 million users. Take a listen to what Sheryl Sandberg had to say about instagram in particular, and how much it is contributing to the overall high. Instagram is a very important along withlatform facebook. We are seeing strong growth across both. The increasing visualization on ads as part of why they are so appealing, and the fact that you can buy ads through the facebook apps system on facebook, instagram, and audience network, its the same infrastructure and targeting. I think it gives the platform a lot of ability to deliver results for marketers. We are its early, but also seeing advertisers excited about stories, which has heavy visualization and the ability to reach people. Emily that said, they still dont breakout instagram revenue , which makes you wonder, why not . At what point does instagram meaningfully contribute to this to the point where they are willing to show us the numbers . I think it is already meaningfully contributing to facebooks revenue. Our forecast this year is that instagram will have 4 billion in ad revenue, and that is going to be over 1 10 of facebooks total revenue. We have a number of 36 billion for facebook ad revenue this year. Its already a big contributor, so thats probably not the reason why they are not sharing the numbers, but i think instagram is a really interesting platform for marketers. They are still really intrigued by it, and they still want to learn more about how to reach that audience that is so prominent on instagram. Emily Something Else they are experimenting with is different forms of video advertising. Take a listen to what she had to say about that. Right now, the air in the testing phases of the ad breaks. We are excited to be testing them. It is going well so far, but it is early days. We will see. Emily Mark Zuckerberg has famously been against preroll ads, but middle ads, like a commercial on television, how optimistic are you about that as a future source of revenue . Midroll ads and preroll ads, for that matter, have been successful for other platforms like youtube. It makes a lot of sense for facebook to get involved in midroles. I agree the role is maybe not facebook,format for but i feel as they start to roll out more video program, including advertising, i think advertisers will be intrigued that. Video advertising is growing enormously, and advertisers want to find new places to spend those dollars. I think facebook will benefit. Emily theres been concerned about graphic violence and facebook live, about the rise in fake news. Facebook has announced a number of things to combat these issues. Sheryl sandberg told me they have not seen meaningful impact on revenue from these problems. How big a risk factor do you think those two things are . I think they can be a risk factor. The advertisers that we talked to in the past couple of months about issues like this, they havent reported any change in the way that their ads are being responded to or their engagement, or return on investment for advertising. So far, these things have not had an impact on the revenue on the advertisers ability to use facebook. Wonder over time if peoples attitudes change, if they are happy using facebook, if they are worried. If it causes them to be less engages facebook. All these things they are watching, but right now we are not seeing evidence on the revenue side. Emily we will be watching to see if they had the 2 billion user mark. Principal analyst debra williamson, thank you for joining us. An update following Apple Earnings results on tuesday. Apple shares fell from record sales. N flat iphone revenue out of china dropped 14 in the quarter. Earlier on bloomberg tv, we spoke about the challenges apple is facing in china. China in particular is a challenging one. It is tough because not only do you have higher awareness, as we do in the u. S. As well, of the new iphone, but you also have significant localized competition with Companies Like devicesreating great that can compete from a features perspective. Emily coming up, we are continuing our earnings coverage with tesla reporting its firstquarter results. The Company Reported a bigger loss than expected, but investors are encouraged about model three production. Shares are dipping after hours. If you like Bloomberg News, check us out on the radio. Check us out on the bloomberg app, bloomberg radio, and weary sex and. Sirius. This is bloomberg. Watching. Tory we are Hedge Fund ManagerDavid Einhorn is putting a target on tesla, saying the markets are too optimistic about their prospects for expanding electric car sales. He says stockholders put the rational faith in ceo elon musk. For the time being, investors remain hypnotized by the tesla ceo. They are comfortable with the company being able to massmarket cars and justify the current valuation. And dizzy has him for tesla and other bubble basket stocks is reminiscent of the march 2000. Com bubble. Many stable it. Tesla says initial production of the model three is on track for tonight july. They still reported a bigger loss than expected in the First Quarter. We are joined by our reporter covering tesla for Bloomberg News. What is the Biggest Surprise . Anything to do with the model three . Reporter i think the bulls, the levers of tesla and fans of elon musk, lovers of tesla and fans of elon musk, have a lot to be happy about. This is a company that has no often delayed project launches, and now they are two months away track. Theyand is on are going to get to 5000 illegal this year, 10,000 a week by next year. Suppliers are ready. A lot for them to be happy about and be excited about. But of course, its not the most explicit sort of earnings report. The bears are kind of winning now. Theres fake news on the guidance of the s and the x, and wondering whether spending is not as heavy as anticipated. A lot emily to chew on. The model three will be the car, mark massmarket and you wonder if the owners will be as forgiving as owners of the model s or the model x. In terms of quality expectations for the model three, how optimistic are you . Reporter it is paradoxical. Productct 100,000 vehicle or any other product to be much better than one that sells for half or third that amount. But there is an issue that when somebody buys a model three, it might be there only car. Model s withg a ludicrous mode, they have other cars, so they can hire someone easily enough. Whereas a 30yearold was barely able to buy a model three, and its in the shop, they are left out. I dont know if they will be that much more judgmental, but they are going to be in deeper trouble if there are breakdowns the way with other tesla models. Emily lets talk about tesla compared to the other automakers. It is now the most valuable automaker by market cap. Are investors to optimistic about tesla, just like what einhorn said . Reporter you know, thats the beauty of the marketplace. They get to debate and they do dollars. We still get to see about 20 of teslas flow is shorting. There are a lot of people who agree with mr. Einhorn. Based on the fundamentals, it shouldnt be worth more than gm or ford. But it is all about the possibility, what it could bring with model three, and as it builds beyond that, and if it can do so profitably. The Profit Margins are pretty darn good, but can you do that when selling 50000 and 30,000 other cars . That is the big test 50,000 and 30,000 cars . That is the big test. And worldwide, with china in the mix, is there going to be enough demand year after year, decade after decade . That is the real test. Those who believe it is like henry ford in 1915, if you can get with him 30 years before the ipo, you would. Thats the way they see it with elon musk. Emily lets talk about cash burn. Is that a concern . Always. this corridor wasnt bad. They consumed about 600 million in cash, they raised 1. 2 billion dollars. It was better than it was three months earlier, but elon musk said they need to spend about 2 billion to launch the model three, or before they started making the model three in full production, they only spent about half 1 billion. That might be some of the overhangs causing anxiety and pushing the stock price down after market. Emily looking outward, tesla has a lot to prove, but are the times changing too fast for ford and gm . Can they catch up . Reporter if you ask dm, they will tell you tesla has to catch up to them, because they already have a 30,000 electric vehicle out. But on image, they cant touch tesla. Implodes,a completely or unless they implode, it is hard. Therespired to be, and images, they are an electric porsche. They are superfast and they dont pollute. There is an aura about them that is an f150 or a corvette just cannot touch. Jamie from the heart of motor city, our Bloomberg News auto reporter. Thank you. In addition to facebook earnings, the social network is stepping up review of controversial videos involving suicide. Bess after recent murders in cleveland and thailand were both posted on the site. Ceo Mark Zuckerberg says the company will hire an additional 3000 workers, on top of 4500 reviewers already employed. Facebook has been criticized for not doing enough to prevent these videos from spreading. I spoke to coo Sheryl Sandberg, this as the social network does not take fake news lately or violence. This is bloomberg. We havent seen any impact on revenue, but we take all of these issues really seriously. We know people want accurate news on facebook. We have announced a number of steps, including disrupting economic incentives and building new products to stop the spread of falseness. We take it seriously. Emily there is a serious bidding battle going on four Straight Path communications. Verizon is said to have offered a 2. 3 billion takeover proposal, giving at t three days to match the offer. Losing Straight Path to verizon would be a big blow to at t, which agreed to acquire the Country Company for 1. 6 billion last month. They are one of the largest older of spectrum approved for fifthgeneration use. At t is eager to use those airways to build the five g network. Continuing coverage from the global conference in beverly hills, our bloomberg editor at large Erik Schatzker caught up with reddit founder Alexis Ohanian and, ask what is at stake given trumps policy actions. We are in an industry that and thats ald, powerful thing. There are not a lot of industries in the world that america is dominant in. The reason we do that is in part because weve always had an industry and a country that has wanted to get the best and the brightest and give them chances from anywhere. Have had ase we level Playing Field for upstarts their dormt idea in room, to sit and make something without waiting for permission, putting it out to the world, and making Something Better. Reporter i dont think anybody believes the administration is trying to stop anybody from doing anything. The other issue you raised implicitly is immigration. I would say not neutrality speaks to that second issue, where it is imperative we have a level Playing Field. The upstart needs to be a will to win. If she makes Something Better and the market users chooses the bigger winner and not Cable Companies. Reporter lets look at the issue separately, even though i can tell from your point of view, they are part of the same problem. Lets begin with immigration. Andes an effort underway talk of restricting the number of h1b visas issued to companies in silicon valley. How would it affect reddit, and how would it affect tech . Frankly, the h1b issue wouldnt affect us tremendously. We have over 200 employees, but h1b visas are not a primary concern for us. More broadly, what is so important is that we have amazing people who we want to bring here to help contribute to d it, to create value read, cleco you, provide for their families. Now they are wondering, is this a country i can stay in longterm . We have our neighbors to the north, canada, taking advantage of the opportunity and the fact that you have talented, proud americans, or people who aspire to be that, who are thinking twice about whether or not america can be the place for them to find their american dream. Reporter you are worried about canada stealing the march on the u. S. When it comes to innovation technological development, . Yes. Frankly, one of the reasons weve been so dominant as an industry globally is because people have known this was the place you could go and create something amazing. Whether it is starting a company or joining one. Reporter for you as a matter of principle, not practical. It is primarily a matter of principle. I published an open letter on reddit. Read it would not exist if it wasnt for the fact that, my fathers side of the family were all refugees. My mother was undocumented for a couple of years and was able to remain in the country. Its a personal issue for me. Reddit fx read it a lot of people, so i feel the need to speak up. Underlinesle here the biggest issue, which is structurally, the country has always thrived because it has taken the best and brightest in. Reporter lets talk about Net Neutrality. Why are you so concerned about it . Pai, hesajit blocking the sec shot. We have got into a place allowing for a level Playing Field. All americans Want Companies to succeed because the market says they should. Now,we are talking about what the fcc chairman is talking about, is going to let Cable Companies pick winners and losers. Thats against the founding principles of how the open internetworks, and its going to mean a worse outcome for consumers. I want better things, and i think most americans do. Reporter what about other arenas late search like search, for example, were google picks winners and losers in its search algorithm . Is, at is so interesting the end of the day, i can load up any Search Engine i want. There are upstarts that get funded all the time to compete with google. There isnt any difference between getting to a google website today with Net Neutrality and getting to some upstart. What i dont want, and what will happen if we lose Net Neutrality rules, is for one of our Cable Companies to decide that the default search package for your internet involves some competitive deal. If you want Google Search or other search options, you have to pay more per month. I dont want my internet to look like my cable bill. Emily reddit cofounder Alexis Ohanian with bloomberg ellet editor at large Erik Schatzker. Coming up, President Trump and the innerworkings with chamath palihapitiya. Facebook cfo dave wehner says hes expecting Revenue Growth to slow down meaningfully. We will continue to bring you the highlights. This is bloomberg. Alisa im Alisa Parenti and you are watching bloomberg technolog