Fbi. Now, the vote has to the senate. If approved, he will replace james comey. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. I am Alisa Parenti. This is bloomberg. Emily imo emily chang. This is bloomberg technology. Coming up, microsoft focus on the cloud pays off as revenue soared past the highest estimates. We will break down there Fourth Quarter scorecard. Elon musk says he got the green light for his underground tunnel project. We will dig into the hyperloop that can get you from new york to d. C. In under half an hour. Hulu steps up to the plate in the streaming battle against amazon and netflix. A guest joins us on the race to rule content in the golden age of television. First to our lead. Microsoft shares are rising in extended trading, up as much as 2. 7 after reporting sales that rose. For the current service. It points to the companys turnaround plan working. Lately to reshape microsoft as a Cloud Computing powerhouse with new Services Related to office 365, a shift that led to a massive sales restructuring. Rose. Activity software increased 43 . Joining us now to break it down is cory johnson. We have to talk about the cloud first. Cory it is amazing growth. Only Amazon Web Services is bigger. Emily how much bigger is amazon . Cory we dont really know but probably five times bigger. Nonetheless, it is a big business and growing. You mentioned the growth rate is really terrific for them. It shows you they have used these strengths that they have, particularly Microsoft Office to move corporate customers from just office to office and the cloud. That how business, a lot of their dedicated Office Customers were already storing stuff is in office 365 and other things. They have some comfort with as it. They are benefiting from the industry trend. Emily i am curious how much microsoft is actually a threat to amazon in this business because obviously microsoft Cloud Business is going, but so is the Cloud Business overall. Cory when you look at the big offerings for this industry, it will be amazon, microsoft, google, ibm, and oracle. Those are the Big Companies out there. What is amazing is prices keep coming down. Amazon has been aggressive about cutting prices, and i that is probably the biggest worry they have. Can amazon continue to cut prices and have the big offerings . The other thing amazon is doing is adding more and more services and more and more types of Software Offerings and more and more types of compute solutions to make for some very competitive business and stay in the lead. Emily microsoft is spending a lot to expand its business, spending a lot of money on data centers. How much is it costing them . Cory the collapsing margins is what you see as the most. Traditionally, microsoft had a high margin business. Minimum compared with the revenues were like. Now, microsoft is having just been a lot more money on r d jakarta keep up with microsoft and google and others. Emily last quarter, they have rolled out some new devices. How is the hardware line doing . Cory the hardware businesscory is not big for them. It was a way for them to lead and show by example. The computing business, the pc business, they call it more personal computing, which is ridiculous. More personal. Intelligent cloud. If they had a stupid Cloud Business, i would allow them the adjective. Soapbox, i am to. Am done. 1 . Usiness down only that is a home in victory in this environment were only apple is seeing growth in pcs. Emily speaking of personal, pc shipments continued to fall. What does that mean for microsoft overall given the windows news . Cory this could have been a lot worse. We talked about over the course of doing it is growing. Emily seven years and counting. Cory again, down 1 . They would happily take that while they grow this business. I have always liked this comparison of looking at wall street estimates, but with this move in the cloud and the rapid growth of cloud means, the quarters are less critical than they used to be for microsoft. Even at microsoft, they do not know how they will do because they have this tiger by the tail of the cloud, and the results can be surprising. We saw that when we have had two of the last exporters having fails below the estimates, which shows how unpredictable the business is. Emily cory johnson, our editor at large, thank you for making it down for breaking it down. More earnings we are watching out of europe. It raised its revenue outlook and Sales Forecast and said it would buy back up to half a billion euros in stock. The higher guidance and buy back may balance disappointing margins. Sap ceo Bill Mcdermott spoke to bloomberg earlier today. We have invested very heavily in two areas in the first half of the year. When his hiring the very best acceleratedreal clip because we want to get the leverage from those hires in the back end of the year. You will see us slowly down because we went fast. The second thing is we invested in the cloud. Emily coming up, elon musks hyperloop project may have cleared a major hurdle. We will explain next. Bloomberg technology is Live Streaming on twitter. Check us out weekdays at a copy of in new york, 2 00 p. M. In san francisco. This is bloomberg. Emily shares of qualcomm fell the most in six months. The stock slid 5 in friday session. Thforecasting steep declines in licensing sales and profit, underscoring its dependence on the royalties that apple has stopped paying. Elon musk sent the tech and transportation world into a tizzy earlier when he tweeted just received verbal of government approval to build the hyperloop. New york 2d see in 29 minutes to d. C. In 29 minutes. Joining us now is max, who has covered Elon Musks Boring Company for Bloomberg Businessweek. Elon took you into the tunnel. What do you make of the idea that regulators would actually give elon musk approval at all for this . Saying verbal approval can mean any number of things. If i am reading the tea leaves here, it could have been some kind of a positive signal from the federal government. Wwe know he has had some conversation with the white house about the idea of digging tunnels, assumedly as part of some infrastructure project. It would also have to do with the government of d. C. These projects would involve a tangle of different regulations, local, state, federal. Verbal seems very small. What it really sounds like is musk is serious or getting more serious about digging these tunnels and trying to build , both politicallitica support and thinking about how to raise money for this. Emily as you have been speaking, i got a statement from a Company Spokesperson saying the Boring Company has had a number of promising conversations with government officials. With the exceptions, feedback has been positive, and we received verbal support from key government decisionmakers for tunneling plans, including a hyperloop from new york to d. C. We look forward to future conversations along this route and expect to secure the formal approvals necessary to break ground later this year. What is your reaction to that . Max i mean, it sounds like they are basically fleshing it out. The key thing here is that, you know, first of all, it is very early. There is a lot of steps, especially when you are talking about the actual hyperloop, a superfast train. A lot of stuff, technical hurdles they would have to cross that have nothing to do with regulation. That said, what elon musk is being into here is, number one, a lot of these big megaprojects have gone very poorly. Obviously, the 2nd avenue subway in new york took Something Like 100 years. The subways in los angeles have cost billions of dollars. Problematica fiel project called big bertha. I think elon musk things i will be able to use some of my know how, some of the same playbook i used to make rocket travel a little bit cheaper. He has managed to cut the cost of a launch by quite a bit at a time when it recently a lot of enthusiasm on both sides of the aisle for some kind of infrastructure spending. Emily any chance elon musk is trying to drum up enthusiasm by tweeting right away that he got verbal approval . Max yes. I think he almost sort of came out and said it afterwards. If you care about this, you should talk to your legislators, your local governments, federal government, state government. I think that is 100 what he is doing. If you remember back to when he was doing spacex, it started with no special expertise, and i think he had this initial plan when he was going to build a greenhouse on mars and use that as kind of like a way to attract attention. This kind of attention grabbing move is not something that is totally new as far as the musk playbook. He is a guy who has a track record for doing this sort of thing. Some of these projects that he undertakes do not end up coming to fruition. They do not really go anywhere. He has said as much, saying you thinks a lot of people are acting as if this is going to fail. On the other hand, in his where his expertise is. He seems to be most of vrable what he has as many balls in the air as possible so i guess that is what he is doing. Emily i want to ask you about a story you have in Bloomberg Businessweek. More news coming out of washington residents have rebuking his attorney general in an interview with the new york times. The scoop that bob muellers investigation is moving to cover President Trumps business. Trump is taking Silicon Valleys butt. How so . Max there was a meme in february that Silicon Valley is going to be this key source of protest. What happened last week while no one was paying attention, the Trump Administration kill this International Entrepreneur rule. It was a modest bit of Immigration Reform that would have allowed an onto party were to stay in the u. S. Visa free, something that people in the valley have been pushing for since 2009. It is one of these inoffensive measures, noncontroversial, had bipartisan support. Barely a whimper, it was killed. It is possible that the Silicon Valley was able to move somewhere on Immigration Reform, but right now, it seems like a lot of these efforts that they have put forward, there is a new thing for mark pincus and reid hoffman. Have not got much traction. That is the point i was trying to make. Twitterhe former ceo of was on the show a couple weeks trump mayaid, look, ru be meeting with tech leaders, but he is not listening. Would you agree . Max at a certain point, why are you going to these meetings if it is just resulting in a bunch of humiliating photos and not much else . If this thing that elon musk were happening, you have to look at that as well where engagement has paid off, but so far, it seems like Silicon Valley has come to the Trump Administration wanted to talk about immigration wanting to talk about immigration, and they have gone nowhere. Trump has gone the exact opposite direction. Emily thank you so much, max, as always for stopping by. You can read his story in this weeks edition of the Bloomberg Businessweek on newsstands now. Coming up, hulu is taking a victory lap after its original 13w handmade tales snagged emmy nominations. Will hear about how the company is getting noticed in the clouded streaming space crowded streaming space. This is bloomberg. Emily and medianews, negotiations to acquire Media Companies networks are grabbing that a deal could be announced as soon as this month. This according to people familiar with the matter. Via, and another are vying to buy the company. Hulu with a big push into topnotch talent. We talked with the ceo about how the company is going directly up against amazon and netflix thanks to its latest success with the handmaidens tail, which just received 13 emmy nominations. You know, we started original programming at hulu five years batchnd our most recent started a yearandahalf ago. We have been in business with some of the best out there. But this one is really special. It has broken through an a way that nothing ever has for us, and so we are really excited about it. Emily how do you get people outside of los angeles and new york to watch it . They do. A large chunk of our viewership is in the bill of the country. We do a lot of marketing all over the country. It is a story that resonates not only in new york and los angeles, but all over the world. Emily what is a mix of originals versus lik license content . Mike from a number of titles that point, it is very small. We have 3500 series of tv across the whole platform and about 20 originals. Consumption is a different matter. They over perform licensed content as a general matter. Emily net worth is spending billions on original content. What is your programming budget like . Mike we spent an awful lot of money. Obviously, we are not spending as much as netflix is this year, but we are aggressively investing. I think it is important we are selective and thought whole about our content strategy. Emily you seem to be licensing a lot of reruns. I am curious what the strategy is there. Mike we are trying to have your favorite show. When we look at licensing content, were focused on certain john must and certain content types as we much of our customerss wants. Emily given how aggressively netflix and amazon are in the market now, i wonder, how hard is it to get a pension for these shows . More is not always better, right . Mike when you look at the competition, there are 300 to 500 scripted shows on tv every year so we are looking to break through the clutter of those shows. When we saw the handmaids tale, with a great script, cast, and we started seeing the episodes come in and thought we have to put our way behind this. We started the campaign out with to add two ads in the super bowl. Emily are you only as good as your last hit . Is all about finding the next hit . Mike it is important. You cannot launch one and have not more in the future. For us, we believe this is the first of many. We are excited what we have in development and are in production on this year. We are doing another show called castle rock that is coming out next year. We are doing a show called looming tower. A lot of interesting shows coming. We hope this is not the last. Emily you do not know what makes a good show. You just have to give it a try, but there has to be more to it than that. You guys must be doing some sort of expectation and research into what works and what people want to watch, right . Mike we certainly do. There is a lot you can learn, but ultimately , it is about story, characters, and world. If the show does not have two of those three or three of those three, it makes it tough to break through. Emily will you ever release a movie in theaters like its an amazon . Mike we have not gone into the original theatrical business. Never say never, but that is not part of our strategy today. Emily you will come a live tv service. Curious about early results. Mike it is going really well. We launched it two months ago. We are updating the service. We have 145 affiliates on board across the country. The demand has been really high. We are going to push hard in the fall as we get the rest of our devices rolled out. I think you will be hearing a lot about it in the fall. Emily with networks have been the most popular . Mike you know, it is interesting. When live sporting events are on, though seem to be the most popular, same as on regular television. Interested to see lifestyle programming is doing really well. Of course, big scripted shows. We lost a 302 weeks ago we launched hbo two weeks ago. Emily any network you had to leave out that you regret . Mike well, for us, what we looked at as we try to put together a package that starts with force. We started out making sure we had a compelling and competitive sports offering. We started there and have added script networks, amd, so we are a e, so we are accountable with what we had today. Emily was a like running a Media Company with 4 of the biggest media businesses and bosses . Mike you get a lot of benefits. We receive a lot. Not only are they funding us in our ambitions, but they are great partners, very smart people that we rea leon. It is a great organization. They are powerful and helpful. Emily do they ever disagree, and is that a problem . How do you handle it . Mike i would not say everyone agrees all the time, but i knew when i came in that they were aligned. I was on the board of hulu as a member of the fox contingent, and when we reinvested, everyone was largely on the case for the last four years. Emily you said you are interested in international expansion. When and where . Mike we have not settled on that just yet. We are looking at a lot of different ideas. When you look at us, we can scream for free str for free, we have a variety of things we can do internationally. I would not be surprised if within a couple of years we are talking about a few more markets. Emily people say we are in the golden age of tv. Do you agree . What is next . Mike it is interesting. If you go back 30 years and look at what existed 30 years ago, three or four broadcast networks. Over the last 30 years, you have gone from that to 500 cable channels, and all of this stuff is happening digitally. I think we are in the golden eggs, but i think choice and john was is going to be the genres is going to be the future. You can find everything you want, every show that has ever been made on your phone right now, and i think that continues over time. You will be able to see what everyone wherever you want it, and that is exciting. Emily my conversation with the ceo of hulu. Coming up, swedish respond carrier reported strong earnings this week. What is behind their growth, next. This is bloomberg. Alisa i am Alisa Parenti in washington and you are watching bloomberg technology. Paroledpson will be after serving ne