This will be problematic for the fed. If we get stronger wage growth that trumps everything. We have not seen a pickup in wages yet. Consumer confidence rose last week to the highest level since 2007. Bank of america cut the bonus pool for equities traders and sales staff by as much as 10 . The bonus cuts come as be of as trading divisions revenue fell 1. 8 last year. Revenue failing to keep pace with expenses. Forget deflategate. Arizona Health Officials are monitoring hundreds of people for the measles as an outbreak started at disneyland and is spreading. Tens of thousands of fans trekking to phoenix epidemiologists are looking for people in hospitals, groceries and postal stores where infected people visited. Arizona reported eight cases so far, including two in the county where the super bowl will be played. The fcc auction of us airways has ended with a record of bids totaling more than 45 billion. That is bigger than the combined take of every auction of airwaves before it. The sale ended with just a 341 rounds. Verizon, at t, dish, tmobile all among the Companies Register to take part in the sale, all anxious to get more spectrum for data hungry customers. Now to the lead. Alibaba sees opportunity in mobile. That mobile focus is hurting the company in the shortterm. Revenue was up 40 yearoveryear to 4. 2 billion. It is slower than the growth rate of the prior quarter. More buyers are shopping on mobile. Ali baba is also dealing with a recent Chinese Government report accusing the company of allowing fake goods and fraud to sell on its suite of websites. Earlier betty liu spoke with the chairman from hong kong and started asking him about ali babas mobile strategy. We had a very good quarter. If you look at the growth and the metrics that we really focus on, it is gnv and active buyers. O nan a gnv basis during this quarter we grew 49 . We now have 334 million active buyers on our platform. These are consumers coming to our platform day in and day out to buy things online. We are very happy with that result. On a net ad basis this quarter we added 27 million new active buyers. A lot of that is driven by the User Engagement and activity on the mobile platform. Lets talk about mobile. I know it is hip and cool these days for company ceos to talk about what theyre doing on mobile, and theres a lot of growth there. Your add rates on mobile are lower than they are on desktop. Is it really a great move for growth for ali baba to encourage their shoppers to go mobile . Yeah, so this shift to mobile obviously there are two sides of the coin. On the monetization rate the reported 1. 96 monetization which has been trending up over the last few quarters. The one thing to remember about mobile is we have 265 million monthly active users coming to our mobile apps to buy things. That is a very good result especially in light of the net ads. We added 48 million monthly active users in this quarter. We believe that as long as you continue to attract users on mobile to buy things to engage on your platform, at some point monetization will follow. One thing i would like everyone to remember, in the fourth quarter, ali baba generated one billion u. S. Dollars in mobile revenue. This is a very substantial number. We broke that 1 billion mark this quarter. Speaking about mobile, yahoo saw some good mobile ad Revenue Growth in their quarter just a day ago. Marissa mayer has not spun out her ali baba shares now spun out her ali baba shares into pimco. Would you have any interest in buying all or part of pimco . We dont anticipate entering into an agreement with yahoo or spiconco. This is something that is the right of yahoo to do. Their board has decided to do the spinoff. From our perspective operating the business day today, today we have a 15 shareholder in us yahoo . After the spinoff we will have another shareholder, that is the spinco. It doesnt change anything from our perspective. I would like to take this opportunity to thank Marissa Mayer and jackie races, who has been on our board of directors until the ipo. They have been great partners with us over the last couple years. I know you are a great deal maker, and you have made lots of deals for ali baba. Is yahoo on your radar at all . We are very focused on our business in china. If you look at the deals we do in terms of investment and m a activity over 90 of them are focused on how we grow our user base, how we increase User Engagement, and how we expand our categories in china. With a limited activity that we do outside of china, its very much focused on the crossborder trade, always with one elg in china leg in china. That is how to enhance our ability to serve Small Businesses to sell chinese businesses to sell to overseas consumers and more so now how to help Small Businesses from around the world, including u. S. , to sell to chinese consumers. Our platform has 334 million active chinese consumers. I mentioned earlier about the fight you have had in recent days. Im sure its not something you wanted to talk about or that you would want to talk about on a day like today, but the fight you have had with the chinese regulators over alleged fraud at ali baba, it is one of the risk factors in buying into your company. What exactly are you doing to combat fraud on your Online Marketplaces . The underlying issue is an issue that we take very seriously. Alibaba runs retail platforms that trade 370 billion a year on the last 12 months basis. Thats a lot of transactions. In a way, we very much reflect a very significant part of the retail economy in china. The issue of Fake Products counterfeit products are really a matter for all the participants in the economy to solve, they involve online efforts and offline efforts. Let me just say this, for us there is nothing that is more important than the trust that consumers have in our platform. That means they should feel comfortable to come to our platform to buy things and trust that our vendors are selling them highquality goods. We take a very draconian approach towards counterfeits. We spent a lot of resources and money and people to combat this problem. We work with Law Enforcement of agencies to shut down factories and warehouses that make counterfeit products and put people in jail. We are doing as much as we can on this issue. Bloombergs betty liu with alibaba executive vice chairman joe tsai. Facebook killed last quarter on mobile and everywhere else, even using numbers user numbers. Also up, a massive jawdropping, billion dollar r d spend. We will look at what Mark Zuckerberg is spending all that money on next. Time for a check of your world news. Investigators of the airasia flight that crashed in the sea found the plane descended that move likely done to avoid bad weather. All people on board were killed. A new round of peace talks aimed at ending the fighting in Eastern Ukraine is set to begin tomorrow. Meanwhile, the eu may slap more sanctions on russia for support a prorussian separatists in ukraine. Shell saving 15 billion after a drop in oil prices. The ceo says hes confident of an oil comeback at some point. He also pledged to do all he can to keep shelled evidence. Shell dividends. Hes helping hes known from growing facebook one of silicon valleys most outspoken investors. The focusing his sights on the social and capital partnerships of an unconventional venture fund. You are legendary when it comes to growing facebook. What did you do, how did you do it, and how much of it was you and how much of it was facebook . It was 99. 95 facebook and 50 basis points me in my job. I inherited an unbelievable leader who had an unbelievable vision, and i was lucky to have a group of people who wanted to tolerate me for 4 or 5 years. I know that startups today are consciously looking for their chamath. I know one startup has a code name for you, charlie foxtrot c f. What are facebooks Biggest Challenges today . It is the challenge of any successful company, the in internal internal inability to distract yourself. Facebook, google apple. Extreme wealth creation, all the distraction that then creates extreme amounts of incremental focus, attention, press adulation. The accolades come out of every part of the woodwork. It takes a really special person to not be able to be affected by that. Google and facebook are trying to do a lot of the same things. Who wins . They both win, but in different ways. Google wins with respect to the entry point. They own the front door to the internet, and they own the front door to 90 of the mobile world. Dont miss much more of emilys interview on studio 1. 0 tonight, 8 30 on the east coast and west coast. Facebook continued its growth with lots more users. The social network has managed massive ad Revenue Growth, especially mobile. The ceo Mark Zuckerberg spending faster to chase the opportunity of mobile advertising and messaging, as well as new hires. Mark mahaney joins the right now. It was an interesting quarter for facebook. So much to talk about here. The growth in mobile, 38 of the users on mobile only, and revenues just march onward. The single biggest trending internet is a switch towards mobile devices. Facebook caught up two years ago and facebook today is ahead of the curve. When all is said and done, when the quarters are printed, they will probably have one of the best growth dynamics in the internet sector. What do you mean, growth dynamics . Fastest growth rate. Revenue 50 plus. They are investing at the right time. They can hold off on investments, raise margins and two years from now their growth will probably stall out. They spent 1,000,000,111 in the quarter on r d. Its a bigger percentage of revenue some they have done for years. When they first were a private company, they thought they could run a much more lately than everyone else in the valley. They learn from their mistake that no, you have got to bring in a lot more researchers, r d people, sales and marketing people. Why . This platform has become bigger than i thought. What is the r d challenge . I dont think theres an r d challenge. If you want to go from 1. 5 billion people to 2. 5 billino people billion people and you want to add up their properties it was not included if they include instagram or not. They dont. Whatsapp was tremendously disruptive. Facebook is bigger than china, just to give you a data point. More people. I want to talk about google. What should i be looking for . There are three surprises we would like to see. First, give us a sense of how the nonsearch ad revenue is going at google. Theres a lot of headwinds now. You have this apple maybe market share loss with safari. Backup. Safari is gaining market share over chrome . It is marginally gaining share. The decision coming up in the next few months is whether safari outsources search, not to google, but to microsoft, yahoo . Marissa mayer talk about it on the earnings call. Will all that business go to one, or could they split it up . It would go to one or the other. Yahoo is in the hunt. Yes. Apple is returning a lot of that cash to shareholders to shareholders trade why not you google . People want to see how the core search business is doing, and want to focus on the pricing stabilization. It has been negative for four years. Cost per click is one of the metrics they put out. When i break the earnings later im going to pretend like i knew all this without talking to you. Cost per click, thats the big number . That is paid clicks. 15 . It is a combination of the two. If they were to get cpcs or pricing flattish yearoveryear, it would be the first time in four years cost per click been declining rapidly as more and more people are mobile. Monetization is lower on mobile. But at some point along the way they get enough liquidity in mobile searches, enough advertisers to buy in, and mobile websites improve, Conversion Rates rise, cpcs flat across the board then they start racing. You want to own google at the right price when that curve tips up. Thank you very much. Bloomberg west will be right back. Welcome back to bloomberg west. Alibaba shares are slumping down this much is 10 after fiscal thirdquarter revenue missed estimates. Wall street, where is the love . There was a whole love love that alibaba. A firsthand look at working as the ecommerce giant. When you enter alibabas headquarters in china, its a lot like stepping into any tech campus in silicon valley. Inside there is a starbucks to fuel all matters, yoga classes and three cafeterias serving employees. But the perks dont stop there. Alibaba takes it one step further, helping employees to find love, marriage, and even start families. It may look like any other tech company, but the culture here is unique. Employees referred to each other as ali people in many use nicknames taken from kung fu novels. One of the big influences on jack mas life was a martial arts novelist. In the early days, people took on nicknames of different characters that were in these martial arts novels. That fighting spirit has attracted young people to work at alibaba. The average employee is 30 years old, works 9 00 to 6 00, and has a starting salary of nearly 33,000 a year nearly seven times the average of the urban chinese worker. Alibaba attracts Young Chinese who are at the top of their fields. People feel they can break down barriers and do innovative types of things in their work life. Jack ma is also unlike any tech company founder. From serenading employees to play matchmaker. A heartshaped getting bored between a gym and a cafeteria is filled with photos and phone numbers of single employees looking to find their match cap this. Jack ma is so revered within the Corporate Culture that every day on ali day he marries dozens, if not hundreds of alibaba employees. They now have ali babies photos on the wall, babies born to alibaba employees. Those new families can get an interestfree loan for a down payment on their first home and over the years, alibaba is also given birth to a whole new generation of chinese internet companies. Former employees have helped to start more than 145 new businesses. Theyve attracted people who believe they can do something different, individuals who are dreamers and fell that they could change the chinese economy through alibaba. This close knit culture has been a critical part of alibaba s identity, and keeping it all in the family has helped the company grow into a global powerhouse with over 24,000 employees. That is more than facebook and yahoo combined. Kenny chang, bloomberg, china. That is crazy. Office love, imagine that. Our dish network has an answer, sling tv. It one big at the Consumer Electronics show. It won big at the Consumer Electronics show. You are watching bloomberg west where we focus on technology, innovation, and the future of business. I am cory johnson. Dish network is rolling out sling tv. It will give customers access to channels that they usually do not get from cable like disney channel. What is the reaction to this . The reaction has been beyond what we have expected. It has been a phenomenal reaction. We opened our website on january 5 where people could preregister and it has been beyond expectations. The options are interesting. The most interesting is espn on devices that people have not been able to get any other way except for cable or satellite. Yes, this is the first time people can subscribe to espn without those traditional contracts with cable or satellite. That was one of our key objectives. We know that millennials love the content that is available on cable, but they do not like the model of credit checks, installments, wires, all of that and we wanted to create something that was more like what you have two cell music but for cable channels. At that the Cable Companies love this. Maybe not. This means that they will be able to sell more broadband which is their most profitable business. But there business is also to hook people on big packages. If you want espn, you are going to take tnt cbs, all of these other things. These are the hooks they use to jack up cable bills from 20 a month to 100 a month. Yeah, i think our business will continue to be strong. The real issue with, what we seeing is, the Younger Generation is getting into their first apartment. They are not choosing paytv at nearly the same rate as the generations before them. They also like to schedule what they watch it when they watch it. They cannot do this with this model. Why not . We work with the providers to make as much of our content on demand as possible. On many of our channels we have a Replay Service where anything broadcast over the last three days, you can go back and watch. Our real objective is, lets if the content tent providers to make as much available as possible. I watched hbo lead of the way it time warner in terms of what they want to do online and how they want to go over the top. Of course, they are very tightly tied to people who already have a subscription on cable because that is where they are a moneymaker. In what ways have they offered feedback . I think the real landmark deal in this industry was when we announced our deal with disney last march. I think what they saw and the other programmers have seen is there is the demographic that the traditional employers are not reaching. If the only way to keep your business package is to meet these consumer needs, the traditional bundles are not meeting needs. So they need the service. Youre saying the east espn is not reaching millennials . Young men who would not consume media another in any other form . What i mean is that is a very popular channel for those viewers. The problem is, they are not signing up to paytv in the same proportion as the generation before them. They want to watch the content area they just need another business model. Raley . What are those numbers like really . What are those numbers like . And rough numbers about 100 million paytv households in the u. S. And about 100. 5 million homes. The number of households is declining slightly. The gap is declining. The biggest contributor to that gap is money. Interesting. How does the business tie in with your corporate parents there . How does this scale in relationship to those broadcasters . Why wouldnt they work for a completely separate entity . We could not do this on our own because we rely on the programming relationships that dish network has with all of our programming partners. We did set