Worries about cord cutters from cable stocks. Are they cannibalizing their own business by doing deals with netflix . First a check on our first word news. U. S. Stocks retreated from a threemonth high today, remarks from janet yellen indicating we may be closer to a hike in interest rates. The s p 500 slipped about half a percent. The dow dropped 51 points. Latest u. S. Intelligence suggest the crash of the russian passenger jet in egypt was most likely caused by a bomb planted by the Islamic State sinai affiliate. The u. K. Has suspended flights to and from the Sinai Peninsula as a precaution. Egypt confirms the voice recorder is damaged. Information from the date of recorder was successfully copied. There was serious damage to the voice recorder. Among u. S. Election day winners airbnb the Company Fought off a ballot measure to limit the service in its hometown. It would have imposed a 75day limit. The measure lost 55 to 45 . Comedy central says trevor noah what had an emergency appendectomy this morning. They say that procedure went well and he is expected back on the show tomorrow. He took over as host in september. The lead tonight is facebook. The social network crossing one billion daily active users for the very first time, 65 of people on facebook use it every single day. Monthly users hit 1. 55 billion. 78 of ad revenue coming from mobile. I spoke with ceo david earlier today. He said we are seeing good performance and video making an instagram starting to make a contribution. Joining me now to dig into the numbers, cory johnson, and David Kirkpatrick joining us from new york. He is the author of the facebook effect. We have been listening on a call. 500 Million People are watching video on facebook everyday. The numbers seem insane. Cory facebook is like china, the number is always big. You have about 2 billion people on the site, 60 of them use it every day. Extrapolate that to be about video is successful on facebook, to be sure. Everyone on facebook is not watching videos every day. There are just so many people emily the growth in advertising is not hurting User Engagement at all. I never click on ads and i am starting to click on video ads on facebook. Cory you do not have to click on an ad for it to work. Emily i have been watching video ads on facebook. They can really get engaging ads on facebook. 500 Million People is about 4 that is uprson, 100 from the last time they reported that number. Emily Mark Zuckerberg talking a little bit about china. Mark people think that facebook is not in china at all and that is not true. Our Consumer Service is not active there, but it is already one of the biggest advertising markets that we have. There are a lot of really big and important Chinese Companies who sell a lot of products to people outside of china. They use facebook as one of their primary tools in a lot of cases to spread information about what they are doing and grow their customer base. Emily david, you have been listening in, what is your take away . David china is always a fascinating topic when it comes to facebook. They want to get in there for the consumers as well as the ad sales. One thing i thought was stunning was that their mobile only users are creeping up to almost half of their total users. Their mobile ads are 78 of their total ads. A company that when it went public was very much faced with questions about whether it could succeed in mobile advertising. It is becoming more and more a mobile only company. Emily when facebook went public, it had zero mobile ad revenue. I want to talk about spending. Spending is not going to slow down, we benefit from a great business with solid margins. We are not giving specific guidance on 2016 spending, but we continue to see great opportunities to invest. He is talking about virtual reality, internet. Org. Cory you can see in the user growth, a reacceleration. They have over 2 billion people. You would think user growth would slow down. It has not. You have seen a lift off in the user growth. It is up 3. 7 . A reacceleration of user growth. At the same time, we see a fall at twitter. You can see the benefit of facebook. Emily they say no plans to monetize whatsapp. Instagram, he would not comment specifically on what it is contributing. He said he is pleased with the product. What is there to be concerned about . If they really go into a very deep investment cycle, we could see margins collapse. Think of this as amazon, multiyear, multibig investment cycle. That could be the real risk. So far, they are proven they can be very targeted and prudent in how they spend. We expect margins to come down next year. Emily David Telling me if facebook could go the way of alphabet, a family of mobile apps. He said we have a completely approach. What are you looking at for the future . What do you see as the main challenges . David challenges are not what i focus on. This is a company for the longterm. Zuckerberg is one of the great longterm thinkers in the history of business. They dont want to monetize lubsitiary businesses unti they get to a million users. Whatsapp is getting close to a billion units. Capital expenditures, maybe if you are a trader for the shortterm, you will worry about that. Execution is proving quarter after quarter to be exemplary. It is astonishing how good they are running this business. Emily indeed. Thank you so much for joining us. We will talk about this next big merger, expedia containing to continuing to spread its wings. They have agreed to buy home away for 3. 9 billion. Shares of both companies are up on the news. Trade of homeaway was temporarily halted. The deal is expected to close in the First Quarter. Expedia just concluded the acquisition of orbits worldwide. How much of this has to do with competition from airbnb . Our editor at large is still here with me. What does this say about the power and the threat of airbnb . Cory we do not know what airbnbs numbers are. Emily i use it all the time. I prefer airbnb. I think homeaway has better inventory, but it is difficult to use. Cory i looked at all of the Financial Filings and in every one, they cite their biggest challenger as expedia. When you look at the sales growth for homeaway, you can see the growth in their business is slowing down despite a Big Partnership with expedia. 13 year over year sales growth. That is better than the trend, but they announced some big business changes. They will start adding a new service fee for users, lower their Commission Rates they are charging to pay for booking customers, and they will offer some affinity to their frequent customers. They are making a bunch of changes, but it is a very big business, over 272 million bookings in the last quarter. Airbnb may be even bigger. Emily is bigger always better . We will be talking about this tomorrow morning. I will be talking to the ceos of both expedia and homeaway. Eastern. A warning from time warner sparks fears about cord cutters. Details coming next. Emily Reed Hastings is opening the companys checkbook for more original content. He said netflix will spend 5 billion on new programs. Hastings also said Traditional Television has to do a better job of its tv everywhere efforts. Time warner has cut Earnings Guidance for the next year. Earnings of 5. 25 a share instead of 5. 60. Time warner is warning major media is down with time warner, disney, all slipping, but they down without a fight. They are ramping up efforts to win eyeballs online. First of all, these networks do deals with netflix. They sell content to netflix. Are they cannibalizing their own business . That is one of the Big Questions right now among investors. If you are time warner or fox or disney, do you take the shortterm revenue that you get by selling your shows to netflix or do you hang on to those shows for little bit longer . Maybe fewer people will cut the cord if those shows are not available on netflix or hulu or amazon. Emily analysts have been saying cord cutting concerns, some say they are overblown. Are they . Is this something they really have to worry about . If you talk to a lot of analysts, the tv industry is not in total meltdown. The tv bundle, the 500 channel bundle, that is not going away anytime soon. 100 Million People pay for it. This Business Model is starting to fray at the edges. The Cable Companies reported earnings last week and their tv subscribers are doing a little bit better, but they are still gradually starting to lose more and more video subscribers. The tv bundle is still around for a while, but cord cutting is a real concern. Emily if netflix is spending money on original content, how does that compare to a traditional tv Network Budget . That is one of the questions, netflix is ramping up its original programming and maybe they get to a point where they have so much of their own content, they no longer need the time warners or fox or they no longer need to buy the old seasons of their shows. They are creating so many of their own shows. Emily we will definitely keep watching. 5 billion on original content, that is a lot. As long as house of cards continues. We are watching qualcomm shares sinking after hours. The largest maker of smartphone posted First Quarter earnings that came in short. The business is being squeezed as the top two smartphone makers are increasingly using their own parts. Coming up, when you think of big investments, think uber, airbnb. The founder of the firm tells us why india is one of the most attractive markets in the world for tech. Emily when it comes to the next market for internet startups, the potential of india is staggering. 15 of the 1. 2 billion people are connected to the internet, which is why the likes of facebook and google are racing to deliver broadband to the secondmost populous nation in the world. Tpg growth is the growth arm of tpg capital is known for investing in a string of successful startups. I got to sit down with the founder, bill mcglashan, and asked what he finds to be the biggest challenge. Bill bureaucracy is a problem. They took the british democracy system and amped it up tenfold. You have an enormous bureaucratic infrastructure. It can slow things down and make life more challenging. The bigger problem in india is the rampant corruption. One of modis for focus is to eliminate that. They are also trying to move china up. It is very hard to do business in an environment where corruption is so endemic. Emily what are you bullish on and what are you hanging back on . Bill we tend to avoid anything to do with government or where bribery and official corruption could be involved. Emily couldnt that be anything . Bill there are sectors that remain quite independent of that. Writ large, the consumer. It is an enormous population just now reaching the Tipping Point of having disposable dollars to spend. We look at the broad derivative consumer environment as being interesting and we look at situations where we can be a partner in helping bring western capability. We can bring western capability to those indian ventures. We partner with a young entrepreneur who is about 30 years old. They started the channel eyeglass company, addressing a market in india that has 40 of the worlds people that need corrective lenses live there and 70 of those who need them do not have them. We are partnered with him to create a worldclass company. We will deliver them to india. Emily eyeglasses, one. Where do you see the most potential for growth . Bill internet broadly is fascinating. Ecommerce, we have seen Major Investments taking place, but it is still fairly nascent. There will not be the ability to build the Foreign Language equivalent of the u. S. Model. The disadvantage in india is that english is the common language. It is the number one spoken language with hindi being second. There are another 14 official languages after that. Lots of other room to run when you have 20 penetration in india today, 600 Million People in the next five years will be on the internet. Emily facebook has prioritized india as part of its internet. Org program. There is controversy on how well it is doing. What have you seen as far as the rise of facebook in india . Is it happening more slowly than you would think . Bill india today is still the number one market for facebook users. Despite the challenges they face, they continue to evolve in that market, it is the number one place in the world for facebook users. It was one of the early adopters up whatsapp. This in the context of a market that is just now happening. You have broadband just being developed. 250 Million People today on the internet. That will go to 650 million in the next five years. There is tremendous macro growth. Emily give us some more examples. What do you see . You being there on the ground, what do you see . Bill we have a particular lens we look through. Where is there an interesting entrepreneur . Also, where we can bring a unique toolkit in helping to grow the business. Another example is health care. We love health care. We bring the modalities that a global firm can bring to bear will me invest in the company. We like the derivative areas around healthcare services. They have a 10th of the resources we have directed against health care, but it is emerging today. One hospital bed per thousand versus a dramatically Different Number in the western world. So, we looked at consumables. We invest in a Company Called sutures. It was a Small Business that is growing rapidly. We have built the fourthlargest consumable business in the world, headquartered in india. For us, it is consumer. Digital media, new forms of media, internet broadly, marketplace businesses, consumer businesses, including health care. Emily what will surprise us most about india . Bill the pace of change on the consumer side is going to sneak up on us. You are going to see a seachange when broadband penetration becomes ubiquitous. And the availability of inexpensive handsets will change things. Emily do you have a time frame . Bill i think it is sooner than we expect, the next five years. Emily bill mcglashan, founder and managing partner of tpg. According to fortune, the round is not closed yet and will likely include Additional Capital from existing investors. They give the amazon competitor socalled unicorn status. Coming up, our exclusive interview with bill maris on his mission to improve health and prolong life. That is next. Emily i am emily chang and this is bloomberg west. The maker of architectural and Engineering Design software is being targeted by an activist investor. A stake of about 6 in the company and says it thinks the stock is undervalued. It intends to engage in discussion on the business. Investors and regulators put more pressure on volkswagen after the company said it understated the Carbon Dioxide emissions for 800,000 cars. They relied on discounts to post october. Les gain in it was the first full month results since vw admitted to cheating on diesel emissions test. Takatas problem is more costly than the fine in the u. S. Honda will no longer use the airbags in its cars. Honda was their biggest customer. Honda says they misrepresented test results. 200a fines could hit million. Dropbox says it has 150,000 business customers. The Cloud Storage provider is facing stiff competition from the likes of google, microsoft, lots of skeptics questioning their Business Model. The ceo said the company added 50,000 paying business customers. To google ventures, the investment arm of alphabet. Founded in 2009, it has quickly become one of the most active intercapital firms in Silicon Valley with investments in over 300 companies. One other area the firm has been active in his Life Sciences. 40 of dollars when into Life Science Companies last year. The man leading the charge is president and ceo bill maris. Great to have you back here. First question, just curious how this whole alphabet situation has changed your job and your approach. Bill good to see you. It is business as usual for us. We have always operated independently. Not much has changed for us. Emily you had a role in the formation of calico, googles efforts to extend our lifespan. What are some concrete examples of progress there and opportunities you see to extend our lives . Bill the opportunity in the Life Sciences is hard to understate. The change we will see between now and the next 20 years is going to be similar to what we have seen happen in communications over the last 20 years. You can talk to anyone, anywhere, anytime for free. 20 years ago, you would write a letter. That is a pretty big change. We could see a similar change in health care. I am really excited about it. Emily lets talk about investment opportunities. What are the most interesting opportunities you see out there right now . Bill we look at the Health Care Ecosystem as a continuum. Diagnostics, therapeutics, devices. A lot of different areas and health care and when you apply Machine Learning a new technology to each of those areas, there are some pretty exciting opportunities. A company we have invested in in the gene editing space. It is something that would have been hard to imagine 15 years ago, but it holds great promise to treat a number of diseases that are untreatable right now. Emily this idea of immortality is very fascinating to you. I was speaking with the founder of google x about the same thing and he said he thinks we will significantly be able t