The deal is worth 43 billion. Sources say that kevin china rising 4 . There are over 2400 journalists and the bureaus all over the world. Is closing for lunch. Singapore,icture tokyo, mumbai. Slash and burn at yahoo cutting jobs, winding down legacy products, and addressing Strategic Alternatives, but what does that mean . And we hear from oracle ceo mark hurd of what it takes to be a leader and what it takes to keep competitors at bay. We check out how mega cabs compare with the Biggest Companies over time mega caps compare with the Biggest Companies over time. But first, to our league yahoo exploring alternatives for the core business. Is that the company putting the for sale sign on the door . For the time being Marissa Mayer is cutting costs and exploring a spinoff of the web business rather than sell now because they feel it is kinder late it is currently undervalued. The search revenue is up 12 . But here is what chairman maynard webb added in a news release the board also believes that exporting additional Strategic Alternatives in parallel to the execution of the Management Plan is in the best interest of our shareholders. I want to bring in our Bloomberg Intelligence analyst to breakdown the numbers, but what does this mean . What exactly are they trying to say here . Reporter two things first, a spinoff will take nine to 12 months and the Strategic Options were with respect to the alibaba state and not the core business. Emily you are saying they are not saying we are going to sell. Reporter yes, and they talk about patent sales, corporate headcount reduction they are trying to simplify yahoo emily what is mercer mayer here . Is she saying she can turn it around . Or is the ship going down . Reporter she is trying to basically simplify the company as much as try to focus on the division that has been growing and inspire growth. Emily mobile and video this is an acronym she made up. How well is the is maven business doing . Is the growth enough to sustain this for the future . Reporter that is exactly what their needs to be more transparency on from yahoo . What is the user activity . The business has grown from almost nothing to 34 of gap revenues in four years, but if you compare that to Something Like a facebook, now they have 80 of their ad revenues coming from mobile advertising, and they were very low four or five years ago, too. On a relative scale, its not growing as fast as competitors, but if you look at absolute numbers, yes, there has been strong growth. I think programmatic is doing well. Emily shares are down in afterhours trading, so of course we will be talking about how investors are looking at the announcements here, what they want if they still want to pursue a proxy fight. Thank you for breaking it down for us. Now we are going to get back to yahoo in a few, but i want to turn to competition in the cloud where microsoft, amazon, and google has been gathering steam. Our editor at large cory johnson is standing by at the headquarters of another cloud contender and that is oracle. He has an exclusive conversation with oracle ceo mark hurd. Cory . Cory thank you, emily chang and bloomberg tv, Bloomberg Radio as well. Were sitting down with mark hurd, ceo of oracle. Thank you. Youre going through an interesting time in oracle. You have gone through changes. You have gone through a ton of acquisitions. Now we have this huge change, the move to the cloud. Talk to me about what that looks like for oracle which has a strong footprint in on premise software. The development of Cloud Software has been targeted at oracle. What does that mean for the industry . Mark it is a big shift. I think you will see a majority i. T. Shift to the cloud. For us, we look at this as an opportunity. We have such a strong on premisebase, it will be important to make those worlds work together. And for us, building a whole new stack of capability through platforms, infrastructure that can work with that on premise base, thats a huge opportunity for us. Cory some of the contenders say they dont have to work together. Throw out the baby with the bath water with the Cloud Software. Why for newer companies, why are they not just starting with the slate clean . Mark vendors are interesting, but customers probably have a different answer. Customers have a long set of applications on premise and they have to run their businesses every day. Dont get me wrong. The bulk of work is moving to the cloud, but for a long time, you will have to get applications that work together. The ability to share information. I think it becomes a key advantage. Most of our competitors are either purely we on premise or purely on premise or purely on the cloud. Cory the cloud, the argument is it is so much cheaper. You guys also have a difference of the pricing strategies from what is going on. How you make that work . How do you make that work . Mark i do not know if i would call it cheaper. It is more variable. To be able to shut something off when you dont need it, to get a variable price i would not say that is cheaper. But it allows you to have better control of your costs. For us, we love the cloud world. We love the on prem world. Both Business Models are extremely attractive. We are about as agnostic as you can imagine. We are invested in driving our cloud stack and that is what were focused on. That transition to the cloud. Cory your competitors like to talk about what youre not doing. S. A. P. In particular talking about how they are stronger, cloud growth, comparing it to what you guys are doing. How do you view s. A. P. As a competitor . Mark i dont think they are doing very much. To be very frank, they have acquired some properties. Cory do you mean things like concur . Mark concur, arriba is a property they bought. The core franchise is really erp. That is the core franchise that the company is built on. They have not done any work from the bottom up to the architect rearchitect to the club. For the cloud. Long run customers want to move those rps to the cloud. Just to give you a quick view of our progress, we have sold i guess by the end of the year, we will probably be between 2000 and 2500 Erp Solutions in the cloud. Its a Staggering Number from zero a couple years ago. In terms of a pure erp solution cory your colleagues have referred to their acquisition of what are we going to do next, buy dairy queen . Mark i completely agree with her comments. Strategically, it did not look interesting. We tend to have a strategy, and then buy and build to that strategy. It has to make sense to us. A dairy queen would make as much sense to us as buying concur. It did not align strategically where we saw the market going to where we thought was important for our customers. Cory do you think we will see oracle doing a serious acquisition sometime in the next year or two . Mark i know you know im not going to comment much on forwardlooking cory i just wonder your philosophy. How do you make those decisions question mark you guys are famous in the m a world, giving answers. You do the diligence, given answer whether you are interested or not. Mark we know what we are doing. We will do what we always do. Something will have to make strategic sense for us to acquire it. It has to make financial sense. We have to be able to operate it. We are quite disciplined acquirers. We dont buy something just to buy it. Cory when you look at some of the Fast Software companies, those valuations, i would say, are really high right now . Do you look at that . Mark they are high and they have been high for a long time. We have tended to be a first mover. We do not buy a company on the cheap. We buy the best property in that market because its important. Whether we build it or whether we buy it, we want to be the best. Cory do you think it is the time to sit back and keep some powder dry in case some things go on sale . Mark its always an advantage when that happens. Its always better when things cost less. If you look at our history, that has not driven every decision we have made. We make a decision based on the right thing to do at the right time that fits with our strategy and we made a lot of acquisitions back in these days may be wrong, but the end of 2010, 2011. We did taleo, a couple others. It was so important. Our fusion product line was just now coming to market. Were buying multiple companies and learning so much about the business and taking leadership positions. Cory what you think you learned from the sun acquisition . Surely you tonight at the numbers to be as hard as theyve been. Mark if you look at the sun acquisition, which predates me a little bit. I think you have java, the most popular programming tool and language in the world. Just that asset in isolation was really important. On top of that you have solaris. Youve got probably the best unix operating system in the world. You had an increase little incredible system that came with it. It was an acquisition that brought a lot of technology with a lot of customers. Cory when i look across the world at your competitors, some are struggling, some arent. If i had to pick which companies were in more trouble, sap, ibm which companies have the wrong strategy, wrong products, most wrong . Mark great question. I think i will stick with i would rather have our hand than any other hand in the industry area it is hard to make these transitions. There is a reason why every company does not get to the other side because its hard. Its hard to do it in the Public Markets. Look at the investments we have had to make. When i got to oracle, i think our r d was 3. 8 billion . We are probably only path to 5. 2 billion this year. Cory huge numbers. Mark huge numbers, but we have had to invest. We have had to invested transition. We have to keep the capabilities and play at the same time we invest in new cloud capabilities. Think about this, cory. When you get into the Cloud Business we have to build data centers in 20 countries around the world. Thats like Building Hotels before you can rent a room. We have had to invest in that capability. Simultaneously we have had to build out a larger go to Market Organization and make all of those investments and if you are in the Public Markets doing all of those at the same time, it can be a challenge. Theres a lot of companies and you have mentioned a few, that it is hard to get from here to there and i can tell you why. Cory mark hurd, ceo of oracle, thank you for your time. Back to you guys. Emily our editor at large, cory johnson, thanks so much there, with mark hurd. Still ahead, weve got to keep digging into the latest news from yahoo as the company cut its workforce and explores alternatives for its investors. Will it come investors or trigger a proxy fight . Emily lets get straight back to yahoo , shares ticking down in afterhours trading. Marissa mayer planning to cut 15 of jobs, leaving yahoo with about 9000 employees, and winding down a legacy of products, closing offices, and yes, looking at selling parts of the company. I want to bring in our deals reporter alex sherman and our guest eric. Eric, i will start with you. How do you translate what they say about Strategic Alternatives . Are they exploring as sale of this company . It was ambiguous at best. At some point she did say that the board was going to explore the sale of Strategic Alternatives, which means the sale of the company. She was not very specific about it, and i understand from other reporters the board has said they will explore the sale of the business. The core business. Emily at least in afterhours, alex, investors are not reacting kindly to this. Is she asking for a proxy fight . Alex it depends on what we see between now and april, i think, emily. If nothing goes forward with the sale of the company or perhaps sale of nonstrategic assets, i dont know that i fully believe we will see what happens with yahoo i think the discussion will probably be based around the entire company. If nothing moves forward with that between now and april, yeah, i think Marissa Mayer may be in for a proxy fight. I think the reason they included in that language and all you have to do is read our story from three weeks ago when we reported that the board was warming to the idea of selling the entire core business. That is the way to appease angry shareholders at this point. A think we have probably reached the end game when it comes to selling the entire business, and theres a lot of confusing language today and certainly marissa is going to move or word with a turnaround land because whether you sell the company or not turnaround plan because whether you sell the youre not, writing the ship is probably good idea. I know my job is going to be trying to figure out who they are talking to and when they are talking to them and exactly what they are talking about, if in fact they are going to sell the entire business. How much money you they would give her that business . Emily alex, i will try to help you with that. Doing the best i can. But we want to talk about where the business is now and what the business is doing. Take a listen to what Marissa Mayer had to say about the mobile business. Marissa mayer we will continue to drive native through advertiser at the same time we will stabilize and slow declines in our legacy revenue. Emily when you look at the mobile and video part of the business, how well is that doing . Eric not well. If you look at the waterfall that they offered to us during that call to show us where voice maven revenue is going to go from this year to the next, the maven revenue is only going to represent 200 million dollars. Its not doing well. This is not a credible plan. This is the turnaround of the turnaround, and its a little ironic that today is groundhog day because its groundhog day for yahoo emily deja vu all over again. Ok, eric hippeau and our own alex sherman. As we head to break, uber is rebranding. Many critics taking aim at the new logo on twitter, saying it looks like a doughnut, and basketball court, even a pokeball. Emily the European Union and the u. S. Have reached a deal on data sharing. The agreement replaces an earlier accord ruled illegal in the wake of Edward Snowdens revelations. The eu fear that personal data stored by u. S. Companies might be exposed to spying. Officials in the eu say that they can be sure that data is protected. Coming up some of from a garage in menlo park to the worlds Biggest Company by market cap, we look at alphabet. Has passed apple. Plus the biggest Virtual Reality funding round of all time. And if you like Bloomberg News check us out on the radio. You can listen on the Bloomberg Radio at, bloomberg. Com, and sirius xm. Bend me shape me, any way you want me as long as you love me, its alright bend me shape me, any way you want me youve got the power, to turn on the light shape the best sleep of your life. Sleep number beds with Sleepiq Technology adjust any way you want it. The bed that moves you. Only at a sleep number store. An update with our top stories. In upsetting a demand for smart phones and pcs. These are just coming out. 300 million in the december quarter. Here is a backdrop of sales falling 8 . To saveany is on track 650 million. Have hadlity vehicles their best january sales in a decade. Kia have haddai, their best month. Yahoo is on the way down. It is considering strategic cutting numbers by 15 . They will also develop more resources to its user engagement. Rest the mayor is facing calls to step down. Marissa mayer is facing calls is that down. 2500 journalists around the world. Midday in some markets. Leg. E entering the less it is looking like this. It is a very bad day to be a equity investor. Every single sector group is down. According to this index, they are lower. Pick or guess some of the bigger losers you have oil and gas down 1213 . We have industrials led by japanese steelmakers. There are bleak earnings. We are doing away with dividends. Across the entire steel space over in japan. Bond yields, that is another story to follow closely. It is pushing towards extremely low levels now. Seven basis points. The five year pushing into negative terrain. 12 under zero. It will be interesting to see how this all plays out. A changing of the guard. This week we saw facebook surpass exxon mobile to become the fourth Largest Company by market cap in the world and apple cruised to become the number one spot. We look back to another age, 1993 for this week back in bloomberg and the rankings were much different. Exxon was the worlds Biggest Company followed by general electric. By the eve of the dot. Com crash in 1999 exxon was replaced by microsoft but Companies Like g. E. And microsoft still loomed large. What caused the change in the rankings . Here to join us Stock Traders almanac editor and chief jeff hirsch. And paul, ill start with you. As a formers equities analyst on wall street covering technology, are you concerned that so much value on wall street today is concentrated in the tech center . How can that be wrong . So yeah, it doesnt really, its not particularly surprising. Its a sector thats seen more growth over the last 30 years, 40 years now, dating back to the semiconductor and its seeing increasing market capitalization flowing in that direction and it is a bigger share and it shows up in the rankings you showed. Emily Tech Companies comprised in 2004 on september 1, comprised 32 of the s p. Today theyre more like 17. 4 of the s p so not nearly as much as it accounted for back then but still, four of the five most valuable companies in the world. Jeff, what do you make of that . Jeff i think this is the beginning of the future here. Back when i did the superboom book in 2011 our contention was that technology would