In their bravery, they the burden for all of us and they will carry that weight long after the smoke has cleared. Mark she also met with families of the wounded and called it a very difficult meeting. Bloomberg west is next. Emily im emily chang and this is bloomberg west. Coming up, elon musk makes his latest play. Tesla offers to buy a Rooftop Solar Company where his cousin is ceo. Does it make sense . We will discuss. Sat down with the ceo of instagram to talk about unprecedented growth. Can chinas Largest Internet Company become a Global Player . Nearly 9pony up billion for a stake in tencent. The largest shareholder of tesla and solar city. 50 aosal in the range of share is in the works. Shares up on wednesday. Musk says the basic message is that there is a huge opportunity to have a highly Sustainable Energy company. Is surging in afterhours trading on the news. For more details, i want to bring in our editor at large, cory johnson. Y they want to cover everything from the creation of energy to exxon mobil, maybe. This is a strange thing. In one companyng to bailout another company that has fallen substantially in the last year. Just a look at the numbers shows how crazy this is. If you look at the cash tesla has on hand and throw in the debt, you have a company that cannot afford solar city. Debt. Has 3. 2 billion in if you look at the cash and debt, solar city is 5. 8 billion in enterprise value. Cash has 1. 4 billion in and has to build more factories to build the amount of cars it needs. Now, they have to somehow raise more money to acquire a company thats in a very different business. Installing rooftop solar is a very different business than manufacturing cars. To try to do both at once is very disparate. Just tesla is not manufacturing cars anymore. They are making batteries. On the call, musk said this is something we have been debating about and thinking about for years. The timing seems right because tesla is ramping up activity with power storage. If you think about it that way, does it make more sense . They have great dreams for power wall, but most people have no use for power wall. Of the teslag out plan for batteries in tesla cars. The notion that they are in the business is ambitious, but shares of tesla are plummeting in afterhours trading. I think a lot of shareholders are saying wait a minute, you are taking this business we think has great potential, making cars, to invest in something whose stock is tanking right now. Emily elon musk has said he will abstain from the vote, but lets talk about his involvement in both of these companies and what this means. Cory keep at the board together on both companies. Emily his cousin is the ceo of solar city. Cory the notion that these companies could be independent, i think, its good of him to recuse himself, he absolutely should, but i dont think we should look at those boards and say they are absolutely without influence on each other or dont follow the desires of. Of elon musk. Emily my question is why now . What is the impetus at this very moment for them to make this offer . Financially, both Companies Need a big change. Tesla some critics say tesla does not have the cash it needs to build extra plants to support the excel are rated production goals they have announced. Accelerated production goals they have announced. They want to open a factory in china. Where are they going to get the money for that . Its going to be very expensive for tesla to do all the things they want to do. Will need to do a massive Capital Raise to fund this and Everything Else they want to do. This is a wild story. Emily we will keep talking about tesla wanting to buy solar city, two musk companies. Cory there is always spacex. Emily why not make it three . ,oming up, a supersized deal another one. A chinese Internet Company is shelling out for 1tencent. Chinas Largest Internet Company sets its eyes on the west. Tencent is looking at the maker of mobile hits. Tencent already dominates the scene in china, but this could give the Company Serious exposure abroad. The other half of the story is who tencent is buying supercell from. In a surprise move, the japanese internet conglomerate announced that its president would be stepping down. Context isfor n more andeditor for asia coverage the ceo of a mobile game corporation. So, what really happened . Is son said he was heir apparent to the company, and he, has been cracking a few jokes on twitter. What is the next big investment, are you going to just roam the world . Tweets. O plan, he it certainly was a surprise when he was recruited by google two years ago. He came in first to make investments in Internet Companies and other technology companies. A year ago, he was promoted to president. He was talked about as the heir apparent. He said he was looking for somebody who could succeed him in the ceo role. The interview our reporters had with him, he said he wanted to remain in the ceo role for a longer time. He said i feel very youngs theyll. I want to continue running the company. Had hoped to take over the position more quickly, and for that reason, he was going to leave the country. Here are questions about arora outside investors had asked to investigate and possibly dismiss him. They did not think he was qualified to take over the job. The board of directors had an independent group investigate him and clear him, but there seem to be some questions behind the scenes that have not quite been answered yet. Christian, as one of the earliest investors in supercell, and a board member, what do you think of tencent taking control of supercell . I think its smart, to be honest. They dont have the same exposure internationally. Mobile gaming is the largest part of the hundred billion dollar games market. As a now, having tencent partner domestically is a big deal. Gets exposurecent abroad. They are one of the few companies in the gaming industry that can consistently create hit after hit in the midcore gaming sector. From that perspective, it really very good deal. Perhaps tencent can help supercell in a way softbank could not. Emily softbank is unloading a stake in alibaba. Peter, your firm is reporting that there may be a basement deal in asia. What are you expecting . Been focused on cleaning up its balance sheet. They sold the stake in alibaba. It was about 10 billion. Now they are selling their. Oldings in supercell they also sold off another game company. They are trying to raise some cash and straighten out their balance sheet. Sprint has been a challenge for them. The interesting thing, from a 10 side, they are spending all this money and not getting control of the company. Dayfounders will still run to day operations. The founders want to preserve this unique culture that christian was talking about earlier. Gaming,n the world of one hit wonders are legend. We have seen companies suffer from this before. Can they keep the innovation going . I think they can. The gaming industry is about talent and culture. So wellercell has done right from the start is to have a team of creators and a culture of trying, trying, trying again. Famously, they say they celebrate every failure. They have killed more games than theyve launched. This year large hit and before that, heyday. , for theuestion is industry, mobile gaming has become the largest segment of the games market. What next . Has proven they are very good at the gaming experience. What happens when the course of continues to grow on mobile . We expect to see in the next 34 years, core gaming growing in a big way. Emily all right. Thank you both. Down with thet instagram cofounder and ceo for a wide interview about the companys 500 million user miles down, ad strategy, and whether or not he regrets selling to facebook. All that and more, coming up. Emily noun to instagram. Four years ago, faced bought the now to instagram. Four years ago, facebook bought the app. We sat down with a cofounder and ceo for a wideranging interview. Ice herded by at about i started by asking about the half billion user milestone. Kevin i think the last time we talked, we had a couple million users. It has been a little over five years. We built from a company of 13 people to now just shy of 500. Its crazy the scale. We have nearly one out of three people in the United States using instagram every single month as well. Its ubiquitous, and thats every entrepreneurs dream. The last 100ded million users faster than the 100 million users before that. Why do you think that is . Heaven images are a universal language. Theys to everyone. They allow us kevin images are a universal language. To everyone. They allow us to communicate globally. Emily which countries or cities are incredibly popular . Brazil is one of the biggest countries. Different phones and platforms, but they are totally into social media and they love sharing images. Is from brazil, and when he goes home, he is an allstar. Emily what are your plans during the olympics . The olympics are always a big moment on instagram. You have all of the athletes and countries represented. Now that instagram is so big, i platform. A great about a brexit . Could that affect you . Potentially. We have a thriving platform in the u k i dont think it will be a big deal for amsterdam. Been yourt has experience working with european regulators . When we were talking earlier, i expressed how much my job has changed. I did not realize how complex it would get to run a company of 13 people with 13 million users around the world to now over 500 million, taking each country on its own and understanding their local laws and local regulations. We want to be globally available, so we have a big team focused on that. It has been one of the most interesting learning curves as a ceo as we have grown. Ly the plot from onlys platform only started incorporating ads in 2013, but according to one marketer, it will account for 9. 5 of facebooks revenue this year. That number is expected to grow to 14 . Early, but its promising. The cool thing about advertising on instagram is that early on when i went into the boardroom, that long, mahogany table where you are pitching your business like its going to make money someday, and you get the eye rolls. Knew this would be a powerful platform. There are a couple of things that make the advertising work. One is inspiration. You log on every day and get inspired. The second is an engaged audience. When you get to the scale of 500 Million People around the world, you can really reach any customer. We do that through targeted advertisements. Emily so, to the extent you can, give us some numbers. How much money are you making . That is offlimits right now. , it has grownd nicely. Its early, but its promising. People talk about instagram and your revenue model like it was easy, once you combine the power of facebook and all of its resources, boom, you can make money. What have the challenges been to transitioning to making money on a broader scale . Company thatave a has built its technology for a single platform, its not as easy just to plug it in. Figured part is we have out how to plug it in in a native way. We did not sub or nonsquare photos support nonsquare tos up until the year one until a year and a half ago. People want to post creative across different platforms. Changes like that, longer video, etc. , are driven by consumer need and advertiser need. Emily and you still have users who are not happy about ads and protest very loudly. How do you balance that and keeping the User Experience simple . Our number one value is Community First and we talk about it a lot. The first thing you should do is listen. Makecompany, we need to sure we understand the experiences people are having. Driven. Ata when people hide ads, we know which adds they are hiding. We change the ads we show to people. We get great feedback both internally and externally. Every employee sees ads in their feeds is well, and we are able to get great as well, and we are able to get great feedback. Emily instagram will account 9. 5 of facebooks overall revenue. That will grow to 14 globally. Do those numbers ring true to you . Like i said, we are not talking about specific numbers yet. We are trying to lay a foundation so we can grow from it. In, i think we will create a platform for a long lasting business that will appeal to everyone. You do not make money on to posters who get paid products and may or may not disclose that they have done so. What is your view on this . How should instagram be participating in the influencer economy . Its really challenging. At many other networks are the scale where they have the amount of influence that influencers have on instagram. That method of advertising is nearly as affect of effective as going through the instagram system. You cant target users. You have no analytics or insights. While we see it and we understand it, we need to make sure we work alongside it and work with influencers to allow them to get the value they need. Because of course, we want to make sure people build longlasting presences. Emily is it something you would crack down on . I would not say crackdown so much as partner. Right now, it is a very small percentage of the total value flowing through instagram. It, ate cannot ignore the end of the day, we need to be the consumers advocate. Its not ok to not know that something is an ad. Thats what we are going to crackdown on. What will you be pitching to advertisers about instagram . I dont want to spoil the pitch. We have a great team going to talk about instagram and how it facebook. My job is to think about the Consumer Experience and making sure that ads are great in the long run, that they pair nicely with the feed and content we present. My focus is on building great product. Emily my interview with Instagram Ceo kevin systrom. Still ahead, we continue the conversation. I ask if snapchat is a threat to the business. You can listen to bloomberg on the radio, at bloomberg. Com, and on serious xm. More of bloomberg west next. Mark i am mark crumpton. Lets begin with a check of your first word news. Fiscal chaos is a crisis of the moment and the senate needs to 1, according to puerto rico. The National Institute of health is studying as many as 10,000 pregnant women in areas hit by ika virus. A u. N. Special envoy to syria says political discussions to determine a path forward for the wartorn country cannot continue while hostilities are escalating and civilians are starving. The ceasefire is largely being ignored and aid convoys have been shelled by government forces. The window of opportunity to reach a political solution is closing quickly. Pilots ae has offered deal in return for calling off a threatened strike according to one of the unions representing the cockpit crews. The groups chief executive has suggested putting the companys controversial transform plan on hold if the strike is canceled. Earlier thislkout month cost air france 15 million. 830 6 30 p. M. In new york, a. M. In sydney, australia. Im joined by paul allen with a look at the markets. Good morning. Paul wednesday trading has been underway for 30 minutes in new zealand and it is looking flat at the moment. Expecting gains here on the a. X, the asx the nikkei is weak at the moment. In april, there was the fuel economy scandal. We will learn where Mitsubishi Motors is later in japan. Eight . 7 leading an billion act decision and 8. 7 billion acquisition over supercell. They will hold 84 and distribute games across china. Rora is going to be stepping down after son named him the likely successor earlier this year. Says he would like to remain at the helm of softbank for longer. No reason given for arora stepping down. Emily back to my conversation with ins graham ceo Instagram Ceo and cofounder kevin systrom. In part three of my interview, i asked him to talk about his vision for video and his thoughts on the competition, a. K. A. Snapchat. Sonny about video, everyone wrote it off. What of what funny is funny about video, everyone wrote it off. What we have seen his people spending time watching video. It has grown 150 in just a few short months. More and is becoming more video dominant, video heavy. I think that is a sign of the times. People are taking more video, can you make more video. More video. All these influencers we were talking about that are going to vidcon are using video as well. Emily what is the vision of around big events like the oscars and the super bowl . 60the idea of expanding to seconds is all about being Community First. 15 seconds is too short to share anything compelling and dynamic. As we talked to influencers, celebrities, etc. , they have things they want to share. Theiry want to share content on instagram, we want to make sure they are able to do it in more than 15 seconds. Twitter keepok and talking about live events, live the video, eventbased products. Your strategy around live in particular, and how do you get more of it . I believe our opportunity at instagram is to capture and share the worlds moments both in the moment and after the moment. If you want to know what its happening in the world, we want to show it to you. That is what you can use our explorer page four. You can see a big dance music vegasal happening in las right now. We have compilations after the fact of chefs making dishes. Its all about knowing lets happening in the world right now and being able to come to instagram what happening in the world right now and being able to come to instagram as a media destination. Facebook has dipped 80 into it well, they are going heavy toe into dipped at well, they are going heavy into it as well. You have to figure out how it will be different at instagram offerings. E other the crazy thing about a service that starts at 21 minutes a day for the average user is that time is of the essence. We only have limited time to pull out our phones and do something. The Facebook Family continues to share and grow on time and be the destination where people love spending time in mobile. Anyone who competes against that is a competitor, but at the end focuseday, we are inward. Can we deliver on Creative Content and products . Is the experience compelling . Thats what we are focused on. Lot like whatds a jack dorsey says about twitter. Do you see yourself competing more head to head with twitter . They dont have the user numbers you do. What social media outlet doesnt a this . Its the opportunity of our thing that didnt exist 10 years ago, that could exist right now, is what happening in