Shes saying russia, russia, russia. Maybe it was. It could also be somebody sitting on their bed that weighs 400 pounds, okay . You dont know who broke in to dnc. Were in a double right now. The only thing that looks good is the stock market. If you raise Interest Rates even a little bit, thats going to come crashing down. Welcome to squawk alley. John ford. Kayla taushi is off today. Seema moody, good to have you. Good to be here. First up, ad week is under way in new york. Digital advertising is in focus. Julia bornsten joins us with one of the biggest players in the game, Sheryl Sandberg. Thank you so much. Thanks for taking time for us at ad week. Youre about to go off and meet with Procter Gamble and gm. How do you explain to investors that you inflated measurement for how long people are watching video on facebook . What happened in this case is about a month ago, we realized there was a mistake in how we were calculating one of our video viewing metric. It wasnt how we were charging advertisers. It wasnt the metric we were billing on. Still we take any mistake seriously and trust it so important. As soon as we found the mistake, about a month ago, we went to all our clients, explained it and fixed the problem. We also believe very strongly in thirdparty measurement. Were not just grading our own homework but other people. We work with a broad variety of partners. What are you doing to reassuring investors that this wont happen again . Well, we cant promise that there will never be another mistake again but we certainly do all we can to get all our metrics right and really work on measurement. The most important thing to our clients is that we measure all the way through sales. When you think about what advertisers have looked for and measured, what theyve always looked for is who sees their ads, how are they spending their ad budgets and is that moving products off shelves, driving cars off lots . So what were working on is all of that measurement so that we can go all the way through from what someone sees to their purchases. And thats where were really focused. Yesterday, the ceo of one of the major ad conglomerates thinks it needs to be more transparent do you think theres a trust snish. Any time theres a shift in platform you need to establish new metrics and new ways of working with that platform. A company like p g is a great example. Theyre 175 years old. Theyve watched advertising more from platform to platform to platform. The first tv ads, people literally standing at microphones reading their radio ads wasnt shifting a platform. Best ads on social media are really created for the social media, for the social media environment. This measurement issue comes at a time where competition is increasing from all sides. What are you doing about this pressure to maintain this very fast growth rate . People are marketing on facebook because people are spending so much time on facebook and instagram. Three years ago, the lines crossed for the first time. The average American Consumer is now spending four hours on tv and 5 3 4 on mobile, digital largely driven by mobile. Of the time people spent on mobile, we get 20 between facebook and instagram. By far, more than the next several combined. And its our opportunity to take that time and attention from people and work with marketers to show the right ad to the right person with the right format so that it sells their product and moves them off shelves. Do you have anything specific that you could say youre doing to stay ahead of the competition . Most important thing we do is continue toi ito iterate on our product. Marketers know people are on mobile much average American Consumer is checking his or her smart phone 150 times a day. If you need to reach people, you need to be where they are. The best place to do that is facebook and instagram. Youre investing a lot in live videos. How will you make money from the Live Streaming people are doing . Video is exploding across facebook, across all mobile phones. That makes sense, right . A few years ago, you had a phone. It would buffer. You couldnt really watch a video, take a video of such high quality easily. Now all of us can take video. All of us can share video. Whats happening with live on facebook is really exciting. Were not yet focused on monitization. Were really focused on last night in the debates alone over 55 million Facebook Live shares of some kind of another, people watching part of the debate or journalists or just everyday citizens commenting on the debate but in a live format, which we think is an incredibly Strong Social experience. A lot of attention on twitter Live Streaming football games. Are you interested in buying any sports rights . I think youre seeing broad experimentation. People like the nfl are going to keep experimenting with different forms of distribution. We are watching carefully to what our users do. Were not working on the nfl games but are seeing experimentation across the platforms. Rumors for buying twitter, is it going to be facebook . We never comment on rumors. Capturing a lot more live video. Does that make snap chat a bigger competitor to facebook . I think what youre seeing is people are moving to mobile. So, we are more people using facebook, using instagram, very strong in terms of our time spent in metrics. Youre also seeing people use other mobile apps because all of this is part of a shift from what people were doing before with their time to mobile. You have so many different apps now. Instagram. Messenger. Does it make sense to split up facebook . Is it going to get too big . Well, i think were focused on having separate teams that have real product autonomy. Youre seeing that in our growth. Whats app hit a billion users. Instagram growth has been really strong both on the user front but also on the advertiser front. Instagram just hit 500,000 advertisers. You also hit a new milestone with those facebook advertisers as well. We did. Facebook hit 4 million advertisers up to 3 million advertisers in march. Thats because businesses know that consumers are spending time on mobile and they need to be there. Everything from our largest clients to the smallest mom and pop business are trying to reach people on mobile. Can you tell us anything about making money from whats app and messenger . How soon do you think theyll be a big part of your business . Were focused for whats app and messenger on user growth, how much time people spend, how many messages they send. Were doing a little experimentation in messenger. Were looking whats happening organically. Businesses and people are using messenger to connect together and we are continuing to see that growth. I know youre very tight on time. I have to ask you about this oped you wrote about the need for gender equality in the workforce. This is an area youve been really focused on. At facebook the numbers have barely budged. Third female in terms of your workforce at facebook and only 27 of your Management Team are female. Why arent the numbers changing faster even at facebook . The largest, most comprehensive study thats done of women in the American Workforce every year. This is our second year. What it shows is that women remain underrepresented at every stage in the corporate pipeline a and, importantly, men are 30 more likely to get that first critical promotion to manager. People think its a problem that happens later on. Its not. It happens early. The numbers are worse for women of color. Its encumbent on facebook and all of us to hire more women in underrepresented minorities, salary reviews, promotion reviews, paying women fairly and promoting at the same rate and uncovering unconscious buy as so that we can deal with it in the workplace. Is it unfair for facebook not to have higher percentages of women . We need to do better. Every company in America Needs to do better. Thats what this study shows. Im so sorry that i understand you have to go. I wish we had more time. I could keep talking to you about all these topics for much longer. Sheryl sandberg, thank you for taking the time to talk to us today. Guys, back to you. Julia bornsten, thank you for that. Covered a lot of ground in a short amount of time. Talking about taking every mistake seriously regarding the video metric. 150 times a day we check our phones on mobile, facebook and insta. 4 million advertisers up from 3 million in march. Yeah. Thats a million in roughly six months. Really fast growth. No matter what type of executive you talk to at facebook, they are very focused on scale and driving engagement and then monotizing second. Thats very different from what weve seen at twitter, which for a long time was talking about their ability to monotize. Snap chat a different balance. We dont have the same kind of metrics on them. Their monotization ideas have been moving at a different pace, faster than facebook tends to. How much powder are they keeping dry . Much Younger Company so room to run. Nearly 5 Million People watch videos on facebook. It will be profitability for facebook. When does Virtual Reality enter the equation . Indeed, one of the few things they didnt much touch on. They are monotizing oculus. Thats out in the market. We expect it to be the first big Holiday Season or the first Holiday Season at all for Virtual Reality against htc and sony what with playstation. At facebook, Holding Quite a bit of video back from monotization. Sheryl sandberg talked about moving a bit into messenger, which has gone into video but not whats app yet either even though they spent 18 19 billion plus on that. And became a conglomerate of sorts. All the deals that twitter has signed from chatter, nfl, epspn and wimbledon and snap chat with spectacles. They will dominate the conversation, certainly today. They certainly will. She avoided talking about twitter. Though julia did ask. Kudos on that. Not going to comment on rumor speculation around acquisition. On snap chat she said yeah, people are going to utilize other things as well and touted facebooks growth. Ad revenue for snapchat expected to hit 1 billion by the end of 2017. Clearly a big threat they have to continue to fend off. Wall streets take on last nights debate. Who investors think came out ahead and who is best for your portfolio. They are very, very upset with what their politicians have told them and what their politicians have done. 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The cloudbased Development Platform thats industrialstrength strength donald trump taking on Hillary Clinton in what could be one of the most watched president ial debates in recent memory. Back with the highlights, john harwood. Donald trump tried to take advantage by going after Hillary Clinton on public policy. But he didnt rattle her. She did rattle trump, by provoking him to interrupt her several times on his Racial Attitudes and finances. Donald was very fortunate in his life, all to his benefit, started with 14 million borrowed from his father. My father gave me a very small loan in 1975. Youve taken business bankruptcy six times. On occasion, four times, we used certain laws that are there. I take advantage of the laws of the nation. You wouldnt pay what the man needed to be paid, what he was charging you. Maybe he didnt do a good job and i was unsatisfied with his work. And they showed he didnt pay any federal income tax. That makes me smart. Donald started his career back in 1973, being sued by the Justice Department for Racial Discrimination because he would not rent apartments in one of his developments to africanamericans. We settled the suit with zero, with no admission of guilt. Donald thinks that Climate Change is a hoax, perpetrated by the chinese. I think its real. I did not i did not i do not say that. I think its real and i think its important i do not say that. This last denial by donald trump was easily rebutted. A tweet from him is still on his feed, saying that china did make up Climate Change. Trumps other responses were also not very strong. For example, on Racial Discrimination, he didnt say he didnt do it. He said we didnt admit guilt. On taxes, he said that makes me smart for not paying taxes. What you have to wonder is when voters are hearing this information thats very personal and very vivid, was donald trump effective in convincing people, no, i am the kind of person you want to be president. Thats his challenge. He needs to add votes that he doesnt have right now. Well have to watch the polls over the next few weeks to see if hes going to be able to add them. Thanks to you, john harwood. Veteran political strategists this morning. Steve mcmahon and former romney, rubio and kasich adviser. Good morning to you both. Good morning. Good morning. If youre explaining, youre losing. Is that being too harsh . No, probably not being harsh enough. One guy said to me its clear that donald trump thinks debate prep is a boarding school. There was no preparation done for this. He lost on just about every issue. She was clearly on offense. She was clearly well prepared. She kept him on defensive from beginning till the end. In contrast to what he has been saying about her, by the end she showed great stamina and he looked tired and worn out. Having said that, he did get a central message across throughout, which is she is the in person, hes the outsider. Shes the politician. Hes not. Hes for change. She is for more of the same that. Did come through in what otherwise was a night dominated by Hillary Clinton. A lot of democrats trying to take victory laps this morning. But there were no knockout punches that i saw. No major gaffes. Might people be reading too much into a possible hillary victory at this debate . Well, i mean, they might be reading too much into what it means. Well have to wait and see what the polls suggest on that. There were a lot of knockout punches that were landed. Unfortunately for donald trump, he was punching himself in the head repeatedly. Hillary clinton, of course, would throw the red meat out there. He would take the bait. It was a disaster for him. No other way to put it. It was a great night for her. She looked disciplined, prepared, ready. She looked like she had the stamina and strength to be president. She sent a message to our allies that were going to keep our word. She reassured the street. If you look at the markets today, theyre up. The reason theyre up is because she had a good night. Because people can see her as president and because they can finally see that donald trump probably inflicted some wounds that are going to be difficult to recover from. Its not hard to understand the appeal of simplicity in this complex world. On the topic of Foreign Policy, trump had no plan on how to defend isis or how to defend the United States against isis whereas clinton actually had an outline and was able to articulate what she would actually do. Was that a missed moment for trump . If you promisedn to knock the hell out of isis, or whatever words donald trump uses, then no specific plan on how to do it, people are properly afraid you might lash out and do something dangerous with a great backlash. I think it was a missed moment for trump but more importantly it was a good moment for secretary clinton. I want to underscore what steve said a moment ago. Her reassurance of our allies was tremendously important around the world. I dont know if it resonates with american voters. I traveled a lot. You know whats going on around the rest of the world. The rest of the world is scared about donald trump trashing our alliances. I thought that was an important moment for the world. I also thought that the exchange on trade although im disappointed that both the candidates are against tpp. Hillary clinton showed she is not a reflexive protectionist. For people who still believe in liberal trading order, that was an important moment for investors as well. Taxes, of course, central topic last night. This is a bite of trump and clinton discussing his tax returns and what we may learn later. Maybe he doesnt want the american people, all of you watching tonight, to know that he has paid nothing in federal taxes. Because the only years that anybody has ever seen were a couple of years when he had to turn them over to state authorities, when he was trying to get a casino license. And they showed he didnt pay any federal income tax. That makes me smart. So if hes paid how effective was that comment, vin . That makes me smart. And to follow on that, what adjustments would you make, going into debate number two, which is more of a townhall setting . Well, the it was a throwaway line. I dont think that the notion that he didnt pay a lot of taxes, unless he evaded them illegally, is a big argument. Most people dont think you get applauded for paying high amounts of tacks. There may be other things in his tax returns that secretary clinton alluded to that are more damaging. Ive been involved in debate prep. So has steve. I think that youve got to figure out how to prepare every given candidate. Everybody is different. It was clear to me that his advisers have not figured out how to properly prepare donald trump for a debate. The town hall will be quite a bit different. It migh