Estimates thanks to surging mobile ads on the news feed platforms. The company is now turning attention to monday he tiesing messenger and whats app. Were starting to put some ads in the product just to see the basic parameters on how that performs, how people like the ads or dont how they work for businesses and just try to get an understanding of that. So were starting to run that across the world all this, of course, is the market is hitting record highs the nasdaq is on pace for its best month in about a year due in large part to the tech names. On facebook itself, lets start there. Weve been talking about monetizing the acquisitions for years. It is finally happening . Its incredible that it really isnt happening at scale yet. Theyre just starting with instagram. They have the other huge platforms with whats app and messenger. We dont know how well they will monetize instagraem, highly visual, great video platform we and others are seeing huge usage in consumption of videos the idea that facebook should be able to generate very major revenue out of that seems reasonable. One of the signals i heard in the call was surprising to me is Mark Zuckerberg saying that theyre not moving as fast as he would like on monetization in Facebook Messenger normally he hangs back and says it will come in time interesting bit after gregs there from him also the contrast between alphabets story and facebooks story. With google, you know, we heard cost per click coming down because of mobile. Kind of acting as a head wind. But there are more clicks. Facebook on the other hand, saying that monetization of clicks is actually going up and theyre going to sloet number of ads that theyre putting into the news feed. So the pricing strength that facebook is seeing versus google, very interesting very interesting. I dont think its that relevant ultimately to them capturing more dollars, whether which lever is going up, whether its more ads or more pricing facebook has been historically very cheap for marketers so there is a lot of head room on the prices. One of the Big Questions now is what happens to the Television Money . A lot of huge advertisers are seeing the ratings drop, especially among our Younger Generation they want to move they dont have the proof of concept yet that you get the same impact on facebook and other social networks but when facebook can close that loop, thats a huge opportunity. How do they get to a number above two billion users when twitter cant even grow any from the much lower base in a quarterer . Its just staggering. I think the other thing that jumps out on facebook is their operating profit margin is ridiculous i mean its silly. And the company is now just starting to make invest ments in content. Its always been publishers or producers post up if you want. Theyre now going to start to invest they had so much room to do that you look at what netflix is spending, 7,3. 5 billion facebook could spend that and still be profitable. Theyll be able to develop a lot of content. A reason for the explosion in the price today is because investors were prepared for less optimistic expense guidance. Is that true well, look, one thing that facebook has done very intelligently since the ipo is it occasionally take the hit and reset and say, look, we can keep hiking the margin but we think its a mistake because we think there is so much future opportunity. Were going to spend now i think they should be doing more of that and people react instantly stock goes down. But look at Amazon Amazon has been doing this since day one. Continuing to reinvest you dont have to maximize profit when you built a business like facebook and others have. Meanwhile, were going to cover twitter in a little bit. I just got off the phone with david take loshgs the c david taylor, ceo of Procter Gamble there is a fight for a board seat on the company. Something that p g is against. Heres what david taylor told me i will continue to listen to nelson as i listen to all shareholders. I asked him given the track record and the experience in Consumer Companies yshgs not add him to the board heres the direct quote from david taylor he says, theres noggin kremental that pelts has offered. I want to prevent anything from derailing the work were doing we have a rigorous selection for Board Membership the fact that he has good advice doesnt mean we just add him to the board. I pressed him, why not taylor said, what pelts tends to do is bring a number of folks with him manage ment would have to spend a lot of time briefing them to have a group come in to be a shadow Management Team to p g is not what we need right now. Taylor went on to sashgs i respect respect peltz but we have to move on and we have the right plan and portfolio. Taylor says that is being shown by the troults dresults today. Reaffirming the outlook. We talk a little bit about the portfolio. Taylor said two trouble spots that he specifically wants to address, diapers in china which he needs to get turned around, he says, and gillette which they are already taking some pricing on trying to lower prices, be more competitive he said its about a 9 to 12month story on gillette i asked is there a greater urgency to get the results turned around given whats happening with the activist invettor pushing for a board seat heres what taylor told mechlt he said, we were already moving fast i feel peltz is pushing on things that im pushing on as well this is the plan we laid out at cagny, the big Consumer Group vent earlier this year he said i respect nelson peltz and i will listen to him theres evidence now that we have the plan and the portfolio and they do not see any reason to bring in someone who they do not see as having any big new ideas to entertain on to this board which they pride themselves on this very rigorous process and in terms of putting it on. And experience i mean, he says if you look at the people on the board, consumer, retail they got ceo and Management Experience this is going to be a fight. Well see if investors back peltz, the stock underperformed over the last ten years and this past year but taylor and the manage ment team and the board feel they got the right strategy and todays results are starting to show that its baring fruit. One reason they even have the call today they argue, is because of improvements and accounting. They moved it up a few days. Exactly. Now they have to persuade enough shareholders of that and the public and the team. There is no company in history that i know of that welcomed inactivists on the board immediately. But is this sort of an odd situation . It is subtle it is friendly peltz doesnt want to replace management and break up the company. He doesnt disagree with the strategy he just thinks they need to move faster and more efficiently on cost cutting and sort of getting the companies within p g more lean and agile and growing and they feel that they dont need that extra advice on a board level. Theyre happy to have that engage ment as a shareholder he owns about 1. 4 of the company now. Were talking about a 230 billion stock. And hes also already likely had an impact. The fact that he addresses it like this. Its going to be costly the proxy fights are not cheap theyre going to have to start mailings, invest ment bankers on both sides so this is going to play out and then the meeting is set for october. Well see if they adjust the timing on that good to seat ball hit the other way. Thanks, sarah, for bringing that us to. Turning to the president , the administration announced that fox con will invest 10 billion to create a new manufacturing facility in wisconsin creating at least 3,000 new jobs. This was a big win for the state. People of wisconsin, for the white house. Theres been some dissection of the incentives given to foxcon what do we make of it . Its good news. Sure, its a nice pr event its what lots and lots of companies have been doing for dozens of years. Carmakers have been building cars here. Thats good. So its quite different from what candidate trump was promising which was huge tariffs. We have to keep out foreign companies. We have to support u. S. Companies. It is an international kmchlt but its great this is what globalization is all b and if there is a good insentive put in place for foxconn to be here, maybe theyll start making iphone sometimes day. I dont think thats what this factory z. At least theyll bring robots over to make iphones this is probably a great thing but i think we got to see the details. And this is 3 billion worth of incentives, all state tax breaks if foxconn hits certain targets. The wisconsin economic develop Ment Corporation hasnt done the best job in actually keeping track of whether Companies Keep their promises, right . So well see if all of these incentive packages get paid out. Theyre not freechlt theyre coming out of the potential tax base wisconsin has to vote on this the legislature has to vote on it. I think people just really need its not a job is a job is a job there are costs here people should pay attention. This is one thing where i think a lot of democrats just completely get it wrong about taxation here. Its like it comes out of the tax base if the factory were to be built there and they were t generate all the revenue and pay the tax. If the factory isnt built there, there is no tochax it doesnt disappear you pull in jobs, those folks have more money to spend that creates tax revenue this is something that more states should be doing the largest green field project by a Foreign Company in u. S. History well find out what means for the state and for apples margins down the road maybe. Yes this one is an apple from what i understand trying to make they keep their promises very important. Make sure they keep their promises. Thanks. Great to be here. Thank you, henry. Shavers paypal hitting all time highs they record a Second Quarter beef and boosting the full year guidance lets go out west with a special guest. Good morning. Thats right p paypal shares off fresh all time highs and im joined by paypals ceo. Thank you for being with us. Good morning. Its a pleasure to be here. Just before this you were talking about when you first signed with visa and the effect we saw in the stock prices, investors didnt love it now look at. This 18 months later, 24 partnerships with apple to visa and now bank of america last night. On the Earnings Call, more are on the way i cant help but think of two major retailers that you dont colonelly have partnerships with, amazon and costco. You said previously youve been in talks with amazon where do those stand are we going to see an amazon Paypal Partnership in the future i think in terms of the philosophy that paypal has right now is we are very open to partnerships as you mentioned, some 12, 18 months ago we announced our First Partnership with visa. And that real yishgs ly, we toop back and said in this environment that were working, is there a way to be cooperative and Work Together as allies with other players in the ecohim . Really its a war on cash. We all want to advance Digital Payments there is clearly a macro secular shift towards Digital Payments the environment is more benign than it was 12 or 18 months ago because as you said, weve now partnered with 24 different Major Technology or oem or wireless carriers. So its a very different environment for us in fact, this morning mastercard announced that we are actually now working with mastercard in asia pacific so we just keep coming in terms of the partnerships. I think we bring a lot of assets to partners and youll start to see that continue to play out. Im curious though, since youve been talking with amazon, do they share that sent. That cooperation benefits everyone across the states or do you think theyll go it alone and make their payments footprint a lot bigger i cant speak specifically for amazon but i will say in our discussions that weve had with multiple partners, whether it is google or facebook or alibaba, there is a desire to look at what are the assets that each of us bring to the party . How can we combine them together to create innovative, unique Consumer Experiences taking advantage of what we both bring . And combining our platforms together and thats that seems to be the way that most of the ecosystem is going right now. Okay. Got it lets turn to one of your products, venmo, very strong results yesterday. More than doubled your payment volume for the app in just a year impressive numbers again this is the free service it does affect paypals take rate that is a percentage of the transaction. With such, you know, explosive transactional growth, does that make it more urgent to figure out a way how can you make money throughout app very hot payment space as you mentioned, venm. So a tremendous application. It is beloved by millennials its a verb right now. Everyone says the venmo them and its exploding in growth as you mentioned, growth grew to will 8 billion. That is 103 growth year over year i think its seventh or eighth quarterer in a row of triple aej digit growth on that what we said on the call is that were going to monetize venmo by expanding the capabilities we spent the last year thinking about the user experience. Because venmo is much more than a p to p service it is really a social payment phenomenon you link it into your social feeds and retailers are so excited to be able to move into the Millennial Market because not only will somebody buy tapping on a paypal button with the venmo account but then put it into the feed so i might say that i bought something from store or youre my friend. I really liked it and then youll be inclined to go and do that as well so we have a lot merchant interest in it and Customer Feedback from venmo users to keep expanding the proposition for venmo. So growing the ecosystem. Lets get back to jon fortt. He has a question for you. Good morning. Im wondering about the integration of paypal into apple pay and sam sung pay which you announced. What percentage of transactions from apple pay and samsung pay should we expect to end up going through paypal what is your target . We dont have a target in terms of percentage of transaction thats might go throughout services. What we do expect is that it will drive significant volume. But not just significant volume, but if you think about samsung pay, were tying into their card Emulation Technology which is the technology that is used at most merchants that accept cards. So working with samsung pay and android pay and announcement with google, it allows paypal users to work within those wallets and be able to trance act in new contacts. They can now move into the instore environment. Partnerships like that allow us to expand the context in which paypal users can shop and experience managing and moving their money. Dan, thank you so much for being with us this morning ill throw it back to you over at the stock exchange. Thank you, david. Thank you very much when we come back, new comments from p and g ceo david taylor. Well tell what you he told sarah a few moments ago. Jeff bezos is in and out worlds richest man. Well get details on that rise to the top and twitter losses are accelerating well talk about the quarter and when user growth may reaccelerate when xasquawk all continues. You always pay your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. Shares of Procter Gamble on the move today. They are higher on the heels of an earnings beat the company in the midst of a proxy fight with nelson peltz who wants a board seat davidtaylor just speaking to m moments ago saying that he respects peltz, hell continue to listen to advice as a shareholder but the company doesnt move on. Heres the quote i picked up from taylor. There is noggin kremental that peltz has offered. I want to prevent anything from derailing the work were doing the fact he has good advice doesnt mean we just add him to the board. For more, lets bring in Senior Vice President at sanfor bernstien. Do you support knell nelson pel do you agree with the board . I think the stock action today says it all. Its a very minor move in the stock. Minor improvement based on the Quarterly Results to be fair one quarter certainly doesnt make a turn around i think to be fair, dave taylor tried to push the envelope forward. Does he say and he said in the Earnings Call that he needs outside points of view i think peltzs history has shown outside points of view and i think that might be something that p g needs on the board. So this argument that hes not bringing any new remarkable ideas, weve got a rigorous board process and, therefore, you cant just come on when you have advice, not to mention the fact that taylor told me peltz tends to bring a bunch of people and they dont want a whole new shadow Management Team to distract them. I think if you look at what p g is doing, in and of itself is not brand new, interesting ideas. So they talk about trying to grow a category. They talk about trying to leverage the scale were not seeing that they talk about innovation and bringing new markets to the product that consumer finds irresistible, you look at the facts and the dollars and cents and the results of this quarter, they took down prices in manufacture the key categories like grooming, like oral care and others and in the other categories, they didnt take up as much as the peers. So im not sure theyre putting into action a lot of the words that theyre using could they be in a transition point . Gosh, i sure hope so the flip side is that we did see a lot of the productivity savin