Than the Federal Reserve. Up after hitting sixyear lows yesterday. The tenyear yield, yeah thats what you get, lend your money to the u. S. Government, 1. 75 lets be generous. Road map this morning starts with alibaba and its shares which are slipping after a miss on revenue. Executive vice chairman joe tasi with us in a first on cnbc interview. Stocks high in the premarket. What you need to know about the changing of the guard in the ceo sweep. From a social network to mobile network. How mobile apps are changing facebooks core business in a dramatic and positive way. Oracles ceo, hes going to join us exclusive interview, thats later this hour. All right, back to the news of the day. Alibaba reports revenues that increased 40 , but were below the expectations of analysts who follow the company. Shares appear poised to decline this morning. You can see right there talking about 90 level. Hasnt seen that in a bit of a time joining us first on cnbc is the executive vice chairman of alibaba. He is joe tsai. Great to have you with us joe. Let me start off with at least concerns. Highclass concerns as we say, given the rapid growth of the company. Nonetheless, youve got asked about this on the call as you transition from desktop to mobile, it does appear that growth slowed. Your desk top take rate declined yearoveryear. Concerns about the take rated tmall. Address whether thats going to right itself or this is a new trend in the future. Well thank you, david. Theres always two sides of the coin to mobile. Were very excited about this quarters numbers, in terms of mobile gmv and the active users. Just taking a step back we had 49 year on year growth in gmv and we added net, added 27 million active buyers, taking our active buyer base to 334 million. Now looking at mobile we looking at december, we had 265 million monthly active users on mobile. So now about 42 of our total gmv is coming from mobile. Were very excited about that especially fleetlight of the fact in the last three months we added 48 million monthly active users on a mobile app. And these are users that are coming in day in and day out to purchase things on mobile device. In that transition, you know we have covered that issue on the call. Our mobile monetization rate is lower than our monetization rate on the desktop computer and thats why that has affected revenue there i guess the key question, joe, will that continue . Is the transition as the transition continue is it your expectation the monetization will move up on pc or expect a lesser rate of growth when it comes to monetization and overall Revenue Growth, i guess, of the company . Well we take the long rue inview in transition to mobile. The first thing we focus on is user growth and engagement. As long as we zero bust growth of monthly active users going up to 265 million a month, that is a very very large number and a net add of 48 million active users, just in the matter of three months. So thats something that we very much focus on. This is the first thing that we will drive. We think monetization, over time will take its course because mobile you can provide mortar gets ads to users because of locationbased data and other personal data that we can collect. So in the long run, we see that monetization is going to trend up. Specific to tmall the take rate would be higher in fact it wasnt. It appears that things seem to be slowing a bit in terms of growth on tmall. Is that a concern for the company . We dont split out take rate on tmall versus marketplace. What youre referring to is gmv growth. Tmall gmv growth grew 61 year on year. That is an extremely, good robust growth. Just by the large numbers the percentage growth comes down. But if you look at net ad of gmv on tmall weve added more than 120 billion r b of gmv, thats 18 billion, 19 u. S. In additional gmv on tmall. We dont see issues with than taking a step back the way we operate two marketplaces is that you know gmv on tmall and marketplace is not something we separately manage. We manage as a whole. As long as we see overall growth being very healthy we would be very happy. Overall growth gmv rate is 49 year on year. Right. Again, as i said most companies would kill for that. But your Investor Base has expectations above that, joe. Tell me a bit about your expectations for nongap ebitda margins oop ss i think 58 , down a bit. You seemed to do a good job holding down expenses. Is that going to continue . Can we expect to see ebitda margins in that range for First Quarter and coming quarters . Uhhuh. We have always said we dont manage to a margin number. Our margins 4 fluctuate from quarter to quarter, depending on our investment plans. So you know you could see that our this quarter our ebitda margin went up relative to the last quarter. You know on a Going Forward basis, we dont provide any guidance on that. But what we would like to ask investors to look at is you know look at our initiatives, look at some of the new things that were doing investing in the online to offline space and local Services Digital entertainment. And these are the areas that well continue to invest in. Yesterday the stocks and down in part, reports out of china. I characterize at least some believing theres increased tension between the company and the government particularly the state administration for industry and commerce. I guess a white paper that they had. Joe, are people right to perhaps be a bit concerned about alibabas relationship with the government, as it oversees in this case questions about, you know fraudulent, fake items on the website . And can we expect to see that tension increase over time . I just want to say, we take our relationship with the government and with regulators very seriously. We put a lot of time into main tanning these relationships and cooperating with regulators on issues of their concern. In this particular instance we felt we were unfairly attacked by a report that purported to be a sample check of some of the items that we thought the methodology was flawed we thought the attack was unusually targeted at us specifically and it it was unfair. So we spoke up loudly and publicly about this. You know overtime we what we hope to do is to continue to work with regulators to address issues of their concern. On the issue of i just wanted to make sure im clear on the issue of counterfeit, you know the whole marketplace, our entire business is built on the trust that consumers have in our platform. Thats when they come to our platform to buy stuff, you know theyre buying good quality products. Right. So you know when you see 334 million active buyers coming to our platform consumers are voting with theyre confidence in our platform. You know with a platform that does annually 370 billion gmv a year, youre going to see some issues with it because its a very large reflection of whats going on in the offline economy. But we are taking a very draconian approach to cracking down on counterfeits. We put in a lot of resources to do that. Ive seen some of those people at your headquarters when i visited. Joe, quickly, yahoo announces aplan yesterday to split off its stake in alibaba into a separate company. That wont take place until later this year. Is that a company you would be interested in buying, given it will own 384 million of your shares . Well i could really only talk about this from our perspective, which is we operate the business day to day. From our perspective of operations, its nothing has changed. Today yahoo is a 15 shareholder in us. After the spinoff were going to have another corporation that is also 15 shareholder in us although it will be owned broadly by yahoo shareholders because its going to be distributed to yahoo shareholders. I just like to say, i would like to take this opportunity to thank Marissa Mayer and jackie reeses, who served as director on the board until the ipo. Theyve been great partners to us. Joe, weve got to let you go. We appreciate you joining us. Joe tsai vice chairman of alibaba. All right, lets move on now to other news. Mcdonalds there no no. You want to talk about this. Longterm view obviously in sync with what yahoos doing. This is one where it came public. I think people felt that acceleration, its clearly that theyre not thinking like that right . Theyre taking it very dealing with the same transition from desktop to mobile, the monetization rate as joe said are lower for now. You know its funny because weve got two companies this morning, facebook the other, incredible growth rates but its all about expectation. But also when we talk about facebook, which i know were going to. Yeah. Its going up. Mobile is more lucrative. Theyre further along in the transition. When alibaba became public facebook had a much higher multiple on 2016 numbers than alibaba. It reversed last night. If you put a multiple like alibaba on facebook, youve got a 95 stock. I mean its really incredible how quickly these two converge. In talking to people who are alibaba holders, who are largely disappointed. Yes. Its a highclass problem, as we say see a Company Growing dramatically. But they point out listen youre 30 times 16 numbers now. If youre paying 30 multiple for a company thats growing revenues 40 , 16. A Company Growing revenues 50 that gets that multiple and thats why facebook is cheaper and goes higher. Alibaba i think the most amazing thing that alibaba, when listening to that unbelievable interview you did alibabas like china. Listen, its growing fast just not as fast as we thought. Its a metaphor forchina. Facebook is a metaphor more mobile. A tremendous contrast to have these two Companies Born on the same day. One lives on mobile the others trying to figure it out. The one figured it out the other is like where facebook was when it came public. One is truly global perhaps in a sense, whereas alibaba is still about the growth of ecommerce and the willingness to spend of the chinese consumer. They benefit from all of that. When i listened to the interview it made me rethink alibaba. Facebook, when they realized we have big challenges we are going to address them headon, we screwed up no admission at all pause they dont think theyve screwed up. Theyre taking a longterm view. I like the fact that zuckerberg mr. Long term said we screwed up short term humility. Tsai has nothing to apologize for except he has to be envious of zuckerberg. We want to talk about don thompson stepping down as ceo of mcdonalds. Mark hurd will join us and jim, oracle ceo, his companys bent on the cloud. More squawk on the street after this. Mcdonalds announcing ceo don thompson is leaving the company after less than three years running the company. Slumping sales at the giant. Steve easterbrook, who once ran mcdonaldss business in the uk going to become ceo, effective march 1st. Earlier ceo jim skinner told us he was confident thompson would turn things around. I have great confidence in the leadership of the company and don thompson. They have suffered substantial headwinds, as you know over the last couple of years. This is a cyclical business and im sure that they will move forward with the appropriate strategies to recover in the market. We asked him why and he said hes a great leader and i picked him. What do you think happened here . I think that this is a company that was in revolt. I think the franchises who are the company, had enough. Menus too hard worried about wage pressures. The dollar affected them tremendously. I think europe has kind of lost its way. When the United States lost its way, the local franchises in this country, they revolted. I think they had the votes on the board this surprised a lot of people. I think this occurred at the board meeting. Reminds me of the Vikram Pandit push at citi they couldnt take it anymore. He is obviously resigning so to speak, saying its his decision. Hes only 51 been on the job a short amount of time. To your point the franchisees may have forced this one. That does make sense. Hes a great guy in a challenged business. What i like about easterbrook, what im hearing about it he recognizes, like wendys, well make the besttasting food. I love my product. Were not shy about. Thats part of nut campaign you see. Remember this man ran 7,000 mcdonalds in 39 countries, a worldwide company, perhaps you dont want someone domestically. Remember, they had, you know charlie, they had an australian ceo who was fantastic. But what i look at this when i like at this situation, i say to myself United States ceos are on notice. This is a new era. Thompson was defend eded. Recently. You asked him i said boy, this is a tough question. Basically, are you going to stick with the guy . The last quarter, you couldnt stick with him and still be a Great International growth company. Easterbrook, my prediction when schultz came back to fix starbucks he told me its going to be 18 months before you even see a sign of a turn. I wanted to say, howards going to bring it back immediately. He said dont you dare. 18 months. I said when will the bathrooms be cleaned . He said 18 months. You know what . People buying the stock understand it my Charitable Trust owns it, terrific. 18 months starbucks a Small Company versus mcdonalds. I think 18 to 36 months. A long time to potentially wait. Not to mention, though the amount of competition thats out there. You talk about it all the time. The healthy way of course chipotle, and at the other end of things so to speak, the shake shacks going public pricing tonight. Well have them tomorrow morning. Irony. How do you navigate that world if youre a mcdonalds, not to mention new, stronger competition, one would argue as you said from burger king and the like and wendys. When karen cramer worked at mcdonalds and has that fry basket, because they it was a simple menu. Foe to mcdonalds, you make it they do a good job, and theyre fast and the best all of thats gone. All of thats gone. The other guys theyve gotten it right. I remember how simple it was, my College Roommate worked at mcdonalds. All you did got the job at mcdonalds, plug and play. They got complex, thats not right. Wasnt thompsons fault they sold chipotle. I believe shake shack is an example of not theyre not antibeef, but when you go to shake shack, notice how simple the menu is . It is the a winner. Mcdonalds can be a winner again. My plan on the turnaround is just based on the fact that schultz was the greatest turn around artest and couldnt get it that fast. They need a marketer someone who understands how to get people back. All right. Well be watching shares of mcdonalds. Also facebook of course. More to come in discussion on that Important Company this morning. Up next, well have the mad dash from jim as we count down to the opening bell. One more look at futures, just because you asked. More squawk on the street after this. Its time for a mad dash. Got about 5 30 before the opening bell. Start out with qualcomm. Talk negative first of all. Qualcomm horrendous outlook, they lost samsung. Now, they have insolvency problems in china. But ive got to tell you, downgrades, price targets that are cut. I was trying to figure out a normalized model without samsung, such a big client, i cant. People cant figure out the multiple. When they cant figure out the multiple, the stock doesnt stop. Does have a lot of cash. It is wellrun. But no one saw this coming. Just worried about china. Samsung. Samsung sells a lot of phones. They sell fewer. Because apple figured out how to stop the galaxies. Do not extrapolate qualcomm. Sky Works Solutions yesterday, fantastic. Apple bays and do not dont make a sox case for this all right. I wont. Its wrong. Harmon. Okay. A fantastic executive, you remember harmon from the days when they almost went private. Kkr made a large investment yes. The big of the beat of 2015. I was looking for 1. 29. They did 1. 79. Whats going on . They are owning intellectual property inside a car. Its not just a sound system anymore. Its audio its the whole presence the connectivity presence an acquisition he made that said your cars connected to the internet, well do. He owns the space. My favorite thing, the deal with neil young highdef sound. But he delivered and its not going to stop here. One of the best performing stocks. Its going here because the quarter was so amazing. And by the way, when i go to the factory, its toyota its mercedes, highend lexus, its everybody. And dont forget ford by the way, which reported a good quarter. Mark fields did a good job. Car connectivity the story behind harm. Hear me . I know. My cars a wifi hot spot. Love it. Opening bell coming up. Talking about facebook. Well come back to alibaba, which is going to be down. Talk viacom and more. Stay with us. Theres nothing more romantic than a spontaneous moment. So why pause to take a pill . And why stop what youre doing to find a bathroom . With cialis for daily use, you dont have to plan around either. 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I know i have an 810 fico score, thanks to the tools and help on experian. Com. And your big idea is hot dogs shaped like hamburgers . Nope. Hamburgers shaped like hot dogs. Thats not really in our wheelhouse. You dont put it in a wheelhouse. You put it in your mouth. Get your credit swagger on. Become a member of experian credit tracker and find out your fico score powered by experian. Fico scores are used in 90 of credit decisions. Watching cnbc squawk on the street. We are live from the Financial Capital of the world. Opening bells going to be ringing in about 20 seconds from now. One of your friends up there on the post there, terry. Macys. Talk at leaf briefly. There it is. [ bell ringing ] you can see the realtime exchange at hq composing itself. A little bit more green on the board than were ac