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tv   Best of Bloomberg Technology  Bloomberg  January 23, 2017 12:00am-1:01am EST

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shery: it is 1:00 p.m. in hong kong and i have an update on the top stories. president trump is breaking a campaign promise, the white house saying they have no intention of releasing his tax returns. kellyanne conway told nbc that people just don't care about his tax affairs. however, more than 230,000 people have signed a petition demanding that release. united airlines have lifted a grounding order in the u.s. after problems resulting from computer failure. all planes a serving domestic airports were affected for about two and a half hours. says theing site third-biggest u.s. carrier has 481 delays on sunday.
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samsung says batteries were to blame for its overheating note 7 fiasco. the company has apologized and promised to tighten battery safety. sam suns biggest business crisis killed off its flagship device with a cost projected to be $6 billion. global news 24 hours a day powered by over 2600 journalists and analysts in over 120 countries. you're watching bloomberg. that's the check of the markets. we are seeing upward pressure for the regional benchmark, gaining .3%. japan is moving around and be composite is up. the shanghai composite up .3%. this is bloomberg. ♪
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caroline: i am caroline hyde. this is the best of "bloomberg technology," where we bring you all the top interviews from this week in tech. coming up, netflix's crown jewels. the company out with a huge beat this week as new customers flock to their original content grade plus, the chipmaker in the crosshairs. we will break down the case against qualcomm as the fight over licensing heads to court. and why a judge decided not to arrest samsung's heir apparent. and what is next for south koreas most valuable company. but first, to our lead -- netflix reports the biggest quarter ever this week. the stocks soared on the news. netflix added more than 7 million subscribers globally to finish this year with nearly 94 million members, beating analysts estimates on both the domestic and international level. the company credits the popularity of new original content, including "the crown" and new seasons of "gilmore
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girls" and "black mirror." bloomberg editor at large cory johnson joined us to break down the numbers. cory: not too long ago it was a company that rented dvds, then a company that put movies out with a little bit of original content. most of their money now is going towards original content, including things like "luke cage" where they have a master plan. luke cage, jessica jones, and they will have their own "avengers," which they will call defenders. they can build a mountain of original content grade -- content. they have also spent a fortune on marketing. the biggest spend they have ever had in the world of marketing. the numbers in terms of marketing spend were greater than ever before and even show an increase. it is now 11.5% of revenue, and when the numbers seem to be coming down, remember they just raised a bunch of money in the debt market is so they could buy more content. what they're are doing with that is plowing it into marketing and adds.
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they had great success and buying subscribers internationally, because that is what marketing dollars are -- but also buying subscribers domestically. they actually saw a check up in the number of domestic subscribers, which looked like that market was completely saturated, going less than 1% in every quarter. this last quarter, they grew at 4%, which i found positive for the company, but that is merely a function of how much you spend. what we really want to see is how long those subscribers stick around. caroline: it is interesting -- sales still up 36%, bang in line. you are seeing earnings despite the market spend still beating, up 50%, it looks as though the market is liking it from a share reaction point of view, but the cost of this -- not only the cost of marketing, but also $6 billion being promised to spend on the original content or content in general next year. is this going to ring alarm bells in the long term? corey: i suggest people look at gross margins is where to see . where the content cost is happening ignore what i said. netflix said in a press release -- and i think a lot of endless
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look at gross margins are foolish -- gross margins does not show you what the actual cost of the movies are. it shows you -- this is hollywood. it shows whatever cost they want to show. they said in the press release that what was going on with this thing was the recognition of content cost, not the actual content costs. there was one number -- and you can see the stock trading up after hours -- michael pastor, a friend of the show just tweeted out a minute ago he was doing some math, and they spent about $100 for every new subscriber they got this quarter, which means they will have to keep those subscribers for the next 35 years in order to break even. that is not feasible. something has got to give. content costs have to come down, the cost of adding subscribers has got to come down. you do not see it in these numbers. caroline: but they can still make inroads in the countries they are not so big in. they have far less when you're looking at the united kingdom.
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there is still room to grow. corey: if they can grow that much. , any increasese in a saturated market is interesting. i think that you can sell a dollar for $.50 for only so long. when is the free clash -- free cash flow going to slow up for this company? the free cash flow numbers was stunningly bad. the subscriber face going up, a very positive number. they have got to have it go up in order to pay for the content. with that big raise, look at this number, $618 million in 13 weeks -- that is $7 million a day. how do you do that? caroline: it's spending on "the queen." cory: and all this other content and marketing. they cannot do this forever. forget the profits on the income statement -- there is cash flowing out the door in an incredible size that netflix. they are hoping they can outlast their competitors, maybe amazon prime, hbo, showtime, i don't know what the plan is, but as content costs go up, and they
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are adding marketing costs on top of that, and they are running out of places to grow. they are burning through this free cash flow and it could be a real problem in this business. stock can do well, but eventually the piper will have to be paid. caroline: we will see how shares trade up tomorrow. if indeed they hang onto these. always great to get your perspective. staying with netflix, it has now been 10 years since the company made its most important strategic shift away from dvds and into streaming. bloomberg's caitlin meehan looks back at the company's evolution. caitlin: in january 2007, netflix announced a bold the charger from its core dvd rental -- a bold departure from its core dvd rental business. watch instantly allowed netflix users to stream a library of about 1000 movies and tv shows over the internet. back then, ceo reed hastings explain the move saying mainstream consumer adoption of online movie watching will take a number of years. the time is right for netflix to take the first step.
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analysts were skeptical. there were just as many holds as buy ratings on the stock, but consumers saw something different and signed on in droves. by the end of 2010, subscribers had grown from 6 million to 20 million. at the same time, in-store rental giant blockbuster filed for bankruptcy. netflix next set its sights on a new venture in 2013, original content, watching what would become an arms race among rivals. netflix spent an estimated $100 million on two seasons of its first original series "house of cards." but original hits do not come cheap. by 2016, netflix had produced more than 600 hours of original content at a cost of over $500 million. it plans to shell out another $6 billion this year, nearly double the programming budget for all of 2014. netflix has not posted positive free cash flow in two years and it is on the hook for $14
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billion, in future payments, but cash flow concerns aside, it does appear that reed hastings' 2007 bet on streaming video is paying off. netflix now has over 90 million global subscribers and makes 94% -- more than 94% of its revenue on streaming video. caroline: another story we are watching, facebook ceo mark zuckerberg took to the stand in a dallas courtroom to defend his company against claims that its virtual-reality unit, oculus, stole the technology behind the rift. a company called zenimax alleges that oculus poached one of its star designers. along with key intellectual property for its vr headset. it also said facebook completed its acquisition of oculus in 2014 with "full awareness" that its tech was misappropriated. if zenimax wins, it could rewrite the story of how facebook has emerged at the forefront of the virtual-reality boom.
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still to come, we had to this week's gathering of the world economic forum in davos, switzerland. qualcomm's chairman talks about the trump administration. this is bloomberg. ♪
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caroline: now to a bloomberg scoop. u.s. regulators have filed a lawsuit against qualcomm for
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allegedly using unfair practices to license its technology. digging into the details, the federal trade commission says qualcomm forced apple to exclusively use its baseband processors in return for lowering the rate of patent royalties it charged. in 2014, it was disclosed that its licensing methods were under investigation by the ftc and a major fine was responsible. qualcomm responded, saying it never withheld or threaten to withhold chip supply in order to obtain unfair unreasonable licensing terms. shares tumbled on the news. now, bloomberg technology's ian king broke the story and joined us with bloomberg editor-at-large cory johnson. >> that is the bombshell today. we have had very general accusations against them, obscure legalistic accusations, but this is specifically saying, no, qualcomm, you used your position to basically force apple to take your chips and that hurt competition.
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caroline: we are seeing a share price reaction, but this is an ongoing theme, it seems. south korea last month seem to finding to the tune of $1 billion. what money is at stake here? corey: a gets to the heart of the business model. fundamentally, the model for qualcomm is to license chips they think are great and license those chips. they gained influence by having a standard specifically written for qualcomm chips, so this gets to the heart of their model, the relationships they have with the company that makes the phones, and there is no bigger single phone maker than apple. caroline: it is a special model that qualcomm has developed here. how much do you think they can fight this in the courts? what is their record like? ian: their record is almost flawless. they never lose. they when you look at the headlines in the trouble they have had, they have only really
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lost one case, against broadcom five or six years ago. everything else gets overturned on appeal and years later they do a deal and they are very successful. to pick up on what corey said, what they license is actually the fundamentals that go into mobile phone technology. what happens with the chip in -- and the chip design is another business. what today they have tried to establish for the time is a link first between those two things , and that is the biggest threat to their business so far. caroline: if we are thinking of losers and winners, the fact may be they do end up being thought as guilty, rather it might seem to occur, who does this win out for? do smartphones get cheaper? cory: they would absolutely get cheaper. if phone makers could shop around for baseband chips, it is one of the most expensive component in the phone. if they could shop around, they might end up with lower pricing, and that is what fundamentally that gets down to -- was a vendor able to go out and find
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the cheapest and best chips they could get for connecting the phones to the networks or were they compelled to go to qualcomm because of the power they have in the marketplace? caroline: what is fascinating here is who is doing the talking? is apple or executives there coming to the ftc and saying we feel what we have been hardly done by? ian: for anybody interested, if you read page 25 of the filing, there is a lot of specifics about agreements between the two companies, deals that were signed, renegotiated, re-signed, hard to imagine that came to the ftc in a dream and they did not get that information from somewhere. cory: it was not like qualcomm was sending the information. and. apple has everything to gain. apple would like to play the providers against each other. they've been unable to do that. caroline: the providers who could be winning out, do we see share reaction? ian: intel has actually managed to get some of those orders away from qualcomm for the first time
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pretty much in the history. cory: in the apple phones. ian: in the apple phones, right. a clear beneficiary there. a lot of other companies have tried to go against qualcomm over the years and really have just faded away. caroline: give us a time frame here? is this something we are going to be talking about over weeks, months, years? ian: years, i think. first of all, it is a court case. it's not going to a judge and saying, give me a judgment. this will actually go to court. so you have all of what that entails and qualcomm cannot afford to let this go. they are going to have to appeal this as far as they possibly can , if it goes against them. caroline: before the news broke about that u.s. antitrust suit, against qualcomm, erik schatzker caught up with the qualcomm chairman and longtime democrat paul jacobs at the world economic forum in davos, switzerland. eric asked how he is reconciling with the views of the incoming administration. >> there are democrats and republicans, but we are all
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americans, and we want to see the administration succeed. in a democracy, you have different points of view, but there is a lot of places where we are very in-line. we want more jobs, great trade agreements. we were happy when the president tweeted about our one web satellite system. there are a lot of areas where we see alignment, and where there is, we can work hard together. when there is disagreement, we will also express our points of view. erik: where do you disagree right now? >> i think immigration is one where i worry about, at least. i would not say i know enough to say we disagree. i think the american dream and the notion of the melting pot has caused the best and brightest to come to the united states and given us a lot of innovation. that is a competitive advantage for the country. that is one i would single out. erik: anything else the president-elect has said that concerns you professionally or personally? clark's i mean, you know, nobody wants a trade work, so we want
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to make sure that in the cases, for example, in china, where we have gotten through our difficulties there, we are trying to be a liaison and add to helping the situation out, helping to promote understanding, so i think that is an opportunity for us. erik: to the degree that you can, who do you reach out to specifically in the incoming administration to help, to give qualcomm a voice where you think you can be helpful? >> there is a broad range. erik: wilbur ross? >> know, a broad range of people within the transition team and the new administration, but you look at her when and i has democrats, but we have plenty of republicans and qualcomm as well. it is a big company and the senior team is pretty well next on that. and so there are relationships that have been there. we have been working with conservative organizations for a very long time. we are happy to see the focus on innovation and on intellectual property, and these kinds of things are important. erik: is silicon valley well represented with peter thiel as
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trump's collett tech whisperer -- trump's call it tech whisperer? >> we are from san diego, so we are not a silicon valley company. whether tech is represented, i think there were concerns in the beginning of many people in the tech community as to whether they were represented. i don't personally have a relationship with peter thiel. i certainly see him at various conferences, but it is good to have somebody on the inside that understands tech. erik: he says there is no room left for innovation in smartphones. what do you say? >> i completely disagree with that. we are going to get all sorts of very cool things coming. we just showed off some new chipsets that have great processing capabilities. its coming -- gigab down to the size of your pocket and they do virtual reality and you don't have to have extra stuff. it uses a camera to figure out the environment and you can walk around and experience virtual reality right away. erik: what might have motivated him to say that if you are so confident that we will be able to do more with that magical computer in our pockets?
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>> people have sometimes seen things slow down in certain companies, whether they are innovating as fast or not, people like to handicap that. people like to say this is happening and this is not happening, but really what is going on behind the scenes is a lot of new technologies are being created, and 5g is a great example of it. we will build new technologies that are not just faster, but ready for mission-critical applications like health care or automotive. they are going to be ready for internet of things applications, like going into industrial uses or we are really interested in agriculture. can we make a tag that is cheap enough that in some rural part of the developing world, can they have tags on all of their cattle? erik: you alluded to some of the regulatory heat qualcomm has been facing. how smooth and approval process can you expect for nxp's $39 billion acquisition, biggest ever in the semiconductor industry, with the regulatory pressure you are under in a number of localities around the world? >> we think that is a very complementary thing. we did not build the deal off of a lot of synergies.
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obviously, people get concerned when they see big synergies from a regulatory standpoint and get concerned to see if you are getting too vertical or getting into a market and having too big of a stake in a market. in this case, it is very complementary. erik: if asked, would you be willing to spin off the manufacturing facilities? >> that's not our first thought. i am not sure why somebody would ask us to do that, but we will listen to what the regulators have to say for sure. caroline: coming up, a south korean court rejected the arrest warrant for samsung's heir apparent this week, so does that mean jay y. lee is off the hook from accusations of bribery? we will discuss the greater implications for the korean tech giant next. this is bloomberg. ♪
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caroline: after months of investigation by prosecutors, this week a south korean court rejected a request to issue an arrest warrant for jay y. lee, samsung's arab parent, but is -- issung's heir apparent, but the investigation completely over? we spoke with the senior director of the korean economic institute of america from washington along with geoffrey cain. >> for south koreans, this would not be something out of line. many south korean business leaders in the past, including jay lee's father, have been convicted of white-collar crimes. his father, the samsung chairman, was convicted twice of white-collar crime, and because
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of his economic benefit for the nation, he was given two presidential pardons by two separate president's, one in the 1990's and one in the late 2000. the continued his chairmanship throughout his life. he is now incapacitated from a heart attack and his son is preparing to take that chairmanship most likely. he is now the vice-chairman, so he is technically the second in command of the empire even though he is meeting staff. caroline: elaborate now, so even if this is not that much of a surprise to those in south korea, how much should international investors and consumers brace themselves for change within samsung on the back of this investigation? >> initially, you won't see much change at samsung. this is a company that the family has controlled for a long time. they have a plan and even if he were to face continued legal issues, that plan will continue. more broadly, i think the larger question for investors will be -- are the prosecutors able to tie samsung to the government in
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taking and coercing it to vote for the merger of the national pension fund, and that will be the key for investors going forward. caroline: jeffrey, how do you react to that if that is the key question? how more broadly does this affect conglomerates within south korea? are we going to see a changing of the relationship between the government and these huge conglomerates? >> it actually is very traditional in south korea for businesses to give donations and sometimes even bribes to government officials. this is something that goes back decades into the country's authoritarianism in the past. businesses give favors to the government and the government gives favors to these businesses. that is how the south korean nation was built originally with the nexus of business and politics. with these allegations, we are seeing this question over whether samsung was coerced into giving a donation to this crony or whether samsung willfully went into this trying to get benefits for this merger that
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was going to happen, trying to get the national pension service to vote for that 2015 merger that got jay y. lee more power. -- more shareholding power. caroline: troy, i think it is fascinating, having read through your notes, you feel that perhaps this isn't the particular leader to be bashing right now, because as it goes, jay y. lee is relatively progressive compared to many within the conglomerates in south korea. will we see change if he is indeed ousted? >> that is the interesting thing about this story. if you look at samsung and what he has done since he came into power, he has essentially made it much more progressive. he has taken and allowed employees to not necessarily address them by title. he has asked his own guards do not bow to him. that is something traditional and south korea. he is trying to loosen the company up and move it towards international standards. there is still more to do, but it is something he has pushed forward. if you compare him to the -- korean air, where we saw the incident last year, he is a much more humble and laid-back individual.
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if you were to be brought down by something that was an old-school korean type of scandal, i think it would be very detrimental because one, the question becomes how would these reforms stay at samsung ? samsung'secause of importance to the economy, it is a symbol of the way others should go. will that take and hold back other reforms as well? caroline: a quick last one for you. how much do you think this will change rivals? will samsung be as important to the economy going forward? >> i think samsung will be. it does make up a huge slice of the south korean economy and its exports. even without jay y. lee, the company does have a very strong reputation in the electronics industry for making great hardware, being reliable. if you are apple or some other company and you need to put in an order for parts for displays for semi conductors, samsung is often one of the first choices because they can make it faster than other companies and make it
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very, very high quality. in hardware, they often get this reputation as a fast follower, but in hardware, they are often at the leading edge. caroline: coming up, one of yahoos earliest executives opens up about the company's future and the looming $4.8 billion verizon deal. our exclusive with susan decker, former yahoo! president next. and a reminder that all episodes of bloomberg technology are now live streaming on twitter. check us out, weekdays at 5:00 p.m. in new york 2:00 p.m. in , san francisco. this is bloomberg. ♪
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caroline: here in hong kong, an update of these top stories. china state media have used the donald trump inauguration to warn against the perils of democracy. the people says his presidency shows the system has reached its limit and capitalism will now inevitably deteriorate. the president used several speeches to outline their political values. a property that spent 100 57 million u.s. dollars over the last five trading sessions. its largest weekly purchase since listing in 2015.
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it may be a confidence move but wheninvestors are worried they announced plans to buy non-property assets. the missing malaysia airlines flight search party has ended. 120,000 square kilometers of the indian ocean and found nothing. dustnished en route from to beijing. there were 239 people on board. arabia's energy manager says opec and other producers o1.5already cut by million barrels. a meeting in the end over the weekend agreed on monitoring to ensure 100% compliance. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries.
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you are watching bloomberg. let's check on how the markets are trading. things are looking better than they were a couple of hours ago on the asian market front. asking a lot of convection in china, korea, taiwan. since june of 2015. -- gold and yen higher as the higher en on the nikkei. down .7%. lookout though it is up by 10%. kyoto peak business doing some interest. .8% to start the week but you are seeing that conviction and gold players today. things looking pretty good across southeast asia. malaysia up .1%.
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still a little bit of nervousness in the market. we are live from london at the top of the hour here on bloomberg television. this is bloomberg. ♪ welcome back to the technology"mberg donald trump has been sworn in as the president of the united states. the relationship with silicon valley. asan decker, joins us for lengthy conversation on wednesday ahead of the inauguration. about president trump's approach to technology and the changes that will come when this new administration. > a relationship between silicon valley and washington is a good question and one i think somewas due for
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conversation this year regardless of whether hillary had one or trump one. -- won. there are broader economic factors out there. a generation today we are our children at the age of 30, fewer than half are likely to make more than their parents. a big reversal from the trend in america for many years where each set of parents felt like they wanted their kids to have it better. there are many reasons for that. technology does play a role in the sense that a of the great innovations that have added so much to this economy have not necessarily been shared by all of america. the anxiety around that have been bubbling for some time. regardless of who's is no white house it is an issue.
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and if you have those tensions get results. both silicon valley and washington need each other. in many important ways. it is important that silicon valley not find itself, two years from now, with the public perception that wall street has with washington. not is a risk if there is some all of branches extended in both directions. can silicon valley step up to the responsibility to ensure that globalization works for the money and not the few? is it the skills? surely they are more inclusive. guest: ultimately there has to be some transfer of the wealth here and displaces workers elsewhere to those families. how that transfer happens is not necessarily the responsibility
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of silicon valley but they can like try to things educate people in certain regions that may be losing jobs in coding. there are definitely things silicon filling can do. valley can do. that would be done right is it nothing in washington ends up restricting the free flow of labor and capital. if terrorists and other forms of regulation that try to keep jobs here instead of allowing for an workers to stay here and keep the cost of producing low, i think that would be a bad outcome. if we could keep free capital and labor and innovation going here, then with the benefits of
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that figure out how to help the people who are displaced from self driving cars, etc.. that would be important and silicon valley needs to step up and look for ways they can help. many people feel donald trump may feel -- bring in less business relation. we have to ask you about the yahoo!-verizon deal. is the rightthis way that yahoo! is going in wooded it b communications that eventually it would sell to? in the lastoo! was year, it was inevitable that it was to be sold. the fact was sold to verizon in some ways is very logical. they own aol. there is a good consolidation opportunity to look at the properties that aol has and the ones you who has. which ones overlap, cost, so i
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can see the business logic. i think it was inevitable because the core issue at yahoo! is that no administration that has been running it, including the one jerry and i were in place, has been able to solve what the core distinction is in consumers minds that makes young great. content,d it was yahoo! is still struggling with their core identity because they did not get really great in the thing -- that they had a core identity. they were mediocre in everything because they were spread so broadly. by the time the last year came along, it had to be sold. i wish of it sold to a company -- i don't know what verizon will do. i hope they make it unique again. becomeway it needed to
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private or semi private by being in verizon even know pricing is a public company is a small part. they will be able to take steps that are hard and long term and nature that could not have been taken when it was a public company because of all the media scrutiny. whether it was a private buyer or becomes a subsidiary public company, this is a good home in the sense they can make tough decisions and try to revitalize it. caroline: was some of the media scrutiny unfair? sue: i think she was dealt a tough hand. some of the seeds of the challenge that yahoo! had were sown early in his years. there are certain things you probably wish you did it differently just like all of us probably wish we did certain things differently.
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did it the best she could and unfortunately was not enough. what about the hacks that seem to have come much later in the day than actually appeared? how much do think that will affect price points with verizon, how much do you think the people at the helm of you who should be taking responsibility for? sue: i don't know how it will affect the price if at all. it is possible there could be a renegotiation to some degree. i don't think it will stop the deal from going through. companyership of the should always take responsibility when something goes awry on their watch and even if whatever happened happened in in previous administration. step up when you're leading a company. caroline: what do you look back on where yahoo! went? do you think they were correct to get into alibaba?
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look at the value. sue: if you look at the original state in alibaba, we struck in 2005, that would be worth $70 per share today. it's what's sold over the years in pieces. considerablyorth less than that. it was the single biggest value creator in yahoo! history. it is a sad sunset for this company. great love for you. we wish it were different but it did innovate in many ways and did create real value. there are wonderful leaders all over the valley who had their jobs there. caroline: any other companies you think are excelling or you are worried about that needs to be looking at their strategy in the valley? sue: we are in an unusual
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situation here for silicon valley. we touched on it earlier but you apple,mpanies like google, facebook, amazon, 10 marketin the top cap in the world. when you think about the top committees in the s&p 500, silicon valley and seattle are a big part of that. it is very important that this relationship with washington get resolved in an effective way. warren buffett, you work alongside, a company with significant scaling value as well. it seems to be sitting on a significant cash flow. this is something being returned to investors at any point? i would say it is possible. i don't think there is any pressure in the several years to be returning that cash.
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one of the things that is so remarkable about berkshire 's it is a glutton of businesses that generate a loss lots of cash. relocate the cash to businesses that need them. it has been a wonderful model. is every a model that year. a major acquisition could come up and it is good to have the resources on the balance sheet to be ready for that kind of acquisition. as long as the core capitalization is working, taking capital that is not productive and putting it into highly productive uses at a creating way, investors will be tolerant of short periods of time where the cash buildup. >> we speak to facebook's head
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of european operations and dive into the areas targeting in 2017. benioffr marc rising competition and why he is not worried. this is bloombeg.
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caroline: facebook has revealed the survey. the 2017 feature of business survey with the oecd. we caught up with the vice president of europe and africa. also the major takeaways from the surgery. -- survey. take a look. guest: pretty confident about where the businesses are now. what is interesting is the outlook for six months. that is when they are feeling more confident. you can go into the survey and really dig and have a look at different countries how they are feeling.
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one of the things that stuck out to me was that the u.k. small businesses were feeling much more confident than the rest of europe. when you start to look further into the survey you can see that businesses that are embracing online to her are being visited more likely to be working internationally, that is something that we have seen as a result of mobile technology. parentsas growing up my got a small business and my grandparents had a small business. if you understand your customers you can actually sell anywhere in the world. shows the challenges that businesses are facing as well in that respect. caroline: could you see any nuances coming up to the post brexit vote in june? post the election of donald trump? can you see that coming from u.s. businesses?
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post-brexit but there was a dip in confidence. one of the things that really stuck out to me with the research was how women and female business owners are feeling at the moment when it comes to their businesses and their outlooks as well. a lot of that is contrary to how we might see conventional wisdom might say. when we think about businesses we may not -- necessarily think they are being run by women. thatresearch is telling us women are using online tools to grow their business more than men. why that is important is because they are more cocky -- more likely to be trading internationally. looking to expand and include more people in the not too distant future. a strong correlation between
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jobs growth and additional economy. caroline: what is the role of facebook? the future of business survey, where do you see yourself within it? you launched facebook for work. is that because you want to be more enterprise focused? we take responsibility with how we work with our partners around the world. workplace, wasat from different organizations coming to us and saying tell us how you run facebook as a business. the way we run facebook is a business is through workplace. we use facebook. we use groups, messages to connect around the world and work and efficient way together. partners say tell us how you do it and we have expanded it to thousands of companies around the world that are utilizing workplace. businesses really
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embracing it because it can allow them to be closer to the people that work for them and allow great efficiency between the ceo and different people within the organization. caroline: rising in competition from oracle has slowed growth. they have seen a strong start to 2017, shares of 47%. cavity forecasting sales jumped 21% in 2018. benioff discussed the company's close as well as the cover edition. c: we had to do what we were doing from the beginning which is connected with our customers and help them connect with their customers in a whole new way. that is what is so exciting about what salesforce does today. that is why so many companies are using salesforce.
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there is a change going on in that companies are really working hard to develop customer intimacy. you have competition, how do you compete to other contenders? marc: amazon is a great partner. uses salesforce to connect to their users. i have a feeling you don't know who to nelly -- good to nelly -- they need salesforce to connect with their customers. these are exciting times. reporter: everybody's making money but you have your critics. how are you going to feature
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salesforce in work new technology? how are you going to reposition, not for the next 12 months for the next five years? i cannot imagine where my iphone 7 is in five years. marc: customer management was a small market. it will be the largest segment of software by 2020, and today we are number one in that segment. we are continuing to innovate and look for ways we can help our customers become more successful. >> how does a your competitors handle the cloud through whichever phone we have in our hand business or personal? rc: it's fascinating how you think about computing today. huge shift from what
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we started with personal computers into the most popular computer today, the mobile phone. aliens of them and they are making them for $20 so anybody can have a computer far more powerful than the most powerful huge shift from what we startedmacintosh or lisa. youris a something in pocket that capability. no computers will disappear because we see voice. amazon.a lexus like you see google home and others. we are talking to computers and walking into a room. talking to our watch. incredible next generation computing. caroline: how will the snapchat parent company transparent said to seek it culture into a couple -- secret culture into a public company? this is bloombeg.
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caroline: as we reported last week, snapchat in london despite
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snapchat secretive culture is now coming into focus. ceo leadership style is getting tested as he convinced his investors of the potential. investors have been reluctant to release any details they are not greatly required -- legally required to divulge. sarah: a secretive company that is very young. you will need to see some visibility into the future. you will recall they are on kyle -- file confidentially. there is a -- some people have been able to get their hands on. until we see the actual f1, we will not have the filed publicly. we will not have income statements, balance sheets, things like that. this plays into a close to the vest culture that evan spiegel has maintained. you think about is offering it is a social media company. the last one to go out was
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twitter and there was a overhang because twitter did not lay out a huge strategy when it went public. that came back to bite them later. to hold on to this stock they will need more than what evan is typically able to give out. caroline: something you have been warning for several years. , not even divulging much to his own team. being an employee for snapchat is being someone on the outside of snapchat in terms of what you get to know. employees there don't get a heads up on what rocks people are working on, you don't get to use their phones at the new year's party. there are little things that the offices are not in some kind of corporate campus like you see on facebook or google. they are scattered across venice california on the beach in
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various office buildings. meetings that are a staple of silicon valley. a lot of people are in the dark within snapchat on how the company is headed. evan spiegel is going to have to tell investors on a road show not just about where the company has been but where it is headed. this is the time to explain the long-term vision for what snap is and can be. caroline: investors will need soothing. facebook copies snap, it may be that evan spiegel is copying mark zuckerberg. sarah: they have been pitching, evan is a visionary ceo. trust him, he has -- you can figure out what is going on in
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the future. they are going to have to. meetings, andnds that is the guy who is in control. he is the one who sees the full picture of what is going on. it is a big task. one they're trusting to control the information flow. we've seen that in the process itself, the coming out -- threatening to cut fees things keep leaking. they lost really put on evan. after twitter has gone out. after some of these missteps with other very big founder led it companies, it is a big ask to ask of investors. it will be the first tech company in a long time. the long-term investors you really want to buy into these public offerings, they are going to be the ones that you needed to convince this is a company to buy into that one up for the ipo or the next 5-10 years.
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caroline: what are you hearing about how well you think the culture change will progress with evan spiegel? do you think he understands how much he will have to give? in the nature of how the company is run, probably give his m -- as little information as he can. what is it worth it to him to expound more? give in to threats from facebook. facebook has copied it snapchat over and over. caroline: that does it for this edition of best of lumber technology. the latest in technology throughout the week. tune in for thursday's for a slew of big earnings. ine in each day at five new york.
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all of us is on bloomberg technology are live streaming on twitter. check us out with today's. that is all for now. this is bloombeg.
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anna: trunk makes job creation of priority as he meets his leaders at the white house today. we look for clues about the president's agenda. manus: trump trade loses steam. the dollar slumps again while gold and treasuries rise. he offers few details of this economic plan. investors worry about in protectionism. may sets tominister meet trump. her industrial strategy tomorrow . the supreme court decision of triggering article 50. ♪


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