emily: salesforce, raising its forecast. we will tell you what we are learning about potential takeover talks. ♪ i'm emily chang, this is "bloomberg west." coming up, jeff bezos has a new top advisor. for the first time it's a woman. we will tell you what it means for the future of the e-commerce giant. spotify, adding podcasts and videos, will it be enough to take on google and fend off apple? keep an eye on your robotics u engineers, especially ifber -- if uber is around.

all of that ahead on "bloomberg west." breaking news, salesforce raising its sales forecast seeing the first and biggest first-quarter he's ever had, underscoring attractiveness as a potential takeover target. cory johnson is live in san francisco for you. looks like a strong report, we did hear from the salesforce president, no comment on the deal but they are 1000% focused on customer satisfaction? cory: that's a lot of percent. that's like 100% 10 times in a row. here is what i take away from the earnings report. compared to what was effective they would do, it's a little bit better than that, it typically is. the reaction in post-market trading is very muted compared to what we usually see. last quarter the stock jumped 12% and then down 12% of about 2%, we will see how that shakes out in trading. what we saw from this company is

that while better than expected it is dramatically slower growth . yes, this is the biggest first-quarter they've ever had, but only 23% bigger than a year ago after acquisitions. looking at the monitor that's 37% one year ago. opening at 37% to 20%, that is a lot slower. it's a very different business with different growth potential from what we would have expected one year ago. one of the reasons for that is because they spent less money on marketing. the big knock on them is that they spent so much on marketing when you're ago, 52% of revenues and marketing. think about that, that's what they are putting in the tank to make the thing go faster. they lightened up just a little bit, only 49% in marketing revenue and guess what? sales growth dramatically slows down. i think that for any potential acquirer looking at this business, it was barely possible

and the free cash was a little bit better, mainly because they recognized a lot of deferred revenues but the business of less marketing spent at a much slower pace it was much slower growth and i think that that would be a concern for any potential acquirer or equity holder right now as well. emily: stay with me. we have kevin ryan joining us from new york today. he is going to be the guest host . also with us, katie here in san francisco, who covers salesforce force. pat, you have been covering them for years. katie, i know you both have your theories about what will happen. is a deal going to happen? pat: i don't know. i don't know. the big question is they got a call. there is agreement on that they got a call and had baker sullivan on the line. more than an interest, someone called. the question is -- you might

that have been? the choices that i'm sure we will get into more are google -- microsoft -- or oracle. emily: katie, what is your fear he? katie: one reason it would be hard for them to acquire salesforce is they would have to acquire mark benioff and if he wants to be vice president of a huge company after running salesforce for so long in that market cap company. emily: it does the scene that he would want to do something like that. katie: exactly. that he would go to oracle perhaps to be a successor to larry ellison? a lot of people said that that was a company that needed a succession plan. emily: partisans are telling us the parties are leaning back from the table. what you make a back? pat: it is to breaks -- make of that? pat: it is super expensive and ask sort of situation where if

you are one of those three players and someone is considering doing it? suddenly you need to consider whether you should right? it would totally change the competitive landscape. if you are microsoft and google is contemplating buying salesforce you have got to be all over that and figure out what it means for your business. emily: back in the day you sold a company called double click to google. how much of a distraction is all of this? kevin: it is a distraction, but if you sell a company for $60 billion, it's not a terrible thing. but until this happens i think we have to put the odds at very small. it's just so big even for those large companies. it's risking a lot. we have seen many acquisitions go badly. plus it's not the type of typical transaction that google does.

just a double-click or youtube or even android in some way they bought core technology early on and then built it from there. i think that this is not very likely. emily: on that note i think that bill mcdermott said today that you don't bite companies were prices are going to drop and revenue will be under pressure in the future. you have always been beating on salesforce, cory, what do you think of that statement? cory: i'm always loving salesforce. even though it's not growing like it used to. later stages of growth have been fueled by acquisitions coming up the cash flow statement from last year. this is a company that has grown lately not because of salesforce software being popular, but growing by buying growth, which has its limits as well and anyone who gets involved in a merger with this company or even looking at it starts to pull away the covers and sees these things and it's hard to imagine

where this grows in the future and where that growth will come from. and the pace of growth. that's the thing, it's a big thing to grow the revenues fast by spending a lot on marketing but what's it going to grow like in the future? these growth rates are coming off fast and that will be disconcerting to potential record -- acquirers. kevin: on the other hand it may be slowing but it is a lot faster than oracle at this point. cory: but it would be a massively diluted deal for anyone who buys oracle. emily: katie, pat, you guys are nodding vigorously. katie: companies that make big acquisitions to get into new areas, it's been a very mixed bag. you are seeing a lot of those companies now breaking up. hp is essentially spinning out compaq, which they acquired in attempting to become a huge player in a dying market.

a lot of these market initiatives are being undone now. pat: i'm going to get the other side of this. they have a ton of cash. these companies are sitting on a huge pile of cash. microsoft has $95 billion. number two, they can cut in enormous amount of cost out of salesforce. oracle already has a salesperson in every major fortune 500 company, you can cut that all out. number three, the world is moving to the cloud, you know? people have got to adjust to that. kevin: all right, pat, katie kevin you're sticking with us. cory johnson, our editor at large, thank you always. in today's edition of drive,uber has apparently emptied carnegie mellon's robotics laboratory according to "the verge."

they announced a strategic partnership to work on self driving cars, remember? they even set up shop at the robotics center where they shared a parking lot. four months later they are moving into what they called the advanced technologies center one mile down the road. that partnership looks like it may have been more of a job fair , according to "the verge." we reached out to uber for comment but have not heard back yet. here about the woman who's feeling this elite role? next. -- filling out this elite role? next. ♪

>> alley, emily, emily? emily: senator rand paul protesting a possible renewal of the patriot act. but is -- but is it all for show? it technically is in the filibuster, the senate is set to vote tomorrow on legislation that prohibits the nsa from collecting phone records in bulk, but it were news provisions of programs that expire on june 1. now, to a big shift at amazon for the first time jet reseau's 's right-hand man is a woman. named amazon's technical advisor to the ceo, known in the company as a shadow, she has been there

since 1999 and has worked on an array of project including the health, beauty, and grocery teams most recently acting as the ceo of quick be. what does her appointment mean for the future of leadership? i am joined here by eeo of joyous and jim munster, an analyst at piper jaffray. jim, what do you make of this? what can you tell us about maria and what she will be doing? -- maria renz and what she will be doing? jim: she is seasoned and jeff bezos has a very high standard, so she has the tools to get there. at the core she's a retail person, meaning that she will be groomed to have some sort of a miniature ceo job that will be more retail related. emily: she's a woman, that's

great, but why is this important? sue: first of all, and i said this futile for, i think of jeff as genderless. jeff and the amazon culture is all about an incredibly hard work ethic. he treats women as brutally as he treats men. it is entirely related to a certain type of individual and gritty work ethic. i say that having been there. what an amazing cfo long before anyone in the valley was talking about gender. from my perspective amazon is a culture of go get it toughness and maria is rising in those ranks, brilliant for all women. emily: the term shadow is on their linkedin profile, what do you think of that?

emily: it is an odd term. i think that if provoked but at the end of the day everyone has passed in and out of that role and have run big businesses at amazon and gone on to run even bigger -- even bigger businesses. emily: andy jaffe is one of the former shadows, as well as greg hart. the head of the amazon india business team what can you tell us about the people sitting on amazon's bench? there's always that question of who could succeed because it's not obvious. kevin: -- jim: jeff has been there since close to the beginning and basically runs their retail. if you had to replace and on replaceable person, it's probably jeff. i don't think that there is

anything in the queue, not that we are suggesting that, but like you mentioned maria will be at the head of a major business and jeff is probably the heir apparent at this point. emily: what do you put think? you think? sukhinder: i think that jeff wilke knows the computer business. emily: you come from the e-commerce business. talk about how important it is to have diversity leadership when it comes to e-commerce? emily: one of the reasons that women are emerging there is that more than half of that population is often female right? if you think about the areas that he's attacking thinking about investments in fashion beauty, premium merchandising these are all experiential types of commerce and i think that in those areas specifically understanding the female mind and perspective is something that a female leader brings to the table. emily: all right great to hear

about the promotion, although the term shadow is debatable, in my opinion. jeanne, thank you. jean: thank you. emily: in today's edition of out of this world -- >> ignition and lift off. lift up -- lift off of the united launch alliance pt five. emily: a successful liftoff today, but what's cool about it is the payload, a highly secretive military spaceplane called the x-37 b, developed by nasa and being used to test technology that would withstand high heat and could fly autonomously. also hitching a ride is the planetary society light sale. a kickstarter funded satellite project trying to use solar radiation rather than rocket thrusters to propel itself through space. it will not be in deep enough space to test just yet, using this mission's date of the planetary society will launch that mission on the space x

falcon heavy in 2015. spotify is building some video muscle, but will the new strategy be enough to win over advertisers and beat back competition from apple? we discuss, next. ♪

emily: time now for the daily bite, today's numbers 20,000. that is how many websites may become unreachable as engineers from the biggest technology firms move above and appropriately named logjam. a paper disclose the existence of the bug. once they happened to see or change information on a secure website, the problem is that when it is fixed some older websites may not work.

microsoft patched vulnerability last week and patches for other popular browsers will be released soon. today spotify announced that it is getting into video. the company announced the update from the bbc. ted talks and clips from comedy central, the videos will be served up based on what you already watch will be available in the u.s., the u.k., germany, and sweden. spotify is also getting into original content. >> what is really cool about what we are doing is the way that our new concept both complements and extends the core music experience. so, we believe it will keep users happy and engaged throughout the day, but also that they will listen to more music as a result. plus it's really awesome content that really adds value to the spotify experience. emily: they are probably feeling some heat right now, jay-z recently relaunched his streaming service and says he already has 770,000 subscribers

and we are less than three weeks away from the apple developers conference and there are reports that beats music will be revealed then. could video be a game changer for spotify? i'm speaking now to the director of marketing at the video service provider with kevin ryan back with us as well as her he i want to start with you -- is this a play for ad dollars? if so is spotify basically admitting that it cannot survive on music since -- music subscription? >> we have seen mobile video increasing over the last year. if you want to make money online, video is the way to do so, especially on mobile. advertisers love the mobile experience they know that viewers are engaged with their mobile devices, so spotify wants to make more money from those users who do not pay for their service? video is the way to go. emily: i recently spoke with the

founder of pandora and he was talking about the difficulty of working in the streaming music business in general, talking about why they had to pivot to an add given model. i want you to listen to what yet to say. >> initially we thought we would be a subscription business, but clearly that short-lived. when we grew our idea was to be ad supported and we had to basically invent that business, online internet radio ad supported business so it was kind of touch and go for long time. last year was our first profitable year, as a matter of fact. emily: kevin, i want to ask you you have started so many companies, how big of a pivot is this for spotify? why now? kevin: first of all, i don't think it's a pivot. i think it is just adding to the product offering, which is different. spotify has incredible

distribution for what they built up over a short. of time. -- short period of time. there will be more products there and they have to get a critical mass. music making is incredibly difficult and they are as well-positioned as every -- anyone. i don't think they are the slightest it worried as jay-z, i don't sense momentum there and it is a hard thing to build -- pull off. emily: ok, maybe they are not worried about jay-z, but what about google with youtube? facebook is making a huge push into native video. can spotify really complete -- compete? >> i think they have a really good suite of applications across many devices, something that snap chat for example doesn't have, but it remains to be seen how they will be able to push their video offering across those devices.

it is not easy to handle audio files and when you do video and start playing around with those ads you start getting into real-time bidding with programmatic ad selling, these are tricky and we have seen big companies wanting to get into the video business like facebook for example, they had to buy to do that. also yahoo!, aol before them they all had to buy a network before they could play in that game. it will be interesting to see how spotify can compete. emily: some of the original content looks interesting, a video series showing a new dance move every day. i want to take a look at that. thank you both for joining us. kevin, you are staying with me now. i want to talk to you a little bit about something you are working on. you have a lot of experience launching and building companies. you just have your latest startup, contour. he said it was like a house for office design. tell us more. kevin: there is a $60 billion

market every year of offices buying furnishings and her is the website where you go to see the entire selection to get inspiration, so we are building that right now. it will launch in a couple of weeks and it looks very exciting . i think that it is going to be a huge opportunity and it is exciting that you can find in or miss opportunities in the internet where no one has launched yet and this is one of those areas where you can find big things. contour is going to be a big success, we are signing up potential firms right now and getting some potential deals. it will take some categories and make them bigger. emily: startups use to happening garages, now we have these companies spending a lot of money on their offices. is it a sign of a bubble? real quick. kevin: i think of the biggest increase is the larger companies that need to spend more on their offices to compete to get

workers. that is where you are seeing the growth. emily: all right, kevin ryan startup veteran founder of many companies thank you so much for joining us and thank you for watching us today from san francisco. ♪

john: i am john heilemann. mark: and i am mark halperin. ♪ mark: we have democrats, but first "the wall street journal." hillary clinton's staff