k: prince is dead. shares were called to his home in suburban minneapolis and founder the star unresponsive in an elevator. president obama released a death, today is the world lost a creative icon. one of the most gifted and prolific musicians of our time. prince was 57 years old. london.t obama is in

allies agreed to various security initiatives. to fight the islamic state. and david cameron will hold a joint news conference on friday. inchoate, peace talks on yemen got underway. it is an attempt to end the year-long conflict. nearly 9000 people have died in that conflict. ♪ emily: i am emily chang and this

is "bloomberg west." coming up, alphabet and microsoft getting slammed in after-hours trading. and dick costolo on who joined in the writing room this season after leading twitter. and jean liu talks about did chuxing, china's uber. and we look at alphabet's after-earnings shares. it was up 18% and to that, it is looking at other bets. losses grew to $802 million. sales have improved. the cfo gave insight moments ago in a call.

>> with regards to investments, the bulk of that is directed to our fiber business. we hope to increase that and execute it in a number of cities. emily: joining us now for a full breakdown is adam berge, james cakak, and cory johnson. cory, i will start with you. what do you make of the results here? not a great sign. cory: i didn't see it that bad as far as things go for google. $62.5 billion in revenue and a

fantastic profit story as well from this company which we have come to expect, but if you look at this, we have seen some progress. we have had double-digit racing, if i can recall, the cost for click is down only 5% and that had been getting worse. it was at -11, -11, and the -13, so i saw that turnaround as something of a positive sign. maybe because google has a new category and new types of categories that talks about prices. with the number of clicks on the site, with that growing so fast, i didn't think it would be a problem for google. emily: adam, we want to hear from you. adam: this is the thing i have

talked about the last two times are maybe three, that my big worry would be the cost for click is being propped up a little bit by things that i don't know that are entirely sustainable, looking at adding units and things of that nature. i think one of the good news is that sindar mentioned, talking about faster loading pages and faster performing campaigns for advertisers. emily: james, what do you make of this, especially as the revenue moves to mobile? james: i'm going to have to completely agree with cory on this one, but the deadline is a myth. this is actually a pretty good result. you have 23% of growth online and when you take alphabet, it is only up 38%.

what has been a headwind for this company for such a long time has transition to mobile and mobile behavior and mobile usage is now turning into a tailwind. you are going to see the pricing moving in that direction as well. so the pricing is going to make a very compelling story as you look at a couple of orders out. emily: now sindar talked about what happens after ai. let's hear what he had to say a couple minutes ago on the call. what he is talking about, we don't have that soundbite, but he said we will leave all of our computing from a first two and ai first world in the long term. cory, what do you make of that?

cory: i think that is a justification for other bets, but it is so far off. it is probably a very interesting place to work and they probably have cars or balloons or discussion about ai, but this ad business is about what makes all of that possible. on earnings day, when we get a chance to look at this company, this cannot possibly get enough analysis because it is so important to see what is happening all over the world and it is such a big business, it is almost unimportant which is kind of on amazing -- unamazing of itself. emily: on that note, we have known that europe has lobbed lawsuits against alphabet. james, how serious could this investigation into android being?

james: unfortunately, it is serious, and this is the one risk that we encourage investors to keep in the back of their minds. if forced unbundling does occur, you have a situation where you are limiting the situation to collect data and limiting the division of advertising revenue and that is a pretty significant risk. i think what google has to do is to put this behind them as quickly as possible. this might mean a settlement or giving up some of the perks that they have right now because the longer that it lingers, and this is an issue that seems to me at least that the eu is not making this about money but making this about principle and that could be dangerous in the long run. emily: it is not just this investigation by the eu but it is facebook which is commanding more and more dollars. is the very foundation of

google's business under threat? adam: we have a unique view of that cycle and how it goes on. sometimes it might be facebook or snapchat or it captures that share and i think we are going through a phase right now where google is going through some very innovative things on the app side. i would are clear bring it back to that ai comment. ai is becoming a very important component of advertising. that is an area of strength. a lot of digital advertising has to do with being able to predict outcomes and ai is a huge part of that and something that we invest in heavily here. it certainly ties very closely to the future of advertising. emily: all right, adam, thank you so much for joining us,

james, thank you as well, and cory johnson, you are sticking with me to talk about microsoft coming up. now fbi director james comey described how much of the agency paid a third party to hack into the san bernardino shooter's iphone. he said quote, "more than i will make in the remainder of this job, which is seven years and four months." he went on to say in his view that it was worth it. speaking of apple, take a look at apple's shares. it is officially in a bear market. it closed 20% lower than its latest high on april 27 last year. apple reported second-quarter earnings on tuesday. up next, microsoft's transition to cloud their services hits a speed bump. why pc sales are pulling down the company. we will look at their third-quarter earnings. ♪

emily: we're watching shares of advanced micro devices surging in after-hours trading. there is a chinese estate-backed venture for service providers for the chinese market. they are trying to diversify away from areas where it is struggling to complete against intel and nvidia. they missed analyst estimates and they would restore growth on focusing on cloud software and it hit a speed bump with the weak pc sales. their profit came in at under $4 billion.

they are down 24% from one year ago. they're steering microsoft away from the struggling pc market to the cloud-based market. take a listen to the explanation of how this works. >> that infrastructure requires new approaches. this is not just the same thing we have done in the past. this infrastructure is going to play a bigger part. emily: for more now on microsoft, we are joined by ubs managing director of software technology, brent thill, and we are joined again by cory johnson. cory, this is supposed to be the future of microsoft. from what you are seeing now, is it enough?

cory: i think it is safely the future of microsoft and this transition has gone frankly pretty well. when it comes to cloud hosting, microsoft is a giant business out there doing it more than $4 billion in revenue. microsoft consumers are doing safely along with azure and they have a lot of success with the type of clients they are getting. google is third in this, but we don't have any solid numbers on this yet. emily: now talking about the profit shortfall, our microsoft reporter just got off the phone with amy would, who is the cfo at microsoft, and she said it was due to catch-up tax expenses. she says what we are seeing is an acceleration into the cloud which brings them into a higher tax rate overall in licensing revenue. azure, compute, and database

growth doubled year to year. so, brent, how do you see them weathering this transition to a mobile world? brent: this was a tough quarter and the guidance was a lot tougher than anybody expected. so what is happening, in the cloud world, they need this up front and that is really accelerating for everyone. microsoft is not alone. this was a departure from what they have been doing in the last couple of quarters, which is having really good numbers and actually showing pretty good progress. so this is a little bit of a step back. part of this is cloud and part of this is pc and what is happening with the macro softening in certain geos like in latin america and the middle

east. overall, if you look at what they are managing what they're doing, they couldn't do it any better. this is a multi-year transition and we think, again, that nadel is doing the right thing in the product line and amy is doing the right thing as well. but she has typically been pretty conservative on the q4 guide, so when you look at q4

guidance, she took a hatchet to the numbers, relatively, so i think we are all going to have to -- emily: right. cory, how do we think about windows? cory: i think this is another guidance issue where we used the phrase earlier, sandbag, but they may have given some light guidance and it worked. microsoft has been a champion for decades in guiding low and being a little bit higher, but that guidance game is a big part of that and that is one of the things that we see under that current cfo. those windows numbers are coming out looking really strong. it isn't really striking in the face of the intel numbers from earlier this week when intel moved to the pc market and looked at their shares and they were taking a big hatchet to their workforce and cut 11% of their people and 12,000 employees and that is a very different reaction in the same market.

emily: quickly, brent, what are you going to be looking for over the next couple of quarters? what you want to see from them? brent: as we said, it has moved from the honeymoon phase to the execution phase. they are trying to get closed transactions so it is really about the transition into cloud. they have standardized the personal computing ideas and if you want to see that continue, that is their biggest of business -- biggest business, is diverse fine pcs. in my opinion, the chatter that they were talking about last year, there is certainly a lot of expectation.

emily: we will be watching. brent thill, head of software research at ubs, cory johnson, bloomberg editor at large, thank you very much. and securworks price shares are at $14 per piece in the first tech ipo of 2016. finally, according to people familiar with the matter, secureworks has provided software to prevent and detect security breaches and operate in more than 59 countries. tomorrow, we will be speaking with mike cody from the nasdaq. coming up, a changing of the guard from taskrabbit. we will speak to their new ceo. ♪

emily: a changing of the guard at taskrabbit. the head of the company steps down and stacy brown-philpot

stepped up. i asked her why the cep stepped down. stacy: the timing was just right. both of us felt like this was a good time. the business is ready to go to the next step in the scale. it was just a natural progression for me to take over and start the business at the next level. emily: i have heard many times about her vision. what is your vision? is there anything you want to do differently? stacy: yeah, of course. i am still a part of the creating of culture at taskrabbit. i wanted to revolutionize every day work what we are still at the beginning of that and there is still so much more that we have to do.

internally, we have to keep the culture, keep the best talent, bring in the best talent. but we also have to focus on execution. we are going to be profitable by the end of this year. we quadrupled our revenue at the end of the last year. we are going to get to profitability, but we have got to be disciplined in our cost and focus on excellence. that is something that will be different for this company. emily: there is so much to say about the on demand culture now. can they last and how are you focusing on economics to make sure that taskrabbit lasts? stacy: i think it is a big industry and this opportunity is huge. i still think that it is a matter of time before the market

started to correct some of the ill yen dollar businesses and the resetting of valuation. i think it is a reset of focus, being able to focus on sustainable business, focusing on economics, and that is something we have always had at taskrabbit, a focus on the numbers. i think we are well-positioned to get profitability by the end of the year. i have never been anywhere where we were told that taskrabbit shouldn't be there. now how do we make taskrabbit exist everywhere? emily: speaking of numbers, you are about huge diversity in regards to african-americans. how do you intend to do that? stacy: yeah, we were planning on launching a diversity inclusion plan anyway. the congressional black caucus asked if we wanted to launch a tech plan and we said yes. they are really focused on being transparent and eating accountable.

i think you can accomplish what you measure. by setting real targets in going public about them, most of the way we are going we are going we're hitting that goal. we are already at 8% african-american and our target this year is to hit 13%. we have the goal of being the average of the population. we should be able to at least do that. emily: how do you get to 13%? stacy: we partnered with code40 two bring on interns during the summer. mentoring, so for the people who do come in, we actually are creating a program to help nurture their careers and focus on that attention. and then we are creating a culture.

the culture of taskrabbit is open and accepting hopefully that will attract more workers to us. emily: the new ceo of taskrabbit, stacy brown-philpot. we will be right back. ♪ ♪

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x1 makes it easy to find what you love. call or go online and switch to x1. only with xfinity. >> asian stocks have retreated from a four-month high. oil is gaining in new york. fuel efficiency scandal at mitsubishi motors has cost the company more than 40% of its market value in less than three days. things could get worse. masson says it may dump mitsubishi as a supplier of many cars.

china has shut down some of its apple web businesses. taking the itunes off-line. apple has not given a reason for the shutdown. those the headlines from bloomberg news. here is the latest in the markets. juliet: japan is coming back online. down more than 4% over the course of this week. it's the steepest losses since january. sharp is looking ok up 3%.

a number of exporters getting a boost from the yen. quite significant losses coming through. we has coming through from the casino players. the insurer in hong kong is up. sony in japan is down 3%. weaker than expected earnings.

the japanese currency has been in focus this week. pretty unchanged against the dollar. overall a negative session coming through in asia. uber's largest competitor in china. about 40 million drivers and 11 million rides a day. by comparison, uber trails far behind, only in about 50 chinese cities, with a plan to expand to 100 by the end of the year. they have partnered with lyft for more global expansion. i met with the president of didi chuxing, to ask why they wanted to rebrand the company.

jean: it is a much more broader concept, choosing these travel commutes, so we are serving the 800 people to commute, that is why it is called that by definition. emily: here in the united states, you are referred to as the uber of china, or the uber nemesis. how do you see yourself? jean: we are the 800 million people with a variety of products. we also do taxi. and about 2 million of the 11 million come from taxi. a lot of very china-specific products. emily: so you are currently in 400 cities in china? what is the next phase of expansion? jean: the next phase is to invest more in intelligence and mission learning, based on the 11 million ride scale. it should be machines making the decision, to get the system smarter and smarter everyday by itself.

if there are 50 request going out, and everyone wants to go in five minutes, you would never be able to match it. forget it, right? we want it to become smarter so it can predict the demand from the bloomberg building. before, the passengers sent out a request. when you have a demand we can match immediately. based on the network, we will gradually learned for each particular area how many requests are coming out and how to move the drivers in time to match the request.

emily: how about expanding outside of china? jean: china is a huge market, 800 million. we only have about 1% ride penetration. from a global perspective, how can we help chinese travelers go abroad more easily? that is why we are launching a didi international product. a lot of travelers turn on the app and get access to a lift to service right now. it is very exciting. emily: what is your relationship

with regulators in china? jean: that is a great question. first, the chinese government has been more and more open to us. it is a top issue for china in general. the government understands we need to utilize existing resources to put in to the immune system so people can travel around. right now, there is a lack of an existing system, so we're solving a basic issue. number two, on our platform there are 4 million jobs -- opportunities created, on a monthly basis. there is a lot of restructuring going on, people will lose jobs. so 4 million jobs means a lot, and it is growing rapidly. third, the environment during when we do carpool we are putting more people into one car.

emily: what are the financials? how much money is didi losing? jean: we are closer to profitability than ever, thanks to the improved scale. we have achieved efficiency. what i can share with you, at the end of laughter, we still had $3 billion on our cash balance, and we are closer to come we are finishing the closing of the second round at this time. so we will have abundant cash on our balance sheet. emily: what you think of the future of the ride sharing market? is this a two player market, a one player market, or a multiplayer market? jean: we want to make sure we are providing a unique service

to our users, our passengers. i know a lot of questions will be on competition. but from our perspective, this is like hurdle lifting. you don't go aside, you will fall. emily: what motivated you to invest? jean: lyft cares a lot about community. their product is very innovative, they are the first to do ridesharing here, and they have been growing magnificently recently. they have almost doubled their market shares. i know in san francisco here they have reached market shares of 50%. the last quarter they grew 50% as well.

we are very happy with that. emily: any estimate of how many of your american users have taken advantage of the partnership with lyft? jean: it has just been three days, so i cannot say. but it is very promising. emily: i did try didi many times when i was in china a few months ago, and it was a pleasant experience. in fact, that experiment in switching back and forth between didi and uber. coming up, hbo's satire "silicon valley," returns. we speak with mike judge and dick costolo who joined us in the writers room this season. ♪

emily: hbo's hit show "silicon valley" comes back for a third season. i sat down with the executive producers of "silicon valley," mike judge and alec berg, along with dick costolo who is a consultant for this season. i started asking about the fate of richard hendrix, the main character who was fired by his company at the end of last season in a epic -- an epic cliffhanger. >> when we did research, we wanted to see what would happen if a guy like richard got fired. all the engineered wondered -- all the engineers wondered if it would work. and others aside, yes, we get rid of founders all the time. so people have different ideas of what reality would be.

emily: what was the dose of reality you brought to the writers room? >> it would be hard to understate my influence on anything you're going to see this season, other than sitting in the back room and saying you could totally do that, that had absolutely happen. you could do worse than that. emily: anything you said no? dick: very rarely. you could make it more dramatic than that. emily: what was a like having a real ceo in the writers room? >> it was amazing. we get stuck a lot, and oftentimes we have to call people to ask them whether it would really happen or not. having him in the room was amazing because as we were thinking things, we could be looking at him to ask if it is real and if it would happen.

emily: you are in improv comedian by ground, i imagine this was fun. >> 100%, about three weeks before -- i have an idea for the line, but everyone in the room is so talented and funny, coming up with these amazing things, it was a wild before -- a while before i was back in the room. emily: and you drew on your own experience leaving twitter? dick: and replacing people at twitter. it was great because not only did i get to be a programmer, but big moves of people being fired and hired. >> all the ins and outs of this world. mike: we had already the twitter book. sometimes i find myself going in the book, no, he is right here.

emily: on that note, you talked about how you had to deal with a lot of public scrutiny as richard and pied piper. twitter has been for trade in a certain way by the media by certain authors during is it as dysfunctional inside as it is portrayed in public? dick: i think the reality of what goes on in these companies is a lot different than however it is per trade in the media, whether being portrayed as things going amazingly well or as things being really dysfunctional. the reality is always completely different on either side.

>> it was always going to be hbo. they were pitching me the idea of a show about gamers. mike: and i have thought about that, but i don't know that world well enough, and that is a world where if you get it wrong, boy, they will you alive, those people. [laughter] i thought i would stand a better chance against programmers. so it was always going to be hbo. emily: what you think about binge viewing? would you want to put all the episodes out at once? mike: who knows, that is hbo's decision. and there is hbo-now, and it is all changing. emily: how much greater freedom to they give you guys? do they say only two dick jokes this season? >> no, they do not cap the dick jokes at all. there are no issues.

emily: one of your writers for the movie "idiocracy" tweeted that they did not expected to become a documentary, a jab at donald trump. surprised by how far donald trump has made it? mike: yes. i am surprised. emily: anyone? anyone? how about this, next felton who wrote a twitter book, alleging that silicon valley created donald trump, specifically social media. and we know how often donald trump uses twitter. what do you think of that allegation? mike: i think he knows how to use those platforms. donald trump, i am referring to.

he is quick to tweet very early in the morning -- dick: quickly before the press cycle, so he can be ahead of it. he has an understanding about how to think about and leverage these platforms to his advantage. emily: what about pulling the plug on social media entirely to prevent a donald trump nor'easter? without too many spoilers, give us a preview. >> well, we pick up where we left off, richard was fired. and does he go back in, start his own competing company, that is where we start. we also did a ton of research. those of the questions we were asking. alec: what was the repercussions

be. emily: thoughts of whether we are in one or not? mike: we were talking about this as we researched it. dick: you would hear them talking about whatsapp and flipping the value of users, and i would take him are we in a giant bubble? mike: i probably should not talk about this on bloomberg. but we would say if the bubble hits, we will go on. like nine months ago, because we were writing about it. >> between when we shoot it and when the bubble burst, we're suddenly a period piece. emily: you're not just in the writers room, but real venture capitalists. what do you think?

>> about whether we are in a bubble or not? it has adjusted over the past several months. and there was a great piece about it this morning. dick: about financings and re-caps that are coming, and how financers will have to get used to down rounds on these companies. those kinds of things are good. emily: so you are a coach to young founders, what are you telling them about the environment?

dick: we tell them to be more thoughtful about how they are spending money. he will probably get worse before it gets great again or easy again because people are being a lot more thoughtful about not going to far. you have to be more thoughtful emily: so you're working on something new in addition to investing. what can you tell us? dick: building a software platform for group fitness, 5-10 people working toward common goals. should have something to show in a few months. emily: the premier is sunday. are you nervous? how you feel right now? alec: what is done is done at this point. mike: nothing we can do about it. emily: how long do you want to keep doing the show? alec: as long as it stays interesting. mike: i always think of things as the way alcoholics do, one day at a time. we write the season, we rarely

talk about what we are going to do next season, because it is daunting enough just doing one. these kinds of series tend to go, they tend to go six. that would be great. emily: here that, pants? it could go six more seasons, if mike judge has anything to do with it. the writers of "silicon valley," along with consultant dick costolo. ♪

emily: elon musk may have a plan to curb the city traffic. he recently hinted he is working on a self driving vehicle that could replace buses and other public transport. tesla has been pioneering self

driving technology with semi autonomous pilot features. warren buffett has also backed initiatives to rollout electric buses to cities, including seattle. the solar powered plane once again, flying from hawaii to california as part of its around the world voyage to raise awareness for clean energy technology. the plane is now in its ninth leg of the journey will finish it trip across the pacific and landon mountain view, california and about three days. and, who is having the best day ever? 14 million dish survivors. -- subscribers. on the deal, it makes these channels available, shares of a viacom rose, the biggest single gain since 2008. and that does it for this edition of "bloomberg west." secureworks tomorrow goes public, we will have the ceo mike cote. ♪

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