emily: i am emily chang and this is the best of "bloomberg technology." facebook is projecting a slowdown in ad growth. have expectations been too high? alibaba shrugs off the chinese economy with double-digit growth. how long it can they continue to defy estimates? in -- weighs waves

in on the u.s. election. lead, facebook had a quarter the past expectations. that's up 50% from the same quarter last year. that is a profit of $2.4 billion. school --sixth straight quarterly beat for facebook. executives suggest they won't be able to repeat the performance and investors are taking note. with coryed us along johnson. take a listen. james: the expectations were quite high. by any reasonable measure, this is a fantastic order for this company. there was not an acceleration of mobile revenues. didas hard to find it

emily: it was 04 years ago. any number of statistics is look at, this is a fantastic report. james: it's a fantastic work, but a quarter after the trend we downgraded. we got a lot of heat for it. the reason we downgraded is coming to fruition. the reason that the stock is acting this way is when you look at it next year, the growth has been coming from a function of engagement growth as well as user growth. the users and the engagement of growing nicely. the ad load will be stalling in 2017 because you don't have another platform like instagram topo. messenger in instagram monetization, it will take more time than some investors were

hoping. emily: instagram ad revenue growth is faster than the actual website. us friday.d cory: they did not give us actual numbers. general, they are saying that the growth has been broad-based. how effective would you say facebook is? cory: the user value, what you can see is how much revenue they get for each user. nearly two thirds of all users are on the service every day. that's a very important metric. they are users on a daily racist. you can see the value of user increasing dramatically. was $4.25.go, it now it's up to $6.08 for every single user on the site during

that's an astounding number in one order. , this is not an immature business. it has not shown the true seasonality. summertime, most companies are. it still growing like a young company. emily: they are continuing to take a page from snapchat. instagram started doing stories. now face pic is working on a camera first sharing option on the main website. listen to what mark zuckerberg said on the call. the text box is still the default way that we share. we believe the camera will be the main way that we share. we are testing this in our main onewith the camera directly swipe away from newsfeed. we have affects for photos and videos. we are testing new camera and

video features in messenger. we will experiment with more tools over the next puma as well. , does that sound like snapchat? james: it's not easy to change behavior. look at digital payment. it's not taking off. the apple watch, it's not taking off. video messaging versus textbased medication is a novel concept, but not easy. agreettom line is this, i everything looks fantastic across the board. when you look at it from an thestment standpoint, expectations were more around $40 billion. unless you get 10% upside, the stock is not going to move favorably. i thinks that what you see today. againstood performance a great performance expectation

backdrop. emily: over one billion acts but -- active users. the majority of them don't have the internet. what point do we simply reach a ceiling? cory: we looked at this as the ipo. they needed to get into china or mobile or the numbers would not get better. it fell over its first couple of months as a publicly traded stock and they figured out mobile. mobile revenue is $5.7 billion. flatmes's point, that , that show the lack of improvement in terms of mobile revenue. it still a lot. maybe not more or not enough from a wall street perspective. i think any this would kill for

these numbers. emily: with the rise of snapchat, we see facebook copying snapchat. does the coolness factor come into play? cory: james is all about coolness. emily: that's why i'm asking you this question. is facebook not cool enough to sustain this growth over the next several years? james: i don't think so. they have instagram. it's incredibly popular. these are heavily used assets. it has all of the scale. you go where the people are. people are on facebook. i'm not worried about the coolness factor. one point on the engagement, you were talking about a ceiling. when you look at the dau over the mau, that is holding around 77% domestically. we are notat

creeping that much higher above that figure. are you a saturated as you possibly can be on the day front in terms of users and extrapolate that? in theiven that number united states, they had 66%. that would give you 1000 basis points across the rest of the world. it's interesting to look at the desktop only users is down to 130 million. that was james as well as our tv editor at large cory johnson. still to come, what slow down in a chinese economy? alibaba outperforms again. how long will this last? we will hear from a ceo saying the internet of things will lead to a fourth revolution. this is bloomberg. ♪

emily: they have joined the list

of investors getting into the tech fund. this is according to people familiar with the matter. they are holding talks with the in a net telecom and plant to incorporate emily -- money into the fund. softbank is in talks with investors if the fundraising target is met. the fun becomes the biggest equity fund in technology. china's largest e-commerce operator is shrugging off concerns about a slowdown in the local economy. 45% andhad earnings of revenue up 55%. they are talking about strengthen cloud services. we caught up with selina wang and kevin carter. they have the largest tolling of alibaba.

are just now getting the internet on mobile devices. the consumer is the real growth story. the mobile and internet has changed the way we consume, it has changed the way emerging markets consumer. it's the reason you see such incredible growth. for a company the size of alibaba is quite extraordinary. you were talking about the facebook results. they german 55%. there are not any companies the size of those two that can grow at faster than 15% on an annual basis. broughthere have been it concerns around growth in the chinese economy overall. i sat down with mike evans of alibaba. take a listen to what he had to say. mike: china is not in the bubble. the economy is slowing but not slow.

the combination or components of the economy are changing rapidly from investment in manufacturing to consumption. --ly: as someone who focuses focuses on emerging markets, do the numbers in china concern you at all? kevin: they don't concern me. they are slowing down and have been for a decade. that's the law of large numbers. what was just said is absolutely right. yes they are slow. they are not in a bubble, but there might be pockets of overvaluation or excess. this is a secular story. this is the emerging markets consumer that is a big deal. biggest calls at the growth opportunity in the history of capitalism. you are giving them the internet on a smart phone and they are lead writing what we would think of as traditional consumption. they don't have malls like we do. they don't have strip malls or the suvs to get to them.

intoyou crash the consumer low-cost smartphones and broadband internet access and local entrepreneurs backed by u.s. venture capitalists, you get this confluence of growth. the emerging markets internet sector is growing at about 40% to the publicly traded companies, there are 45 and emily: break down the individual units. how did each fair individually? selina: e-commerce had some impressive growth is kevin said. it was 50% in that core business. cloud computing is something investors have been watching mostly. there was triple digit growth again as well as the new entertainment unit. cloud computing still had some losses this quarter. given the rate of growth, analysts say it could be profitable in the coming quarter. core business is still strong. there is triple digit growth in

some of the new businesses. emily: at the same time, they are facing questions about transparency. they say they are making efforts to make the financials more transparent. there is concern around a day that is coming up. how do they calculate revenue there? they did not give any more details this time. they reentered -- reiterated what they have said, they are voluntarily cooperating. there was an article that said a whistleblower is cooperating and giving them information. he said that's completely false. that's not real news. we will come out when there is real news. there is not a lot of detail on what's going on right now. it's how they were accounting for their logistics business and how the act counting for singles date. transparency issues

around chinese companies is not an issue. are these things you think about? kevin: they are in the news. i am not concerned about them much at all. i think alibaba is a very clean company. one thing to investors forget is everything is relative. investing in the emerging markets is risky. one of the big risks is corporate governance. if you look at the giant brazilian oil company, they have serious problems. state-ownedhinese enterprises that dominate the emerging markets indexes, 30% of the big emerging market etf's are in state-owned enterprises were corruption and fraud are rampant frankly. all you have to do is look at the headlines every day in brazil and you see there is a lot of risk and corporate

governance risk. the rest of the emerging markets, i would say the internet companies backed by u.s. institutional investors have better corporate governance and you find on average. emily: singles day is a few days away. mike evans told me that they are expecting more revenue than ever before. talk to us about broader expectations for this particular day and how they will be accounting for it giving it additional scrutiny. selina: it's not clear how they will account for this differently. we will see that in the coming days and weeks. mike evans said he expects the numbers to be even greater and something they are anticipating. katyhave already announced perry is one of their global ambassadors. they have celebrities that will be on stage during single state. they have a virtual reality shopping they will test out.

they have a fashion show where you can see with the models are wearing as they walk down the catwalk. they are rolling out somebody more products and games and activities to hook people into singles day. hitsinute the clock november 11, we will see numbers skyrocket. coming up, him on musk unveils his latest project and it's not the self driving car or a rocket to mars. we will look into the first ever solar product. there has never been a u.s. presidential election with his much big data analysis. what kind of impact is it having with just days to go? we will discuss later this hour. this is bloomberg. ♪

emily: tesla's balance sheet may

get a boost from solar city. they could add $1 billion to the cash alanson three years. elon musk has been making the case for a tie up since the deal was approved by the board in august. the deal has been criticized, with some saying it's a poor use of tesla's cash. tesla is out with its first ever solar product, the solar roof. tom randall explains the plan for a solar energy trifecta. the roofs ofook at these four houses. can you tell which one is covered in solar? it's a trick question. they all are. tesla just unveiled its first ever solar product and its stunning. it's not a solar panel, it's a range of four review materials to look indistinguishable from

slate or asphalt shingles. >> people of their homes. ithink taking this approach can be. tom: the tile is made of textured last. it looks like shingles, but allows sunlight to pass through from above and into a standard solar cell with no loss in efficiency. tesla says the class is his toughest steel and can whether a lifetime of abuse from the elements. be fitted with heating elements to melt off snow in a colder climates. neighborsl call your over and look out this sweet roof. it's not a phrase you hear often. this is the plan to become a son to vehicle energy company. the idea is you can run your home on solar powder -- power

and use that electricity to power your home and car. tesla doubled the capacity for that power battery creating the cheapest storage for solar power into the night. this combination is the closest we have ever come to affordable off grid electricity. they are fuzzy on the pricing. >> the goal is to make solar roofs that look better than normal roof and last longer with better insulation and have a cost that is less than a normal roof. why would you buy anything else? tom: this was the closing argument to shareholders to approve a bid to buy the biggest rooftop solar installer to make it possible. there are plenty of reasons to be skeptical, but if he can pull

it off, this trifecta of battery, fruit, the and the electric car will be available at the end of 2017. competition to reign over you had of things is you. one company looking to make its mark is c3 energy. they closed a funding round. their aim is to connect manufacturing equipment and medical advices and all of the things used by the world's largest company. funding hit a whopping $3.2 billion, double what it was in 2012. those numbers will decrease this year according to insight. the founder and ceo worked at oracle back in the day. he joined us to discuss the landscape. tom: i have been in the business for four decades.

toave seen the transition personal computing and cloud computing. each of these was a replacement market. it's clear i think that the next generation of computing is all about smart connected devices and the internet of things. this is an entire replacement market for everything that's happening. just like all the others grouped to be. limits oft are the iot. we hear that there will be chips in our bodies. where won't there be chips? tom: there might have been a half-million sensors out there. today there are 39 billion. in 10 years, each of us will have them embedded in our bodies. care, financial services, telecommunications, transportation, the energy

industry, you name it. emily: you are taking on companies as against ge. microsoft is backing some of these upstarts. tom: we took on all the big software companies when we started oracle. we took on all the large like ibm andanies we did pretty well. in each of those markets, we maintain market leadership locally. millionabout 100 sensors under management today. is 100 million more than anyone else in the market. we are doing well. what about the security issues, the cyber attack issues? that means another potential vulnerability. tom: this is a critically important issue that we do not pay enough attention to. you look at the threat, the infrastructure threat we are

under. are morea myth that we secure behind our own firewall than in cyberspace. i would argue the opposite is true. see the nsa for details, the department of state for details. secure insed to be our own data rooms when it took a forklift to move storage devices. it no longer takes a forklift. that is the opportunity where we can secure data. avoidingryption and and attrition is in cyberspace. this is the place where we can secure it. emily: that was c3 iot founder. l.a. clippersrom owner steve ballmer. his take on the election, cap versus clinton. thiel defensive support of

donald trump and says he's not the only one. this is bloomberg. ♪ wow, x1 has netflix?

hey, drop a beat. ♪ show me orange is the new black ♪ ♪ wait, no, bloodline ♪ how about bojack, luke cage ♪ oh, dj tanner maybe show me lilyhammer ♪ ♪ stranger things, marseille, the fall ♪ ♪ in the same place as my basketball? ♪ ♪ narcos, fearless, cooked ♪ the crown, marco polo, lost and found ♪

♪ grace and frankie, hemlock grove, season one of...! ♪ show me house of cards. finally, you can now find all of netflix in the same place as all your other entertainment. on xfinity x1. emily: welcome back to the global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries, this is bloomberg. with the election just days away, we are covering how the results could impact silicon valley and the repercussions for tech globally. i talked with steve ballmer and got his take on the pending election and what businesses can gain or lose. take a listen. i know you typically vote republican. steve: i am an independent. i am not registered with either party. i care about issues deeply. i will vote for anyone who shares my interests. what do you think a

hillary clinton presidency would mean for innovation for a donald trump presidency? steve: neither plan has much to do with job creation. convincedbly less that the federal government action versus local government action has anything to do with job creation. i think it comes out of productivity gains, which comes out of innovation. emily: has this become too much about not the issues, not enough about what's important? steve: it's become a lot about personality. that should always be a little part of things. on both sides, that's been blown up. emily: we have seen so many people come out and say they are against donald trump. why not be more public about it? invite's --ld

advise ceos to keep their political thoughts to themselves. their shoulders may not agree with their views. represent their shareholders. 40% will vote for either of the two candids. i don't think that's a good thing to do. a company should stand up for their issues, i don't think they should pick a candidate. i wouldn't want a company in which i am an investor to do that. as a private citizen, i will vote my mind. the thing i will emphasizes the issues i care about and the facts. emily: my conversation with steve palmer. be sure to catch the role interview on studio 1.0 on whimpered television. and -- valley investor peter thiel opened up at a

national press club event. he said the presidential nominee represents a new republican party. peter: no matter what happens, what trump represents isn't crazy and it's not going away. he points toward a new republican party beyond the dogmas of the reaganism. he points even beyond the remaking of one party to a new american politics that overcomes and i'll and rejects bubble thinking and reckons with reality. he has been a political lightning rod the season. siliconotten scorn from valley. he recently increased to support by donating $1 million to donald trump's campaign. let's turn to big data and what it can tell us about voter sentiment at this point. that pack is a startup

makes it easier for people to learn about who is running for office. this data is based on public information from fundraising to voting records. interviewten to our with the ceo steve hilton. there is an interesting thing that has happened to people who used to support those aggressive challenges to establishment republicans like paul ryan. they have flopped to trump. that's a way of describing it says the tea party has become the trump party. the other thing that has happened is you see a lot of consolidation behind hillary clinton where a lot of the holdouts, the bernie sanders supporters who couldn't bring themselves to get behind her, they do seem to be coming her andin terms of donations opinions about what she might do as president. there are some interesting

changes. i think the kind of data that we are providing now for our users, where it's going to be most useful is not at the presidential level, but down ballot where people haven't got any idea about who the candidates are for state legislature or so on. they affect education and health care and play a big part in people's lives. candidates often get on the ballot without anyone understanding where they are coming from. gives users aata good guide to where the candidates stand. emily: she has finally consolidated the democrats. it has happened in the last few weeks. she has vastly outraised trump in every industry except agriculture. steve: to be honest, he hasn't put that much money into

fund-raising. if you like pioneering and you approach an election campaign and try to raise as much money as possible, he is not getting the support of business across the board apart from that one sector. it's a particular interest, the tech sector is united behind hillary clinton. peter thiel has been a high profile exception to that. technologypeaking, like other industries is getting behind clinton. emily: what about smaller donors in general. how have both candidates handle done really cup has well the small donors. he has made more of an effort. that happened over the summer. clinton has diverse fight her base somewhat. she is reliant on some of those big donors and trump is the one who seems in more recent time to

have done better at mobilizing small donors. i think at the presidential level, there is still far too much influence of the big check writers, the big donors and we've got a long way to go before we get that true democratization which is one of the reasons we started the site. what benefit can fund-raising have? i know there is last-minute fundraising going on. steve: there are two important things to bear in mind. at this late stage, one of the most familiar things that campaigns do is spend money on ads in certain parts of the country. people get sick of them because they can barely turn on the tv without seeing a political ad. that doesn't give you much benefit. you can barely by the inventory. the crucial point is the way the

system works. decidedtion is state-by-state. if you live in one of the many states that is solidly democratic or republican, your vote is unlikely to shape the out some of the election. that's why we hear so much about the battleground states. is thing that is interesting someone has created a fun crowdfunding to give give rides the poll. they are teaming up with l yft. this is right on our homepage right now. even if you live in california or new york, one of those solid democratic states, if you are looking for something to do to support hillary clinton, this is one of the most practical things you can do, give money so people who live in the battleground

thats can be helped to get very practical help to get to the polls and vote on election day. emily: it's good to hear that you're doing that. this did not exist in the last election. your goal is to educate voters. do you see evidence that it's working? are voters more educated than they were four years ago? steve: that's a big part of our mission. we want people to participate in every level. we are trying to build tools that help them run for office. we want people to engage in be better informed when it comes to voting. don'tjust discussed, we want a system that is so dependent on big donors. i think there is a real problem with the fact that so many andle are not interested really turned off by this election season where the

candidates at the top of the ticket have proven so unattractive. i think we've got a long way to go. 4s, we think focusing on the local aspect of politics is probably the best place to start. people could feel if they run for office in their local community, they can make a difference. you can see the difference you make. there is less cynicism unless partisan bickering. we think local politics may be the best place to get people engaged. emily: on the presidential election, there are concerns the polling might not be representative of the actual result in we saw this with brexit. thisare the chances that election turns out that the results are different than what we believe them to be? steve: i think there is a high chance of that.

i think that is one of the big similarities between the .election and brexit you've got a huge group of people in america as you have in the u.k. who for many years have felt that no one is really listening to them. they are losing their jobs and they feel let down by whoever has been in power. their attitude is what difference does it make? they haven't voted in many years. those are the people that with brexit. there is a chance to make a statement and get a big change. they see the same thing with donald trump. i would not be surprised if there are secret trump supporters who have given up on politics and think he might be the disruptive shakeup the system needs. they are afraid to say so. pac ceohat was crowded

steve hilton. we will break down the new deal with get around. if you like bloomberg news, check us out on the radio. you can listen to us on the new radio at. this is bloomberg. ♪

emily: india's largest right hailing startup is raising $600 million. this is according to someone from a with the matter and would give them the capital for 18 months. current investors are participating in around. staying with right sharing, toyota is the latest auto maker hop in. they are partnering with a san francisco-based startup that allows people to run out there vehicles when they are not in use. we caught up with the ceo. take a listen.

sam: we are partnering with toyota in two ways. one is on the technology side. the other is finance. you can walk into a toyota dealership and buy a car or lease a car that you will share on get around and pay for it out of your earnings. i have talked to you a couple of times over the years. you saw your first burst of yftlicity before uber and l or anything. i'm curious how this has evolved as ridesharing has taken off. sam: we see it as competent entry. is theft we are seeing move towards accessing transportation through a smartphone on demand. more and more people are moving to a world where they're living car free and the access to mobility services. uberan use something like

and get around in a complementary way. that is great for us. as these companies are changing how consumers use and consume transportation, that is creating a new market for us. emily: in a future of self driving cars, why would i want to on a car at all? sam: you have a choice. what's happening now is we are making it easy to own a car for free. we are integrating our technology to make it come that way right out of the factory. you can choose to own because you want a particular car or you need one every day of the week. you can just rent cars on your own. it gives more power to the consumer and allows them to make that choice. emily: elon musk says he is trying to do something similar to what you do. what do you make of the mosque plan? sam: we love it. it's great to see him embracing

car sharing that way. on get had tesla share around for four years at this point. for us, it's validation that this is happening, it's just going to happen a faster. emily: paint a picture for me in 10 years. will people not have a car? what sort of percentage do you see doing each thing? sam: we believe that 10 shall now, sharing cars will be the predominant way people use of vehicle. everyone buying a car today and using it themselves, with technology that's going to go away. it doesn't make sense. it's not sustainable. we use cars 5% of the time. that's a waste of resources. technology is enabling consumers to be much more efficient and

that trend will only accelerate. emily: how big of a market will this be? sam: what you see is a readjustment, a change out in the value of how you own and operate vehicles. emily: hang on a second. i want to turn to the larger industry. something.ced what can you tell us about this? eric: it's a pilot program right now between her and gm. it's 90 days in san francisco but there is interest to work together more. general motors has been building at its own car sharing business called maven. cars outa way to get to consumers and businesses like lifted uber. you are also competing with gm.

what do you think will differentiate your service from all of these different options? sam: our model is different. these are cars people are sharing with other people. we don't own the cars. that's a fundamental difference. we've been doing this for a number of years. andave developed technology property in the space. we feel that's why to unit chose to work with us. they looked at all the partners globally and decided that what we developed and how we see the future of the world, those two things are very aligned. that puts us in a very unique position and we intend to continue innovating like we have for the past three years. emily: were there a ton of different automakers? there are different permutations of how they serve customers. is there room for everyone or

will there be some sort of consolidation? eric: i think there will be some consolidation. these companies see the same trends that show what they are growing toward, a move to the city, a move away from car ownership. if those things happen and more people live in cities and they are crowded, you could see a number of successful players and models. if you take in uber around the city but you want to go out for share,and you rent a car there is room for multiple types of companies with inside the space, especially if there is a movement culturally. driving cars self fit into your vision of the --ure but to mark sam: future? sam: we welcome it. that makes our model that much

more fluid. if you can share your car with more people in the city. emily: do you see people wanting to own a self driving car? than cardel different ownership as we've known it? sam: i think car ownership will change. you might see entrepreneurs own a small fleets of cars. you may see large fleets of a thomas cars. -- autonomous cars. the idea of everyone owning a car will change. i don't think it's going to swing entirely. aid.: that was sam's still ahead, electronic arts is boosting its outlook or the holiday quarter. we will break down the latest in gaming next. remember that all episodes of bloomberg tech are live

streaming on twitter. as is bloomberg. ♪

emily: this is according to people from the with the merger. he will serve as the ceo of the combined company. investors have been encouraging this for months as the two companies have spent millions impeding against one another and fighting legal battles. electronic arts beat estimates for the second quarter, earnings fell 18% on revenue that well or

percent. watching closely guidance for the holiday quarter. they are still lower than some analysts estimated. we discussed. on very strong results. the core franchise, the madden business, the other sports games are performing very well with fever up. they have some new games coming out for the holiday quarter. it appears to be off to a good start. games are doing very well in the early stages. it looks like the company is executing a strategy well. emily: you mentioned the new shooter games. they are mown mostly for their sports titles. how do you expect the category to stack up? michael: sports is pretty

stable. basketball it has faded into obscurity. we are talking about modest growth. in the shooter category, they have two big games this quarter. they only had one last year. they should be up hundreds of millions of dollars in that category. it's a much bigger growth vehicle for them. emily: we were focused on the star wars game last year. what's the big focus this year? matthew: the new shooters. game and growth, the big opportunity for them. star wars galaxy of heroes launched a year ago and it's the driver of a mobile growth. they have some new games coming in that area. they have done some new things with new platforms and technology such as virtual reality that's coming online this order. emily: we talk a lot about the

transformation of these companies. -- purchasesches are 63%. how have they manage the transition? michael: i think they are better than anybody. the only company that compares to them is activision. a company that's a third of their revenue. ea has been doing a mobile for 15 years. they are positioned finally to thrive. they are as good as anybody in downloadable content in a full game digital downloads. they have been pretty good it anticipating the shift and they were ahead of the curve. it hurts him five years ago. they just started to execute in the last three years and the stock is been on fire. emily: that does it for this edition of the best of "bloomberg technology."

remember to tune in for our 1.0.t addition of studio i will be interviewing steve ballmer. this is blomberg. ♪

oliver: we are coming you from new york. the nflelection eight tv ratings. carol: he is trying to get republicans to look at climate policies. oliver: this might be the world's most ambitious cryonics company. bloomberg businessweek starts now.