♪ >> i am caroline hyde. this is the "best of bloomberg technology." we bring you our top interviews from this week in tech. snap filed for an ipo, $3 billion, the details ahead. plus, apple sales at an all-time high and mobile ad revenue pops. we break down the big tech earnings of the week. ceo digital pivot, the shares how it turned to big data

and won. first, snap filed its long-awaited ipo with an initial price of $3 billion, planning to raise $4 billion for a market value of $25 billion. the parent company is the first u.s. social media company to go public since twitter. is the first opportunity for outsiders to get a close look into the company known for its culture of secrecy. revenue ofoking at 404 million dollars last year, and an net loss of $514 million. you can see how much cash this

company is burning. the headline daily active users, the revenue number, but we did not have a sense for how much they are having to spend to get there. glimpsethe first investors have to take into account. can i balance the amount they are spending with the opportunities they are pitching when i'm trying to get to that $25 billion market by ua should in. >> we are seeing a secretive to discloseng significant losses, but that valuation? started looking at it intently word the risk factors. there are familiar things. there is the competitive landscape. copied byetting facebook and instagram, companies with more resources and reach. there are issues like founder

control. we will have to see if we want to bet on this company long-term. the founders retain the majority of voting control. , after twitter's ipo, that is what people are talking about. at snapchat is 158 million daily users, more than twitter has, but a little bit more than instagram has for the product that copy snapchat. >> so when you are comparing -- >> right. >> we have a fascinating approach from you, the cofounder of evernote. general catalyst is an investor in snap. what makes this attractive? we are super excited about

snap. companies change consumer behavior as they did. they are an extremely good company, a consequential product, and amazing execution. caroline: we have a company exiting, investors how excited and willing have they been? >> this is a down time for tech ipos. that does bode well for the snapchat listing, and they have not been able to make a big bet with a lot of shares offered that promises returns and growth , which is what snap is pitching here. pages, at the first few we do see looking back on the

past development. we don't see a lot of roadmapping going forward. vision, butategic when you look at the information investors will digest, you have the numbers, and you have to believe the story management is pitching throughout the roadshow. public.: you didn't go what are the trepidations as a founder when looking to go to the market? i think it is always a trade-off between access to capital and how much distraction there is. you pick the best combination of that. smaller were at at a scale, it was easy to have as much access as we needed on the private markets, and going public is a distraction because

you have to be open and match wall street time estimates. snap is doing amazing innovation, augmented reality, wearables. they probably have more stuff that is a longer time frame. snap said its performance will be "lumpy". they would have to make fits and starts of investment in new products, and their revenue growth may not be predictable. caroline: we are looking at 158 million daily active users, they are going back every hour, minute. >> right. they are so engaged. good time why it is a for snap to go public because they have done something to transform the way people live their lives. whoives everyone an owner

was to be part of that opportunity a chance to do it. caroline: how does the app make money? app thatknow how an since disappearing pictures makes money? just selfies.t now they are pitching themselves as a camera company. .> snap is not just about ads court to their concept is creating content. lenses, geo filters are all about. , you are straight into the camera. filters thaty for you can overlay on photos and videos and send them to a friend or group. >> geo-filters overlay the where and when businesses are people can pay to include a nap.

app. i can also send my snap to a feed which my friends can see. is a group of feed that snap goes through and grabs publicly posted snaps and puts it into one video feed. we have seen this around in events like the women's march or donald trump's inauguration. in 2015ver, starting brands started uploading mobile inazines that create stories a more millennial-friendly version. >> you can't forget the spectacles. you can grab these for 100 $30 at pop-up vending machines around major cities. you take a 10 second videos and it goes straight to your snapchat app. while haveers for a

been wary about using snapchat because they are insistent on vertical video ads, when advertisers are used to the horizontal shape of tv. >> the true test will come in the years after snap goes public because the revenue model is only a couple of years old. up, fitbitoming struggling to maintain momentum. hit this taking a week. more details ahead. plus, we dive into apple earnings. tim cook a said the company services business will be the size of a fortune 100 business and 2017. here he is with more. >> it was our best quarter ever for services. customers broke

all-time records during the holiday, including $3 billion in purchases in december alone, making it the app store's single best month ever. ♪

caroline: fitbit had a rough week, plunging 16%. the company is eliminating 6% of its work because of falling demand. the fitness tracker is forecasting full-year revenue grew 17%, down from a previous forecast. aftershares popped reporting first-quarter revenue billion, upr $70.5 3%. , 78at on iphone unit sales million units in the quarter due to strong demand for the iphone business sawrvices 18% revenue growth. a principal analyst with forrester research joins us with more. make up theles majority of revenue at this time. while the we look at global

smart phone subscribers, that will grow 50% over the next five years, but apple makes a lot of money selling phones. they look at the markets are pursuing, middle-class and upper-class, that growth will not be as high. it is doubly impressive, the numbers for 2016. coming across was was they are doubling down on services, doubling the size of this unit, which is as big as a fortune 100 company, doubling that over the next four years. how much is services the right pet for apple? >> it is absolutely the right until they start selling other appliances, there are only so many smart phones and tvs you can sell. i think there are some areas like apple pay where there is

low consumer adoption, a love and percent in the u.s., but a lot of upside. caroline: when you look at the other products they sell, the is ipods, apple tv, but do they need a lot of products in what looks like a record fourth quarter? >> i don't know if they need another product. smart watches are only a fraction of total wearables, but they will be 40% in five years, so there is a lot of upside as we move from 18% to 29% in four years. caroline: what struck me was the lack of a momentum from china. brazil going well, turkey going well, but china seems to be a slow down area. are they right to focus on china

or switch to india? >> apple makes a lot of money selling phones. eou have to look at th markets where there is the most upside. china is a tougher market, but they have done well. not where their biggest growth will come from. caroline: the right sort of country given the average earnings power in india is less than china. do they have as much of an opportunity? ofif we look at the growth smartphone adoption in china, 50% over the next five years, but in india, that will almost double. the middle-class and upper-class are very large markets, even bigger than the united states. staying with apple, a bloomberg scoop. the company is designing a new chip for mac laptops.

already used in the latest macbook pro. this week,rnings out and mobile ads continue to dominate revenue. we will break down all the numbers next. ♪

caroline: now to facebook earnings, a 51% jump in sales and $8.8 billion, topping projections. to push to continue reach consumers on mobile phones. the user base is continuing to grow, 2 billion monthly active users.

this move solidifies phase looks position behind google. >> i am sure there are some people who would be upset that the numbers aren't even better than they are, but come on, analysts were expecting incredible results, and pretty much everything eat it. we have 25% of the world's population using the platform on a monthly basema basis. caroline: three times the u.s. population. david, dig into the growth of drivers. speaking to the cfo, he was trying to point out that it's , now 5s is mobile

million instagram. that is growth. >> they are doing superbly on growth. when i think of where their real prospects are, it is the truly global nature of their business. if you look at the growth in asia and the rest of the world, areca, latin america, they doing surprisingly well, and this is where i've thought there long-term potential was, because they make 10 times more per user in the united states than they do in asia, and yet, the opportunity down the road to build those numbers more to parity is real, so they are getting faster user growth in those regions and making more money per user, so i was struck ir asian revenue was up 59%. and the rest of the world, 52%, so even though the numbers are small compared to the u.s. and

europe, there is opportunity long-term. caroline: we are hearing the cfo saying they need to spend aggressively. ,t seemed to be the head count 34 percent ramping up in the fourth quarter, and they will accelerate that more in 2017. are they spending wisely? >> i think so. innovation, whether ad products or expansion, you have to have the resources. if you have the cash, that is where to spend it. the idea of ad product innovation with feature set hand,tion goes hand in and that will change as they cloak global markets as well. the expectations in asia are different than the u.s., the u.k., and europe, so you have to invest smartly and get the best

engineers to do it. about thedavid, what move to video? sheryl sandberg and mark zuckerberg have been bringing up. there is a wall street journal piece out saying they may be developing a tv app. is video still hot? >> that's where they can compensate for this problem where they have saturated our mobile,ds, particularly so either they charge more per , or grow their user base find other kinds of ads that make more money, and video ads can do that. i thought that journal he's suggesting a set-top box, atv , but my guess is they that like some kind of app

allows you to watch tv and still be on facebook on tv. they have tried this in the it has nothet worked. caroline: mark zuckerberg saying he will seek original content deals and is still putting video first. find the silver lining. facebook did lose out in court, oculus intentionally built on stolen technology. $500 million, the damages they will have to pay. is this of particular concern? >> oh, gosh, i don't know. of course it is a concern. that willurt ruling hit the pocket book. that is always a concern.

an engine for innovation, anything that questions its source code is , but $500e of concern million is something that will continue to be litigated for a for theersus the growth platform. i am sure it is a concern. is it a dealbreaker? i can't see it as being that. caroline: david, what about fake news and how much zuckerberg has been trying to respond to this, but now with some fervor and orchestrate how he interacts with his own user base. concern to the intelligentsia. it is not a concern to the average user. mostly they want to be entertained and diverted, and they are. i do think facebook is taking the issue seriously. i think you will see them taking

more measures to avoid seeming to compound the partisanship that is so big a problem and so many societies around the world. the problem is they are so global and operating in so many languages that this problem is global, even the russian interference in the media, so it will not be easy to get a grip on this right away. on oculus, i think out kilis is oculus is looking like something they overpaid for. palmer lucky make it some of the blame for this lawsuit loss, embarrassing behavior around politics. maybe they are regretting their association with him. coming up, tech

mobilizes against the travel ban . we cut through the confusion and analyze the opposition out of silicon valley. all episodes are now live streaming on twitter. check us out at @bloombergtechtv 5:00 p.m. in new york, 2:00 p.m. in san francisco. "best of bloomberg technologyth. ♪

caroline: welcome back to the "best of bloomberg technology". i am caroline hyde. silicon valley finds its voice as president trump's immigration ban fuels opposition. trump's next order on immigration may even be a greater blow, targeting work visas used to recruit talent overseas. monday, sean spicer address the reform effort. >> you have already seen a lot of action on immigration. overall need is an to look at all these programs,

and you will see executive comprehensiveompliment measures to address the problem. h-1b order is a much bigger threat to silicon valley than the order that trump issued on friday, although i think this more popularuld be among average americans than the immigration order on friday. in congress, republicans and democrats, there has been concerned that tech companies have abuse the h-1b process to recruit overseas engineers at the expense of , and used it to suppress salaries for tech workers in the u.s.. caroline: we have just seen

pictures of the protests over the weekend. there has been fighting talk coming back from president trump about the reasoning behind these demonstrations, perhaps the chaos we saw in the airports. he says this order was entirely aimed at making the u.s. safer. he has compared it to a review the flow ofugee, iragi refugees from that country in 2011 by president obama, but there are key differences. in 2011, the obama administration said they had specific, credible evidence that iragi nationals might be planning attacks. in kentuckysted shortly before obama issue that order. the obamase, administration has not offered any evidence of a credible threat to the united states. they have an posy order and

claimed it has to be in place for security reasons. caroline: thank you. u.s. tech leaders came together and unified anger over the weekend. recap of whoe this said what so far. >> mark zuckerberg was one of the first to speak out. in a post he wrote "like many of you, i am concerned about the impact of the recent executive order signed by president trump. we need to keep this country safe, but we need to do that by focusing on people who actually pose a threat." statements grew over the weekend over overy backlash search pricing. the ceo tweeted "the travel ban

is against everything uber stands for. any driver who cannot work because of the ban will be compensated." lyft also promising to donate $1 million over four years to the aclu. in. musk also weighed remember the ceo was born in south africa. he tweeted "the blank entry ban on citizens from primarily muslim countries is not the best way to address the country's challenges." he went on to ask followers to read the order and said we will seek consensus and presented to the president. techast half of the top 20 founded or are

led by immigrants. among founded or are led by immigrants. among those, microsoft ceo, google ceo, and apple ceo tim cook, all issuing statements condemning the travel ban and supporting their immigrant employees. for more on the tech industry impact, we bring in bloomberg's senior executive editor and bloomberg's managing editor of asia. tech standup unified. is a massive political repudiation of the trump administration. there are two things, silicon valley derives enormous strength from immigrants. number two, these are blue state companies, and their employees by and large did not want to see donald trump president. veryare reacting negatively to this immigration

executive order and putting pressure on their leaders to take a stand. , stevee: fascinating jobs himself was the son of a syrian. where do we go next? building amongn those leaders that next will be the visas analyzed and executive order to against. -- ordered against. >> that's right. they depend on bringing workers in from around the world. to be clear, maybe it's good to begin with a caveat. we saw the draft of an executive order. it has not then signed by president trump. there are a couple of things that are very clear. the work visa programs do not work to the original purpose of their legislation. two, the changes are consistent with the populist statements president trump has made. it looks like trump and congress

will look at a variety of reforms aimed at giving american workers priority, then paying workers coming in from the outside more money rather than bring in lower wage workers and pay them more. caroline: what seem so this is mores that fuel to the fire. some olive branches to begin with. we saw the tech leaders in the room with donald trump. will that unwind? >> no, why executives like elon musk and travis kalanick see the need to be on the business council despite the pr price of among employees and customers. table to a seat at the push their agenda is. the h-1b program is prized in silicon valley, and they want to maintain it, so that's why they're trying to advocate on their own behalf. caroline: is there an update on the timing of this?

you said the executive power is not quite as strong on this front, but could we see it as soon as this week? there is speculation that it will be coming soon. it will be difficult to tell given the original rack clash. will see a split over the h-1b issue between the u.s. tech companies recruiting highly paid workers from overseas to work on specialized assignments and the outsourcing companies typically bringing in workers who are paid less money. the reforms are aimed at splitting those two and looking at the differences between them. if there are fewer visas to the outsourcing companies, then there will be more available to companies bringing in specialized work. caroline: when we are looking at so many actions we seeing, donations to the aclu, that

seems to be an interesting tact some are taking, perhaps not speaking directly against trump, but putting in help for their own workers. >> not to interpret it cynically, but tech ceos are striving to demonstrate they are bona fide. lyft donated $1 million to the stumbling.uber there is not a lot of rationality behind this delete uber campaign, but people, the anti-trump crowd concluded they were not being strident enough in their communications on the executive order, and here they their own statement, so a little optics at play here. caroline: we heard from another big tech voice, this time from

canada. caught up with the blackberry ceo and he shared his views on why he opposes the ban. reasons oftand the protecting the u.s. in terms of thisy of the country, but is an extreme move, and one that came quite suddenly. said the he later travel restrictions were too broad and confusing to be successfully implemented. still ahead, our exclusive conversation with ge ceo. if you like bloomberg news, check us out on the radio. you can now listen on the bloomberg radio app, bloomberg.com, and in the u.s. on sirius xm. this is bloomberg. ♪

caroline: after a long courtship, snapchat plans to list shares on the newark stock exchange instead of the nasdaq. going -- firms are general electric has been focusing on software and analytics, so what can we expect from the industrial company in the near future/ ? the ceo set down for an exclusive interview in boston. take a listen. recognitionre the that our new jet engines have a couple hundred sensors and

provide a continuous stream of data it we decided we wanted to model that data on behalf of our customers. that led us back into the chain of adding talent and building software platforms. every company will be a software company. we want to lead that path and that is how we have invested. i have had to relearn. one of the things when you are running ge is you always have to say, why not us? it's kind of like, what is next, let's try, so we brought in a lot of people from the industry to help us. i have had to learn new ideas. >> loosen your time. >> exactly. >> have you do that? the company has a famously strong culture, which is not exactly the same -- >> we had to change. you have to recruit the talent.

then you have to get people that are comfortable with the speed and culture of silicon valley, the way people get paid, the pace you have to go. people have to learn to live in a horizontal and vertical world at the same time. if you are in an airplane at , do you want the people who made that engine to quit every five years? see you have to bring industrial thinking into the digital realm. >> what with the company look like in 20-30 years? >> we will still have an industrial core, but will be a big software player. i don't know we will be broader or in more industries, but we will be much deeper. information all the

way through how things get made, so a ge that is deeper but not broader. >> the same industries -- >> analytics, making the parts. that to me is more value for the industries we serve. global back to your analytics thing about is that it democratize is the supply chain and says you can do at a factory with 300-400 people what used to take you 2000 people to do. we are investing in both of these and a substantial way. .> the idea of a conglomerate you are now a much more focused company. is that fair? of our medical

business comes from the global research center. we basically invented the x-ray tube 100 years ago, all the life sciences comes out of our research centers. it all rests on a common core. gedo you think the core of is still that management ethos. >> nothing is general anymore. when i first became ceo, .nsurance, media, jet engines that is too hard today. i think you have to have this combination of depth and breadth , and managers who are more technical, so we have had to reshape. nbc anding to work in medical services -- >> it is much more constrained

today. we want people to be broad to, but they also have to be deep. you can't pick the right ideas and drive the change required. caroline: that was ge chairman see eo -- and ceo. coming up, uber's ceo slams on the brakes, calling it quit on trump's economic advisory council. all the details ahead. this is bloomberg. ♪

caroline: france has issued an ultimatum to the uber, pay more or risk new legislation that would set a new minimum wage for drivers. a mediator has been appointed to coordinate discussions. if talks fail, france will recommend a legal minimum based on time and distance traveled. meantime, uber ceo travis

kalanick quit drums economic after a council petition calling for him to step down. on sociald blow back media following president trump's controversial executive order on immigration. thepoke with with a reporter that covers the company. >> it is a pr disaster for uber. elon musk and others are on it, but the backlash for uber has been strong. caroline: it feels rather unfair and that respect, others ceos and leaders have not had this act lashed, and also at the time when uber continue to service of jfk airport. it's worth noting that lyft

continue to serve them as well. it's seems a storm they failed to deal with properly. >> there were a lot of factors. uber started off with a combative reputation, so did not have a lot of goodwill with people. it is a product in big cities where many users are in the streets for these protests, so it underestimated the stance they would take given the demographics of its own users. caroline: we did hear from travis kalanick, promising to put forward concerns from users to the president directly. what can he do now if he is not on the advisory council? an about-face. he won't be able to attend the advisory meeting and voice those concerns. withine: we also caught up

rad stone of bloomberg technology following the uber and airbnb for years. he has written about them in his latest look, the upstart. it really is remarkable how these two company started eight years ago, both founders kicking around at the inauguration of barack obama and talking about their crazy ideas. the book entered why and's the two stories, very representative of this last wave of silicon valley innovation, and unlike google,, microsoft, and it was a fight for both companies in every city, and i chronicle how they did it and why the ceos had to be different , not introverted technologists him of its storytellers leasing together these

coalitions, bringing their customers to support them to create these international companies. say about how their characters were different than other founders, were more extrovert, and that did not always sit well with egg investors. >> that was fascinating for me. venture capitalists the soothsayers of our world, but it is hard for them to see the future as well. the investors who got in email about uber cab and the opportunity need to invest, some did not reply. the ceos seem different. investors were not sure they trust travis clinic.lendar

kalanick interesting to note that he is aligning himself with the donald trump, being on the advisory panel. they are not afraid to rub up close to authority. >> let's be clear. this is the source of the delete uber campaign. withs is on this council the elon musk and the ceos of ibm, gm, nike, and they want a seat at the table, and yet, we have to say that people have an ambivalent relationship with uber and seem to be willing to ask that the worst from it. through almost a sort of misunderstanding over the weekend because uber was facilitating rides to jfk, so

were others. they don't tell their drivers what to do, but they tweeted a message saying they would not turn on surge pricing, and nevertheless it was construed as an advertisement, and now we have this mess. caroline: it is something you document well in your book. i am fascinated about is the new administration. a threat to one of donald trump's own business lines. comeuch has he spoken to for, or against the startups? >> donald trump is probably the orld's most visible hotel ier. brian chesky had a relationship with the president, and yet the challenges these companies have faced have been fundamentally local, cities and states

governing their future, so the threat with trump is he can get on his twitter soapbox and create problems here at it would be a conflict of interest, but that has not stopped the president in the past. it is one of the reasons why we see travis stay on the council despite the hit. they want to stay on the table and further their agenda. elon is on the council as well and has an agenda. get the criticism, and uber does because it is high profile. caroline: that does it for this edition of the "best of bloomberg technology". we will bring you the latest in tech throughout the week. witht miss our interview tim armstrong on tuesday. remember, all episodes are live streaming on twitter at @bloombergtechtv weekdays. that is all for now. this is bloomberg. ♪

carol: welcome to "bloomberg businessweek". i am carol massar. oliver: i am oliver renick. a secret alliance between two old enemies in the middle east. carol: the irs wants a piece of michael jackson. oliver: all that ahead on "bloomberg businessweek". ♪ carol: we are here with editor in chief megan murphy.