♪ >> i am caroline hyde. this is the "best of bloomberg technology." you all our top interviews from this week in tech. the fcc chairman out with plans to kill net neutrality. he joins us for an extended interview. what a week for big tech earnings, alphabet, amazon, twitter, all the highlights. , dropbox hitsoop a key milestone on its way to

ipo, an exclusive interview ahead. first, this week saw a showdown in washington, the net neutrality debate. the fcc chairman unveiled his game plan for rolling back neutrality rules. democratic015 by a majority fcc, net neutrality rules prohibit internet service providers from favoring or discriminating against online applications, content, and services. "it makes no sense, we cannot keep the promise of net neutrality openness and freedom without the rules to ensure it." this was the reaction from senator edward markey. with the fcc chairman

from washington, d.c. will be a political debate that will engage millions of people, but we will focus on the facts and laws. americans by and large believe but oneen internet, infrastructure investment, the next generation networks to be built out. the sec does not need heavy-handed regulation that saddle businesses with lots of rules to does incentivize building those networks. -- this incentivize building those networks. areline: if these rules changed, then they will invest? risen since that original ruling of net neutrality. they don't seem to have really been hurt. at the actual numbers, they are down 5.6% for the top 12 broadband providers

in this country. that does not include smaller providers who are not included within that statistic. we have heard from cable, wireless, telephone and other providers who told us these title ii regulations are in pete beating them by executing on their business plans. as 22 isps told us, title ii hangs over our business is like a black cloud. that is the uncertainty we want to remove. every american deserves faster, better, cheaper internet, and i am committed to delivering it to them. caroline: how can you ensure the right role areas -- takes usings, title ii in the opposite direction and reduces competition and increase digital redlining. areas,reas, low income

we will not get a return on investment, let's not the ploy. we want to make sure everybody has internet access they need proactive,o i have a proconsumer agenda. caroline: you say you are taking advice,ent regulation looking for suggestions. what do you think will come to the fore? >> that is why we have started this conversation. this is the beginning of the discussion, not the end, so we want to hear from the american public in the what is the best way to preserve those core vis of a free and open internet and investment in infrastructure? i am confident we will find a way to appeal to consumers. caroline: you are talking about consumers. you will hear their voices. you are ready heard the voices of perhaps smaller startups are

affected by this, 800 startups and investors led by y combinatioor worried about the rollback of net neutrality. the letter you received today the 800 targets, "rather than dismantling regulations that would allow the ecosystem to thrive, we urge you to focus instead on policies that would promote a stronger internet for everyone to he." have years ago, who would for seen that google, amazon, netflix would become household names around the world? that is the framework i believe will promote startup entrepreneurship everywhere in this country going forward, so i am committed to giving them a

chance to succeed, but title ii does not allow them to do that. caroline: then why are they so worried? have stirredeople up hypothetical hysteria based on what they think will happen. if you look at the sec 2015 decision, you will look in vain to find where internet service providers were blocking access to lawful content, so we went to a fact-based approach to figure out a way to preserve those core values. those are the things that will allow everyone in the internet economy to benefit. caroline: the argument is more competition will basically promote the likes of at&t and comcast to play by the rules and make it a fair and open internet for the content providers. is there any way this could be or should be measured? are you going to look for any kind of oversight? the reasonsne of

why we will ask for public input on what the regulatory framework should be. we know title ii is not the right answer, but we will be publicizing the entire text of my proposal tomorrow. we were asked the public, is there anything else we should be thinking about going forward? there is a way to do it, and we will try to find the best way in the time to calm. when you goerefore out and start discussing trying to bring some republicans as well as democrats into your line of thinking, what will be the best way of getting certain democrats who are against this on board or convinced? what is your key line of clarity? at the moment, you want to stick with the facts. to bek, we are going doing a fact-based approach than previously. the bottom line is the arguments i am making today are the

arguments made by president clinton in the 1990's. arguments that were made by democratic senators in the 1990's. this is not some radical political french argument i am trying to make. it is a light touch approach that has served the united well. o i would take the political heat out of this argument. i understand it will be difficult, but at the end of the day, americans are best served with a light touch framework that focuses on the facts, adheres to legal principles, and respects the basic principles of economics. the more heavily you regulate something, the less likely -- caroline: coming up, twitter shares soared after the social network said user growth picked up in the first quarter. we will dig into whether this will boost twitter's bottom line next. "bloombergs of technology" are live streaming on twitter. check us out weekdays at 5:00

p.m. new york, to clock p.m. san francisco. this is bloomberg. ♪

caroline: twitter reported earnings this week here at it finally seems to be addressing its biggest challenge, attracting new users. the social network reported average monthly active users rose 6% in the first quarter compared to last year. as twitter comes posted a year over year drop in quarterly revenue. and were deep dive joined by forrester research and cory johnson. to some degree, sure, it is a bit of a trump effect, but more about seeing the name twitter in beingess more than growth attributed to the president. been associated

with the current events more and more and more, especially in this last quarter, so we can attribute some of it to the debate taking place in the conversation around to that. caroline: whether trump or not, does this lure advertisers to spend more with twitter? cory: the answer is no. user growth is great. the user growth has been pathetic for quite a long time. 20%ou look back to the ipo, growth over 3.5-year's. that is not big growth. you would think they could pull money out of users. 2.8% growth is better than it has been. it still stinks. it is on a small base compared so thoseok, instagram, user numbers are week. much, users are growing

with all the data they said they would get about users and find out how to pull numbers out of ?hat, what is the question what is the revenue base and how fast is it growing? revenues were week, down on a year-over-year basis for the first time ever. the value of a twitter user is going down a lot. how much they can charge for each user is getting worse and worse. they can't lame it on international. are not willing to pay to reach twitter users, and that's a real problem for this business. point, a greate quote in the bloomberg story facebook grows at four twitters the year, that tells you there is something wrong here." is there something wrong or we changing and revenue will pick up? >> i do think revenue will pick

up. i am a marketing analyst rather than a financial analyst. when i look at it, it is true, revenues are declining, and that is a scary story, but they are doing things that will be more appealing, make them more appealing to advertisers in the future. they are doing hygiene, getting rid of added products that don't work, focusing on cleaning up some measurements. , but theysmall things are things that look like they are going in the right direction. our substantial changes needed? so, both in terms of the core product and the ad product. we need to see some real innovation rather than some of the incremental changes, but from my perspective, the moves they are putting in place should make them more palatable to advertisers in the future, yes. caroline: that was the director of forrester research and cory johnson.

alphabets also out with earnings this week. they came on the heels of the stock seeing record highs. we dug into the report. take a listen. stockwere surprised the was not up more. the earnings beat was 4%, the stock is up 4%, so investors are treating this as the same company it was before earnings came out. quality company and investors are not showing that in terms of rising sentiment. we are still as confident as we were before earnings came out. i have been speaking to an excepted if at alphabet and asking what about the youtube controversy, the backlash from advertisers, the slowing down of wanting to link your self with certain videos?

they said this would be a medium-term affected, but we could see changes in the longer term. are there worries around this? q1, it would not affect the business. if you look at youtube as an of its revenue is generated from the small to mid tale of advertisers, and it is the one stop shop for them. for the largest brand advertisers come at youtube is a scary place to run, and it was not built for those large-scale brand advertisers. youtube was caught preferably with pressnts down around great advertising and great advertisers running against hate speech unproblematic content them up but we are seeing google is having to approach this problem and deal with it, and there are

chinks in the armor going forward. caroline: are you worried about youtube at all? >> we are not too concerned. i was watching you earlier with that google only expects a modest impact. i think it is a blow to sentiment and pr for google, and here they are with a modest apact, so they have done pretty good job of identifying the problems and working to correct it. our sentiment is google is saying everything from the inside, not seeing a major impact yet, but i would go with that commentary in terms of 40 impact. moving away from youtube and other areas, we were concerned about the money plowed into moon shots here at the cfo came in and got a brain on it. on it.

>> you can see from the numbers that the core business is still advertising across search and video. they are going to be careful about spending their money in the right places. as key thing for them they need to find that next growth area. who knows if the problems associated with content will have long-term effects on their video business. i think search is pretty safe, but their video business over the long term if it is not seen as a safe place for brands to run, it will have a material impact. you may not see it the next quarter or the quarter after, but over the next couple of years, you won't see 80% of video budgets into youtube digitally, so these moon shots are a way to diversify revenue. caroline: still ahead, we stick

with earnings and dig into another tech giant that has reported this past week. amazon's scorecard next. t-mobile out with another subscriber win. the ceo john ledger joins us to break down the numbers later this hour. this is bloomberg. ♪

now amazon may be diving into the driverless car raced. the tech giant has formed a team dedicated to developing self driving technologies beyond the realm of cars. this is according to the wall street journal. at least 12 employees were assigned to the group a year ago to examine how driverless vehicles could help amazon deliver packages more quickly. time wenot the first have heard amazon could make a play in the autonomous driving sector. speaking of amazon, the

e-commerce giant came out with earnings this week. we broke down the numbers. cycle and investment the sun in berks on, they are saying we can deliver topline growth, so it is ok if we increase spending to bolster our growth story. perspective, the north american margins are steady, but international losses continue because they are expanding aggressively there and have a lot of opportunities to expand prime internationally, so the growth runway continues, but more importantly they are showing they can execute. i want to dive into our bloomberg again. even though we are at near records for amazon, we have not one single sell on the stock. largely they are buys, a few

holds. and prime that stood out for you? what about the margins from amazon? >> certainly we are happy to see aws perform well. it was good to see the numbers come back up. for this company in the long run come we need to see it can fire on all of these cylinders, but the u.s. bess in particular. the margins will continue to be small, but we are confident it will continue to grow year after year after year. there is so much headroom in the u.s. retail business for amazon between ahat high-growth product like aws and a solid domestic retail business that is growing, that will feel together the international expansion they are working on. caroline: you both talked about international expansion. leadarnings press release

with india. there is a clear sign of intent coming from amazon. exactly, the strategies are different. it is telling you they are expanding by localizing their strategy in which is working for them. caroline: mexico also a new area they are launching time to what about the content side of the business? with amazon prime comes the fire stick and tv. , but it doesding not a was deliver profitability. >> right, a real way to think about the video focus and any content focus is how do we increase the number of engagements per day and minutes of engagement per day. alexan think of echo and as an extension of that. that eventually accrues

to i will shift a larger or centage of my retail spend a to amazon. even though that is not generating topline dollars, it is cementing the industry's most powerful customer relationship. in terms ofere next amazon can possibly go? we are seeing record highs for many stocks. i'm looking at amazon with a $439 billion market cap. are you expecting continued positivity coming from amazon? >> now that these touch points radiozon keep adding with , ai, different products and services, it brings people back to prime. once people are back to prime, they spend more, so this cycle has a lot of runway. just of markets they are starting to enter.

there are international markets with lots of headroom for the retail segment. business continues to beat expectations in terms of how big is this market, and that number keeps going up. they have into markets to support that growth longer-term. it is just a balancing act of how much should we invest and continuing to show these positive roi numbers the revenue growth. caroline: i will ask this when we discuss alphabet, but the growing advertising side of that amazon is starting to show off, art these key competitors. we see them fighting it out in cloud as well. >> absolutely. these are two of the most unlikely competitors that people try to separate mentally, but they are in the business of attention. if you think about advertising, amazon is in a position to give you much more contextual ad placement thing google is, even though you are working against

the search results. it is not nearly as powerful as product search results. amazon cand what i was it adding to its echo line, will be in a position to know so much about you and make product recommendations that surpassed the value of advertising coming at a time when major advertisers are pulling back millions of dollars. if i am google or alphabet, i'm very nervous. this week, we learned espn will cut 100 staff in an effort to save money. that is according to a person from a your with the matter who says that leader in sports tv is coping with rising costs and fewer subscribers. in a memo to staff, they president said the disney network is determining who to cut from the current payroll. coming up, our exclusive interview with dropbox ceo on

the latest in the path towards ipo. all episodes of bloomberg technology are live streaming on twitter. check us out at @bloombergtechtv , 5:00 p.m. new york, 2:00 p.m. san francisco. this is bloomberg. ♪

caroline: welcome back to the "best of bloomberg technology." i am caroline hyde. now to our exclusive conversation with the ceo of dropbox. the company inches towards an ipo. dropbox is cash flow positive with annualized revenue of more than $1 billion. they are also -- i spoke to him this week in san francisco. take a listen. >> it has been great. we have 500 million people ,round the world using dropbox 200 thousand paying business

customers, and a lot of milestones we are proud of, so in january, we crossed $1 billion revenue run rate. we are the fastest company in history to reach that milestone. were free cash flow positive. today, we are also profitable on ebitda basis. it is rare for software companies operating at our scale, profitability, and to be growing at the rate we are, so we are proud of that. caroline: profitability, the enigma. how do you achieve it? cost efficiencies, the growth side? >> it starts with our customers. people love truck box. it is a testament to the strength of our business model. have 500o say we million sales people all of have millions of people brought dropbox into millions of

businesses, and that is how we grow, so the vast majority of our revenue is self-service, so you just pay with a credit card, which means sales and marketing costs are lower. when you combine the scale and efficiency -- caroline: it is interesting you have helped dropbox to lower the cost of business. where do you see these sorts of efficiencies going in terms of technology in general? i'm interested in your viewpoint as to whether you are an optimist or pessimist? as to whether technology is pushing forward in helping efficiencies work? how do you feel silicon valley is adopting that? you zoom out, technology is progress, and there are a lot of great things about that. that is the story of humanity and our evolution, but when you zoom back in, for every problem

that technology solves, it feels like it creates a new one, so things like email and thumb inventions, but when you look at it another way, they are holding us back. fortunately a lot of these pain points become opportunities for us. whether it is frustration around problemives, a broader we are working on, which is work about work. so when you add up all the time we looked for information, it is 60% of our time is spent on so wead, work about work, are trying to knock that number down as much as possible because it is a huge waste. then when you think about tech more broadly, i think we will end up in a good place, but at the same time as technology

creates new problems come up we have to be mindful of that and solving those. caroline: when you say we have to be, deeming entrepreneurs and business leaders? how much the administration's need to be looking at it? a company or government, we are part of her broader community. caroline: when you look at the current administration, there has been rolling of eyes and exhaustion coming from silicon valley, the travel ban, h-1b visas. >> it has been an unpredictable 100 days or so. look, sure, a lot of positions the administration has taken on things like the executive orders on immigration are really troubling. my cofounder, his parents emigrated from iran, so if that kind of thing was in effect now, there would be no dropbox or

when we started. rallying are all together and figuring out what we can do to engage. together inllying silicon valley, is silicon valley at the best place it could be right now? driving -- oris do you think it is thriving? >> it is always complicated. -- that is where the bulk of our attention goes. caroline: i want to get a little where youight as to tell other entrepreneurs to go now. reach out to our viewership, , seeng to be the next ipo their business scaled such issuers. do you have a recipe for success?

>> when it comes to a lot of these problems, one thing that was surprising is that it is easier to go after big problems than small ones. i thought it would just be harder because the challenge is so much bigger, but what happens is people are really motivated, inspired to take these things on. it is easier to attract great talent. mike feist would be to set your sights high. caroline: that was the ceo and cofounder of dropbox. , 500 million people using the microblogging site, and its parent company has enjoyed exploding revenue growth. the chinese telecom giant says it is because of the rapid growth of weibo users in rural areas. grew revenue by 100% to 110%, so that is very

big. that moment is continuing this year, so you will see growth in revenues. to a lesser extent, from the-based services. , the messaging service that provides some much of your revenue stream, you have done a successful job and growing users second-tier and third tear cities. where are your new markets? >> we will grow faster than our competitors this year, but the market is slowing down. we are focusing on the competition and will increase sticky products and more diversification in offerings, especially the video area. growth inemendous discreditsage and to

in usage in life streaming products. we had just started to beta stories like the ones snapchat has, so this is an area we will be focused upon. video is the key for future growth. isyou said you think there too much money flooding into the tech sector. are you suggesting bubbles in the tech sector? where? >> it is everywhere. i'm talking about internet in general. especially in the last 5-6 years. there is a tremendous amount of money pouring into markets, whether foreign firms are local firms, there is too much money. that is why when a new concept emerges like streaming for

, like the shared economy , then you see not like dozens of companies being created, hundreds of companies being created, and in theory these companies will not be successful him up but when they have a concept, they think it will work. so there is a lot of new money flowing into creating new companies and new businesses, so the result is huge competition in terms of market share to get bigger. a lot of competition is a rational and away. caroline: that was the sina chairman with the tom mackenzie. ,-mobile came out with earnings picking up more subscribers to gain ground on rivals.

we will speak with john legere next. if you like bloomberg news, check us out on the radio. you can listen on the bloomberg radio app, bloomberg.com, and in the u.s. on sirius xm. this is bloomberg. ♪

caroline: t-mobile has set a ,igh bar and cleared it again picking up more subscribers to gain on rivals. the u.s. carrier assigned 900,000 customers in the first quarter, showing series growth. to $698 net income rose million. we caught up with t-mobile president and ceo john legere. >> our for your own birthday is may 1 since we became a public company, and 16 quarters in a

row we have added more than one million customers. we are highly consistent. were post-paidns net ads, and to 798,000 were post-paid phone subscribers. 250% ofate we took over all the growth in the industry this quarter, so a gigantic 380,000 of pre-paid nets. service revenue and total revenue grew 11% and adjusted eb grew 47 percent. that is in an industry where no other carrier gross service revenue and hasn't for years, so we are thrilled with the earnings today a long with a gigantic win in the low band spectrum options. to us about that

$8 billion you are splashing on spectrum. how will it be put to work? band was a historic low auction, 600 megahertz, when you're long process. we won 45% of all the spectrum in the auction, 31 megahertz of low band spectrum, and increased our overall spectrum holdings by 39%. we now have three times as much low band spectrum per post-pay customer as verizon does, so it was important for us. the spectrum we got covers every single inch of the united states and puerto rico. it is that beachfront spectrum that goes in buildings and covers rural areas. we are growing our retail footprint by 30 million to 40 main people to use the spectrum and take the competition which up until now was only in two thirds of the country to every

inch. it is historic and exciting for us. make you moret viable? we have to talk about consolidation. januaryed about it in saying you see 2017 as a year of consolidation horizontally and vertically. are you going to be a player in that question mark >> the anti--- that? the anti-collusion. ends on thursday, so i can't comment specifically. what is important to understand where all this hype is coming from is that there are great opportunities for wireless players and adjacent industries to bring capabilities together to serve customers in a better way and increase value. number two, nobody has been able to talk to each other for over a year. number three, there is an expectation that the new administration will be more lenient from a regulatory standpoint. you have 3-4 people who have committed they need to do something. position,rom a strong

much more viable, we have the opportunity to continue to grow, but we also on behalf of shareholders and customers will be interested in looking at the opportunities that we might further accelerate that growth and serve customers better. caroline: do think you could serve customers and shareholders better with a horizontal deal? would it be better to team up with other mobile suppliers, or better to get into the content? >> yes, yes, and yes, right. i have often said that what is can be easily summarized as all content will go to the internet, and all internet will be viewed mobile can do find where things are going. t-mobile could be very strong by itself and continue to grow. we could consolidate with another wireless clear and get scale and bring competition even greater. we could come together with a

cable player from a standpoint of convergence that makes sense overtime. content goesn all to the internet and the internet is viewed mobile, we have 73 million and growing people who get their monthly access to the internet and content from t-mobile, so i think there will be a lot of fascinating things happening. we areportantly is strong, profitable, and have on free cash48% flow growth and our stock is trading at all-time time highs today, so we feel very good about all options. we are at heady highs when it comes to that particular number, but what about future profitability and competition? you have done so much to disrupt in a field of four, but they are copying you how can you say your average revenue per user will remain stable and you will keep on adding more users? >> because we are the

competition. you say they are following. we are dragging them kicking and screaming on behalf of the consumer. four years ago when t-mobile became a public company, we announced that we are going to fix a stupid, broken, arrogant industry on behalf of consumers, and i would also point out that the 13 un-carrier moves are industry changes, permanent, and there are more coming, so much more to do, and we want the industry to change and follow suit. -- but therestable is more change to come and our competitors know it and are struggling to keep up with us. china's: coming up, ride hailing app is new the close of a massive funding round . will it bring the company to another level in the startup world? details ahead. plus, traditional retail has

been suffering from the rise in e-commerce, but when company is bringing on high tech features to improve the in-store experience. this is bloomberg. ♪

caroline: didi chuxing is close to a milestone. the chinese ride hailing giant is near an agreement to raise $5 billion to six been dollars making it the most viable start up in china. the round will lift the valuation to $50 billion, up from $34 billion after its acquisition of uber's china business. we went live to hong kong with lulu chen. is raising $5 billion to $6 billion. the main investors include andbank, silver lake, cnb,

that $50 billion valuation, they are china's largest startup. they would rank only second to uber. two hailing companies the most viable startups in the world. dd be doing with its money? will it be taking on its formal rival now friend-enemy? -- >> have been very tough on the company, especially since the chinese government issued stricter regulations that have hurt and main revenue stream of theirs. despite more time to develop avenue revenues and the delay of a possible ipo floated as an idea last year, in terms of other areas they can explore, driverless technology. they are locking heads with uber, google in those areas.

dd still has global aspirations grab and o with cra la. tell us about the other regions they are trying to get in. have they been successful? >> didi has taken an approach to partner with local competitors, inal operators like ola india. they are not actively building out and organic business on the ground there. the same case with southeast asia and regions like south america, which they said they awful has interest in expanding in. caroline: fascinating we could see an ipo from china faster than uber going public. talk to us about the regulatory hurdles that home. you mentioned some revenue streams have been hurt and china. which ones are we talking about here? >> for didi, the majority of

their revenue comes from their private car hailing service and they're fast car service, basically think about it as uber the chinese government has issued regulations across dozens of cities across china, especially beijing and shanghai. they have limited the number of people who can drive on the road to only local residents, higher requirements for cars as well, so this has cut down their revenue stream in those sectors, which has been their main revenue, their area for profit and what investors were looking forward to when it comes to talking about a potential story for an ipo of the company. thanks to bloomberg's lulu chen from hong kong there. --, with connected far-fetched believes that has created the store of the future using the latest software and hardware, the retailer aims to

help luxury brands gain more information on customers in-store and online. bloomberg went to london's design museum to take a sneak peek at what is in store. ♪ on line retailer far-fetched is betting it shapes the future. this is a concept store showcasing the latest in retail tech. how do you capture all of that fantastic information you gather in store with customers touch and feeling products question mark we have created a product called the connected rail. it is a combination of rfid and ultrasound. the rfid signal recognizes the product and the ultrasound recognizes the movement. you take the product off and start to see your products appear. essentially it is like online browsing. whichever you touch and pick up in-store are automatically sent to your app.

you have created your in-store wishlist. ♪ see athe middle, you hologram of the product. they control the experience on a touch device. what it allows the customer to elements of the product and their own style to it. mirror.the connected i see my products. i select a coat, and that is slightly too big for me, so i andse an alternative size they will bring that size to me. you also see we have some product recommendations here. they are able to push items into the mirror from their devices. if you wanted to, you can pay and go. packed.ms would be

that was the bloomberg technology team reporting from london. now in this edition of out of nasa astronaut peggy whitson said a new record, the u.s. record for most cumulative days in space, passing jeff williams. her accomplishment, president trump offered his "onratulations saying, behalf of our nation and frankly on behalf of our world, i would like to thank you." it does fall short of the world record held by a russian cosmonaut who spent 879 days in orbit. that does it for this edition of "best of bloomberg technology." next week, we will be live in los angeles with a great lineup of guests. remember, all episodes of

bloomberg technology are now live streaming on twitter. check us out at @bloombergtechtv weekdays. that is all for now. this is bloomberg. ♪

oliver: welcome to "bloomberg businessweek." i am oliver renick. fitness where the slide from prosperity to poverty and chaos. we examined the effects on the region. we go to canada, justin trudeau opens up to our editor about working with donald trump. then, the prestige, power, and celebrity influence of sheryl sandberg. all that ahead on "bloomberg businessweek." ♪ olivercarol: