yousef: i am yousef gamal el-din dubai. top story. republicans and democrats have reached a tentative deal which will prevent the u.s. government grinding to a halt. $1.1 trillion spending bill funds most federal bodies but rejects much of president trump's wish list, including moneys to begin building a wall on the u.s. mexican border. it should keep the government open to the end of september. prime minister theresa may is sticking to her guns that britain should be allowed to negotiate a free-trade deal with the e.u. at the same time as discussing his departure arrangement. remaining 27 nations agreed over the weekend that their priorities were the settlement

of britain's financial commitments, a guarantee of rights for e.u. citizens in the u.k., and the resolution of the border between northern ireland and the republic. the am very clear that up end of negotiations, we need to be clear not just about the brexit negotiation, how we withdraw, but what our future relationship will be. these negotiations are going to be tough. i want to ensure that we are free on a trade deal and our withdrawn arrangement so we know what both of those are when we leave the european union. yousef: less than a week to go in the french presidential campaign. it marine le pen appears to have taken a step back from her euro exit policy. there is no rush. she later told a newspaper that the euro is dead, but she wants to bang currencies. one for daily use by the population and one for international trade. the latest poll shows emmanuel macron supported by 59% of voters. the 10 trails with 41%. lower commodity prices have

helped push china's official factory gauge lower in april, declining from a five-year high. from 51.8ing pmi saws in march. that is amidst analysts expectations. the world's second-largest economy is poised to slow after unexpectedly picking up in the first three months of the year. 21st century fox teaming with blackstone to buy tribune media according to people familiar with the situation. this would rival a plan by sinclair broadcast group. the plan for an all-cash bid is said to be funded by blackstone. fox would contribute its tv station to the joint venture. we have some of these asset classes on the move off the back of the news of details of the government spending bill in the united states, a reminder that most of the european -- are shut

for the main holiday. a fifthar-yen trade up of 1%. barrel. per i am yousef gamal el-din. i will be back in half an hour. this is bloomberg. ♪ caroline: i am caroline hyde. this is the "best of bloomberg technology," where we bring you all our top interviews from this week in tech. coming up, the fcc chairman officially out with big plans to kill net neutrality as we know it. ajit pai joins us for an extended interview. plus, what a week for big tech earnings! from alphabet, amazon, twitter, we will take into all the highlights. and a bloomberg scoop, dropbox hits a key milestone on its way to its ipo. our exclusive with the ceo , drew houston ahead.

, first to our lead. this week saw a showdown brewing in washington, cracking open the net neutrality debate. federal communications chairman ajit pai unveiled his game plan for rolling back net neutrality rules at a speech wednesday in the nation's capital. passed in 2015 by a democratic majority fcc, the net neutrality rules aimed to prohibit internet service providers from favoring or discriminating against online applications, content, and services. now, democratic senator edward markey from massachusetts responded to the chairman's pai's appeals, saying, "it makes no sense. we cannot keep the promise of net neutrality openness and freedom without the rules to ensure it. chairman pai and the trump administration and the ceo should inspect a tsunami of resistance." said the, they have rules as they stand have made a

digital divide. we spoke to fcc chairman ajit pai from washington, d.c. ajit: this will be a political debate that will engage millions of people, but we are going to stay focused on the facts and the laws. the facts are americans by and large believe in an open internet, but they want to have an infrastructure investment. they want the next generation networks to be built out. and so i think what the fcc does , not need is heavy-handed regulation that saddle businesses with lots of rules that simply disincentive rises incentivize -- disincentivizes them from building those networks. that will be the course we're charting henceforth. caroline: have you had commitments that if these rules are changed, they will invest? i'm looking at the profits of at&t, $14 billion. $8 billion if you are comcast, shares have risen since the original ruling of net neutrality. they don't seem to have really been hurt. ajit: if you look at the actual numbers with respect to

investments, they are down 5.6% for the top 12 broadband providers in this country. and that does not even include the smaller providers who are not included within that statistic. we have heard from a number of providers, cable, wireless, telephone and other providers who told us these title ii regulations, as they are called, are impeding them from executing on their business plans. they don't spend as much. they can't get as much financing. and as 22 isp's told us, title ii hangs over our businesses like a black cloud. that is the kind of regulatory uncertainty and overreach that we want to remove. because every american deserves better, faster, and cheaper internet, and i am committed to delivering it to them. caroline: so you take away some regulation and oversight. how can you therefore ensure the right rural areas are indeed provided for? ajit: two things, title ii takes us in the opposite direction and reduce competition and increase what is called digital redlining. so companies have more of an incentive to look at rural areas or low-income urban areas and say, "you know what, we are not going to get enough of the

return on investment there, so let's not deploy." secondly, we want to make sure everybody has internet access they need and want, so i have a very proactive, proconsumer agenda to promote internet access, especially for those on the wrong side of the digital divide. caroline: so you are taking some replacement regulation advice, you are looking for suggestions. what do you think will come to the fore when you ask for this sort of advice? ajit: that is precisely the reason why we started this conversation. as i said in my speech today, this is the beginning of the discussion, not the end, so we want to hear from the american public, what is the best way to preserve those core values of a free and open internet, of more competition, of greater investment in infrastructure? i think -- i am confident we will be able to find a way that will appeal to consumers in the time to come. caroline: you are talking about consumers, of course very worth , fighting for. you will hear their voices. you've already heard the voices of perhaps smaller startups that might be affected by this. we have got 800 startups and

investors led by y combinator, they are concerned about the rollback of net neutrality. you have also heard from the bigger players, the 40 proper top internet companies, voicing their discontent. the letter you received today from the 800 tech startups, say, "rather than dismantling regulations that would allow the startup ecosystem to thrive, we urge you to focus instead on policies that would promote a stronger internet for everyone." how can you allay those sorts of fears? ajit: a free and open internet is what delivered unparalleled value for the american consumer. 20 years ago, who would have for seen that google, amazon, netflix would become household names not just here in the united states but around the world? they thrived because of the light touch regulatory approach that started in the clinton administration and proceeded through the bush and the first six years of the obama administration. that is precisely the kind of framework that i believe will promote startup entrepreneurship everywhere in this country going forward. and so i am committed to giving , them a chance to succeed, but title ii does not allow them or others to do that.

caroline: then why are they so worried? ajit: a lot of people have stirred up a lot of hypothetical harms and hysteria based on what they think will happen. and if you looked at the fcc's 2015 decision, you will look in vain to find any example of systemic market failure where internet service providers were acting to block access to lawful content, for example. and so, going forward, we wanted to take a fact-based approach to figure out a way to preserve those core values, a free and open internet, allowing startups and entrepreneurs to thrive, and preserve investment in infrastructure and increased competition. those are the kinds of things that will allow everyone in the internet economy to benefit. caroline: so thus far, 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 anyway you think this could be measured or should be measured? are you going to look for any sort of oversight? i know that you don't want it to be heavy-handed, as you say. ajit: that is one of the reasons

why we are going to be asking for public input on what the regulatory framework should be. we know that title ii is not the right answer, but as we will see, and i will be publicizing the entire text of my proposal tomorrow, we tee up a number of different ideas for how to do it. we ask the public, is there anything else we should be thinking about going forward? so i think there is a way to do it, and we will try to find the best way in the time to come. caroline: and therefore, when you go out there and start discussing, trying perhaps to bring some republicans as well as democrats into your line of thinking, what do you think will be the best way of getting certain democrats who are so against this on board or convinced? what is your key line of clarity, do you think? because at the moment, as you say, you want to stick with the facts? ajit: look, we obviously are going to be doing more of a fact-based approach than we did previously. but the bottom line is this, the arguments i am making today are precisely the arguments made by president clinton in the 1990's. the arguments that were made by

clinton's fcc chairman in the 1990's. the arguments that were made by democratic senators in the 1990's. this is not some radically political fringe argument i am trying to make. it is the light touch approach that served the united states well under democratic and republican administrations alike. and so i want to take the political heat out of this argument to the maximum extent possible. i understand it will be difficult to do, but at the end of the day, americans are best served with a light touch framework that focuses on the facts, adheres to the long-standing legal principles, and respects the basic principles of economics. the more heavily you regulate something, the less likely you are going to get more of it. caroline: now coming up, twitter , shares soared wednesday after the social network said user growth picked up in the first quarter. we will dig into whether this growth will boost twitter's bottom line, next. and a reminder that all episodes of "bloomberg technology" are now livestreaming on twitter. check us out. it is at @bloombergtechtv, weekdays 5:00 p.m. new york, 2:00 p.m. san francisco. this is bloomberg. ♪

caroline: twitter. it reported earnings this week. it finally seems to be addressing its biggest challenge -- attracting new users. the social network reported that average monthly active users rose 6% in the first quarter compared to the same period last year. now, this growth comes as twitter posted a year over year drop though in quarterly revenue. we held a deep dive and were joined by the forrester research director melissa parrish in new york and bloomberg editor-at-large cory johnson. melissa: to some degree, sure, it is a bit of a trump effect, but i would say it is more about seeing the name twitter in the press more than it is growth being directly attributed to the president.

i think the name has been associated with current events more and more and more, especially in this last quarter, so sure, we can attribute some of it to the political events and current live events taking place and the conversation around to that. caroline: cory, whether it is trump or not, does this lure advertisers to start spending a little bit more with twitter? cory: we know the answer to that. the answer is no. i mean, user growth, great. 4% sequentially year-over-year. the user growth has been pathetic at twitter and has been for quite a long time. if you look all the way back to the ipo, you see 27% user growth over 3.5 years. that is not a big growth business. but you would think, well, at least they could pull money out of users? yes, 2.8% growth is better than it has been. a lot better than it's been. it still stinks. it is still on a small base compared to facebook, compared even to instagram, we saw fresh numbers from today. so those user numbers are weak. but when you add to that their ability to monetize -- if users are not growing much, with all the data they said they would

get about users and find out how to pull numbers out of that, what is the question? what is the revenue base and how fast is the revenue base growing? and the revenues were weak, down on a year-over-year basis for the first time ever. but more importantly, 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 blame it on international. international is still about 79% of the users. the advertisers are just not willing to pay to reach twitter users, and that's a real problem for this business. caroline: melissa, to cory's point, there was a great quote in the bloomberg story saying, coming from wedbush securities, saying "when facebook grows at four twitters a year, that tells you there is something really wrong here." is there something really wrong, or are we just seeing a bit of changing of how they will be charging, and will revenue eventually pick up? melissa: i do think revenue will eventually pick up. but look, i am a marketing analyst rather than an analyst for investors or financial analyst.

i think when i look at it, it is true. revenues have been declining and that is a scary story to hear. but from my perspective, they are doing things that will be more appealing, make them more appealing, will make them more appealing to advertisers in the future. they are doing some hygiene. they are getting rid of some ad products that they know don't work. they are focusing on cleaning up some measurements. these are small things, admittedly, but they are things that look like they are going in the right direction. are substantial changes really needed? yes, i think so, both in terms of the core product and the ad products. i think we need to see some real innovation rather than some of the incremental changes, but from my perspective, the moves that they are putting in place should make them a bit more palatable to advertisers in the future, yes. caroline: that was forrester research director melissa parish and bloomberg editor-at-large cory johnson. and alphabet also out with earnings this week. they came on the heels of

alphabet's stock seeing record highs in trading. we dug into the report with+++ mike bailey, the director of research. take a listen. mike: we were surprised the stock is not up more. the earnings beat by about 4%, the stock is up 4%, so investors are treating this as the same company it was before the earnings came out. i think that in our minds, this is a higher-quality company, and investors are not showing that in terms of rising sentiment. we are still as confident in alphabet as we were before the earnings came out. caroline: so mike is confident. harry, i want to get your point of view here because i have been speaking to an executive at alphabet, and asking, "look,

what about the youtube controversy surrounding all of this, the backlash from advertisers, the slowing down of wanting to link yourself with certain videos?" and they said, actually, look this would be a modest effect in , the medium-term. in the longer term, we might actually see improvement as they change the business. but are there worries around this, harry? harry: in q1, it would not affect the business. the ad boycott only happened in the last month or so. and it really started in u.k., and it is spreading to the u.s. if you look at youtube as an entity, most 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 who really want to be in brand-safe places, youtube is a scary place to run, and it really was not built for those large-scale brand advertisers. now, youtube was sort of caught proverbially with its pants down where there is now a lot of , press around great advertising and great advertisers running against hate speech and other problematic content. but what you are seeing is that google is now having to approach this problem and deal with it, and i think there is a little bit of chinks in the armor of youtube going forward trying to deal with this. caroline: chinks in the armor, mike. you are not worried about

youtube at all? mike: we are not too concerned. you know as i was actually , waiting to come on here, and i was watching you earlier with the commentary that google only expects a modest impact here. i think that is very telling. you know i think this was a , major blow to potential sentiment, a blow to the sort of the pr for google. and here they are, and it is only going to have a modest impact. so i think in our minds, they have done a good job of sort of identifying the problems and working to correct it. and our sense is google is seeing basically everything from the inside, not seeing a major major impact yet, so i would typically go with that commentary in terms of the forward impact. caroline: harry, if we are moving away from youtube and looking at other areas, what about -- we were concerned about the money plowed into so-called moonshots. ruth porat, the cfo, came in and got a rein on it. do now feel more at ease that perhaps they have a handle on the spending? harry: i don't think it has made

a major contribution to their revenue. you can see from the numbers that the core business is still advertising across search and video. um, you know, i think that they are going to be careful about spending their money in the right places. i think the key thing for them is that they have to find that next growth area. you know who knows whether these , types of problems associated with content are going to have long-term effects on their video business? i think search is pretty safe, but their video business, i think, over the long-term, if it is not seen as a safe place for brands to run, i think it will have a material impact. you may not see it next quarter or even the quarter after, but i think, over the next few years, you will see that there is about thought that plowing of 80% of -- there is not that plowing of 80% of video budgets into youtube digitally. and so these moonshots really are a way for them to diversify their revenues into different areas. caroline: that was harry krugman, ceo of cargo, and mike

bailey, director of research. still ahead, we stick with earnings and dig into another tech giant that has reported this past week. amazon's full scorecard next. plus, t-mobile out with another subscriber win. ceo john legere joins us to break down the company's first quarter numbers and a roadmap for the year later this hour. this is bloomberg. ♪

caroline: now amazon may be , diving into the driverless cars race. the tech giant has reportedly formed a team that is dedicated to developing self-driving technologies, well beyond the realm of cars. this according to "the wall street journal." now, at least 12 employees were assigned to the group more than a year ago to examine how driverless vehicles could help amazon deliver packages more quickly. now, this is not the first time we have heard amazon could make a play in the autonomous driving sector. earlier this year, amazon was approved for a patent for a roadway management system to help self-driving vehicles to find the best lanes for their driving needs. and speaking of amazon, the e-commerce giant came out with earnings this week.

james mcquivey of forrester and research and jitendra waralof of bloomberg intelligence joined us to break down the numbers. jitendra: the whole investment cycle amazon embarks on, they are saying that, hey, we can deliver the topline growth, so it'll be ok if we increase that spending to bolster our growth story here. from a profit perspective, again, aws the biggest contributor, but the international sort of losses continue because they are extending aggressively here, and have a lot of opportunities to expand prime internationally, so fba internationally so the , growth runway continues, but more importantly, they are showing that they can execute against these numbers. caroline: i want to dive into my bloomberg again. because it is quite phenomenal to show even though we are at these lofty, heady heights of near records for amazon, we have caught not one single sell on the stock across all analyst recommendations. largely they are buys, a few holds overall. but still, the stock trades higher in after-hours. let's get james mcquivey's point

of view. because was it aws and prime that stood out for you? what about the margins from amazon? james: certainly, we are happy to see aws perform well. there was some softening in the last quarter, so it was good to see the numbers come back up. but really, for this company in the long run, we need to see it can fire on all of these cylinders, and it is firing on those cylinders, but the u.s. business in particular, the margins are small, will continue to be small, but we are really confident it will continue to grow even a small margin year after year after year. there is still so much headroom in the u.s. retail business for amazon to claim, that between a high-growth product like aws and a really solid, domestic retail business that is growing and growing, i think that is what is going to fuel together the international expansion they are working on. caroline: interesting, both of you have talked about international expansion here. jitendra, i think it's interesting the earnings press release lead with india. this is such a clear sign of intent coming from amazon. jitendra: absolutely, if you

just look at their investments and even their strategies, which are regionally different, the ir pricing strategies are also different. it is basically telling you they are expanding by localizing the strategy, which is really working for them. caroline: mexico also a new area that they are launching prime. what about the content side of the business, james? what about amazon prime comes with the amazon firestick and fire tv. they are spending big as ever. this is a company that reaps in that revenue, but does not always deliver profitability. james: right, a real way to think about the video focus and any other content focus of amazon is is how do we increase the number of engagements per day and minutes of engagement per day? you can even think of amazon echo and alexa as an extension of that. if we get you to touch amazon in some way, 8-10 times a day, that can include video, asking alexa

what is the weather all that , eventually accrues to i am going to shift a larger percentage of my retail spend to amazon. so even though that is not generating topline dollars, it is cementing what is undoubtedly the industry's most powerful customer relationship. caroline: jitendra, where next in terms of can amazon possibly go? we are seeing record highs for many of these stocks. i am looking at amazon with with a $439 billion market cap. it's about to grow if it holds onto those after-hours trading numbers. are you expecting just continued positivity coming from amazon? jitendra: as he mentioned, now that these touch points at amazon keeps adding with video, with the ai assistants, different products and services, it brings people back to prime. once people are back to prime, they spend more, and so this cycle has a long runway, because if you look at the markets, they are just starting to enter. there are international markets where there is a lot of headroom for the retail segment.

and of course, the cloud business, which continues to beat expectations in terms of how big is this market, and that number keeps on going up. so i think they have end markets big enough to sort of like 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 through revenue growth. caroline: james, i'm going to ask this to our guest when we discuss alphabet, but how worried should alphabet be by the growing advertising side of the business that amazon is starting to show off, and are these really key competitors? we see them fighting it out in cloud as well. james: absolutely. these are probably two of the most unlikely competitors that people for years tried to separate mentally, but they are in the same business. it is the business of attention. and if you think specifically about advertising, amazon is in a position to give you much more contextual ad placement than google is, even though you are working against search results.

it is not nearly as powerful as product search results. so when you add what amazon can do when it starts observing you in your life with cameras that as of this week it has added to some of the alexa-echo line, it will be in a position to know so much about you and make product recommendations that surpass the value of advertising coming at a time when major brands like p&g are pulling back billions of ad dollars, which they are not sure are spent well. if i am google or alphabet, i'm very nervous. caroline: that was james mcquivey of forrester research and jitendra waral of bloomberg intelligence. now this week, we learned espn , will cut 100 staffers in an effort to save money. that is according to a person familiar with the matter, who says the leader in sports tv is coping with rising costs and fewer subscribers. in a memo to staff, the espn president said the disney -owned network is determining who to cut from the current payroll. now coming up, our exclusive interview with dropbox ceo drew houston on the company's latest milestone as it charts a path towards ipo.

and a reminder that all episodes of "bloomberg technology" are now livestreaming on twitter. check us out at @bloombergtechtv, 5:00 p.m. in new york, 2:00 p.m. in san

>> our top story is republican -- the story around the tentative deal that will prevent the u.s. government grinding to a halt. $1.1 trillion spending bill rejects much of the wish list, including money to begin building a wall along the u.s.-mexican border. the agreement shifted the american government through the end of september. isime minister theresa may sticking to her guns that britain should be allowed to negotiate a free trade deal with the european union at the same time as discussing its departure

arrangement. seven nations agreed over the weekend that their priorities are the guarantee of resolution of the border between northern ireland and the republic. >> i am very clear that at the end of negotiations we need to be cleared not just about the negotiations but what our future relationship is going to be. these negotiations are going to be tough. >> lower commodity prices pushed the official factory gauge lower in april. to manufacturing pmi fell 51.2 from a reading of 51. 8, missing expectations. the first official economic indicator for the second quarter signals growth as holiest to slow after unexpectedly picking up in the first three months of the year. italian airlines are set to be interested in alitalia. the ceo says it could buy 51% of

the near bankrupt national carrier. speculation has been mounting over a call for alitalia. is makingentury fox an offer to why ninia, according to people familiar with the situation. bidplans for an all cash are said to be funded by blackstone. breaking lines heading the bloomberg on the french presidential candidate marine le pen, she has been speaking to europe one radio saying that her presidency will lead to the end of the euro, underscoring that point in saying that economic plans can be implemented without euro exit. also, the latest poll shows pro-european centrist emmanuel

macron has 59% of voters. a quick check on the asset classes, the details in the united states. you can see italian impact on a dollar-yen trade. this is bloomberg. ♪ caroline: welcome back to the "best of bloomberg technology." i am caroline hyde. now to our exclusive conversation with dropbox ceo drew houston. the cloud filesharing startup has been touting financial milestones of the company inches towards a public offering. dropbox is already cash flow positive with annualized revenue of more than $1 billion. and houston told us they are ebitda positive. i spoke to him this week in san francisco. take a listen. >> it has been great. we have 500 million people around the world using dropbox, 200,000 paying business customers, and a lot of milestones that we are proud of. so in january, we crossed $1 billion revenue run rate.

and it turns out that we were the fastest tech company in history to reach that milestone. and last year, we were free cash flow positive. today, something we haven't shared is that we are also profitable on an ebitda basis. that matters because it's a rare combination. so it is rare for software companies to be operating at our scale with our level of profitability, and to be growing at the rate we are, so we are proud of that. caroline: profitability, the enigma. how? how did you achieve it? is it about cost efficiencies, the growth side? how did you manage to scale to that? >> it starts with our customers. people love dropbox. i think it is a testament to the strength of our business model. so inside the company we like to say we have 500 million sales people because all those millions of people have brought dropbox into millions of businesses, and that is how we

grow. and so the vast majority of our revenue is self-service, so you just pay with a credit card, which means our sales and marketing costs are lower. so when you combine the scale and efficiency, those are the ingredients. caroline: it is interesting you have helped dropbox to lower the cost of business in an awful lot of other industries and areas. where do you see these sorts of efficiencies going in terms of technology in general? i'm interested in your viewpoint on whether you are an optimist or pessimist? as to whether technology is pushing forward in helping efficiencies work? but at times there will be disruptions. how do you feel silicon valley is adopting that? and the administration adopting that? >> when 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, one thing we talk about is that for every problem that technology solves, it feels

like it creates a new one, so things like email and thumb drives at the time are these great inventions, but when you look at it another way, they are holding us back. so fortunately a lot of these pain points become opportunities for us. whether it is frustration around thumb drives, that's just one example of a broader problem we are working on, which is work about work. so when you add up all the time we spend looking for information, emailing and all these things, it is 60% of our time is spent on this overhead, work about work, so we are trying to knock that number down as much as possible because it is a huge waste. and then when you think about tech more broadly, i think we will end up in a good place, but i think at the same time as technology consciously or subconsciously creates new problems, we have to be mindful

of that and solving those. caroline: when you say we have today, is that for the entrepreneurs and business leaders to be looking at? how much do think the administrations, whether in the u.s. globally, needs to be looking at it? >> whether a company or government, we are part of a broader community, so it is something everybody has to look at. caroline: when you are looking at the current administration in the u.s., there's been rolling of eyes and exhaustion coming from silicon valley, and many times feeling whether it is the travel ban, h-1b visas. >> it has been an unpredictable 100 days or so. and look, sure, a lot of positions that the administration has taken on things like the executive orders on immigration are really troubling. arash, my cofounder, his parents emigrated from iran, so if that kind of legislation or that kind of thing was in effect now, there would be no dropbox or when we started. and so, tech, we are all

rallying together and figuring out what we can do to engage. caroline: rallying together in silicon valley, is silicon valley at the best place it could be right now, do you think? some of the reputational damage that is happening at the moment, is that something you want to fix, or is it thriving as it's always been? >> i think it is always complicated. we focus on things that are in our control. and so, we see -- when we talk to customers, there are a lot of problems out there. that is where the bulk of our attention goes. caroline: i want to get a little bit of insight as to where you tell other entrepreneurs to go now. reach out to our viewership, those that are wanting to be drew houston, wanting to be the next ipo, see their business scale such as yours. do you have a recipe for success, do you think? >> when it comes to a lot of these problems, one thing that

was surprising to me is that it is easier to go after big problems than small ones. because i thought it would just be harder because the challenge is so much bigger. but actually what happens is people are really motivated, they are inspired to take these things on. it is easier to attract great talent. and so my advice would be to set your sights high. ♪ caroline: that was the ceo and cofounder of dropbox drew houston. now to weibo, commonly known as china's twitter. more than 500 million people using the microblogging site, and its parent company sina has enjoyed exploding revenue growth. the chinese telecom giant says it is because of the rapid uptick of weibo users in rural areas. sina chairman charles chow spoke exclusively to bloomberg about how he plans to keep driving forward. >> last year, we grew revenue by 100 percent to 110% for advertising, so that is very big.

that moment is continuing this year, so you will see growth in revenues, mainly for advertising, and to a lesser extent, from fee-based services. >> weibo, the messaging service that obviously provides some much of your revenue stream, you have done a very successful job in growing weibo users in second-tier and third tier cities in china. how much growth have you got following that strategy, and where are your new markets? >> we will grow faster than our competitors in the usage growth this year, but the overall market is slowing down. so we are going to focus on the time spent competition. we will increase more sticky products and more diversification in terms of product offering, especially in the video area. you see that we have tremendous growth in terms of usage and also tremendous growth in usage and live streaming products.

this year, we just started beta testing video stories similar to the ones snapchat has, so this is an area we will be focused upon. video is the key for future growth. >> you said you think there is too much money flooding into the tech sector. are you suggesting that there are bubbles in china's tech sector? and if so, where? >> it is everywhere. it's not just one particular area we are talking about. i was talking about internet in general, especially in the last 5-6 years. you see a tremendous amount of money pouring into markets, whether vc, whether foreign firms are local firms, there is too much money. that is why when a new concept emerges like live streaming for example, like the shared the economy, then you see not like dozens of companies being

created. it is like hundreds of companies being created, and in theory these companies will not be successful, but everybody win ever they have a concept they think will work, they don't want to miss this there was a lot of money flowing into creating new companies and you businesses. and so the result is that huge competition in terms of market share, in terms of you have to burn cash to get bigger, so a lot of competition is irrational in a way. caroline: that was the sina chairman with the tom mackenzie. now coming up, t-mobile came out with earnings this week, picking up more subscribers to gain ground on rivals like at&t. we will speak with ceo 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 high bar and cleared it again, picking up more subscribers to gain ground on rivals verizon and at&t. the u.s. carrier signed more than 900,000 customers in the first quarter, showing some serious growth. t-mobile net income rose to $698 million last quarter from $479 million a year earlier. we caught up with t-mobile president and ceo john legere. >> our four-year-old birthday is on may 1 since we became a public company, and 16 quarters in a row we have added more than one million customers.

so we are highly consistent. we had 1.142 million net additions. 914,000 additions were post-paid net adds, and 798,000 were post-paid phone subscribers. and here is the piece that's interesting. we estimate we took over 250% of all the growth in the industry this quarter, so a gigantic percentage of the gains, 386,000 pre-paid nets. and at a record low of 1.18. service revenue and total revenue grew 11% and adjusted ebitda normalized grew 21%. and 46 percent net income. you have to remember too that that is in an industry where no other carrier grows service revenue and hasn't for years, so we are thrilled with the announcement of the earnings today, along with a gigantic win in the low band spectrum auctions. it sets things up beautifully. caroline: talk to us about that $8 billion you are splashing on

spectrum. how will it be put to work? >> well, it was a historic low band spectrum auction, 600 megahertz, moving from the broadcasters over. and it was a one-year long process. we won 45% of all the spectrum in the auction. we got 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. and it is that beachfront spectrum that goes in buildings and covers rural areas. what we are already doing is we are growing our retail footprint by 30 million to 40 million people to use the spectrum to 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. caroline: does it make you more

even more valuable, do you think? we have to talk about consolidation. you talked about it in january, saying you see 2017 as a year of consolidation horizontally and vertically. are you going to be a player in that? >> yeah, now the anti-collusion period associated with the auction ends on the 27th which is thursday at 6:00 p.m. 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. and you've got three or four people who have admitted they need to do something. dish, sprint, comcast, etc. t-mobile now from a strong position, much more valuable, 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 do you think it's better to get into the content? >> well, yes, yes, and yes, right. i have often said that what is happening can be easily summarized as all content will go to the internet, and all internet will be viewed mobile can define where things are going and what structures will take place. t-mobile could be very strong by itself and continue to grow. we could consolidate with another wireless player and get scale and bring competition even greater. we could come together with a cable player from a standpoint of convergence that makes sense over time.

and remember, when all content goes 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 is going to be a lot of fascinating things happening. most importantly is we are strong, we are profitable, and have given 45% to 48% on free cash flow growth and our stock was trading at all-time time high today, so we feel very good about all options. caroline: stocks just dipping a little bit, down a percentage point. as you said, we are at heady highs when it comes to that particular number, but what about future profitability and what about competition? you have done so much to disrupt in a field of four, but they are copying you. how can you say that your average revenue per user will remain stable and you will keep on adding more users? >> because we are the competition.

and 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 also would point out that the 13 un-carrier moves we have done are industry changes, permanent, and there is more coming. there is so much more to do, and we want the industry to change and follow suit. we will have stable rpu but there is much, much more change to come and our competitors know it and are struggling to keep up with us. caroline: coming up, china's ride hailing app didi is near the close of a massive funding round, vaulting the company to another level in the startup world. details ahead. plus, traditional retail has been suffering from the rise in e-commerce, but one company is bring on some 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 $6 billion making it the most valuable startup in china. surpassing smartphone maker xiaomi. the round will lift didi's valuation to $50 billion, up from $34 billion after its acquisition of uber's china business. that's according to people familiar with the matter. we went live to hong kong with bloomberg's lulu chen. >> didi is raising $5 billion to $6 billion. they are close to closing the fund. the main investors include softbank, silver lake, cnb, and like you said, at $50 billion valuation, they are china's largest start up, surpassing xiaomi.

on a global scale, they would rank only second to uber. caroline: quite phenomenal, two ride hailing companies, the most valuable startups in the world. what will didi be doing with its money? will it be taking on its formal rival and now frenemy? >> right, there are a lot of areas they can explore. i have to say that this money is coming in a timely fashion. the past few months have been very tough on the company, especially since the chinese government issued the stringent regulations that have hampered and main revenue stream of theirs. so despite some more time to develop revenue avenues and the delay of a possible ipo floated as an idea last year according to people familiar with the matter, in terms of other areas that they can explore, driverless technology. they are definitely locking heads with uber and google in those areas. didi still has global aspirations. they still have an ally with

grab and ola, also in india. they are competing with uber on those fronts. caroline: tell us about the other regions they are trying to get in. have they been successful? has it been a hard slog for them? >> right. well, didi has taken an approach to partner with local competitors, local operators like ola in india. they are not actively building out an organic business on the ground there. the same case with southeast asia, and also regions like south america, which they said they also have interest in expanding in. caroline: fascinating we could see an ipo from china faster than we would see uber going public. talk to us a little bit more about the regulatory hurdles they have had at home. you mentioned some revenue streams have been hurt in china. which ones are we talking about here? >> for didi, the majority of the revenue still comes from their private car hailing service and their fast car service,

basically think about it as uber x, and the chinese government has issued these 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. caroline: thanks to bloomberg's lulu chen from hong kong there. now, with connected clothes rails and smart meters, online retailer farfetch believes that has created the store of the future. using the latest software and hardware, the retailer aims to help luxury brands gather more information on customers in-store and online. bloomberg went to london's

design museum where the tech was showcased to take a sneak peek at what is in store. ♪ >> online retailer farfetch is betting it can shape the future. this is its 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 feel products? >> we created a concept called the connected rail. this is using a combination of rfid and ultrasound. the rfid signal recognizes the product, and the ultrasound recognizes the movement. you take the product off and you will start to see your products appear. essentially it is like online browsing behavior, whichever products you touch and pick up in-store are automatically sent to your app. this is effectively what you created, your in-store wish list. ♪

>> in the middle, you see a hologram of the product. what the customer sees, they control the experience on a touch device. what this allows the customer to do is take elements of the products and then add their own style to it. right, so this is the connected mirror. so in this example, i see my products. i select a coat, and that is slightly too big for me, so i can choose an alternative size and send a request to the sales station and they will bring that size to me. you also see we have some product recommendations here. sales are able to push items into the mirror from their devices. if you wanted to come you consent to use the mirror, a and go. your items within the pack and dispatched to you afterwards.

caroline: that was the "bloomberg technology" team reporting from london. now in this edition of out of this world, this week, nasa astronaut peggy whitson set a new record, the u.s. record for most cumulative days in space, surpassing astronaut jeff williams' record of 534 days according to nasa. to mark her accomplishment, president trump offered his congratulations saying, "on behalf of our nation, and frankly on behalf of our world, i would like to thank you." while an impressive feat, it does fall short of the world record of days in space which is held by a russian cosmonaut who spent 879 days in orbit. now 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, including david solomon, president of goldman sachs. 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. ♪

>> let's kick off with our top story. republicans and democrats have reached a tentative deal that will prevent the u.s. government grinding to a halt. the $1.1 trillion spending bill will fund most federal bodies, but rejects much of president trump's wishlist, including money to begin building a wall across the u.s.-mexican border. it should keep the government opened through the end of september. french presidential candidate marine le pen says her presidency will lead to the end of the euro. with less than a week to go until the vote, she also told europe one radio or economic plan could be implemented without a euro exit. the lates