>> i am alisa parenti in washington, and you are watching "bloomberg technology." authorities say a suspect in this afternoon shooting at a florida high school is now in custody. broward county officials say there is at least 14 victims involved in this incident. swat teams converged on marjorie douglas high school in parkland as students with their hands raised came running out. vehicle triedn a to make an unauthorized entry onto the national security ,gency at fort meade maryland this morning. that left three people injured. all of the gunfire with directed toward the vehicle and not the nsa building. former republican presidential nominee mitt romney will

announce tomorrow that he is running for the utah senate the held by a retiree warren hatch. that is according to the associated press. three people with direct knowledge of the plan. massachusetts governor moved to utah after losing the 2012 presidential election. a french court has acquitted a man charged with harboring islamic extremists after they carried out attacks in paris in november, 2015. he has denied knowing the identity of the two men to whom he was renting. one of the two was the suspected ringleader of the paris attacks. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. ♪

emily: welcome to "bloomberg technology." i'm emily chang, live from the goldman sachs technology conference in the heart of san francisco, where silicon valley needs wall street every year. we've been hearing from tech luminaries. jack dorsey talked about how remaining independent will be a strength for twitter. later today, we will hear from uber ceo dara khosrowshahi. i will speak with the goldman sachs president and co-coo, as well as benchmark's bill gurley. we have physical earnings out. cory johnson is back at home base with more. cory: can't wait to see all that. cisco, news crossing the tape,

$12 billion of sales in the last quarter, sales up for the first time in the last 12 quarters. cisco, disclosing a one-time charge related to the tax overhaul. the company revealing some big plans. it will increase the dividend 14% and it committed to another $25 billion to buy back stock. john butler joins us now. he covers cisco for "bloomberg intelligence." we will pretend to have this conversation for the first time. i really interesting quarter from cisco. what worked? john: sales up, very good. what was really good at cisco is the core business here really is sales. it is over 20% of revenue. they have a new product that is really starting to work. the trick with cisco, what people are looking for is they want to see that company start to get out of the woods in terms of growing again. i think we are getting there. this is the first quarter that really looked good to me, like they are on a more sustainable growth trajectory.

cory: let's talk about the product starting to work. john: it's the catalyst -- cory: this tells us everything we need to know about what's going on in the world of hardware. cisco makes boxes to stick in the back of businesses and data centers. this catalyst does what? 9000 john: you can drive the network, if you will, from a software dashboard.

it is all point-and-click in terms of provisioning new circuits and setting up your network. that is very attractive to companies and carriers as they want to minimize the i.t. personnel in an organization. also, as security gets more important. that software-driven element of hardware is on the rise. cisco was a little bit slow in getting there. i think they are there now, and i think the momentum will continue to build for them. cory: to that point, it seems like other companies have been trying to get in there. they are facing competition from cisco on the software side. their advantage may not be as strong anymore. john: cisco was a little behind the curve as well, as you mentioned. the big companies have really had a hard time turning that battleship, if you will. smaller, more nimble companies have come in and had success there. cory: as it relates to the buyback, and i just tweeted something about this -- yes, it will reduce the shares outstanding, or will it? the company has been issuing so much stock that you have seen the share count jump every single quarter i think for the last 16. at what point do we see a buyback as changing the nature of the income statement, as opposed to just fixing something? john: honestly, cory, that's tough to say. cisco really is an acquisition growth story.

when you are as big as cisco, sometimes you need to buy bank -- to buy your way into new markets. it is tough to predict their behavior on that front and therefore it is tough to predict where the share count is going to go. this is a big buyback. this really is good news for current shareholders, i think. cory: last question as it relates to cisco. you said this is a growth story again. john: they are getting there. the orders are something i really watch, because that gives you a forward view of the business. in this quarter, orders were up 5%, which is, against a revenue forecast of 3% to 5% for next

quarter, it gives you a lot of comfort. what that tells me is they are starting to gain momentum. they are really starting to gain traction with those new products, and that really is the key to this story here. cory: john butler, thank you so much. appreciate your time. chuck robbins, doing a great job, as you just heard. we will get results tomorrow at 9:30, back east, out here at 6:30. emily chang, you're in such a perfect place. the conference you are at -- i love that you are there. people are pumped to know what is going on in technology. today was a remarkable day on the markets. emily: right. cory, i wanted to ask you to walk us through what happened today and talk to us a little bit about how it fits into the broader volatility. we will have goldman sachs' president and co-coo, coming up. he thinks this is a good environment for trading.

what did you see today? cory: we knew that -- let's go back to last friday or two fridays ago. we saw this sort of amazing slight, very slight increase in the employment number and wages. we were waiting for wages to go up. every economist under the sun has been telling us that wages were going to go up. we finally saw it, as wildly predicted, and the market went haywire. the vix went through the roof. the volatility index had been trading at 10 or even high nines for even months or years, with very few increases above 12 or 15. it suddenly shoots up to near 15, to near 19, to 30. it blows up the reversed

traded exchange. it takes billions of dollars out of the market. for the first time ever, two weeks ago, we saw the future volatilities contract one month and two months both of 80% in the same day. it was incredible. today, we get the cpi with a higher price than expected. the market waved it off, and the stocks rallied. emily: what about the fang stocks in particular? we have been closely tracking what's going on with facebook, apple, alphabet, amazon. what did you see there? cory: we saw a reversion back to

the way the market has been trading the last few years, at least for one day, where we saw the rallies in spite of some of the news that was out that might be bad for the economy overall. we saw that, generally, across-the-board, stocks rise. we saw companies like fossil, watchmaker -- they got 40% of their sales were smart watches, a little tech boost. they call them wearables. i think every watch is a wearable, right? the wearable sector did enough to give the stock and 80% boost -- stock an 80% boost today, with the belief that technology is the future. i think it shows that the individual stock stories are doing very well. when the news is well, the stock feels great. across the board, people wanted to buy stocks today. you saw that across the table. emily: all right, cory johnson, editor-at-large. thanks for breaking it down. we will talk about it all with heather bellini, goldman sachs tech analyst. this is bloomberg, live from the goldman sachs technology conference in san francisco. ♪

emily: welcome back. the goldman sachs technology conference in san francisco. we have been hearing from twitter and square ceo jack dorsey. uber ceo dara khosrowshahi, coming up. i will speak with david solomon, coming up. heather bellini, i want to start with you on facebook. no company seems to be getting quite pummeled in silicon valley like facebook has been recently.

unilever now threatening to pull their ads because of the platform being what they call a swamp for extremism and hate. how concerning is this? heather: so, i think if you are a chief marketing officer, you want to make sure that you are protecting your brand. brand safety is top of mind. it is not just for facebook. it is also for youtube with google. it has been experiencing the same type of feedback. i think maybe some of this might be a little bit overdone. i don't think that facebook and google are trying to create an environment where this type of backlash is occurring, but i do think they are making a lot of efforts and inroads, whether it is investing in people to try and make sure they're getting rid of this content before it comes online or investing in ai, machine learning, to do that. these are platforms that have exploded over a very short period of time. it is an iterative process that i think they are truly focused on.

emily: how much do you think it will impact revenue? do you think it will have a material impact on revenue? heather: you have to think about the platform, whether it is facebook or google with youtube. these are multibillion user platforms. if you look at the daily active users for facebook, 1.4 billion. there are probably 1.5 billion plus active users on youtube, if you look at the measurement there. if you are an advertiser, are you going to walk away from that many eyeballs? we've heard sheryl sandberg say, we could deliver the super bowl in terms of reach every day to u.s. advertisers, just domestically-focused advertisers. i think this is a call to action. i think the cmo's want to see more being done, but i also think facebook and google are responding in kind.

i think it is an iterative process, but i don't think they can ignore these platforms. emily: what about the fact that, for the first time, users in the u.s. didn't grow for facebook last quarter? heather: they declined 700,000, 800,000 users. the u.s. and canada are about 190 million users. you are at a point where, even when we model out, we don't model a lot of growth, if any, in daily active users for the company, just given the percentage of the population that they are already hitting. i don't think that should be a big surprise. if you look at where their growth in usage has been, it has been predominately outside the u.s. in a lot of emerging economies, so it wasn't all that surprising to me. what you have to continue to focus on is the value that advertisers are getting from this platform, despite what they might be saying. they are getting a lot of improved targeting, better targeting then they could get on -- than they could get on any other medium, and they are seeing return on investment on these ads continue to go up. facebook continues to do things that improve the reach, improve the targeting, therefore you are seeing at pricing go up for the

company. it is working the way it should, we feel, at this point. emily: you mentioned alphabet. youtube's ceo recently said they spoke should get back to baby pictures. facebook has been changing algorithms to show more posts from friends and family. interesting to see the dichotomy there. youtube struggling with its own issues. what do you think the big headwinds are for youtube? and heather: they have the brand safety issue to be aware of as well. we talked a brand partners and ad agencies a lot. they are just as concerned about that on youtube as they are with facebook or some of the other social media platforms. i think again, in partnership , with the advertisers, from a measurement perspective, people want to see the standards

continue to move in the right direction. i think, unfortunately, it has been a sign of the times for the last year or so how this message has evolved. these platforms maybe did kind of -- not that they went off the rail, but i would say the issue has been just from what users have been posting on all of these sites. collectively, everyone is more focused on it. you have started to see that change with some of the algorithmic changes on facebook, but i think youtube is focused on it as well. emily: interesting number is out on lobbying. google outspent every other tech company. facebook hasn't spent very much. there's a lot at stake for facebook right now. do you see headwinds coming from their relationship with washington? heather: i think on the third quarter conference call, their earnings call, which was early november, mark zuckerberg tried to make a statement by saying he was going to hire all these extra people to start policing the site, something we were talking about before. he then announced the algorithmic changes in early january. i do feel they are trying to show their users and the political establishment that

they are trying to police themselves. does that mean they are not going to spend on lobbyists and start to get much bigger there like google? probably, you would see it moving more toward maybe not spending as much as google does, but moving in that direction. i do think that at least they are trying to show everybody that this is front and center and really important to the company's strategy. emily: there has been talk that amazon could surpass facebook as the second-biggest platform for digital ad dollars right now. google is dominant, then facebook. do you see a potential shakeup in the hierarchy? heather: well, heath covers amazon for us. by his estimates, i think in 2017, ad business was about a $2.5 billion business, and about $3.7 billion this year is his forecast.

it's going to take a while for them to be able to surpass facebook and take that number two position. i certainly don't think anyone should discount the power of amazon and its prime users and just how many people go there to shop. i think it is something that everyone needs to be mindful of. we definitely hear a lot of interest from ad partners, telling us that people are kicking the tires and looking at that opportunity to find that third platform, which has been slightly more elusive. emily: what are the big issues you are watching for google and facebook over 2018? heather: for facebook in particular, we are focused on facebook watch as another way to engage with your users. for us, we think about time spent.

there are only so many minutes in a day that you are going to spend sifting through your current facebook feed or your instagram feed. how else can they improve engagement or increase engagement with people like you and i? that might be, if you are a patriots fan, starting to watch "tom versus time," the docuseries, three 15-minute series. that would mean you're spending more time interacting with the platform. i see facebook watch -- that is something we are spending a lot of time on right now, something we hope to see bald into a much bigger reason why we are going to want to go to the app. emily: heather bellini, goldman sachs tech analyst. thanks so much for stopping by. we will talk more about amazon's lobbying efforts in particular and how their strategy is changing. that is next. this is bloomberg. ♪

emily: welcome back to "bloomberg technology." i'm emily chang. want to go straight to cory i will johnson, talking about amazon. cory? cory: you just had a great interview talking about what other tech companies are doing in washington. amazon, no slouch there. we take a look at all the things amazon is doing, lobbying and strategies. naomi nix covers lobbying for big tech firms for bloomberg is. what is amazon doing? -- bloomberg news. what is amazon doing? naomi: they have dramatically increased the investment they are making in lobbying in washington. in fact, the percentage of money they spent on this has grown by 400%. it is now more than $12 million. it used to be just under $3 million in 2012. cory: is that 400% year-over-year? that's huge. naomi: it's huge. not only are they spending more,

they are reaching out to more government entities. they have grown the number of -- they are reaching out not only to the white house and congress, but to agencies that deal with the postal service and trucking regulation. they are also covering a lot more issues. they cover more issues than any other -- of the other tech companies we looked at. cory: are they covering more issues because they are doing more or because amazon is just huge right now? naomi: it's really both. the growth in the company's business model has really spurred the growth in lobbying here in washington. so, the fact that they are, you know, looking at, say, expanding into drone deliveries made them want to lobby the faa and tackle the regulations regarding drones right now. so, as their business model grows, as they grow into new markets, whether it's drone deliveries or health care, we

should expect amazon to continue lobbying other agencies to get the kind of changes they need to seize those business opportunities. cory: great stuff, naomi nix. everybody check that out on bloomberg.com or on the bloomberg terminal, if you should be so lucky. we have a filing from berkshire hathaway, known for all the companies it owns, but also the companies that warren buffett and team invest in. one of them is ibm. ibm has them poorly over the entire berkshire's investment, so it is kind of giving up on ibm. berkshire hathaway missed with ibm. emily: cory johnson, thanks so much. coming up, the interview you have been waiting for. david solomon, president and co-coo of goldman sachs. that is next. this is bloomberg. ♪

haidi: you are watching bloomberg. i am haidi lun. florida say 17 people were killed in a school shooting in southern broward county. the suspected gunman has been arrested. he is said to be 19 years old and a former student of the school. offeredt trump has federal assistance to the state and his condolences to the victims' families. jacob zuma has bowed to pressure and resigned, but he says he disagrees with the decision to force him out, calling the treatment unfair. the party is expected to name ramaphosa as acting president to stand until next year's election. >> no lives should be lost in my name.

anz should never be divided in my name. i have therefore come to the as presidentesign of the republic with immediate effect. climbed the most since december. the reason buildup in your storage tanks and terminals appears to be slowing down. a government report shows the american oil inventories rose by 1.4 million barrels per week, lower than all but two estimates. the compliance rate of the 10 non-opec nations participating toproduction cuts slipped 79%, the lowest level since july. we are seeing asian stocks up for a fourth consecutive session, erasing those gains -- those losses, i should say, and

gaining back. we are seeing solid moves across the region. australian market up by 1.2% on the close. biggest one-day jump. singapore doing well with earnings come through today. it is being powered by what is being seen in the hang seng index. it had the huge jump towards the end of trade yesterday, up by another 2% heading into the lunch break ahead of the lunar new year holiday. what you are seeing is a reversal in the bond space. we have seen bonds dumped after the inflationary reading out of the u.s.. you saw the yield on the 10 year note -- we are seeing yields in asia rising today. let's have a look at wti is all because it is tracking quite strongly up at $60 per barrel, pushing through the $60 per barrel mark. it is lunar new year. china, south korea, vietnam, taiwan, all out of action.

is what the hang seng has done over the last three dog years. ofhas been a little bit mixed fortune ahead of the lunar new year break. that is a quick check of markets here in asia as we recover all of these gains. ♪ emily: welcome back to "bloomberg technology." we are live from the goldman sachs technology conference in the heart of san francisco. we have been hearing tech ceo's and investors speaking all day long. earlier today i sat down today , with david solomon, president and co-coo of goldman sachs. we started by talking about why they do this conference every year. take a listen. david: the year has set up in a way that i think it should be very constructive for m&a activity and for ipo activity. ipo activity started to pick up a little bit toward the end of 2017.

we have a very healthy ipo backlog, but we also have an environment for a variety of reasons why 2018 should set up to be a pretty active year for strategic m&a in the technology segment. emily: are private valuations healthy right now? david: private market valuations have tightened a little bit over the course of the last 12 to 24 months -- emily: meaning? david: meaning capital has been a little tighter. i wouldn't say valuations are bubbly, but there is no question that in an environment for the last five years, where growth was sluggish, investors were really looking for a place where there was growth, and silicon valley technology was a place where there was a lot of growth. when you look at large-cap tech, you look at a company like amazon, it's growing. you look at facebook on $40 billion of revenue, it's growing 40%. these are big companies with large market caps. they are growing quickly. that creates interest. i don't think valuations are going down. each company is an individual decision.

but some of the ebulence has tightened up a little bit. are seeing a lot of volatility. how'd you take advantage of it? david: there's no question that the volatility we have seen is with respect to economic growth. you see the strong growth numbers coming out. that will bring volatility back to a more normal environment. there is no question that volatility spiked over the course of the last couple weeks. it would be healthy at this point for volatility to be more normalized in the context of a longer market period.

i would expect to see more normalization of volatility versus the ultra low volatility environment we have been in for the last couple years. emily: you are advising qualcomm on a potential takeover by broadcom. i know you can't speak to this. do you think the size of the deal would be an outlier? david: it is still a very large deal by any stretch. bringing us back to the technology space, when you look at large-cap tech and these companies that have $5 billion plus market cap, they have not participated in the

consolidation. is it possible one of these big companies wants to enter a space and does something significant? sure, that's possible. by and large, $100 billion will continue to be a very big m&a transaction. emily: speaking about cryptocurrency, so much curiosity about it. how can goldman help clients who are interested? david: we are watching the space. we are interested, too. when our clients are coming to us and say, hey, we want to learn about this, we are learning, too. we are clearing some future product for some clients. that activity is small. we have no immediate plans to start trading these currencies. there's a lot of hype and activity around this. we are watching the space cautiously. trying to watch it, like everybody else. we think blockchain is very interesting technology. whether or not cryptocurrencies become a real store of value and how that evolves is something we will watch carefully. emily: you've been vocal about

hiring and promoting women. what specifically are you doing at goldman sachs to make that happen? silicon valley has a big problem. david: diversity is hugely important to us at goldman sachs. it's hugely important for our business. for us to be successful with our clients and excel as a human capital organization, we have to have a very diverse organization. for 20 years, we have been working at improving the diversity of our business. one of the things we are very focused on right now is we hire a lot of people every year, particularly out of school young people. we have been very focused on trying to make sure the diversity of that group of people we hire every year out of school matches the diversity of the world that we are hiring from, whether it is women or black americans or hispanic americans. we are looking for opportunities to continue to increase the diversity of our population. over the course of last year, we made real progress. we brought the diversity of women in our summer class that will come in this year up from something in the low-40% to the

higher 40%'s by focusing on that entry point in the pipeline. if you do that and your entry point where you're hiring a lot of people create a more diverse population over time, attrition for men and women is pretty much the same, you should do better at having a broader pool to promote more women through the organization. emily: i found it interesting that, if you look at the numbers at the top banks, they are closer to 50-50. there is still some work to do when it gets to women in leadership. silicon valley, the numbers are more dismal. more like 25%. women account for 7% of investors. how is it possible wall street is doing a better job than silicon valley? david: you have to put some of this in perspective. when you talk about silicon valley, you're talking about a broad universe. a lot of the companies we have been talking about in the last few minutes, when we talk about technology companies -- google is not 20 years old yet. you talk about facebook, it's 15 years old. you now amazon, a little bit , more than 20 years old. these are very young companies.

and so, in the context of getting focused on this, they have only gotten focused on it more recently. goldman sachs started getting focused on this in the early 1990's, mid-1990's. and we still have a lot more work to do, but we have made a lot of progress because we've had that focus. we've had leadership from the top who focused on this as a strategic priority for the organization. silicon valley is getting focused on it. it takes time. emily: david solomon, president and co-coo of goldman sachs. and, coming up, we will speak with famed venture capitalist bill gurley of benchmark capital. also, of course, a big-time uber investor. looking forward to this one, just after this quick break. this is bloomberg. ♪

emily: welcome back to "bloomberg technology." we are live from the goldman sachs tech conference in san francisco. i'm here with bill gurley, venture capitalist, investor in uber, stitch fix, and more. and selina wang, our bloomberg tech reporter. bill, you just got offstage. one of the things you are sounding the alarm right now is that vc's are being too nice. you know nobody wants to be a , nomad. hurting thectually industry and hurting companies. what are you most worried about? bill: this is something that has probably been going on gradually for like a 20-year period, rather than something that just happened yesterday. if you go back years, decades ago in the venture industry, there are famous people who are known --. valentine was known for coming into a boardroom and demanding -- the world was more oligarchic back then. that's the issue, right? hypercompetition has made it so the majority of vc's biggest

fear is missing out on the next investment, so they are afraid to have a reputation as someone who asks too many questions or pushes too hard. and i think it has led to a situation where there is not a lot of stewardship or discipline and results. and that kind of thing. emily: what can be done about that? phil: i don't know. it's a tricky problem. the thing that led us here is -- it's the systematic competitiveness. emily: has it happened at uber? bill: i didn't bring it up related to that. when i talk -- there's a lot of by side investors here who are increasingly reaching down into these private companies. when they hear that, they are like, that's what i just experienced. >> we've seen this low interest rate environment fuel this type of capital. how does the rate increase impact the vc industry? bill: the smartest investors in the world tell you macro isn't possible. i offer a caveat before i offer any commentary on that front.

i think it's extremely likely -- high probability that a lot of the issues that exist today in our industry and a lot of investment categories are due to this excessively low interest rates. director miller has made a name in macro investing. he says, if you give texas oilmen the ability to drill holes, they will drill as many as the you possibly can. -- drill as many as you possibly can. low interest rates drive speculation, and there is clearly more money in late stage available to these private companies than ever before. $500 billion private rounds was unthinkable. the smart people would say that inflation is on the come and that that will cause the fed to raise. it may not be a wall we want to look over. we'll see. emily: you mentioned you've talked to softbank. they are coming in now with more money than anyone. is that a concern for you? is it boxing you and other vc's out?

bill:, well, look. one of the things i talk a lot about on stage is that it's a natural part of a company's evolution to eventually go public. and one of the things that i believe strongly that i think is less well understood is that being public helps the companies run better. it's an enforced discipline. people are extremely smart. they ask very provocative questions. you have to be on your a-game. it delays the natural evolution. here is how i look at it. like it or not, it is a reality. it is a reality we have to adapt to, so we are spending time figuring out how to coevolve. we are always forced to play the game on the field. >> uber's financials came out yesterday. help us make sense of the huge spread. are the losses ever going to go away?

bill: i switched the board seat with my partner, so i'm not actually involved in those things being distributed. i'm further away and i'm super excited about dara and everyone and the things they are accomplishing, like with the waymo thing. there are some strong profit drivers. i'm very optimistic. we have a great new team on board that know how to run profitable companies. it will take some time. you are forced to play this game on the field issue, because there is still quite a bit -- emily: we're making that a t-shirt for you. uber-waymo, settled. how do you feel about that? they have avoided a long, drawn -out public trial. how do you feel about the new guard? are you hopeful that there aren't more skeletons? bill: i'm super excited about where we are now versus where we were. i think it's very clear from

london, waymo -- dara is starting to build up a track record of having put out these fires and attacked these problems, so i don't know if there are more. there may be more. but i have a high degree of confidence that our probability of moving through them is way better than it was. and i think he is starting to earn credibility in that role. >> you are in investor in both benchmark and uber. did you know anything about the hack before dara became ceo? bill: i did not. both uber and martin from hacker one spoke in front of the senate last week and went through all the details. >> do you think the developments here are going to impact bug bounty programs? bill: it's possible. i think people want to make sure that the structure and the systems that are set up are being used in appropriate ways.

i think both dara and martin have made comments about, if they could do it over again, those would become new policies that would get built into everyone's program. sheryl sandberg has said that it is the very best way to protect yourself. it is the only offensive solution. most security solutions are defensive, where you're building a bigger and bigger dam, trying to hold people out. this is the most levered way to attack. emily: i just wrote a whole book about improving diversity in silicon valley. katrina, one of your founders, we tell her story. you were one of her investors. you said yes when a lot of other people said no. what specifically are you doing at benchmark to get more women on the benchmark team and to improve diversity at your portfolio? bill: yes, well there are a , couple of trends that are super helpful in this regard. i think people like you sounding

the alarm and raising awareness is super helpful. what you've done is amazing. and all these people are talking about it. it heightens people's attention. i also think that the other thing we can do is point out the progress a little bit more than we have. if i look at all of our companies in the executive room, it's remarkably different today as a percentage than it was. even in the boardroom. executivekatrina's -- woman, woman-majority board. it's an outlier. it's a data point. highlighting that data point can be successful. just by happenstance, and it relates to the progress being made, i sit on four boards where the women are founders.

so, things are happening. i think it is continued attention from -- here's the problem and continued attention about progress. drawing attention to the progress, you invite more people to try, which is helpful in the overall process. emily: bill gurley, a partner at benchmark capital, thank you so much for joining us. and selina wang as well. great to have you and to hear about what you guys are doing. coming up, we will talk about warren buffett and ibm. that's next. this is bloomberg. ♪

emily: welcome back to "bloomberg tech." we're going to get back to our editor-at-large, cory johnson. news, cory, that warren buffett has dramatically reduced its stake in ibm. what can you tell us? cory: he has decided to get out most of his position, pretty much out of ibm. and pretty much everything else. tom giles joins us now. bloomberg technology editor. glad to have you sitting across from me. tom: good to be here. cory: i want to show this to you and our viewers. which it shows what happened to ibm's stock while buffett was

building his position. so if you look over here on the left, you see buffett increases his position, the green line. the stocks around here, unlike many warren buffett holdings, the stock did not go up while he held it. it went down. tom: it went the wrong way. he held it during a really rough period of the ibm story. after ginni rometty took over, from her predecessor, paul fasano she really tried to right , the ship. she changed some of the ways they were doing things. the buybacks slowed down. she tried to invest in making this a provider of cloud computing services and getting away from the old ibm, mainframes, services, hardware, etc. she's come a long way, but it happened very, very slowly. it's a big ship, and you don't turn a big ship overnight. cory: i think you are being too nice. i've never been accused of that sitting in this chair. ceo of an important investment

banking firm was with me this morning, and we happen to that happened to -- and we happened to talk about ibm. we all laughed around the table. shrinking revenues and rising earnings per share -- who is going to fall for that? warren buffett fell for that? tom: i wanted to leave that to people who know more about it -- he avoided technology. i want to leave that to people who know more about it. invested iny, he things that you understand, that i get. mcdonald's, for example, is one of the notable investments. cory: but he has also owned american express. he's been in all kinds of things. tom: things he understood and berkshire hathaway understood. tech, they avoided. although they have been changing , that. big holder of apple lately. so he has definitely changed his tune in that regard. charlie told bloomberg a while back that better version two technology -- that aversion to technology might have been one of their biggest mistakes. for some of these companies, they were right.

cpry: ibm's profits went from $16 billion per year to $6 billion per year. it is a worse company from before he got involved. you are the best, tom giles. bloomberg technology editor. emily isn't he the best? ,he is the best. emily: he is the best, as always. tom giles, our senior tech editor, and cory johnson, our editor-at-large. thanks for holding it down at home base. we are live here at the goldman sachs tech conference in san francisco. thank you so much for watching. we would be back at home base tomorrow. this is bloomberg. ♪

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