♪ caroline: this is "bloomberg technology." coming up, walmart's largest deal ever. the retail giant agrees to buy a 77% stake in flipkart, in an effort to ward off amazon. plus, a deal that will shake up the broadband market in europe. and uber critics. customers will hail flying taxis sooner than you think.

we will hear from a top uber exec ahead. coming up, the battle for e-commerce supremacy has zeroed in on india. walmart has agreed to pay for a 77% stake in india's largest online retailer, flipkart. it is walmart's biggest deal ever as the retail giant looks to fend off amazon in the world's second most populous nation. the news came as a surprise announcement by the softbank ceo, who spoke to a room full of investors in tokyo before the deal was fully confirmed. for more on the deal, we are joined by matthew from bloomberg news in new york. amazing way that it was given to the public as a journalist, but what do you make of it? what is walmart buying into? matthew: they are buying into india. this deal was about getting

ahead in an e-commerce market that is exploding. india has the second largest population of internet users in the world. walmart needs to get ahead in this market to battle amazon around the world. it was slow to get into china. it does not want to make that same mistake again, so it was willing to spend that much money on a business that is really not profitable yet, and that's what you saw in the share reaction today. investors were cautious about this. the shares were down 4.5%, but they have recovered. caroline: just looking at the walmart capitalization of walmart, perhaps taking a hit. it continues to need to build up investor confidence. viewers can have a look at the beliefion in amazon's factor. in the blue line, you see

amazon's market sector capitalization at almost 800 and, but almost a quarter of that is where walmart currently languishes. clearly market cap is so much more for amazon, but the revenue is hardly anywhere in comparison to walmart. money has brought in more at bricks and mortar at the moment, but the belief is that amazon will keep getting that much bigger. will walmart be able to be the key player in asia? matthew: they want to be. this is definitely a battle taking place around the world. let's not forget the u.s., where walmart makes most of its money. another reason for the skepticism is that walmart's e-commerce business in the u.s. took a tumble in the holiday period, so that raised investor concerns. you can look at the market caps, and amazon's does dwarf walmart's.

this is a necessary step. it might be a painful step as well. walmart was very cagey today in terms of saying when flipkart is ever going to turn a profit. it will help walmart from an e-commerce perspective, from an innovation perspective, and maybe even a talent perspective. caroline: what about a payments perspective? they are buying into that area of flipkart too. matthew: when you talk about what it is about flipkart that really impresses you, it is this mobile payment app that flipkart has. they have a couple of fashion sites as well that do particularly well. walmart is getting into fashion in a deeper way.

they are doing a deal with lord and taylor. for walmart, that really excites them. it's not just an e-commerce startup. there are elements and assets within flipkart that walmart thinks they could learn from and maybe even incorporate into their other international operations or even the u.s. caroline: no one will be better positioned in asia, says the ceo of walmart. thank you very much. meanwhile, one of the biggest startups on the planet has big plans. uber is holding its annual summit in los angeles, highlighting its plans to partner with flying cars. eric newcomer joins us with uber's chief product officer, jeff holden.

eric: we are here at this amazing flying cars -- the phrase i'm going to use -- conference. do we have a flying car right now? >> we definitely do not. this is the very beginning. this started as a deep investigation -- can we actually take the business model of ridesharing into the sky? no matter what you do on the ground, you are always limited by the fact that it is a two-dimensional road network, and there is so much more mobility bandwidth in the sky. we did a deep dive on this a year and a half or two years kicked thist whole thing off. this is the second annual summit. eric: uber is the convener here, bringing the software to it. you have five vehicle partners now.

what are those vehicles? what do they look like? >> the vehicles are different from what you might think of as an urban aviation aircraft, which would be a helicopter. these are all electric, battery powered aircraft, and that enables us to design a different kind of aircraft that is much more efficient and quieter, has smaller rotors instead of big rotors. we think it will be so quiet, it will blend into the soundscape of cities. it uses a fixed wing for cruise flight. eric: they sort of look like planes, but a lot of them have rotors. jeff: right, they have a system to take off and land, but they can do a cruise flight. it is optimized for this specific use case. eric: your first goal is 2020. what do you want to have happen then? jeff: there are two major milestones. one is demonstrator flights,

which we will have by 2020. these will not be commercial flights. dallas and los angeles are our launch cities. in 2023, we want to start commercial flights. you will be able to push a button and get a flight. eric: wow, how confident can you be? i guess the biggest question is, what is the biggest barrier to that happening, the technological, regulatory? jeff: it is hard to say. there are no barriers that i would consider showstoppers. there are fully funded vehicle programs running full speed ahead with capable partners. boeing just acquired aurora. these are very capable builders. on the regulatory front, you saw some of the discussion yesterday -- this is relatively new territory.

we had a fireside chat and discussed some of these things. there are new challenges that come with this kind of aircraft that will require different types of regulatory approaches. it's a different kind of aircraft, so we have to figure out how to certify that. but there is a lot more technology in the cockpit. eric: how autonomous are they? right now the design is generally what? a pilot in the front and four passengers in the back? jeff: we will start with a pilot. the autonomy software will be there from day one. the pilot will be operating a fly by wire system to control all these flights. eric: you can have multiple vehicles landing in the same area, right? jeff: exactly. we will go through high throughput situations. the vehicle will be operated by pilot, but it will be a different kind of control.

we will be running autonomy software that will make decisions, but not execute, and we will basically build a statistical case that it is safe, and only then will we transition to autonomy. eric: you are a future-looking guy. i am sure there are people at home and say this does not exist. what would you say to that person? jeff: a few things have happened that would make this confluence possible now. one is that battery technology got to the point to where you have enough density of energy that the battery can carry itself through the air with motors, and then you have to carry payload on top of that. we are well past that point. that enables a different kind of aircraft with low noise operation.

then there is the autonomy technology, the ability for fly by wire systems and so forth. that is the second piece you need. the third piece is the ridesharing business model. there is a showed that is popular called "popular mechanics" covers from years ago showing people taking off in their front yard. the original model will not work for this. i gave a talk yesterday about this -- at least when cars were invented, there were already roads. imagine if when the car came along, all there was were trees? eric: there is a lot to make happen at once. jeff: yeah. we have to build the sky ports. to fill the sky ports, there has to be enough people flying these things. ridesharing brings that because it is already a scale model, and

we can incorporate it into the apps overnight. eric: what government has to get the ok for this to happen? jeff: between the faa and the european equivalent, they control 80% of the world's airspace, so it is important to have those two on board. eric: that's great. thank you very much. jeff: of course. caroline: that was eric newcomer in los angeles with uber's jeff holden. coming up, facebook announces a major management shakeup, the biggest reshuffling since the company began. this is bloomberg. ♪

caroline: facebook named new leaders for its key divisions, including whatsapp and messenger. it is the biggest reshuffling since the company's founding. facebook is looking to move past the cambridge analytic a controversy and keep the trust of its users. will the rest of 2018 pave the way for facebook's comeback? let's bring in an analyst from global x funds in new york. they have facebook and tencent among its holdings. and with us in london is alex webb. jay, is this the sort of uffling that is needed at facebook? >> social media companies are trying to move their leadership around to explore things like what chain and grow their product offering. if you look at how high growth has been, there has been a lot

of pressure on these companies to continue to push into these exponential technologies where they just have to the kind of the leaders in the technology space. caroline: a mention of blockchain. it's interesting that we are seeing david marcus, the ceo of paypal, come to facebook. he is now leading this division. do we know much about it? >> not really, but what's interesting is the approach toward privacy and the ability to delete your data. it is hard to square that with blockchain, which is distributed it all over the place. that is one of the biggest complaints. the blockchain enthusiasts say europe is going to be behind on this because it is not technically possible anymore. caroline: so you think the ledger and the use of it can never be deleted -- will that hinder or help the fact that facebook is trying to become

transparent and easier to digest in terms of trust? alex: it is technically more transparent because your data will be in a ledger. it is an intriguing question because it does not have a simple answer. caroline: jay, give us a sense of some of the other key moves. you mentioned the interest of blockchain. what about the new head of instagram? instagram perhaps has an opportunity to steal market share away from snap as it has its own trials and tribulations. jay: they are trying to segment the market. what you have seen from users on facebook in terms of desktop and mobile, it is migrating toward an older generation. you are seeing gen xers and baby boomers more involved, for as moving in aare different direction.

they are kind of moving assets around with instagram being more of a high-growth opportunity. it is funny to say, but the traditional facebook app is kind of long in the tooth, so they will be moving around resources to focus on the higher growth opportunities. caroline: what about the growth opportunities we saw in europe? alex, you mentioned gdpr. a much more stringent regulation is coming into play in the eu on may 25. having moved from san francisco to london, how do you think the social media landscape is adjusting to that? alex: the instagram piece is interesting, because outside of the u.s., we are not necessarily aware that instagram is owned by facebook. in europe, there is a huge amount of antipathy towards monetizing data. they have to find other ways to

monetize their users, not just their data. charging for their new data services something they might be considering. with instagram, something interesting and perhaps a massive misstep is that when you open the snap at, the first page is to create content. on instagram, the first page is to consume content. that is a substantial difference in the way it is framed, and therefore how it is easier to monetize. caroline: talk about monetization. are we going to see a change, the way we monetize? jay: i don't think there is going to be a wholesale change. data is their most valuable asset. that is why twitter and facebook are free, because they are collecting data and monetizing it. to expect them to change their model away from monetizing data

is unrealistic. there is something they can do about making that data more secure and anonymous, and making people feel more comfortable with giving them their data. that has come to light in the last few weeks. it is their data capital, and they will continue to monetize it as much as they can, because it is incredibly valuable, what they know about it. alex: by offering a paid option, that will actually serve to underscore the value of the free option. you, thatart paying mean bymisses the early making money from that, but it justifies more readily the consumer the value in this free product. caroline: fascinating. jay, great to get your perspective. coming up, we speak with the ceo of the world's largest privately

held semi conductor company. that's next. this is bloomberg. ♪

caroline: globalfoundries is the world's largest privately held semiconductor company. the company provides a variety of services to some of the worlds largest technology companies, including qualcomm. erik schatzker visited the lab in new york earlier this week and sat down with the ceo, tom caulfield, to talk about his priorities as the new chief executive. >> we have an immense set of assets around the world, and part of our sustainability is getting better return on those assets. the priority for this team is, let's take advantage of these assets we have deployed around the world, make sure we are

filling them with the best products for us and our customers, and it will crank up our financial return. >> how do you get a better financial return? tom: for me, it is three things, productivity, cost reduction, and efficient manufacturing. >> but they were doing it before. tom: they were. maybe it is best suited for others to manufacture, and we can deploy assets in more value-added solutions. and the value we create, we have to do a better job of capturing that value. >> what kinds of products might you exit? tom: we have technologies and products that were four or five years ago and had a lot more value to our customers. we look to redeploy those assets

on different features. for example, non-volatile memory. and into the portfolio for more value rich capability. >> if you are successful, you will take your return from what now into what in the future? >> i have to be careful, my boss may be listening. [laughter] >> why has globalfoundries been such a challenging turnaround? tom: i think a piece of this has to do with integrating. remember, the whole reason globalfoundries came into existence was because amd needed to choose between being a product company and a manufacturing company. the best of us is when we make products, and we don't need real scale to make products. they spun off the manufacturing operations and gave birth to

globalfoundries. on day one, just because you spun it out does not mean you fixed the problem of scale, so immediately in organic growth was the play. it was important to get that scale. the organic investments here in malta, and inorganic with ibm. the biggest problem with globalfoundries was getting the economic scale to complete, and we are starting to get to compete, and we are starting to get to that tipping point. caroline: coming up, vodafone is challenging deutsche telekom on its home turf with a $22 billion deal for liberty media assets. we will hear what the deutsche telekom ceo has to say about its rival. and bloomberg technology is livestreaming on twitter. check us out @technology.

this is bloomberg. ♪

caroline: this is "bloomberg technology". up europe'sshaking fragmented telecom network with a deal. carriers face major competition from digital players from news caused waves particularly in germany where vodafone has drawn rebukes from its closest rival, deutsche telekom. we spoke exclusively with the deutsche telekom ceo about the

entire. take a listen. >> i think the deal is unacceptable. there was a time where they were not about to sell the cable business in one piece. it was sold in three pieces and now all three pieces are coming together under one and the roof of vodafone. we are building the rule of germany with fiber infrastructure. let's see where vodafone are going. in they willing to invest rural areas? the media industry, almost 60% of our market is monopolized, is this good for democracy or the media companies in society? i question that, 25% of our households in germany are insufficient and there is no exit for deutsche telekom.

my last point is we have a fully whereted deutsche telekom we are building infrastructure. regulated andt eyey say they are at level with us on structure. something has to change in the regulatory environment, because if they are a giant in this environment, what does it mean for regulation? therefore, we are asking for deregulation going forward. we are fighting for fair competition for the industries of our customers. >> what are you specifically going to do about this? are you going to go to regulators about these complaints? >> i think there is no m&a

possibility in the market we are operating. what i would do is to make sure that politicians, the leaders and authorities deciding on this deal understand the economic situation by this transaction. i am not asking for the next telecom, i am asking for a fair competition and possibility we are able to fight with the same weapons and send pricing and same network infrastructure as they are going to be able to do so. >> let me ask about the merger you are pursuing in the u.s. with sprint. regulators in the past had an issue with this combination, why do you think it will go forward this time? >> the market has totally changed. if you see today, all the costs

from comcast to charter are announcing that they are going to a market that is having a fixed and mobile combination and shows the market is not just a pure mobile or pure fixed market, it is a conversion market. the second thing we see is that rural america is getting competitive and installing 5g infrastructure. we need scale and the capability to utilize this if researcher. -- infrastructure. and to build 5g infrastructure not only for big cities but especially for rural america. caroline: impassioned deutsche telekom ceo. and how the vodafone deal will

shake up, alex would want about what liberty media challenge could do alone. this is a big deal, 18 billion. taking that th debt in order to acquire this company in germany. he has a weaker market competition in places like poland that are promising, but people talk about content in the u.s. we are seeing the carriers are moving with some speak into the content space. we see at&t who want to get time warner, and comcast making a play to acquire sky, it seems logical to go for a big content player. he would be able to get a massive studio, but something like lions gate, that might seem like a logical play.

he could boost his stake and encourage greater organization among smaller players. caroline: we were talking about distribution of vodafone. structure about the vodafone wants.he phone onc >> vodafone is trying to decrease in germany and its easy start market there, and for other reasons like the connections they'll be getting

through 5g. the way to have structured the debt is in trying to reduce the likelihood it gets for that rating. is increasing its target to leverage, and it is outside of the comfort range. by offering convertible debt against rated differently and more favorably by the agencies and also doesn't dilute in the short term and can buy back in a couple of years. caroline: let's talk about europe and consolidation. the u.s. is an enormous market where there are concerns about players and becoming three. in europe there is an ongoing call for more cross-country consolidation. do you think regulators are going to let this happen? >> they haven't in the past, and

there is a narrow tight rope to tread. to get some more pricing power but also does and what it to be vodafone, it wants it to be someone else. i think we see it in france as well, there's a deal in the works that is a big question mark. in germany the argument is it is going from three operators to two operators. caroline: let's see how the regulators react. great to have your reaction. up, alphabet is rolling out new features and upgrades from google's businesses. that is next. this is bloomberg. ♪

caroline: google introduced new products and technology upgrades at its annual conference this week, driving home it's superiority in artificial intelligence and commitment to augmented reality. i and in >> you get off the subway entrance to find where you are going and you turn to google

maps in the frustration is there were you're not sure where you are going. what is >> >> to situation is familiar where you get off the subway and figure out where you are and you walk 10 feet that way and see the blue dot move, and as because urban settings, gps doesn't always work reliably enough to figure out where you are. we are working on vps, a visual system where you and i would use with landmarks in the environment figure out where we are and navigate, using similar visual features to help you figure out where you are get you going. >> google is sitting on this massive asset. this taken so long? >> it is about the culmination of a number of technical investments coming together from

to make sense of signs and things like the visual positioning system to help and for exact location. and the building out our map data set and that is many years in the making. >> today's announcements are focused on mobile, anything of mobilecapabilities phones other than headsets? >> i think that things will happen in augmented reality in the coming years from but everyone has a smart phone and camera and there's enormous opportunity to improve products and improve user experiences using the device we already have. google lenses about that and exploration we showed in walking directions is like that and you will see more in the coming days. >> you think the vr market is 10 years away from

taking off? >> i don't have a crystal ball that we see promising adoption of it. we believe in long-term promise and last week we unveiled a partnership with lenovo, which is our first standalone headset. -- talk to metee about where do you see the killer app? >> there is one killer app that tips everything. we see it as a long ramp up and you will see breakthroughs in and around the area we talk about today like mapping and search where instead of trying to enter a long keyword-based search to figure out what the car in front of you is or that dog, you can show your phone and get answers instead of fighting with the blue dot to figure out where you are going. the phone can lead the way. >> is there potential for

businesses, like using augmented reality and mapping to connect with businesses? >> we think there are opportunities, but it is so early and the focus for me and the team is getting the products right and making them useful and helpful to users in everyday life. if we can do that we can do other things in services and businesses. >> are you playing the harry potter game? >> i sure am, and i am a big fan of the franchise and the two together. alphabet vrat was and i are ceo. chang caught up with alphabet vp of news and cover

how the company is fighting back fake stories. >> this is all done with machines in our judgment in terms of what is the most important story of the day, you could think of it as crowdsourcing editors and we look at other news organizations and what they are covering and how they are covering it, and with algorithms, that determination as to what the talks really are, so did a feeling that google news right now it will be about the administration decision with regards to the nuclear deal with iran. emily: algorithms and machines are the part of the people who create them and in the world a fake news you are focused on prioritizing authoritative sources. how are you making sure the decisions you make about those choices and sources are the right decisions? >> in assessing authority we use many signals to get to that point. and in those cases we are not

making specific decisions about what sources good or bad. we use hundreds of signals the copies that and readings that we have evaluating our results on your regular basis and give them good guidance in terms of how they evaluate specific articles in their level of expertise in the authority and reflect that in our machines to continue to make the best judgments we can. but only what is the important story at any given time, but what are the best sources to be servicing to give us the right information about that story? emily: how would you rate your efforts to combat fake news since concerns about fake news has come front and center? >> as far as we are concerned we can always improve what we can do. what keeps us awake at night is the trust of our users. we are constantly evaluating and evolving our approaches to

security and we recently announced results against breaking news events. we shift our models towards authority in those times when news is breaking and attracts many bad actors. we want to make sure that rumor not run fact. in those cases we should even more forcefully towards authoritative sources. it is an ongoing -- that our lives aren't perfect, but it is up to us to evolve them so we do the right thing. emily: the primaries and midterm elections are happening, is anything specific you are doing to prevent misinformation, particularly around political campaigns, given what we saw with the last election? richard: absolutely. too with elections i

would take the same approach we are taking with breaking stories. they are important events that know. we step up our approaches in we step up our approaches in caroline: that was some of our conversation with google's phoebe of news. coming up, more on uber's flight car ambitions. that is next. this is bloomberg. ♪

an activist firm presented tesla shareholders was

the carmaker to shake up its board. ctw opposes the reelection of three board members were up for what next month from claims tesla has veered off the path of profits and says the board is beholden to ceo, elon musk. that had back to google's summit in los angeles -- uber has five current aspirations and developing a flight vehicle carnologies for electric taxis and released three sets of design ideas that pushes partners to experiment with new types of vehicles. eric newcomer is on the ground in los angeles and caught up with their founder. he is an entrepreneur and future builder of space colonies, and eric asked about the ability to pull off flying cars.

>> my friend, the chief officer at amazon who created amazon prime when he was there and at uber created uber x and uber eats. the guy delivers. they have a global platform and in the 50 million people per day and have the ability to do this. i believe the are going to pull it off and i can't wait. >> what do we call this technology? flying car? peter: i don't think it will be named flying car. in the early days of cars the called them horseless carriages. they could be air taxis, jeff is using the term aerial ridesharing. it is just not flying car, you

,re going from a flying airport in old abandoned parking garage, you are in an autonomous uber or aerial transport. aerial ridesharing where you share your ride with people in the air. >> any rivalry? do you have a stake in underground transportation? peter: one thing that is clear is that you, me, everyone else has one thing in common. we have 24 hours a day and seven days a week, and it is how you save your time. airplanes and try to

save time wherever i can just to avoid flying from lax. anything that gets me there quicker, autonomous cars is going online right now and waymo is operating in 10 cities and we have aerial ride sharing dozens of companies building these vehicles. we have elon musk, we have hyperloop one, fact of the matter is we announced, instead of getting out of your home, put on your vr goggles and go do your shopping. we will figure out how to save time. >> it is striking to me how much of the investment is in the private sector with transportation. it used to be a huge government endeavor. nasa is here and supportive but it seems like the heavy lifting -- peter: it is about risk-taking. you're not going to see the government doing this. the government will support and provide policy and eventually

adopted but they are not going to invented or take the risk. >> how close is hyperloop one instructing one of these partnerships? peter: in the middle east and asia, the programs are under development. richard branch came on as a chairman of the board and is blowing it through the roof. we have amazing technology right outside of las vegas. my kids are never going to drive. flying point-to-point or hopping on the hyperloop one is the future. caroline: now, developing news. california has voted to require rooftop solar powers on new homes and become the first u.s. state to impose this shows you solar panels is less of a niche product and shows the potential future and the norm. that does it for "bloomberg technology".

tomorrow we have more highlights from the uber summit. that is all for now. this is bloomberg. ♪

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