♪ emily: i am emily chang and this is "best of bloomberg technology." coming up, our exclusive conversation with keith block. has first interview since being named ceo. president trump's campaign against what he is calling unfair search and social media. what are his next steps and our technology companies responding? a dramaticas made u-turn on his controversial attempt to take tesla private.

we wrap up the saga of the deal that never happened. first tour top story, salesforce gave a disappointing forecast in its latest results. revenue came in below expectations. the san francisco-based software maker has promoted keith block as well as another ceo, embracing co-chief executives. him forwn with exclusive conversation and talked about his experience as co-ceo so far. >> we are certainly in a situation where mark and i have been working together very closely. we have been together for over five years and have known each other for a long time. this is a natural extension of the model we have been working together. we are a large global enterprise that has been growing quickly. tos is an opportunity for us put together a decision-making

process and make decisions quickly far customers. emily: he is a cofounder of the company and a big personality. how do you decide responsibilities? >> it is a very trust-based relationship. it gives us an opportunity to focus on our strengths. when you think about mark, as you described him, he is a visionary who has great ideas around the product strategy, an outstanding ceo, passionate about the culture. my focus is on growth, execution, and it allows us to focus on our strengths and areas of expertise. emily: co-ceos have not necessarily worked out in other cases. some might say it has prevented the ability to be decisive. how do you overcome those historical precedents? >> i think it starts with trust. we have a very trust-based relationship. we are both trusted advisors to each other who collaborate all the time and make decisions together. this asthis session see

a way to -- we see this as a way to execute at scale. we are excited with what we have done in quarter to and this is a great operating model for us. emily: you have boosted your forecast for the year on the stock is down. what should investors be looking at in this quarter? >> we are thrilled with these results. we are the number one leader and number one category in enterprise software. we are growing at a rate that is twice the rate of the market, so we are taking shares, we are driving success with our customers, and we are very pleased. we are operating at scale, growing at scale, and everything is going well with the company. emily: you said you are well on your way to the $23 billion in 2022. what do you need to do to get there? what will you do to get there? >> i think that growth strategy is in place. we think about international expansion.

we are super excited. it was a 28% growth. we think about our focus on industries and speaking the language of our customers. we are doing some incredible things in financial services, in the public sector. we have the world's largest ecosystem in the cloud, great business with our systems integrators, so we are thrilled with our growth strategy. we are on our path to the $23 billion goal, which makes us the fastest-growing top-five enterprise software company in the world. emily: what are the white spaces ucf there that still exist -- that you see out there that still exist for you? >> we are considered to be one of the most innovative companies in the world. having the market share leader in sales, service. solutions,r industry international expansion, all that realizes great customer

success. emily: salesforce has been known for making big deals. how much will a mandate be part of this -- m&a be part of your strategy and where? >> our ideas always come from our customers. we listen to our customers. they give us our great ideas. our most recent acquisition and two, we gotthey -- that idea from our customers. emily: i've heard plenty of salesforce acquisition rumors. we've heard twitter come up. is that something that has ever been of interest? >> will listen to our customers and that is our guiding light. that is how we decide how we innovate. emily: let me put it this way, would you do a deal that big? are you open to big, potentially

transformative deals? >> real soft was a largest acquisition we have done in the history of the company. emily: let's talk about international expansion. what is the actual status? that is where salesforce has a lot of untapped opportunities. >> we have made a lot of investment to drive growth in the international space. strategy borns a out of driving success for our customers globally. we want to be able to service our customers globally, so there is a lot of room to run. we are excited about those results. emily: you worked at oracle for 26 years. benioff trademarc barbs many times. is oracle in dire straits as he seems to think it is? >> i have been with salesforce five years, just celebrated my

fifth year anniversary in june, and i cannot be more thrilled to be here. emily: who is the competition then? >> there is competition in every moment -- element. -- ouregory of crm category of crm continues to broaden. we are growing at twice the rate. of the market, taking share, operating at scale, growing at scale, executing at scale. our job is to focus on our customers. we have over 30,000 employees that wake up every single day and are focused on driving customer success. if we take care of that, everything else will take care of itself. emily: as the company continues to vertical eyes it's sales strategy, where the sale sectors tsat you will -- verticalize i

sales strategy, what are the sales of sectors that you will --? what should we be looking forward to? >> dream force is our big event of the year. millions of viewers online, it is a celebration of innovation, success for customers. it will be at the end of september. it is always a great event. emily: obviously the cloud is growing. but yet, it is a war between amazon and microsoft, and google, and potentially salesforce, depending on how you look at it. you have any concerns that those big companies will make it impossible for a company like you to ever get there? >> we like to think of ourselves as a big company. with are the number one category leader and will be at $23 billion by 2022. these are our partners.

emily: it's always difficult with salesforce and some of these other companies like dell to draw the line between friend and enemy. >> this is not unique to the cloud. this has been around forever. as long as your transparent with your partners it works out for the customers. emily: that was our conversation with salesforce ceo keith block. google response to criticism from president trump that news search results favor the left. check us out on the radio and listen on the bloomberg app, and on bloomberg.com. this is bloomberg. ♪

emily: instagram has announced it will now offer users the option to use more secure third-party identification apps

-in.ock in -- log president trump in the meantime has issued a warning to social media companies after he accused google of rigging search results to show negative news about him. google, twitter, and facebook are treading on troubled territory. they have to be careful. it's not fair to large portions of the population. emily: google responded to the accusations, saying that when users type queries into the search bar, our goal is to make sure they received the most relevant answers in a matter of seconds. we don't bias our results towards any political ideology. we sat down with some guests. >> he might have a little bit of a point in that some of the new

conservative sites are farther out on the right more conspiracy minded, probably aren't showing up very much in google search results. beyond that, fox news which he loves and watches religiously, comes all the time. we hear this from politicians all the time. you only write the bad things. that is kind of what the news media does. it is a common critique and something we hear a lot from the president. emily: what has been the response from google? >> i was talking to some folks that claim that this is outrageous, that the idea that google does this intentionally. they dealt with this two years ago with the notion that they were suppressing negative search results about hillary clinton. here is thatssue google for 20 years has been pretty secretive about its algorithm and has not shared

details. that can increase conspiracy theories. facebook and twitter have done a lot this past year dealing with criticism and the other direction, that they served misinformation. that's what sort of like to this moment. emily: you spent a lot of time in washington, kate. what do you make of the fact that facebook, google, and twitter are under attack by the president? >> it will be interesting to see. they are big platforms. when you look at the largest companies on the planet, and a lot of them come out of silicon valley, so of course they will be in trumps crosshairs. he will hear and read about himself and the people he cares about all the time. i think they have something to potentially be worried about were involved in. you see them starting to take a much bigger role.

they have more communications, more senior people will be showing up next week to talk to the senate intel committee on the broader issue of russian meddling in the election and how we prevented going forward -- prevent it going forward. certainly everybody worries about regulation, but they can't that needs something to be discussed when we talk about communications. and is it fair and equal? emily: larry kudlow said they are taking a look at google. does is at the same time that google is exploring, expanding back into china with a censored search engine. what could the government actually do here? >> in terms of news, there may not be a lot that the government can do. there is a liability shield that internet sites enjoy it for third-party content. if you were to cut into that, google has faced a letter libel

lawsuits and think -- a lot of libel lawsuits and things like that. i have not heard a lot of appetite. the federal communications commission might have a little bit of an exit here. . they have shown no appetite generally to do this sort of thing. what i would be looking at is whether or not the government can do things on privacy or russian election meddling that would otherwise hurt the company. whether that is for coverage of trump or something else, i think that is what they are looking over their shoulder for right now. facebook, ceo of sheryl sandberg, and jack dorsey, ceo of twitter will be testifying before congress next week. google has said they will send cancel walk or -- kent walker. congress has said that's not good enough. >> they want to see the ceo,

pachai, but they were not subpoena him to show up. i would say he is much more in the mold of google founders. he is a product guide, engineering. he loves being in front of the company, the developer conferences. he does not love the politics and does not love sitting in front of and being grilled by senators. emily: is facebook making a mistake by not sending their top executive? >> it can be. that seriousness that facebook and twitter are showing is well received in washington and by the public. remember, we are part of the audience. i think it is a missed opportunity.

when of the challenges for all these companies is that data has been one of the biggest assets, their algorithms have been one of the biggest assets. they should perhaps be making sure they are in the conversation to defend part of their assets that are so important while being responsive to the public. i think not having somebody senior there makes their voice -- clout in the middle of this conversation. emily: facebook, google, and twitter recently altered down a rainy and backed accounts -- all iraniann a rainy and -- counts. after three-weeks of chaos, elon musk says he does not plan to take tesla private after all. investors still have a lot questions. this is bloomberg. ♪

emily: it began with the news that facebook has shut down 652 backed accounts tried to spread misinformation. it provoked the following reaction from facebook ceo mark zuckerberg. >> security is not something that you ever fully solve. our adversaries are sophisticated and well-funded, and we have to keep improving to stay at. . the shifter we have made from reactive to proactive detection is a big change and it will make facebook safer for everyone overtime. emily: one company helping to secure the internet is fire eye it is thanks to their warning that they were able to detect these accounts. >> you get a sense for these sort of things.

you start learning the trade craft of the adversary. a lot of times there is a direct link between folks doing cyber attacks breaking into the network and folks doing information operations. you cannot really separate them, but when i talked to the analysts that found this, a lot of it was luck, and a lot of it was their unique training and experience. they started pulling a thread on a twitter account that just did not seem right. thats anti-saudi, but character behind the account didn't feel right, it felt more like eight state-sponsored count. emily: you are talking about the lowest bounds here. what else could there be? we have to believe there are other countries doing this as well. >> i think so. when of the reasons we do all of these information operations is that it is tangential to protecting our customers. as i travel the world and meet

other department of defense and other government officials, everybody is thinking what is the government's role on offense , and the information space, what is fair game, what is not? we feel, let's find where there is disingenuous sites, where there is not authentic news and pointed out to folks this point it out to folks -- point it out to folks? emily: what kind of evidence have you seen? >> if we see evidence, we will tell folks, but at the end of thinky it is foolish to it won't happen. emily: we had microsoft president brad smith on the show last week. they also identified several webpages operated by a group tied to the russian military. they took control of those webpages. take a listen to what brad smith had to say. patternwe see now is a that in many respects is a

similar to what we saw in the united states in 2016 when certain campaigns and political parties were attacked. it is similar to the pattern 2017,e saw in france in when we really saw every major candidate for the french presidency targeted. we're seeing it again. emily: would you agree with that? >> i. think it makes sense if you're a political official, wealthy, influential, have power, you will always be targeted by a criminal helmet or potentially for espionage purposes. emily: what is the purpose of these misinformation campaigns? how difficult is it to stop? >> it will be very difficult to stop. the more people that are aware of it, the more people that will spot it. it is easier for the folks trying to be divisive it to spread fake news than it is to catch it. we will take a group defense, zone defense. we are out there looking for

it. we hope to make a difference. emily: what should we be looking at? my inbox is filled with spam every day. >> i think anybody can play the role. i think in general most people don't want to be surrounded by lies. they want to be surrounded by truth. when you see sites going up purporting to be news sites, but you know it is disingenuous, i think you have a right to know about it. emily: when you have a president that says google is completely biased and so is facebook and twitter, does that run contrary to what you are trying to accomplish? >> i'm not sure. i don't have an opinion one way or the other. we are trying to protect our customers the best way that we can. we just need to be informed. fireeye was recently

engaged by google to detect breaches. tell us about that. >> i don't know if they were recently engaged or not, but i can tell you we have thousands of customers that want to stop this and come up with -- we come up -- and relight on our intel. emily: what can you tell us about how much you have been approached by potentially new businesses in this new threat landscape? >> i think almost every business wants threat intelligence. ima subtype -- cybersecurity -- i am a cybersecurity expert. we need to get the intel out to every single entity so they can assess the risk to their industry based on their business, on what they know about geopolitics, on their current security platforms. the bottom line is that we promote the intel to folks so they can assess their own risk and better safeguard their own networks. emily: do think it is too late

to contact the midterm elections -- protect the midterm elections? >> it is hard to judge how the hearts and minds of people are won by anonymous people or fake news. emily: why is it so hard to stop? >> the anonymity of the internet makes it hard to stop. emily: do you think these companies have a bigger responsibility that they are not living up to? the fact that you tipped off of facebook but facebook cannot seem for themselves? >> i don't know if they could not see it for themselves. policing hundreds of millions of people worldwide would be a complex challenge to do. emily: coming up, apple's new iphones are likely to have a familiar design. what the world's most valuable

company is planning to double down on the iphone x. had -- on that had -- i ahead. this is bloomberg. ♪

♪ welcome back to the "best of bloomberg technology." elon musk has made a dramatic u-turn on his controversial attempt to take tesla private. after almost three weeks of fever pitched excitement, elon musk wrote a blog saying that the carmaker would remain public. he says it is clear it would be more time-consuming and distracting to take the company private than initially anticipated. i believe the better path is for tesla to remain public. with the distraction out of the way, analysts expect the folks fundamentals,he tesla's ability to turn out its .odel three sedan

he said when he tweeted that funding was secured, but if you look at both his statement on the reports that came out, you know, it was not there. this deal did not make a whole lot of sense to begin with. tesla has done very well on the public markets and the argument that this was going to be less of a distraction for the company, which is what musk initially said, did not initially make a lot of sense. this created a circus. emily: you have potentially andiple sec -- fcc fraud market manipulation. is this something that investors and analysts can easily forget? what has lobby plagued by uncertainty -- will tesla be played by uncertainty -- plagued by uncertainty for

the foreseeable future? >> i think he will be fined but be able to keep his ceo role. this was an issue of the bad process and that governance. i think it was motivated by elon's on frustration of dealing with short-sellers, investors that caused this. emily: what is the community saying? do they still want elon musk in this job? >> absolutely. even the critics probably would be cautious about just tossing him out. the fact is that the company needs to do so much over the next couple of years to justify its valuation, and even in the way that elon musk as failed to -- has to expectations

failed to live up to expectations, it's not easy to see how you bring in a regular car executive and do a whole lot better. a lot of investors see it as a bet on him, not as a bet on tesla or even electric cars. it's a weird box they have been in for the last year. emily: i wonder, has elon musk fundamentally undermined the trust that investors will have in him? we discovered multiple non-truths here, including that funding was not secured, and he was gone for five days from the factory floor, as he should and easily could have been, but there is this pattern of lying, essentially. >> he has never met his production goals and market and investors forgive him for that. look beyondhave to some of these short-term unfortunate issues and look to the bigger picture of what the company must do over the next

few years to increase production, bring up the additional models in the pipeline to justify the valuation. emily: max, talk to us about the potential penalties that could result as a result of these fcc inquiries. we have talked about potential criminal liability, fines. news is street research suggests that he could agree to certain controls on his communications. with that mean he cannot use twitter -- would that mean he cannot use twitter? wanted to squeeze his shorts, he probably would have been better off stopping tweeting. that probably would have cleared up a lot of investors and help them out. i think one thing that happened here is that we saw a crack in the support for elon musk, both on the board level and investor level. it's not that people want to dump him overboard or rein him in, but i think this combined

with some other stuff could lead to significant changes. those other things could be disappointing results in terms of bottom line production numbers, or something more dramatic from the fcc. emily: meantime, bloomberg's that three tracker appears tesla could have actually exceeded 6000 model threes per week this month. presumably, that is good news, if they can keep it up, but what are you actually monitoring on the factory floor? will be the target of 5000 and even potentially 6000 would be good. you don't want to ever increase the production too much, and then have issues with cars. i think in the bigger picture and what has happened here, there is a need for increased governance at tesla. this entire event may make tesla it better company and make elon

musk more focused on production and less distracted by the outside issues. is actually could be a benefit in the long-term. ivan find site of tigris financial partners. market -- mark your calendars. apple has announced it is holding its next event september 12. they are offering three new models of the iphone x this fall that will have a range of prices, features, and sizes to increase appeal. none will be completely new designs. gene munster and bloomberg tech's mark gurman joined us to discuss. >> we know there will be three phones that will all look like the iphone x. they will all have face identification. there will be one lower and lcd model that comes in several colors. it should be appealing for people upgrading to previous

, perhaps iphone 6 or iphone 7. if you're coming from an iphone x from last year, not a lot to see new this year. >> emily: is the sake -- is this a smart decision -- emily: is this a smart decision for apple? >> yes, it is. the reason why is that what they are trying to do is really inch up asp's. the streets are looking for flat asp's. if you just kind of look at the ,ap, the most high end phone the one that will be about 25% bigger than the current iphone x is probably going to start close to $1200. you kind of pull all of this together and what you come out -- ais an asp a probably 830 orly -- of probably $

$840 at its peak. nothing big number. now will week -- that is a big number. now we will have the most expensive one with the highest capacity at $1300. emily: do think apple will be able to make the lower-priced iphones, the older design that a lot of people are more familiar with? for the iphone x, it is new behavior to actually get used to that phone. >> i would look at the iphone 7 specifically, it came out in september of 2016. i would be pretty unsurprising if they kept that around, dropped the price, and made that the new low-end iphone. that is something to pay attention to. emily: talk to us about the colors? what are the options?

>> colors are fun. eaywill continue to offer gr y and silver, gre they are working on gold. the cheaper models, we are likely to see those three make colors, but also perhaps red or blue as well. and little bit more color this time around on the low-end phones. emily: what kind of growth are you looking for over the next year? some expect 2019 to be a disappointing year for the iphone. would you agree? -- it willink what )%-5% -- 0%-5% of

growth. i think we are shifting weight -- shifting away from --. there is one way we can see whether investors are starting to be more comfortable with a 0%-5% iphone growth. that at the stock action after they announced the iphone's. the stock has been moving up initially. this is typical in any given year. if it holds its gains, because usually it sells off, i think that is a sign that investors are ok with that flow of 0%-5%. as long as it is growing, investors will be fine. emily: if it grows at 0%, where does the growth come from? is it the services, purchasing apple music? >> part of it is services.

this other piece that is getting kind of that -- the layers are getting peeled back is around asp's. thanould see higher asp's we talked about. probably about 80% or so of apple's revenue. the other x factor, the thing that can get investors excited is the cash that they will be returning. we think they will be returning cash at twice the pace that investors think over the next 2.5 years. don't forget about autonomy and other things they are working on. there is a lot even though the stock is at an all-time high, a lot of reason for optimism. was mark gurman and gene munster. kiefer boeing.h

later, shares of the cloud computing company has skyrocketed this year thanks to a sped up timeline for profitability. we will hear from the ceo jeff lawson. this is bloomberg. ♪

♪ emily: amazon and whole foods have expanded delivery of groceries to cities across the united states including columbus, dayton, portland, greater washington, d.c., and areas of york city -- new york city. competitors like walmart and kroger have stepped up their online grocery presence. bungalow was hoping to make a name for itself and competitive real estate market. it aims to give people affordable places to live. the company has raised funding. we caught up with the ceo, andrew collins to discuss.

>> residential real estate is a largest asset class -- the largest asset class in the united states and has not really been affected by technology. it is time for real estate to adjust to the modern world. bungalow takes existing inventory where families and lifestyles were different from the 1950's, 1960's, and adjusted to today. emily: everybody has heard about trying to get an apartment, it is such a headache. how does it work? >> we streamline the process. we make it much easier with our online listings. we have 3-d walk-throughs. we help individuals with finding other great people to live with as well. that's the real bread-and-butter of bungalow. emily: why is this not something that airbnb could do? >> bungalow is in the business of providing different places --

permanent places to live. is a big difference between providing a place to live for 3-5 years, and providing a place to look for 3-5 days. emily: what about the regulatory issues? how do city regulars -- regulators feel about this? .> airbnb has paved the way our leases are generally 4-18 months. on average, renters are staying with us for close to a year on the initial lease. emily: you have been working on this for 18 months and have already raised $64 million? that is a lot of money superfast, isn't it? >> real estate is expensive and works well when you know what you are doing. is not cheap. every house -- it is not cheap.

every house is expensive. fundamentally, real estate cannot be done for $10. it takes real money to change the world. emily: you buy homes from homeowners, fix them up, and turn them around. what sort of trends are you seeing in the real estate market given what is happening with rates, the administration, the stock market? >> we are adding one new city per month. by the end of next year we will be in 50 plus cities. we have seen markets move differently in the united states. san francisco is a unique real estate market. the prices here are four times the national average. overall, i think at the high-end of the market, which really is not mainstream, there has been a softening of several million dollar homes. in the mainstream part of america, people want places to live, they want to upgrade, want

an extra bedroom for their kid, want to move to a better job. none of that has changed, so the number of houses being exchanged isn't changing, at least right now. emily: where do you think the market is going? >> i think the market is still likely to have depreciation across the board, especially -- except at the top 1% of houses. the median home and united states is worth $240,000 -- in the united states is worth $ 240,000. there is more people don't want to live in san francisco then there are supply of bedrooms -- that want to live in san han there are supply of bedrooms. it's a little bit like that

debate.ion people should be able to live in any city they want in the united states & the best career that they can find for the most compensation, with the best mission that aligns with their values, but they literally cannot do that. there is not enough housing in many cities in the united states and that makes no sense. things like bungalow can help fix that. open door unless people to flexibly move whenever they want -- allows people to move whenever they want. emily: what about the safety and security question? you have to match up roommates. there are a lot of scary roommate stories out there? -- out there. >> there are a lot of scary roommate stories because people cannot do background checks. cann organization we provide that safety and trust that you can't to do if you are

searching on craigslist for a remake on your own. -- roommate on your own. emily: we have seen uber and lyft struggle to do background checks on their own drivers. how can you be confident in yourself doing background checks? >> it's not just background checks. that's one criteria of how we check. emily: do you think trump and rate issue will affect prices? >> obviously there is a relationship between interest values and real estate. the effective cost of a mortgage is driven by the interest rate. the purchasing power of a homeowner declines as rates go up. there is a fundamental connection. everybody who lives in the united states still needs a place to live and we are not adding enough supply, so that causes appreciation where people can afford less. that creates a mismatch that nobody knows how it will play out. emily: what is the cost of this

service? >> because we are helping individuals find it other individuals to live with and renting a room, it is 40%-50% less than what a studio apartment would cost. emily: how are you protecting the data of people you work with? there are privacy issues here. you are getting their personal with these potential roommates. >> absolutely, but we are keeping all that information and privacy internally to our team. that was the bungalow cofounder and ceo. make a name for itself in the crowded cloud computing sector? we hear from ceo jeff lawson next. ♪

♪ emily: since going public in 2016, cloud computing software

vendor twilio has been growing its customer base in a crowded market. in its most recent earnings report, the company posted its second ever profitable quarter and had a rosy outlook. ceo jeff to the twilio lawson about the strategy going forward. has been the gradual process of building the company over the last 10 years that focuses on customer success. we have the platform approach business model that puts developers first. to builds use twilio all sorts of different types of interaction with their customers. we see this from travel, real estate, old companies, new companies, anything you can imagine. with a uses based pricing model model, itased pricing

benefits both of us. this usage-based pricing model gives us this great expansion rate. the confluence of all that is what you see in the strength in our financial performance. emily: what do you help whatsapp do? >> when you install whatsapp on a phone, they send you a text to confirm your identity. that is twilio. it used to be that you outsourced software that was not strategic. now every company needs to be be good -- be good at building software to differentiate themselves. if you are a startup, maybe you bring in twilio and get started, and that's enough. when you are on enterprise, there will be more complicated decisions being made. in andes team will come

help that initial prototype, that initial idea that those developers are working on, turn it into reality at scale inside of a bigger enterprise. emily: i.p.o. is involved with -- twilio is involved with voter engagement. >> we have been excited to partner with organizations that are connecting boaters with that rs with their elected officials. we announced an initiative called voices for democracy. what we said is that we have a polarized world right now. we think what the world needs. is people to connect with each other. voters need to believe that their elected officials are listening to them. that is the most important kind of communication that it to happen. emily: at the same time we are seeing democracy under threat,

state actors trying to meddle in elections, how do you make sure those interactions are secure? >> we have been working with great organizations that are bringing solutions for how to -- toith constituents constituents directly into the u.s. house of representatives. there are representatives where they say text us if you want to talk to us. now you can text us. we focus on working with great organizations that represent official channels of communication and help people to mobilize each other and get out there voices so their voices are heard by their elected officials. was -- thato that was twilio's ceo jeff lawson. that does it for "best of bloomberg technology."

we are live streaming on twitter. be sure to follow our global breaking news network tictoc on twitter. this is bloomberg. ♪

♪ >> antisocial. trump's campaign against what he is calling unfair search and social media. how would this shape tech regulation? the ecb supervisory board regulator tells bloomberg regulators are in no rush to tighten capital demand over turkey risk. the clock ticks until brexit. on the charges -- chances -- are the chances of a no deal more likely? welcome to "bloomberg markets